[Senate Hearing 109-100]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-100
 
   PRESIDENT'S FY 2006 BUDGET REQUEST FOR THE DEPARTMENT OF HOMELAND 
  SECURITY'S TRANSPORTATION SECURITY ADMINISTRATION (TSA) AND RELATED 
                                PROGRAMS

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 15, 2005

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation



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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                     TED STEVENS, Alaska, Chairman
JOHN McCAIN, Arizona                 DANIEL K. INOUYE, Hawaii, Co-
CONRAD BURNS, Montana                    Chairman
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
JIM DeMint, South Carolina           FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              E. BENJAMIN NELSON, Nebraska
                                     MARK PRYOR, Arkansas
             Lisa J. Sutherland, Republican Staff Director
        Christine Drager Kurth, Republican Deputy Staff Director
                David Russell, Republican Chief Counsel
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
   Samuel E. Whitehorn, Democratic Deputy Staff Director and General 
                                Counsel
             Lila Harper Helms, Democratic Policy Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 15, 2005................................     1
Statement of Senator Boxer.......................................     5
    Prepared statement...........................................     5
Statement of Senator Burns.......................................    56
Statement of Senator Dorgan......................................     5
Statement of Senator Inouye......................................     2
    Prepared statement...........................................     2
Statement of Senator Lautenberg..................................    58
    Prepared statement...........................................    60
Statement of Senator Lott........................................    61
Statement of Senator McCain......................................     4
Statement of Senator E. Benjamin Nelson..........................     6
Statement of Senator Pryor.......................................     6
Statement of Senator Stevens.....................................     1

                               Witnesses

Berrick, Cathleen A., Director, Homeland Security and Justice, 
  Government Accountability Office...............................    17
    Prepared statement...........................................    18
Stone, Hon. David M., Assistant Secretary, Transportation 
  Security Administration........................................     7
    Prepared statement...........................................     9

                                Appendix

Godwin, Jean, Executive Vice President and General Counsel, 
  American Association of Port Authorities, prepared statement...    67
Response to written questions submitted to Hon. David M. Stone 
  by:
    Hon. Daniel K. Inouye........................................    68
    Hon. Frank R. Lautenberg.....................................    73
    Hon. John D. Rockefeller IV..................................    72
    Hon. David Vitter............................................    75


   PRESIDENT'S FY 2006 BUDGET REQUEST FOR THE DEPARTMENT OF HOMELAND 
  SECURITY'S TRANSPORTATION SECURITY ADMINISTRATION (TSA) AND RELATED 
                                PROGRAMS

                              ----------                              


                       TUESDAY, FEBRUARY 15, 2005

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m. in room 
SR-253, Russell Senate Office Building, Hon. Ted Stevens, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    The Chairman. The Committee will come to order.
    Let me welcome the witnesses who are here to discuss the 
President's Fiscal Year 2006 budget for the Transportation 
Security Administration. Since September 11, we've made major 
improvements in securing all modes of transportation in this 
country. Still, much remains to be done. I believe Congress 
will carefully consider the 120 percent fee increase proposed 
on travelers. The fee increase, we're told, could result in 
lost revenue for an industry that's already on the financial 
ropes. Last year alone, the industry lost about $10 billion. 
And the question that has to be asked is, is this the right 
time to add another 1\1/2\ billion dollars in fees to an 
industry that already pays $15 billion in taxes and fees, to a 
variety of government agencies?
    I'm not going to make a long statement. I do hope that 
Members will keep their statements short. I do believe that TSA 
remains behind on procurement and installation of explosive-
detection machines in airports around the country. And the 
Known Traveler Program is also behind. And the background 
checks on airport workers remain an issue. We'll have questions 
about all of those.
    I thank you, Admiral Stone, for coming, and Ms. Berrick. I 
know you had to change your schedule to be here, for our 
schedule, and I appreciate your willingness to come and appear 
before us.
    Senator Inouye?

              STATEMENT OF HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    Senator Inouye. Thank you, Mr. Chairman.
    I look upon this oversight of TSA as one of the most 
important of this Committee. I have three principal areas of 
concern.
    In 2001, we agreed, by nearly unanimous votes in the House 
and the Senate, that transportation security must be a 
national-security function. However, between TSA's endless 
reorganizations and the recent talk about returning to private 
security screening companies, it's becoming apparent that the 
central guiding principle is being eroded. And, Mr. Chairman, 
if we lose sight of this principle, I think we'll forget one of 
the most important lessons of September 11th.
    The second concern is, aviation security has received about 
90 percent of TSA's funds and virtually all of its attention. 
There is simply not enough being done to address port, rail, 
motor-carrier, hazardous-material shipment, and pipeline 
security. And I'm sure all of us agree that this must be 
changed.
    The third, as you've noted, Mr. Chairman, the 
Administration is preparing to increase aviation security 
funds. This makes no sense to me. The airline industry, as 
you've pointed out, is bordering on total bankruptcy. And the 
Administration wants to add to its costs. Yet, at the same 
time, the Administration is demanding that its unaffordable tax 
cuts must be made permanent. And I just don't follow this 
thinking. And, quite frankly, I can't believe that this 
proposal will be adopted by Congress.
    Mr. Chairman, with your approval, I'll submit the rest of 
my statement for the record.
    [The prepared statement of Senator Inouye follows:]

             Prepared Statement of Hon. Daniel K. Inouye, 
                        U.S. Senator from Hawaii
    Mr. Chairman, as we begin this new session, I rank our oversight of 
the Transportation Security Administration as one of our highest 
priorities. As the primary Committee of jurisdiction for transportation 
security, I'm looking forward to a spirited and consistent review of 
TSA's work as we continue to make progress securing all modes of 
transportation.
    I have 3 principal areas of concern:

        1. Congress agreed in 2001, by nearly unanimous votes in the 
        House and Senate, that transportation security must be a 
        national security function. However, between TSA's endless 
        reorganizations and the recent rhetoric about returning to 
        private security screening companies, it is becoming apparent 
        that this central, guiding principle is being eroded. If we 
        lose sight of this principle, we will forget one of the most 
        important lessons of September 11th.

        2. Aviation security has received 90 percent of TSA's funds and 
        virtually all of its attention. There is simply not enough 
        being done to address port, rail, motor carrier, hazardous 
        material, and pipeline safety. That must change, quickly.

        3. The Administration is proposing to increase aviation 
        security fees. This makes no sense to me. The airline industry 
        is bordering on total bankruptcy, and the Administration wants 
        to add to its costs. Yet at the same time the Administration is 
        demanding that its unaffordable tax cuts be made permanent. I 
        don't follow their thinking, and quite frankly, I don't believe 
        the proposal will go far.

    Mr. Chairman, over the years, and particularly since 9/11, this 
Committee has led the effort to make transportation security a matter 
of national security. We crafted two landmark bills, the Aviation and 
Transportation Security Act of 2001 and the Maritime Transportation 
Security Act of 2002, to ensure that funding and programs were 
developed to completely change the way we address security. The 
September 11th tragedy, the Madrid train bombing and many other attacks 
remain locked in our conscience as we try to do all we can to avoid 
another attack.
    The continued threat risk is real and the vulnerabilities are real, 
across all modes of transportation.
    We recently witnessed a rail tank cargo accident--not a terrorist 
attack--in Graniteville, SC. An entire town had to be evacuated, 
demonstrating the potential harm if someone does target a rail tank 
car. The District of Columbia was so concerned about rail cars carrying 
hazardous materials traversing the city they adopted a resolution to 
ban them.
    Port security is of particular interest to me. My State of Hawaii 
is entirely dependent upon shipping and the steady flow of maritime 
commerce. The dock strike at the port of LA/Long Beach in 2001 caused 
people in my state to begin running out of basic supplies. If an attack 
occurs, it could be weeks before service is renewed.
    It is important to remember that 95 percent of the nation's cargo 
comes through the ports, so a port incident will send devastating 
shockwaves through the entire economy, impacting every state. Yet the 
security initiatives at most ports have been, to this point, woefully 
underfunded, and most ports are ill-prepared for an attack. 
Unfortunately, our maritime system is only as strong as its weakest 
link. If there is an incident at any one port, the whole system will 
screech to a halt, as we scramble to ensure security at other ports. If 
we had to shut down our entire port system, the economic damage would 
be widespread, catastrophic and possibly irreversible.
    Considering these simple observations, I cannot comprehend the 
Administration's lack of serious attention and commitment to port, 
rail, motor carrier, hazardous material and pipeline safety 
initiatives.
    Security funding for all modes of transportation beyond aviation 
has been desperately lacking. The 9/11 Commission found, ``over 90 
percent of the nation's $5.3 billion annual investment in the TSA goes 
to aviation . . . [and] . . . current efforts do not yet reflect a 
forward-looking strategic plan.'' And according to Senate Banking 
Committee estimates, the Federal Government has spent $9.16 per airline 
passenger each year on enhanced security measures, while spending less 
than a penny annually per person on security measures for other modes 
of transportation.
    But considering the real threat risk and the constant talk about 
our War on Terror, I find it even harder to understand how the 
Administration has forgotten that, in a post-September 11th world, 
transportation security is national security.
    Based on the President's Budget, there are apparently some in the 
Administration who seem to believe that our work is done. Their budget 
proposal suggests a wholesale dismantling of the Transportation 
Security Administration. In the last 2 years, we have witnessed a near 
constant reorganization that, under the current proposal, now makes 
Maritime and Land security virtually nonexistent at TSA. The changes 
suggest either a fundamental lack of understanding of what it will take 
to ensure the security of all transportation modes, bureaucratic 
mismanagement, or worse yet, the Administration's complete loss of a 
sense of national urgency.
    The President's Budget recommends shifting critical work away from 
the Transportation Security Administration (TSA) to other organizations 
within DHS that have neither the expertise nor the necessary authority 
to be effective. In my view, further decentralizing the 
responsibilities of TSA will destroy the remaining, limited 
accountability that TSA provides for transportation security.
    The problems with the Budget proposal go further: it offers 
inadequate funding for the U.S. Coast Guard to meet both its increased, 
homeland security responsibilities, and its traditional missions like 
search and rescue and enforcement of coastal laws; an creates an odd 
rearrangement of the security grant programs that not only defies 
Congressional directives, but adds bureaucracy and decreases 
accountability; it cedes TSA's regulatory authority of the 
Transportation Worker Identification Credential (TWIC) program; and the 
list goes on.
    On aviation security, the Administration's proposal creates as many 
problems as it aims to solve. While TSA spending in FY06 would increase 
by $156 million, this funding level depends on $1.5 billion generated 
by increased security fees on airline passengers. Since this proposal 
was unveiled, there has been no shortage of airline and industry 
analysts that have raised deep concerns over what effect this may have 
on the future of existing air carriers.
    The Administration cannot satisfy its budget needs on the backs of 
one industry. I know that several other countries and airport 
authorities impose security fees, but with perhaps one or two small 
exceptions, no one imposes all of the national security costs on the 
airlines. We can debate how much we need for security, but it does not 
make any sense to place the burden for new DHS revenue on an airline 
industry that is bordering on total bankruptcy, when at the same time 
the Administration is demanding that its unaffordable tax cuts be made 
permanent.
    The U.S. economy depends on a strong commercial aviation industry. 
Since September 11th, the U.S. air carriers have taken unprecedented 
steps to cut their costs, and their employees have been true heros. In 
the face of steep layoffs and cuts in pay and benefits, the workers 
have been selflessly supportive of the industry and still manage to 
provide the highest level of service possible day in and day out. I 
think we must be very careful in dealing with issues that will have 
wide ramifications for the aviation industry and its workers.
    TSA should be aggressively seeking improvements to the current 
transportation security regimes for all modes and promoting the 
technological and capital improvements that will save considerable 
money in the long run while improving security. Instead, we have been 
given a budget that seeks short-term solutions that, I believe, will 
have negative consequences in the long term.
    Given the many misplaced priorities that I see in the President's 
Budget proposal, it is clear that the Congress needs to help refocus 
the Department.
    I have been discussing the real needs of the U.S. transportation 
security system with my fellow Committee members, and we have been 
developing a transportation security reauthorization proposal to 
provide further direction to the Department's cargo security functions, 
to strengthen aviation, maritime, rail, hazardous materials, and 
pipeline security efforts, and enhance interagency cooperation. The 
proposal will incorporate several Commerce Committee-reported and 
Senate-passed bills from the prior Congress and will also put forth new 
ideas to enhance transportation security across all modes of 
transportation.
    We expect a fully funded, effective operating Administration that 
can:

   Provide security to the traveling public and instills 
        confidence in the first line of defense--be it an airport 
        screener or a seaport agent;

   Establish secure, efficient cargo systems for air, land and 
        sea;

   Deter people that seek to do harm.

    It is easy to set the goals, but often difficult to achieve them. I 
speak for my colleagues when I say that this Committee is fully 
committed to achieving these goals. And we have a record that 
demonstrates our ability to deliver a bi-partisan, broadly supported 
result.
    The difficult work of securing all of our major modes of 
transportation, including our ports, railroads, intercity buses, 
pipelines, and motor carriers, is just beginning and the country 
demands a robust agency within DHS dedicated to that task.
    I thank the witnesses for their participation and I look forward to 
their testimony.

    The Chairman. Thank you very much.
    Senator McCain, do you have an opening statement?

                STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    Senator McCain. Thank you, Mr. Chairman.
    Briefly, I understand many passengers, including myself, a 
frequent flyer, don't look forward to the prospects of paying 
an increased passenger security fee, as would--which is 
proposed in the President's 2006 budget. We're facing tough 
fiscal realities, and we need to make some tough choices.
    Neither the airlines, already under huge financial strains, 
nor the general taxpayers, I think, should shoulder the entire 
burden of securing the airline passengers. I believe it's 
important the Federal Government continue to play a critical 
role in ensuring the safety and security of airline passengers. 
And, in this instance, I think it's appropriate that those 
directly benefiting, even me, the passenger, join in helping to 
cover those costs.
    I look forward to hearing from the witnesses today on their 
views on the proposed passenger security fee increase and the 
President's TSA budget. In addition, I look forward to hearing 
from Admiral Stone, in particular, on the Department of 
Homeland Security's progress in implementing the many 
transportation security provisions that were included in the 
Intelligence Reform Act.
    Thank you, Mr. Chairman.
    The Chairman. Senator Dorgan?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you.
    This is obviously a very important issue. I think not only 
aviation security, but all forms of transportation security are 
critically important in this time period, and I look forward to 
having an opportunity to visit with our witnesses about it.
    I did just want to make a point that this Committee 
supported the amendment which will now require--and I believe 
they're very close to finishing the rule on it--the prohibition 
of butane lighters on airplanes. As you know, Richard--I 
believe it was Reid--had the butane lighter. The FBI said he 
would have blown up--the shoe-bomber would have blown up the 
airplane. And so, we've been working on that. And I understand 
that's about done, and I think we're just waiting for a day or 
two before that gets out.
    But I think rail security, port security, aviation 
security, all of these issues are critically important, and I'm 
anxious to discuss some of them today with our witnesses.
    Mr. Chairman, thank you.
    The Chairman. Senator Boxer?

               STATEMENT OF HON. BARBARA BOXER, 
                  U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. I'll just put my statement in the record.
    [The prepared statement of Senator Boxer follows:]

 Prepared Statement of Hon. Barbara Boxer, U.S. Senator from California
    Mr. Chairman, I want to thank you for holding this important 
hearing.
    I believe that the overall budget the White House has sent to 
Congress is incomplete and unacceptable. Among the many problems with 
the budget is that it does not include the cost of the wars in Iraq and 
Afghanistan and, at the same time, it underfunds important domestic 
programs--including homeland security.
    We are here today to focus on one of the biggest aspects of 
homeland security--securing our transportation system.
    Transportation security funding is crucial for California. The 
state has five major airports. California's ports receive over 40 
percent of our nation's goods. The ports of Los Angeles and Long Beach 
comprise the largest port complex in the U.S.--they are crucial for our 
nation's economy. California has the Amtrak line with the second 
highest ridership in the nation.
    Almost three and a half years ago, this country confronted the 
worst terrorist attack in our history. Protecting our nation should be 
a top priority. However, this isn't the case with the Administration's 
Homeland Security budget.
    Congress has said that aviation security is a federal 
responsibility. According to the Joint Explanatory Statement of the 
Conference Committee on the ``Aviation and Transportation Security 
Act,'' which became law in November 2001, ``The Conferees expect that 
security functions at United States airports should become a Federal 
Government responsibility.'' We must live up to that responsibility.
    We have the same responsibility for port, rail, and transit 
security. But, the Administration's budget eliminates the Port Security 
Grant Program and replaces it with the so-called Targeted 
Infrastructure Protection Program (TIPP) that combines funding for 
protecting our ports, railroads, and transit systems.
    So under the Administration's proposal, these major transportation 
systems will be fighting against one another for homeland security 
funds. There is no guarantee where the funding would be targeted.
    In addition, the Administration requested only $600 million for 
TIPP. That is not enough to meet all of our security needs.
    It is not close to the $5.4 billion over ten years that the U.S. 
Coast Guard estimates is needed at port facilities or the $7.3 billion 
that is needed overall for port security. It is not close to the $6 
billion that transit agencies say is needed for security upgrades. It 
is not close to the almost $800 million that Amtrak says it needs to 
improve its tunnels--not to mention improving security in other ways.
    From the budget, we can tell what the Administration's priorities 
are--and they do not appear to be in protecting our nation.
    Transportation security funding is crucial for California and our 
nation. We must be proactive in preventing another terrorist attack.
    Thank you, Mr. Chairman.

    The Chairman. Thank you.
    Senator Nelson?

             STATEMENT OF HON. E. BENJAMIN NELSON, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Ben Nelson. Thank you, Mr. Chairman.
    I noted that, in the budget, in the proposed fee increase, 
that this is for continuation of the current program, 
apparently does not involve any kind of upgrading of the 
mechanical or nonpersonal security screening. I hope that, in 
your comments, you'll address how we're going to upgrade the 
screening process in the future to make it less cumbersome in 
certain areas, and more secure in other areas. There have to be 
these upgrades that have been talked about for quite a period 
of time, but I don't see anything that's being addressed, and I 
hope that you will deal with that. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We welcome your testimony, Admiral. Please proceed.
    Admiral Stone. Good morning, Chairman Stevens, Senator 
Inouye, and distinguished Members of the Committee.
    The Chairman. I'm sorry, I did not see Senator Pryor come 
in. I apologize, Senator.

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman. All I want to say 
is, thank you for being here today. We appreciate the 
witnesses, look forward to the testimony.
    Mr. Chairman, thank you for your leadership on this 
Committee. I'm a new Member here, and I'm excited about the 
tasks that lie ahead.
    Thank you.
    The Chairman. We're glad to have you. You're not exactly a 
stealthy Senator. I'm sorry I missed you there.
    [Laughter.]
    The Chairman. Senator Burns? Do you have a statement, 
Senator?
    Senator Burns. I don't have a statement. I just would make 
some points, but I can do that later. I think you want to get 
to the witnesses.
    The Chairman. Good idea. Thank you.
    Proceed again, Admiral.

    STATEMENT OF HON. DAVID M. STONE, ASSISTANT SECRETARY, 
             TRANSPORTATION SECURITY ADMINISTRATION

    Admiral Stone. Thank you, sir.
    Good morning, Chairman Stevens, Senator Inouye, and 
distinguished Members of the Committee.
    I am pleased to testify before you this morning to discuss 
the President's Fiscal Year 2006 budget request for the TSA. I 
look forward to working closely with the Committee on 
protecting the Nation's transportation systems and continuing, 
under your direction and leadership, the strong relationship we 
have forged with this Committee.
    For example, several Members of the Committee have focused 
on assuring the security of air cargo. Consistent with 
requirements of the intelligence reform legislation and our FY 
2005 appropriations, we're working to triple the number of air-
cargo inspections that are actually conducted and are currently 
analyzing comments to our air-cargo security notice of proposed 
rulemaking in order to issue a final rule by August 2005. 
Furthermore, we are moving aggressively to double our air-cargo 
inspection workforce from 100 to 200.
    The President's budget requests 5.6 billion for TSA in 2006 
to stabilize and strengthen TSA's essential mission. The 
request reflects an increase of 415 million for several 
initiatives and decreases of 258 million for programs being 
transferred to other components of DHS and for other 
adjustments. This results in an overall net increase of 156 
million over the amount appropriated to TSA in 2005.
    In addition, the FY 2006 request is based on the new 
program structure that redefines TSA's programs, projects, and 
activities to clearly align the agency's mission with its 
funding requirements. The restructuring will better enable TSA 
to effectively and efficiently secure our nation's 
transportation systems and will provide TSA with needed 
flexibility to respond to the ever-evolving security landscape.
    Under the new structure, TSA appropriations will be divided 
into three categories: Aviation security, surface 
transportation security, and transportation security support. I 
would like to highlight increases to particular programs where 
we believe the commitment of additional resources will greatly 
enhance TSA's effectiveness and efficiencies.
    These areas include 174 million to complete highspeed 
operational connectivity, called Hi-SOC. Hi-SOC will enhance 
the ability of TSA to transmit, on a timely basis, vital threat 
and security information throughout areas where operations are 
being conducted. In addition, it will increase training 
efficiency and screener effectiveness, while minimizing costs, 
and also assist TSA in transmitting human-resource data. 
Finally, and most importantly, Hi-SOC will allow TSA to be a 
metrics-based organization, providing field data to 
headquarters via the Performance Management Information System, 
known as PMIS.
    I would like to highlight also the 43.7 million over 2005 
for emerging checkpoint explosive-detection technologies. To 
address the threat of explosives carried on persons, TSA is 
utilizing 28 million from 2005 to purchase and deploy to 
checkpoints, at 40 of the nation's largest airports, 147 trace 
portals. For 2006, we requested an increase of 43.7 million, 
for a total of $72 million in 2006, to purchase an additional 
195 portal units for deployment at an additional 41 airports. 
We also anticipate that the proposed increase will enable us to 
purchase explosive-detection document scanners, designed to 
collect explosive particles from travel documents that a 
passenger has handled, as well as to invest in appropriate 
facts-gather technologies, once approved.
    There will be 180 million in additional funding for the 
screener work force. TSA has experienced a recurring need to 
reprogram funds from other programs to support the 45,000 
screener work force. The estimate for increased FY 2006 payroll 
funds is based on the actual 2004 and 2005 experience to date. 
It incorporates higher benefit and other adjustments previously 
supported through reprogrammings. The proposed increase would 
be directed mainly toward stabilizing the screener payroll 
base, and should minimize the need for any screener workforce 
reprogrammings in the future.
    The budget contains significant resources related to 
deployment of explosive-detection systems. Of the 617 million 
requested specifically for EDS ETV, 394 million would be used 
to purchase and install EDS.
    Furthermore, the President's budget includes funds for 
reimbursement to airports for their work related to 
reconfiguration of airport facilities to accommodate 
installation of inline EDS under the eight letters of intent 
that have been executed.
    The President's budget proposes language to maintain the 75 
percent federal cost share for LOIs. TSA believes that the 
current cost share is fair and equitable, and that changing 
this cost-sharing formula would not only disrupt current LOI 
commitments, but would also undermine security effectiveness at 
other airports.
    TSA will continue to work in conjunction with stakeholders 
to identify airports where there is the greatest need for 
support for the installation of inline EDS systems and to 
explore alternative mechanisms to fund inline EDS installations 
in the future.
    The President's budget proposes to adjust the manner by 
which aviation security screening activities are funded. The 
proposed budget is designed to shift cost, to have the airline 
passenger, rather than the general taxpayer, shoulder the 
majority of the cost of aviation security in the interest of 
fairness and equity. The budget proposes to increase the 
passenger fee by $3, raising the fee on a typical flight from 
$2.50 to $5.50. The maximum fee for passengers traveling 
multiple legs on a one-way trip would rise from the current 
maximum of $5 to $8. If this adjustment were to be adopted, 
passenger users would cover 73 percent of the estimated total 
aviation security screening costs through aviation security 
fees, as opposed to their current FY05 level of 36 percent.
    In addition, the budget proposes air-carrier fee 
collections be set at 350 million in FY 2006, which would 
comprise 7 percent of aviation security screening costs, which 
is in sync with their current FY05 7 percent level.
    The overall FY06 fee approach clearly shifts the burden of 
the fee more heavily onto the passenger user, and provides 
relief for the U.S. taxpayer, reducing the taxpayer's burden 
from 57 percent in FY 2005 to 20 percent in FY 2006.
    I would also like to highlight our efforts to enhance 
security across America's surface transportation systems and to 
adopt threat-based risk-management approach for operational 
responsibilities across all modes of transportation.
    In accordance with HSPV-7 and the National Infrastructure 
Plan, TSA is working closely with IAIP and is leading efforts 
to develop the TSA sector-specific plan. This plan delineates 
roles and responsibilities between transportation stakeholders 
to ensure that efforts are systemic, complete, and consistent 
with security efforts in other sectors. It will serve as the 
framework for defining the responsibilities for risk management 
of the transportation sector.
    Within this plan is the modal plan that will implement the 
sector-specific plan on an operational and mode-specific level. 
The base plan was released for stakeholder review earlier this 
month, and I'm pleased to announced that, as of yesterday, 
stakeholders have secure Internet access to the modal plans for 
review.
    Our efforts on the SSP and the modal plans are being 
expedited to meet the requirements set forth in the 
intelligence reform legislation for DHS to develop, prepare, 
implement, and update the national strategy for transportation 
security and modal security plans by April 1st, 2005.
    In conclusion, I want to convey how proud I am of TSA. Our 
employees have sought to carry out their responsibilities with 
skill, dedication, and professionalism. This past year was 
particularly challenging with the large number of national 
special security events that took place and the return to high 
levels of airline passengers. TSA will continue to strive to 
improve transportation security while maintaining the free flow 
of goods and people. We plan to do so while meeting and 
exceeding the high expectations that Americans expect of us.
    I'm happy to also report the results of our 2005 Customer 
Service Survey that were released late yesterday. Highlights 
included 92 percent of passengers were satisfied with their 
overall experience at the passenger checkpoint; 89 percent of 
passengers thought security was adequate, as opposed to 
excessive or inadequate; 85 percent of passengers believe 
screening procedures are similar between airports; and, 
finally, 82 percent of the passengers have confidence in TSA.
    We know we have plenty of room for improvement. However, 
these numbers give perspective to what is often a slanted and 
distorted story regarding the performance of TSA.
    Thank you for the opportunity to testify before you today. 
I look forward to working with the Committee in support of our 
FY 2006 funding request.
    Mr. Chairman, this concludes my oral statement. I would be 
pleased to answer any questions, sir.
    [The prepared statement of Admiral Stone follows:]

    Prepared Statement of Hon. David M. Stone, Assistant Secretary, 
                 Transportation Security Administration

    Good morning, Mr. Chairman, Senator Inouye, and Members of the 
Committee. I am pleased to appear before the Committee to speak in 
support of the President's FY 2006 budget request for the 
Transportation Security Administration (TSA). I appreciate the strong 
partnership we have forged together to ensure the safety and security 
of the nation's transportation systems while maintaining customer 
service and the free flow of people and goods. I look forward to 
continuing our endeavors in partnership with the Committee under your 
direction and leadership.
    TSA's mission--to protect the Nation's transportation systems to 
ensure the freedom of movement for people and commerce--continues to be 
a vital one, 3\1/2\ years after the tragic events of 9/11 that 
motivated TSA's creation. TSA's mission is completely aligned with that 
of the Department of Homeland Security and the Border and 
Transportation Security Directorate, created one year after the 
creation of TSA. TSA has worked diligently to implement the mandates of 
Congress to improve the security of aviation and surface 
transportation, first within the Department of Transportation and now 
within the Department of Homeland Security.
    Today I would like to highlight some of the major accomplishments 
of TSA over the last fiscal year and focus your attention on some of 
the key initiatives that will be supported by the President's FY 2006 
budget request for TSA. Those key initiatives include:
    Strengthening Security Through Information Technology Connectivity. 
High-speed information technology connectivity will be key in our 
efforts to deliver effective and efficient security by better 
facilitating screener workforce training and the timely sharing of 
vital performance information.
    Strengthening Security Through Emerging Technologies. As we 
continue to refine our layered approach to aviation security, we are 
placing a high priority on addressing the threat of explosives coming 
through the passenger screening checkpoints. We are using FY 2005 
funding to move forward with deployment of explosive trace detection 
portals at screening checkpoints, and the proposed FY 2006 funding 
levels would further our efforts to deploy other emerging technologies 
for passenger and baggage screening.
    Strengthening Security of Surface Transportation Modes. The tragic 
March 11, 2004, rail bombings in Madrid were a brutal illustration of 
our continuing need to protect rail and other open surface 
transportation systems. Additionally, although not terrorism-related, 
recent derailments of both passenger and freight trains carrying 
hazardous materials remind us of the potential for harm by anyone so 
inclined. TSA is committed to working with the private sector and other 
government entities to bring an appropriate level of security to all 
modes of transportation.

Recent Accomplishments
    Before addressing these key programs, I would like to highlight 
briefly some of TSA's major accomplishments. With passenger air traffic 
returned to pre-9/11 levels, TSA is proud of its role in restoring the 
confidence of the flying public and making air travel more secure than 
it has ever been, while successfully minimizing passenger wait times at 
security checkpoints, delivering a high level of customer service, even 
during busy travel seasons. TSA has also worked with DHS, other federal 
agencies, and private sector partners to enhance security across 
surface modes of transportation through its intermodal programs. During 
FY 2004, TSA:

   Intercepted seven million prohibited items at airport 
        checkpoints, including just over 600 firearms.

   Implemented the Registered Traveler pilot program that 
        allows frequent fliers who have undergone background checks to 
        undergo expedited screening, thus improving customer service 
        while maintaining a high level of security through verification 
        of identity. The results of this pilot are now being analyzed.

   Took major strides in developing and field-testing several 
        new technologies, including the Secure Automobile Inspection 
        Lane (SAIL) pilot on ferries operating between New Jersey and 
        Delaware, scanning cars and trucks for explosives; the 
        Transportation Worker Identification Credential (TWIC), a 
        biometric-based identification system to verify the identity of 
        individuals and control access to secure areas of the nation's 
        transportation system; the Transit and Rail Inspection Pilot 
        (TRIP) for screening passengers and baggage in a rail 
        environment; and Explosives Trace Detection Portals and 
        Explosives Detection Document Scanners at multiple airports.

   Recently certified the Reveal Technologies CT-80, a third 
        type of Explosives Detection Systems (EDS) machine, and are in 
        the process of conducting pilots in the operational 
        environment, for the detection of explosives in checked 
        baggage. This machine is smaller, less costly, and more 
        compact, making it more appropriate for use in limited space 
        and smaller airports where baggage throughput is lower and 
        larger EDS machines are not practical because of limited space 
        or the size of the airport.

   As part of Homeland Security Presidential Directive 7, for 
        protection of Critical Infrastructure, we are nearing 
        completion of the development of a security road map called the 
        Transportation Sector Specific Plan (TSSP) and the 
        Transportation Security Operational Plan, or TSSP's Modal Plan 
        annexes, which set forth operational strategies and 
        transportation security programs focused on reducing and 
        mitigating security risks for the transportation modes, 
        including aviation, rail, mass transit, highway, pipeline, and 
        the postal and shipping sector.

   Issued Rail Security Directives setting security standards 
        for all heavy and light rail operations, as well as Amtrak and 
        the Alaska Railroad Corporation. These standards establish a 
        formal baseline and standardize protective measures for all 
        passenger rail assets, including personnel and physical assets 
        and critical facilities.

   Began implementing a more localized, airport-centric system, 
        underpinned by 20 local hiring centers around the country that 
        serve as the focal points for local hiring activities. This 
        decentralization promises speedier hiring to meet the dynamic 
        needs of individual airports and greater screening workforce 
        retention. The objectives of this next generation hiring system 
        are to streamline the hiring process by providing direct, 
        immediate hiring support to individual airports, putting 
        screener hiring and training under control of the Federal 
        Security Directors (FSD), and improving the ability to deliver 
        the right mix of required screeners in a timely manner. We also 
        anticipate the next generation hiring system will improve 
        retention rates.

   Enhanced airport security nationwide by requiring 
        fingerprint-based background checks and additional background 
        screening on more than one million airport employees; requiring 
        more patrols and surveillance in secure areas; increasing 
        checks of employee identification (IDs) and vehicles in the 
        sterile and secure areas; and piloting of SPOT (Screening of 
        Passengers by Observation Techniques) at two airports that may 
        enhance the capability of TSA screeners to identify threats to 
        security.

   Strengthened air cargo security through increasing the 
        number of air cargo security inspectors (to total 200 by the 
        end of March 2005), issuing an air cargo Notice of Proposed 
        Rule-Making (NPRM) that proposes major changes to the air cargo 
        industry to strengthen air cargo security throughout the supply 
        chain, while not impeding the flow of commerce; enhanced the 
        Known Shipper Program by implementing a centralized database 
        that currently includes information on approximately 450,000 
        known shippers; and, in coordination with the U.S. Customs and 
        Border Protection, developing a Freight Assessment System that 
        will identify elevated-risk cargo to be targeted for 
        inspection.

   Pursued research and development to enhance air cargo 
        screening capabilities by pilot testing commercial-off-the-
        shelf (COTS) technology for air cargo screening at six airports 
        and issuing research and development grants to inventors of new 
        technologies for screening air cargo for explosives.

   Worked closely with Customs and Border Protection, vetted 
        flight crews on all incoming and outgoing international flights 
        on domestic and foreign airlines throughout 2004. That amounted 
        to more than 1 million screenings, some 3,000 a day, which 
        served as a powerful and successful anti-terrorism deterrent. 
        This vetting has thus far resulted in denials of 13 crew 
        members that posed an unacceptable security risk.

   Implemented the alien flight student training program 
        originally run by the Department of Justice and expanded the 
        program to include student applicants seeking training on 
        aircraft with a maximum takeoff weight under 12,500 pounds. 
        Further, TSA has implemented improvements to the assessment 
        procedure and now conducts checks on student applicants against 
        additional law enforcement and intelligence data sources.

   Doubled the capacity of the training program for Federal 
        Flight Deck Officers and extended the program to include cargo 
        pilots. There are currently thousands of trained officers 
        defending the cockpits of both commercial and all-cargo 
        aircraft.

   Developed, tested and rolled out the volunteer Advanced Crew 
        Member Self-Defense Training program for flight and cabin-crew 
        members of air carriers.

   As a customer service initiative, added to our public 
        website security checkpoint wait time information to assist 
        travelers in planning for their next flight.

Summary of the FY 2006 Appropriation Request
    The President's FY 2006 Budget Request of $5.6 billion for TSA is 
dedicated to stabilizing and strengthening TSA's essential mission. 
These amounts do not include funding for programs such as Secure Flight 
that are currently under the purview of TSA's Office of Transportation 
Credentialing and Vetting. Most of these programs will be transferred 
to a newly established Screening Coordination and Operations (SCO) 
Office within the Department's Border and Transportation Security (BTS) 
Directorate. The request reflects an increase of $415 million for 
several initiatives, and decreases of $258 million for programs being 
transferred to other components of DHS and for other adjustments. This 
results in an overall net increase of $156 million over the amount 
appropriated to TSA in FY 2005.
    TSA's FY 2006 budget request proposes revised appropriations 
language based on a new program structure that redefines TSA's 
appropriations and programs, projects, and activities to clearly align 
the agency's mission with its funding requirements. As we are 
completing our second year as a part of DHS, and integrating programs 
with those of the Department as a whole to achieve greater synergies, 
leverage assets, and reduce duplication of effort, this realignment 
will more accurately reflect TSA's needs on the road ahead. This 
restructuring will better enable TSA to effectively and efficiently 
secure our Nation's transportation system by providing needed 
flexibility to respond to the changing security landscape. Overall, the 
Administration proposes that TSA's FY 2006 funding be divided into 
three appropriations: Aviation Security, Surface Transportation 
Security and Transportation Security Support.

Aviation Security
    TSA requests $4.7 billion for the Aviation Security appropriation 
in FY 2006. These funds will support the current federalized and 
privatized screener workforce, provide sufficient training and other 
support for both passenger and baggage Screening Workforce and 
Equipment, and continue other critical aviation security regulation and 
enforcement activities. Critical increases are requested for screener 
payroll, checkpoint explosive detection technology, and high speed 
operational IT connectivity. An additional $250 million will be 
provided by the Aviation Security Capital Fund for EDS installations. 
Funds will be used to continue workforce performance improvement and 
facilitate travel while maintaining security in our nation's commercial 
service airports.
    The Aviation Security appropriation includes two distinct decision 
units: (1) Screener Workforce and Equipment and (2) Aviation Direction 
and Enforcement. Screening Workforce and Equipment comprises funding to 
support passenger and baggage screener activities, including screener 
salaries, training, supplies, checkpoint support, purchase and 
installation of screening equipment to include explosives detection 
systems (EDS) and explosives trace detection machines (ETD). This unit 
also includes contractor private screening companies under the 
Screening Partnership Program. In FY 2005, TSA proposes to devote $3.8 
billion to these activities, plus $250 million more from the Aviation 
Security Capital Fund for EDS installations.
    The Screening Workforce and Equipment decision unit also includes 
the funds for reimbursements to airports for their work relating to 
reconfiguration of airport facilities to accommodate installation of 
in-line EDS pursuant to the eight letters of intent (LOIs) that have 
been executed. The President's Budget proposes language retaining 
direction included in the Homeland Security Appropriations Act, 2005, 
to maintain the 75 percent federal cost share for LOIs. TSA believes 
that the current cost share is fair and equitable and that changing 
this cost sharing formula could not only disrupt current LOI 
commitments but undermine the long-term security effectiveness and 
efficiency of equipment integration. TSA recognizes that additional 
airports have expressed an interest in obtaining federal financial 
support for installation of in-line EDS systems. TSA is determining 
where there is greatest need for the installation of in-line EDS 
systems. In addition to the already executed eight Letters of Intent 
(LOI) covering nine airports, TSA purchases and installs in-line EDS 
equipment through a variety of funding mechanisms, especially Other 
Transactional Agreements (OTAs). The President's Budget also includes 
proposed language to permit the distribution of funds from the Aviation 
Security Capital Fund based on the greatest benefit to aviation 
security, rather than a non-security related formula.
    The FY 2006 request includes $165 million in increased funds for 
screener payroll. TSA has experienced a recurring need to reprogram 
funds from other programs to support the 45,000 screener FTE. The 
estimate for increased FY 2006 payroll funds is based on actual FY 2004 
and FY 2005 experience to date and incorporates higher benefit and 
other adjustments previously supported through reprogrammings. These 
increased funds in FY 2006 will stabilize the screener payroll base and 
should eliminate the need for reprogrammings in the future. With these 
additional funds, TSA will continue to ensure security and adequate 
wait time performance, especially at larger airports.
    The second decision unit, Aviation Direction and Enforcement, 
includes activities that ensure that TSA continues to build a strong 
security regulation and enforcement presence on-site at the nation's 
commercial airports. Funding requested under this decision unit 
supports air cargo and airport regulation compliance through 
inspections, TSA-certified explosives detection canine teams, and 
reimbursements provided to state and local law enforcement for support 
provided at commercial airport checkpoints. This decision unit also 
includes the airport management and direction staff, airport 
information technology (IT) connectivity, and administrative support. 
This unit also supports the Transportation Security Operations Center 
(TSOC), which serves as the 24/7 operations center (command center) for 
transportation security-related operations, incidents, or crises for 
TSA, interfacing directly with the DHS Homeland Security Operations 
Center for good information-flow with DHS. In FY 2005, TSA is budgeting 
to spend $862 million for these programs.
    The President's Budget proposes to recover the majority of the 
Aviation Security funds through aviation security user fees, 
specifically the passenger security fee and the air carrier fee 
(Aviation Security Infrastructure Fee (ASIF)). The original intent of 
the Aviation and Transportation Security Act (ATSA), Pub. L. 107-71, 
was for the newly created aviation user fees to cover TSA's cost for 
aviation security. ATSA also capped the fees but in a way that 
indicates Congress assumed TSA's costs would be fully recovered even 
with those caps. However, currently, the government and taxpayers are 
shouldering the majority of the costs of civil aviation security rather 
than passengers and air carriers. For example, in the first two years 
since TSA was created, the FY02 and FY03 total security fee collections 
comprised approximately 30 percent of total TSA costs for civil 
aviation security. These fees funded approximately 41 percent of the 
agency's aviation security costs for FY04, and, if the current fee 
levels continue, estimates for FY05 and FY06 show that the security 
fees would be less than 50 percent of the costs of aviation security 
costs.
    Since it costs TSA significantly more to provide aviation security 
than the agency collects in fees, the proposed budget is designed to 
have the airline passenger, rather than the general taxpayer, cover 
more of TSA's aviation security cost in the interest of fairness and 
equity. The 2006 Budget proposes to increase the passenger fee by 
$3.00, raising the fee on a typical flight from $2.50 to $5.50. For 
passengers traveling multiple legs on a one-way trip, that fee would 
rise from the current maximum of $5.00 to $8.00. If this adjustment is 
adopted, the revised fee would ensure near full recovery of aviation 
screening costs. TSA would cover nearly 80 percent of estimated total 
TSA aviation screening costs through aviation security fees (equivalent 
to more than 90 percent of the total of airport-specific security 
cost). Consequently, resources from the general taxpayer could be used 
for more broadly applicable homeland security needs.
    The Budget also assumes a lower collection level for the air 
carrier fee than was assumed in the proposed FY 2005 budget. TSA would 
set the amount of the fee collected at $350 million in FY 2006, a 
reduction from the $750 million presumed to be collected in the 
requested level in FY 2005. We note that, consistent with the DHS 
Appropriations Act, 2005, the Government Accountability Office is 
currently conducting an audit to help determine what the proper air 
carrier fee collections should be based on the criteria set forth in 
ATSA.

Surface Transportation Security
    The Surface Transportation Security appropriation includes 
resources for TSA's security operations in all non-aviation modes of 
transportation. Such operations include developing best practices, 
standards, and regulations to protect the transportation 
infrastructure; conducting inspections to monitor and enforce 
compliance with standards and regulations; designing and implementing 
vulnerability assessment models for all surface transportation modes; 
and strengthening industry stakeholder partnerships through sustained 
information sharing. TSA's FY 2005 spending plan includes $128.8 
million for these programs, plus $27 million in anticipated receipts 
from fee programs. The budget requests $32 million for the Surface 
Transportation Security appropriation in FY 2006. These funds will 
maintain TSA's various surface transportation security initiatives, 
including the surface transportation inspectors that focus primarily on 
rail security.

Transportation Security Support
    The third appropriation, Transportation Security Support, supports 
the operational needs of TSA's extensive airport/field personnel and 
infrastructure. TSA has developed and will maintain a flat 
organizational structure that emphasizes front-line service delivery 
with well-trained managers that are supported by an array of services. 
Included in this appropriation is funding for headquarters facilities 
and staff, Transportation Security Intelligence Service (TSIS), and 
rent, furniture, parking and transit benefits. The FY 2005 TSA budget 
includes $771.9 million for the full range of support activities. TSA 
requests $545 million in FY 2006 for the Transportation Security 
Support appropriation. These funds will ensure that TSA's screeners and 
other operational employees have sufficient intelligence, information 
technology, policy direction, administrative services, and other key 
support to accomplish the agency's mission. TSA will continue to seek 
opportunities to increase efficiencies in these programs through 
innovative approaches and improved management.

Strengthening Security Through Information Technology Connectivity
    The President's FY 2006 budget request includes an increase of $174 
million for High Speed Operational Connectivity (Hi-SOC) to continue 
our efforts to deploy at more than 200 sites. This request supports a 
key DHS strategic objective of providing operational end users with the 
technology and capabilities to detect and prevent terrorist attacks, 
means of terrorism and other illegal activities. The DHS Office of the 
Chief Information Office (CIO) Council identifies TSA connectivity as 
its number one requirement.
    Hi-SOC is a critical investment for TSA that will greatly impact 
DHS's mission performance. Without these funds, 379 out of 600 (63 
percent) field sites, including airports, will continue to communicate 
and provide security-related information over dial-up Internet 
connections. As a result, FSDs have reported download times of two or 
more hours when attempting to access Security Directives, On Line 
Learning programs, Human Resource capabilities and TSA and DHS 
websites. Further, at some of the largest airports in the country there 
is little to no telephone or computer interconnectivity among 
administrative spaces, screening areas and baggage areas. If a security 
incident were to occur in one area of the airport, a critical time 
delay in transmitting information to another key operating element 
could create a risk of enormous magnitude. Overall, Hi-Soc will:

   Increase Training Efficiency and Screener Effectiveness 
        while minimizing costs. As of June 22, 2004, TSA has deployed 
        network connectivity to 1,822 of 4,052 (45 percent) of the 
        training computers located at 120 of 440 (27 percent) 
        Federalized airports. This network connectivity has provided 
        access to the Online Learning Center for these airports, yet 
        the majority of the federal screeners must endure long download 
        times or rely on alternate means to take their mandatory 
        training, making it difficult for them to access programs to 
        help them stay abreast of the most current security threats. 
        Additionally, supervisors at these locations must perform 
        manual data management for their training records.
        Hi-SOC will also provide a much more efficient method of 
        developing and transmitting training materials to airports. 
        Currently, the Workforce Performance and Training Office (WPT) 
        must use a high cost and labor-intensive distribution process, 
        which includes the production of computer disk training 
        material (approximately $110,000 per year, with 20 mass 
        distributions).
        Today, screener training results cannot be collected or 
        aggregated. As a result, the WPT cannot correlate training 
        results down to the individual screener level nor tailor 
        remedial training material at the screener level. Hi-SOC will 
        enable training results data to be aggregated quickly and 
        ensure data is immediately available to local airport screener 
        managers and others to facilitate improvement in screener 
        workforce performance.

   Improve Overall IT and Aviation Security. Because airport 
        computers are not connected to the TSA network, TSA cannot 
        maintain information security on the computers or deploy quick 
        security patches to the computers, making these computers 
        potentially vulnerable to hackers and virus infections. Hi-SOC 
        will provide much better protection through an overall computer 
        network with secure communications and tested capabilities.

   Enhance Aviation and Surface Security. High speed 
        connectivity is necessary to deploy and implement fully several 
        security programs that have been or are being developed. These 
        programs include Electronic Surveillance System (a remote 
        camera system for performance monitoring, potential facial 
        recognition technology) and Transportation Workers 
        Identification Credential (TWIC). Hi-SOC will also greatly 
        increase the efficiency and decrease the cost of the Threat 
        Image Projection program (a threat detection training and 
        performance process using images of prohibited items to 
        simulate a threat) by allowing performance data to be accessed 
        from headquarters and enabling rapid updates of the threat 
        image library, in lieu of manual updates to x-ray machines at 
        airports across the country.

Strengthening Security Through Emerging Checkpoint Technologies
    TSA is committed to enhancing technological support to the 
screening workforce at the passenger checkpoint. Of the many 
technology-related activities that contribute to this goal, a key 
element is deploying emerging technology. The President's budget 
proposes an increase of $43.7 million for Emerging Checkpoint 
Explosives Technology.
    The 9/11 Commission recommended that DHS take immediate action to 
improve explosives screening of all higher risk passengers at airport 
screening checkpoints. TSA will devote a total of $100 million to this 
initiative in Fiscal Years 2005 and 2006 to ensure that all higher risk 
passengers receive improved explosives screening. This will reduce the 
need for extensive pat-down screening.
    In FY 2005, TSA received $28.3 million in resources for the first 
time to field emerging technology equipment at checkpoints. These 
resources will be used to acquire technologies that had recently been 
developed and will improve the effectiveness of checkpoints today. This 
funding will facilitate the purchase and deployment of 147 static trace 
portals, a passenger screening sub-system using a whole body portal to 
inspect passengers for concealed explosives using an automated, non-
contact trace sampling and processing system. The selected sites for 
this initial deployment effort will include 40 of the Nation's largest 
airports. TSA will use the portals to screen those passengers 
identified as selectees for the presence of explosives. Use of the 
portals will limit the need to conduct selectee pat-down searches to 
those who cause the trace portal or walk through metal detector to 
alarm. TSA anticipates that the use of this technology will also 
decrease passenger processing times and minimize the impact on the 
traveling public.
    TSA is also piloting explosives trace detection document scanners 
that are designed to collect explosives particles from travel documents 
that a passenger has handled. The first generation of this technology, 
currently being tested at four airports, is a manual system that 
requires the screener to handle the document during the screening 
process. TSA is working with industry to develop an automated system, 
which will allow the document to be inserted into the technology 
directly, eliminating the need for screener interaction.
    For FY 2006 the Administration is requesting $43.7 million in 
addition to the existing $28.3 million in base resources to direct 
additional resources to this important initiative. With this funding, 
TSA is planning to purchase an additional 195 trace portal units, which 
will allow us to expand the deployment of trace portals to 41 
additional airports. Additionally in FY 2006, we anticipate that an 
automated explosives trace detection document scanner will be ready for 
purchase and deployment.
    TSA also will deploy improved technology for screening checked 
baggage. $394 million of the $617 million requested for EDS/ETD for FY 
2006 (including contributions of $250 million from the mandatory funded 
Aviation Security Capital Fund) will be used to purchase and install 
EDS (which includes Next Generation (Next Gen) and ETDs for needed 
life-cycle replacement). These purchases are part of the agency's 
deployment plan to change the mix of stand alone EDS and ETD machines. 
Next Gen EDS availability is a direct result of prior year investments 
in the research and development of Checkpoint and Electronic Baggage 
screening systems. These systems are expected to provide improved 
detection capabilities and improved passenger and baggage throughput; 
are smaller in size in some instances; and are expected to reduce 
staffing requirements and minimize industry/customer impact. 
Operational expenditures are expected to be reduced because Next Gen 
development is divided into two categories, short term and long term. 
Deployment of short term Next Gen solutions will begin in FY 2005 and 
continue through FY 2006. One of the two Next Gen projects that will be 
pilot tested in FY 2005 will be Reveal Technologies CT-80. This 
technology, while still CT (computed tomography/cat scan) based, is 
much smaller and less expensive than the current certified EDS 
technologies. We will be purchasing eight units from Reveal for 
operational testing at three airports within the next several months. 
Then, TSA will review the results of the pilots to determine the 
appropriate next steps. The other Next Gen product currently undergoing 
certification testing is an upgrade to one of the current high-
throughput EDS technologies. This upgrade will increase throughput 
capacity, reduce alarm rates and significantly enhance the image 
quality presented to our screeners. With these improvements, we 
anticipate that fewer bags will require resolution screening, thereby 
reducing the manpower needed to clear bags that cause an alarm.
    Long term, Next Gen solutions are under development and may be 
deployable in FY 2009 and beyond. The mix of equipment would change as 
it could be possible that one Next Gen EDS could replace up to three 
ETD machines for primary screening, depending upon throughput 
requirements. We anticipate that one ETD will still be deployed with 
Next Gen EDS for use in alarm resolution. This solution will provide 
increased EDS security benefits and expand EDS capabilities to cover 
all operations at airports that have only partial EDS capabilities.
    In the past, the TSA budget has contained requests for research and 
development (R&D) funding. The TSA R&D program consists of research and 
development performed at the Transportation Security Lab (TSL) in 
Atlantic City, New Jersey, applied research and development efforts for 
weapons detection, as well as infrastructure and conveyance, Next Gen 
Explosives Detection Systems, and development of Air Cargo technology. 
These programs received a total of $178 million in the FY 2005 
Department of Homeland Security (DHS) Appropriations Act. For FY 2006, 
the research and development elements of these programs would be 
permanently transferred to the DHS Office of Science and Technology 
(S&T). A significant portion of the R&D budget and a portion of TSL 
full time equivalents (FTE) are proposed to be transferred to S&T in 
the FY 2006 request. TSA will retain $23 million, as well as 14 FTEs 
needed to ensure the agency can continue to meet its operational 
mission and to liaison with S&T for defining program requirements and 
integrating R&D products into operations.

Strengthening Security of Surface Transportation
    TSA also enhances security for America's surface transportation 
systems, while ensuring freedom of movement of people and commerce. 
America's transportation system includes approximately 775 million 
passengers traveling on buses each year and over 9 billion passenger 
trips on mass transit per year; over 140,000 miles of railroad track 
(of which 120,000 miles are privately owned), 3.8 million miles of 
roads (46,717 miles of Interstate highway and 114,700 miles of National 
Highway System roads), 582,000 bridges over 20 feet of span, 54 tunnels 
over 500 meters in length, nearly 2.2 million miles of pipeline; and 
nearly 800,000 shipments of hazardous materials transported everyday 
(95 percent by truck).
    To help achieve greater security for surface transportation, TSA is 
the DHS responsible agency for developing the Transportation Sector-
Specific Plan (TSSP) and Transportation Security Operations Plans 
(TSOP) (i.e., modal security plans). The plans are being developed in 
accordance with Homeland Security Presidential Directive 7 (HSPD-7), 
the developing National Infrastructure Protection Plan (NIPP), and 
Congressional direction. They will serve a critical purpose by 
providing the framework and defining the responsibilities for risk 
management of the Transportation Sector. TSA has worked closely with 
Information Analysis and Infrastructure Protection Directorate (IAIP) 
and the Department of Transportation to develop the Transportation 
Sector Specific Plan (TSSP) under the guidance of Border and 
Transportation Security Directorate (BTS). The TSSP and TSOP will 
provide important guidance for TSA's surface transportation security 
work.
    As evidenced by last year's rail bombings in Madrid, there is an 
ongoing potential threat to our domestic, intermodal transportation 
system that requires intermodal countermeasures. TSA has regulatory 
authority for all of surface transportation security and utilizes a 
threat-based risk management system to ensure transportation security 
and to direct the investment of resources. Transportation security is a 
shared public/private responsibility, and with this in mind, TSA 
coordinates and leverages government and industry efforts to develop 
security plans and standards for intermodal transportation.
    This approach provides consistency among modes and recognizes 
transportation security in the context of intermodal, interdependent 
and international concerns. TSA continues to work with modal 
administrators within the Department of Transportation and industry 
stakeholders to establish best practices and national standards, 
develop security plans and regulations, better assess security 
vulnerabilities, and identify needed security enhancements for surface 
transportation modes and related infrastructure. In FY 2005, it is 
anticipated that TSA will:

   Build upon the pilot project efforts and initiatives 
        commenced in FY 2004 to identify best practices, develop 
        performance-based standards and regulations, and build risk-
        based security plans, such as identifying Hazmat transportation 
        security vulnerabilities and mitigation strategies.

   As delegated by IAIP, continue to develop and implement 
        vulnerability assessment models for all surface modes as the 
        basis for identifying security gaps and developing mitigation.

   In coordination with IAIP, strengthen industry stakeholder 
        partnerships to facilitate information sharing through the 
        transition from Information Sharing Analysis Centers (ISACs) to 
        Sector Coordinating Councils and Government Coordinating 
        Councils.

   Increase security awareness and response by providing 
        security awareness materials for surface transportation 
        employees, operators, and passengers; conducting national 
        security exercises; and continuing to provide transportation 
        security guidance, support, and coordination for National 
        Special Security Events.

   Provide operational support and expertise to Office of State 
        and Local Government Coordination and Preparedness in the non-
        aviation transportation security grant selection process.

   Hire and deploy 100 surface transportation compliance 
        inspectors, who will first focus on rail security, to enhance 
        the level of national transportation security by leveraging 
        private and public partnerships through a consistent national 
        program of compliance reviews, audits, and enforcement actions 
        pertaining to required standards and directives.

    In presenting our budget, we understand our responsibility towards 
the American public to be good stewards of the funds entrusted to us. 
TSA has achieved an unqualified audit opinion for FY 2004, its fourth 
consecutive clean audit. In FY 2005, TSA is striving to maintain its 
clean audit record and correct any internal control weaknesses noted in 
audit reports. With the transition to DHS behind us, TSA continues to 
implement more efficient and effective financial management processes 
across the organization.
    In conclusion, I want to express, as I have in the past, how proud 
I am of TSA's security screening workforce. Our screeners have carried 
out their responsibilities with skill and professionalism in a 
challenging and ever-changing environment. This past year was 
particularly challenging with the large number of National Special 
Security Events, for which many of our screeners and other personnel 
provided unique support. The reality of TSA's mission is such that we 
must constantly be prepared to provide on a 24/7 basis the highest 
level of security we can within the resources we have been provided. 
The increasing variety and sophistication of weapons and communication 
tools available to modern terrorists presents a significant challenge.
    While our security screening workforce is on the front lines, 
headquarters staff and TSA leadership maintain the vigilance necessary 
to support our vital mission. Each day, I meet with TSA leaders at an 
Operations/Intelligence briefing to address key operational and 
intelligence issues as they arise and to ensure that appropriate action 
is taken. While we are aware that the risk of terrorism will likely 
never be eliminated, that risk has been greatly reduced. TSA will 
continue to identify and evaluate threats and vulnerabilities and to 
implement measures that both facilitate transportation and improve its 
security.
    Thank you for the opportunity to provide this information. TSA 
looks forward to working with the Committee as we continue our efforts 
to strengthen homeland security. I will be pleased to answer any 
questions you may have.

    The Chairman. Thank you very much.
    Ms. Berrick, the Director of Homeland Security and Justice 
at the GAO, please.

 STATEMENT OF CATHLEEN A. BERRICK, DIRECTOR, HOMELAND SECURITY 
                    AND JUSTICE, GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Ms. Berrick. Thank you, Mr. Chairman and Members of the 
Committee, for the opportunity to discuss TSA's budget request 
today and efforts to secure the transportation system.
    My testimony today describes DHS and TSA efforts in 
managing risks and allocating resources across transportation 
modes and in integrating screening and R&D efforts to achieve 
efficiencies, as proposed in the President's budget.
    TSA should be commended for the many initiatives they have 
undertaken since September 11th to strengthen security. These 
include purchasing and deploying equipment to screen checked 
baggage for explosives and hiring a federal work force of over 
40,000. However, we have found that, in allocating its 
resources, TSA could improve in conducting the systematic 
planning needed to prioritize their efforts.
    With respect to baggage screening, we found that, having 
initially fielded equipment to screen checked baggage for 
explosives, TSA has not conducted the planning needed to 
optimize efficiencies. TSA has estimated that integrating 
screening equipment in line with airport baggage conveyor 
systems, although requiring a significant up-front investment, 
could result in savings of over $1 billion to the Federal 
Government over 7 years for the nine airports they reviewed. 
This estimated savings is due, in large part, to the 
significantly fewer number of screeners that will be required 
to operate the machines.
    We also found that airport passenger and baggage screeners 
do not always receive the required training that they were 
required to have. This is due, in part, to a lack of highspeed 
Internet access at airport facilities. Only 27 percent of 
airports currently have this access. The President's budget 
request for additional funds to install this access should help 
airports make this training available to all screeners.
    We also found that TSA plans to implement a threat-based 
risk-managed approach to securing air cargo. However, TSA must 
take a number of actions before they can move forward with 
their plans. These include developing a data base to help them 
target high-risk shippers and finalizing criteria for profiling 
high-risk cargo.
    DHS has also proposed in the budget request two key 
organizational changes designed to achieve synergy and avoid 
duplication of efforts. These changes include creating an 
Office of Screening Coordination and Operations that would 
combine several terrorist-related screening activities, and 
consolidating their R&D efforts at the DHS level. We commend 
DHS in attempting to achieve efficiencies through this 
consolidation. As they move forward, it will be important to 
define program commonalities and roles and responsibilities.
    DHS will also need to address existing challenges that we 
have identified with its screening and R&D programs. These 
challenges include developing a comprehensive plan for managing 
the transportation workers identification credential and 
increasing coordination between DHS and other federal agencies, 
including the Department of Transportation, related to R&D 
activities.
    We are encouraged that the President's budget request 
outlines that TSA plans to integrate a risk-management approach 
into their decision-making processes. Consistent with this 
approach, TSA will need to conduct rigorous planning and 
prioritization to help ensure they are focusing their resources 
on the areas of greatest need.
    Mr. Chairman, this concludes my opening statement. I would 
be happy to respond to any questions.
    [The prepared statement of Ms. Berrick follows:]

Prepared Statement of Cathleen A. Berrick, Director, Homeland Security 
             and Justice, Government Accountability Office

    Mr. Chairman and Members of the Committee:
    I appreciate the opportunity to participate in today's hearing to 
discuss the security of our nation's transportation system and the 
numerous initiatives under way and planned intended to strengthen 
security. Following the terrorist attacks of September 11, 2001, much 
attention was focused on securing our commercial aviation system. Since 
that time, emphasis on other modes of transportation has grown as 
vulnerabilities are identified and highlighted, such as attempts to 
introduce weapons of mass destruction into the United States through 
ports, or to launch chemical attacks on mass transit systems. Critical 
transportation systems crisscross the nation and extend beyond our 
borders to move millions of passengers and tons of freight each day, 
making them both attractive targets and difficult to secure. Securing 
these systems is further complicated by their nature and scope, the 
number of stakeholders involved, and the need to balance security with 
the expeditious flow of people and goods through these systems. The 
Department of Homeland Security (DHS) and the Transportation Security 
Administration (TSA) face the daunting challenge of determining how to 
allocate their finite resources to manage risks while addressing 
threats and enhancing security across all transportation modes.
    My testimony today describes DHS and TSA efforts in managing risks 
and allocating resources across aviation and surface transportation 
modes, and in integrating screening, credentialing, and research and 
development (R&D) efforts to achieve efficiencies. My comments are 
based on issued GAO reports and testimonies addressing the security of 
U.S. aviation and surface transportation systems, and our review of the 
President's budget request for Fiscal Year 2006. Appendix I contains a 
list of related GAO products released since September 11, 2001.
Summary
    DHS and TSA have undertaken numerous initiatives to strengthen 
transportation security, particularly in aviation, and their efforts 
should be commended. Since September 11th, for example, in addition to 
hiring and deploying a workforce of over 40,000 airport passenger and 
baggage screeners, TSA has:

   Installed equipment at most of the nation's more than 400 
        commercial airports to provide the capability to screen all 
        checked baggage using explosive detection systems, as mandated 
        by Congress.

   Taken numerous steps to expand training available to the 
        screener workforce and to develop performance measures to 
        assess screener performance.

   Outlined a threat-based, risk-management approach for 
        securing the air cargo transportation system.

   Taken actions to evaluate and enhance the security of 
        airport perimeters and the controls that limit access into 
        secured airport areas.

   Partnered with federal agencies and state governments and 
        the general aviation industry in securing general aviation 
        operations.

   Implemented a Screening Partnership Program through which 
        commercial airports can apply to TSA to use private rather than 
        federal passenger and baggage screeners.

   Issued security regulations for passenger rail assets, and 
        begun to conduct criticality assessments of stations, tunnels, 
        and bridges.

    DHS has also proposed, in its Fiscal Year 2006 budget request, two 
key changes in its organizational structure that are designed to 
achieve synergy and avoid duplication of effort. These changes include 
creating an Office of Screening Coordination and Operations within the 
Border and Transportation Security Directorate that would combine 
several ongoing, terrorist-related screening initiatives, and 
consolidating its R&D efforts--currently spread across four DHS 
component agencies including TSA--inside its Science and Technology 
Directorate.
    While these are commendable efforts, we also found that TSA had not 
always implemented a risk management approach, or conducted the 
systematic analysis needed, to inform its decision-making processes and 
to prioritize its security improvements. While we recognize that fully 
integrating a risk management approach is challenging for any 
organization, our work has shown that such an approach can help inform 
decision makers in allocating finite resources to the areas of greatest 
need. For example, we found that since the initial deployment of 
equipment to screen checked baggage for explosives at commercial 
airports in response to congressional mandates, TSA has not conducted 
the systematic planning needed to optimize the deployment and 
integration of this equipment. Limited analysis has shown that the 
integration of this equipment in-line with airport baggage conveyor 
systems--rather than maintaining the systems in a stand-alone mode--
could result in significant savings for the Federal Government for the 
nine airports assessed. We also found that TSA must take a number of 
actions before a comprehensive risk management approach can be applied 
to securing air cargo. These actions include establishing complete 
databases of known shippers, addressing the potential ease with which 
shippers may become ``known,'' and identifying and testing security 
technologies in order to develop and implement a system to screen 100 
percent of high risk cargo. We also found that a risk-based approach is 
being adopted for rail security.
    In addition, while we applaud DHS's efforts to achieve efficiencies 
through leveraging resources and technology and improving internal 
coordination through proposed organizational changes, it will be 
important for DHS to address several challenges that have been 
identified with respect to these programs as the integration moves 
forward. Restructuring alone will not resolve all existing challenges 
or ensure the successful integration and achievement of DHS's goals. 
The challenges we identified include developing regulations identifying 
eligibility requirements for the Transportation Workers Identification 
Credential, and instituting a comprehensive plan for managing the 
project. DHS will also need to include goals with measurable objectives 
in its R&D strategic plans, prepare and use risk assessments to select 
and prioritize R&D projects, and coordinate with R&D stakeholders.

Background
    The nation's transportation system is a vast, interconnected 
network of diverse modes. Key modes of transportation include aviation; 
highways; motor carrier (trucking); motor coach (intercity bus); 
maritime; pipeline; rail (passenger and freight); and transit (buses, 
subways, ferry boats, and light rail). The nation's transportation 
systems are inherently open environments, designed to move people and 
commerce quickly to their destinations. For example, the nation's 
transportation system moves over 30 million tons of freight and 
provides approximately 1.1 billion passenger trips each day. The 
diversity and size of the transportation system make it vital to our 
economy and national security.
    TSA is responsible for the security of all modes of transportation, 
as outlined in the Aviation and Transportation Security Act (ATSA) 
(Pub. L. 107-71). Following the passage of ATSA, TSA began addressing 
two major challenges--procuring and installing explosives detection 
systems (EDS) and explosive trace detection (ETD) systems to screen 
checked baggage for explosives, \1\ and hiring and deploying federal 
screeners to screen passengers and their baggage at commercial airports 
nationwide. TSA is also tasked with managing security risks to surface 
transportation systems. These systems include 9 billion passenger trips 
per year on the nation's mass transit systems, over 161,000 miles of 
interstate and national highways and their integrated bridges and 
tunnels, and nearly 800,000 shipments of hazardous materials.

Risk Management Approach
    Given the vast transportation network, quick and easy access for 
passengers and cargo must be maintained while identifying the best 
possible strategies for security. The President's Fiscal Year 2006 
budget request recognizes the need for TSA to identify, prioritize, and 
manage risks, and mitigate the impact of potential incidents, to help 
ensure that the best strategies are pursued. Consistent with this goal, 
GAO has advocated the need to implement--at TSA and throughout the 
Federal Government--a risk management approach for prioritizing efforts 
and focusing resources. A risk management approach entails a continuous 
process of managing risk through a series of actions, including setting 
strategic goals and objectives, assessing risk, evaluating 
alternatives, selecting initiatives to undertake, and implementing and 
monitoring those initiatives.
    Assessing risk, a critical component of a risk management approach, 
involves three key elements--threats, vulnerabilities, and 
criticality--that provide input into the decision-making process. A 
threat assessment identifies and evaluates potential threats on the 
basis of factors such as capabilities, intentions, and past activities. 
A vulnerability assessment identifies weaknesses that may be exploited 
by identified threats and suggests options to address those weaknesses. 
A criticality assessment evaluates and prioritizes assets and functions 
in terms of specific criteria, such as their importance to public 
safety and the economy, as a basis for identifying which structures or 
processes are relatively more important to protect from attack. 
Information from these three assessments can lead to a risk 
characterization, such as high, medium, or low, and provides input for 
prioritizing security initiatives. \2\ Figure 1 depicts a risk 
management cycle.



President's Budget Request for Fiscal Year 2006
    In addressing security needs and challenges for all transportation 
modes, the President's Fiscal Year 2006 budget request categorizes TSA 
activities into three main areas: (1) Aviation Security, (2) Surface 
Transportation Security, and (3) Transportation Security Support. \3\ 
Each of these areas is summarized in detail below and the total funds 
requested are presented in table 1 that follows the summary.
    Aviation security includes two distinct decision units: screening 
workforce and equipment, and aviation direction and enforcement. 
Screening workforce and equipment includes funding to support passenger 
and baggage screener activities such as screener salaries and training, 
and the purchase and installation of screening equipment. Aviation 
direction and enforcement includes regulation compliance for air cargo, 
airports, and airlines through inspections and other efforts, and 
airport technology activities and administrative support. The budget 
requests about $5 billion for the aviation security appropriation for 
Fiscal Year 2006. These funds will support the current federalized and 
privatized screener workforce, provide training and other support for 
both passenger and baggage screening, and continue other aviation 
security regulation and enforcement activities. Increases were 
requested for, among other things, the screener workforce, checkpoint 
explosive detection technology, and high-speed information technology 
connectivity. The budget request further identified the mandatory $250 
million appropriation of the Aviation Security Capital Fund to assist 
in the purchase, installation, and/or integration of EDS and ETD 
systems. At these levels, TSA expects to maintain current security and 
wait time performance at over 430 commercial airports.
    Surface transportation security includes resources for TSA's 
security operations in all non-aviation modes of transportation. Such 
operations include developing standards and regulations to protect the 
transportation infrastructure; conducting inspections to monitor and 
enforce compliance with standards and regulations; designing and 
implementing vulnerability assessment models for all surface 
transportation modes; and facilitating information sharing with 
transportation stakeholders. The budget requests $32 million for 
surface transportation security in Fiscal Year 2006. These funds will 
be used to maintain TSA's various surface transportation security 
initiatives, including surface transportation inspectors added during 
Fiscal Year 2005.
    Transportation security support includes funding for the 
operational needs of TSA's airport and field personnel and 
infrastructure. This area also supports TSA headquarters and the 
Transportation Security Intelligence Service. Although R&D funds are 
also included in this appropriation, the President's Fiscal Year 2006 
budget request proposes that these funds be transferred to the DHS 
Science and Technology Directorate. The budget requests $545 million 
for transportation security support for Fiscal Year 2006. These funds 
will be used to help ensure that TSA screeners and other operational 
employees have sufficient intelligence information, information 
technology, management direction, administrative services, and other 
key support to accomplish the agency's mission.



TSA Has Taken Steps to Strengthen Aviation and Surface Transportation 
        Security, but Better Planning Is Needed
    TSA has taken numerous steps to strengthen aviation and surface 
transportation security and should be commended for its efforts. 
However, better planning is needed to help ensure that these 
initiatives are focused on the areas of greatest need to assist TSA in 
achieving efficiencies and enhancing security. For example, since 
September 11, for example, TSA has (1) installed EDS and ETD systems at 
most of the nation's commercial airports to provide the capability to 
screen all checked baggage using explosive detection systems, (2) 
expanded screener training and developed performance measures and 
indicators for the screening systems, (3) developed an air cargo 
strategic plan, and (4) evaluated the security of airport perimeters 
and access controls and provided funds for security equipment. Despite 
these efforts, however, we have consistently found--because of 
circumstances beyond TSA's control and a lack of planning--that TSA has 
not conducted the systematic analysis needed to inform its decision-
making processes and to prioritize security enhancements. For example, 
we found that TSA has not always conducted needed assessments of 
threats, vulnerabilities, and criticality in allocating its resources, 
and has not fully assessed alternatives that could be pursued to 
achieve efficiencies and potentially enhance security. Such planning 
could guide TSA in moving forward in its allocation of transportation 
security funding and assist it in making wise investment decisions 
while enhancing the security of all transportation modes.

Systematic Planning Needed to Optimize the Deployment of Checked 
        Baggage Screening Systems
    In February 2005, we reported that TSA had installed EDS and ETD 
systems at most of the nation's more than 400 commercial airports to 
provide the capability to screen all checked baggage using explosive 
detection systems, as mandated by Congress. \4\ Despite these efforts, 
however, we found that in moving forward, TSA had not conducted the 
systematic planning needed to optimize the deployment of these 
systems--in particular determining at which airports EDS machines 
should be integrated in-line with airport baggage conveyor systems to 
achieve efficiencies. Such planning is important for TSA to be able to 
ensure that it is efficiently allocating its limited resources to 
maximize the effectiveness of its checked baggage screening operations 
and is achieving desired results.
    From its creation in November 2001 through September 2004, TSA 
obligated \5\ about $2.5 billion (93 percent) of the approximately $2.7 
billion it had budgeted for Fiscal Years 2002 through 2004 for 
procuring and installing explosive detection equipment--predominantly 
to screen checked baggage for explosives--and making associated airport 
modifications to accommodate the equipment. Specifically, TSA procured 
and placed about 1,200 EDS machines and about 6,000 ETD machines at 
over 400 airports, and modified airports for the installation of this 
equipment. Given the congressional mandate to screen all checked 
baggage using explosive detection systems by December 31, 2002, later 
extended to December 31, 2003, TSA worked with a contractor to quickly 
deploy EDS and ETD equipment to the nation's airports. This response 
resulted in TSA placing stand-alone ETD and the minivan-sized EDS 
machines--usually in airport lobbies--that were not integrated in-line 
with airport baggage conveyor systems. Some of these interim lobby 
solutions resulted in operational inefficiencies, including requiring a 
greater number of screeners, as compared with using EDS machines in-
line with baggage conveyor systems. Also, screening solely with ETD 
machines is more labor intensive and less efficient than screening 
using the EDS process. TSA officials stated that they used EDS machines 
in a stand-alone mode and ETD machines as an interim solution in order 
to meet the congressional deadline for screening all checked baggage 
for explosives. Officials further stated that they employed these 
interim solutions because of the significant costs required to install 
in-line systems and the need to reconfigure many airports' baggage 
conveyor systems to accommodate the equipment. While in-line EDS 
baggage screening systems have a number of potential benefits, 
including streamlining airport and TSA operations and reducing 
screening costs, these systems are capital-intensive because they often 
require significant airport modifications, including terminal 
reconfigurations, new conveyor belt systems, and electrical upgrades.
    Since the initial deployment of EDS and ETD equipment, TSA has not 
conducted a systematic analysis of cost savings and other benefits that 
could be achieved from the installation of in-line baggage screening 
systems. However, TSA has estimated--through its limited retrospective 
analysis for the nine airports that received letter of intent (LOI) 
funding agreements \6\--that in-line baggage screening systems at these 
airports could save the Federal Government $1.3 billion over 7 years 
compared with stand-alone EDS systems. \7\ TSA further estimated that 
it could recover its initial investment in the in-line systems at these 
airports in a little over 1 year. One factor that significantly 
affected estimated savings was the number of screeners required to 
conduct screening when using in-line baggage screening systems. 
According to TSA's analysis, in-line EDS systems would reduce by 78 
percent the number of TSA baggage screeners and supervisors required to 
screen checked baggage at these nine airports, from 6,645 to 1,477. 
This analysis indicates the potential for cost savings through the 
installation of in-line EDS systems at other airports and provides 
insights about other key factors likely to influence potential savings. 
These factors include how much an airport's facilities would have to be 
modified to accommodate the in-line configuration; TSA's costs to buy, 
install, and network the EDS machines; and subsequent maintenance 
costs.
    TSA and airport operators are relying on LOIs as their principal 
method for funding the modification of airport facilities to 
incorporate in-line baggage screening systems. The Fiscal Year 2003 
Consolidated Appropriations Resolution approved the use of LOIs as a 
vehicle to leverage Federal Government and industry funding to support 
facility modification costs for installing in-line EDS baggage 
screening systems. When an LOI is established to provide multiyear 
funding for a project, the airport operator is responsible for 
providing--up front--the total funding needed to complete the project. 
Work proceeds with the understanding that TSA will, if sufficient 
funding is appropriated, reimburse the airport operator for a 
percentage of the facility modification costs, with the airport funding 
the remainder of the costs. The LOI does not constitute a binding 
commitment for federal funds.
    Although airport officials we interviewed stated that they will 
require federal funding to install in-line systems--and TSA officials 
stated that additional airports would benefit from in-line systems to 
achieve efficiencies and for other reasons--TSA officials stated that 
they do not have sufficient resources in their budget to fund 
additional LOIs beyond the eight LOIs that have already been issued as 
of January 2005. These eight LOIs will support the installation of in-
line baggage screening systems at nine airports for a total cost to the 
Federal Government of $957.1 million over 4 years. The Vision 100--
Century of Aviation Reauthorization Act--among other things, provided 
for the creation of the Aviation Security Capital Fund to help pay for 
placing EDS machines in line with airport baggage handling systems. The 
President's Fiscal Year 2006 budget request for TSA provides 
approximately $240.5 million for the continued funding of the eight 
existing LOIs and provides no funds for new LOI agreements for in-line 
system integration activities.
    We reported that with the objective of initially fielding EDS and 
ETD equipment largely accomplished, TSA needs to shift its focus from 
equipping airports with interim screening solutions to systematically 
planning for the more optimal deployment of checked baggage screening 
systems. Part of such planning should include analyzing which airports 
should receive federal support for in-line baggage screening systems 
based on cost savings and other benefits that could be achieved from 
more effective and efficient baggage screening operations. Also, for 
airports where in-line systems may not be economically justified, a 
cost-effectiveness analysis could be used to determine the benefits of 
additional stand-alone EDS machines to screen checked baggage in place 
of more labor-intensive ETD machines currently used at more than 300 
commercial airports.
    To assist TSA in planning for the optimal deployment of checked 
baggage screening systems, we recommended that TSA systematically 
evaluate baggage screening needs at airports, including the costs and 
benefits of installing in-line baggage screening systems at airports 
that do not yet have in-line systems installed. DHS agreed with our 
recommendation, stating that TSA has initiated an analysis of deploying 
in-line checked baggage screening systems and is in the process of 
formulating criteria to identify those airports that would benefit from 
an in-line system. DHS also stated that TSA has begun conducting an 
analysis of the airports that rely heavily on ETD machines as the 
primary checked baggage screening technology to identify those airports 
that would benefit from augmenting ETDs with stand-alone EDS equipment.

TSA Is Taking Steps to Enhance Screener Training and Measure Screener 
        Performance
    Since we first reported on TSA's passenger screening program in 
September 2003, TSA has taken a number of steps to expand training 
available to the screener workforce and to develop performance measures 
to assess screener performance. With regard to screener training, the 
President's Fiscal Year 2006 budget requests $91 million to fully 
implement TSA's passenger and baggage screener training programs and 
related workforce development programs at the expected Fiscal Year 2006 
screener workforce level. However, as we reported this time last year, 
insufficient screener staffing and, at many airports, a lack of high-
speed Internet/intranet connectivity have made it difficult for all 
screeners to receive required training and have access to all courses 
offered. \8\ Specifically, we reported that Federal Security Directors 
\9\ at 5 of the 15 category X airports we visited--during our reviews 
of passenger and baggage screening--stated that it was difficult, if 
not impossible, to comply with TSA's recurrent training requirement of 
3 hours each week, averaged over a 3-month period. \10\ The directors 
stated that because of staffing shortages, they were unable to let 
screeners take required training because it would affect the director's 
ability to provide adequate screener coverage.
    In May 2004, TSA announced a revised allocation of the 45,000 full-
time equivalent screeners among the nation's airports in order to 
provide more appropriate screener coverage. TSA based the allocation on 
various factors, including forecasted air travel, hours of operation, 
baggage screening and checkpoint configurations, types of screening 
equipment deployed, and actual operating experience. In addition, TSA 
headquarters officials stated that TSA is factoring training 
requirements into workplace planning efforts, including a new staffing 
model currently under development. \11\ However, it is too soon to 
determine whether the staffing model will address TSA's ability to 
provide required training while maintaining adequate coverage for 
screening operations. \12\ The President's request of about $2.7 
billion for the screener workforce in Fiscal Year 2006 represents an 
increase of about $245 million over last year's enacted budget, but 
maintains the screener staffing level at the congressionally mandated 
ceiling of 45,000 full-time equivalent screeners.
    The lack of high-speed Internet/intranet connectivity at airport 
training facilities has also limited screener access to TSA training 
tools. TSA established its Online Learning Center to provide passenger 
and baggage screeners with online, high-speed access to training 
courses. However, effective use of the Online Learning Center requires 
high-speed Internet/intranet access, which TSA has not been able to 
provide to all airports. In February 2004, we reported that TSA had 
provided connectivity to 71 airport locations, including training sites 
with 927 fully connected training computers, and expected to install 
high-speed connectivity at up to 81 additional airports by the end of 
Fiscal Year 2004. \13\ However, TSA suspended installation of high-
speed connectivity at airports in April 2004 when funding was 
exhausted. Currently, TSA reports that it has provided high-speed 
connectivity to 120 airports with 1,822 fully connected training 
computers. TSA plans to continue to distribute new training products 
using other delivery channels, such as written training materials and 
CD-ROMs. However, we reported that until TSA provides high-speed 
connectivity at every airport, screeners at airports without high-speed 
connectivity will not have access to the full menu of courses available 
through the Online Learning Center.
    The budget request for Fiscal Year 2006 includes $174 million to 
complete the installation of high-speed connectivity at the nation's 
commercial airports. The budget request stated that without these 
funds, 379 out of 600 (63 percent) of the field sites, including 
airports, will continue to communicate and provide security-related 
information over dial-up Internet connections, causing delays and 
access problems. We believe that the installation of high-speed 
connectivity at the nation's airports will significantly increase 
screener access to available training, thereby assisting TSA in 
strengthening its screening operations. For example, the budget request 
stated that without these funds, screeners would not have access to 
training programs such as ``Threat of the Day,'' which allows screeners 
to stay abreast of the most current security threats.
    In addition to training, developing performance measures for TSA's 
screening program is necessary to assess achievements and make 
decisions about where to direct performance improvement efforts. In 
April 2004, we reported that while TSA was taking steps to measure 
screener performance, it had not collected sufficient data to assess 
how well screeners performed--particularly with regard to baggage 
screeners--and had not determined what steps to take to strengthen 
screener performance. \14\ Since then, TSA has gathered additional 
performance data and has established performance measures and targets 
for the screening system. We have an ongoing review assessing TSA's 
efforts in strengthening screener training and measuring performance. 
This review will address TSA's efforts in developing performance 
measures to assist in the prioritization of security improvements.

TSA Efforts to Implement a Risk Management Approach for Securing Air 
        Cargo Are Ongoing
    TSA's Air Cargo Strategic Plan, completed in November 2003, 
outlines a threat-based, risk management approach for securing the air 
cargo transportation system. Specifically, the plan identifies priority 
actions based on risk, cost, and deadlines. The plan also calls for 
coordinated efforts in four strategic areas--enhancing shipper and 
supply chain security, identifying elevated risk cargo through 
prescreening, identifying technology for performing targeted air cargo 
inspections, and securing all-cargo aircraft through appropriate 
facility security measures. In November 2004, TSA published a proposed 
rule that would implement many of the provisions of the Air Cargo 
Strategic Plan for enhancing air cargo security.
    The President's Fiscal Year 2006 budget requests $40 million for 
ensuring the security of air cargo. The $40 million request will 
support the 200 authorized air cargo inspectors and associated air 
cargo screening operations initiated during Fiscal Year 2005. In 
addition, the request will support the continued development of 
required programs, training and development of requirements for 
Indirect Air Carriers, \15\ and improvements and maintenance of the 
Known Shipper \16\ and Indirect Air Carrier Program Databases. TSA will 
also field test the Air Cargo Freight Assessment Program, which will 
incorporate the Known Shipper and Indirect Air Carrier Program 
Databases.
    TSA's proposed rule for air cargo security describes a number of 
actions that must be taken before a comprehensive risk management 
approach can be applied to securing cargo. One of the key components of 
TSA's risk-based approach for securing air cargo is the development and 
implementation of a system to screen 100 percent of high-risk cargo. 
This program, known as the Freight Assessment System, is based on 
several key components. First, the system will use data on known 
shippers and indirect air carriers who deliver cargo to air carriers 
for transport. It is important that this data be complete, accurate, 
and current, so that shippers about whom relevant security information 
is known can be distinguished from those shippers about whom there is 
inadequate security information. Second, the system must incorporate 
criteria for profiling cargo so that it can identify high-risk cargo 
that must undergo physical screening. Third, effective technology must 
be deployed to screen cargo identified as high-risk.
    TSA is still in the early stages of developing the Freight 
Assessment System and needs to resolve several issues that could affect 
the system's development. First, the principal source of data for 
prescreening is through the use of its Known Shipper Program. However, 
carriers who collect this information are not currently required to 
submit data on known shippers for inclusion in TSA's centralized 
database. In May 2004, a TSA official testified that the known shipper 
database contained only about one-third of all known shippers. There 
are also concerns about the relative ease of obtaining known shipper 
status, and the ability for someone to pose as a known shipper by 
falsifying or counterfeiting shipping documents used to identify the 
source as a known shipper. Second, the TSA working group charged with 
proposing criteria for profiling cargo has not yet reported its 
recommendations to TSA. Any field testing of the Freight Assessment 
System will require complete and verified data on known shippers, as 
well as criteria for evaluating risk. Finally, TSA is in the early 
stages of identifying and testing air cargo security technologies. For 
example, it has not yet developed plans outlining when these tests will 
be completed, or determined whether technologies proven to be effective 
will be deployed.
    In addition, TSA's proposed air cargo security rule estimates the 
costs of implementing the agency's proposals for enhancing air cargo 
security at $837 million over a 10-year period. However, industry 
stakeholders have raised concerns over TSA's projected cost estimates, 
in part because of the number of air cargo workers the stakeholders 
estimate to be affected by some of the proposed measures. For example, 
several stakeholders commented that TSA's cost estimate for conducting 
the proposed security threat assessments of air cargo workers was low, 
and that TSA underestimated the number of air cargo workers that would 
have to undergo an assessment. In addition, air cargo industry 
stakeholders expressed concerned that they would incur approximately 97 
percent of the projected cost of the air cargo security procedures 
described in the proposed rule. We have an ongoing review evaluating 
TSA's efforts to implement a risk-based approach to securing air cargo, 
including TSA efforts to target high-risk cargo, and efforts to 
identify and test screening technologies.

TSA Has Taken Actions to Strengthen the Security of Commercial Airport 
        Perimeters and Access Controls, but More Work Is Needed
    In June 2004, we reported that TSA had taken a variety of actions 
to evaluate the security of airport perimeters and the controls that 
limit access into secured airport areas, but had not yet determined how 
the results of these evaluations could be used to make systemwide 
improvements. \17\ Specifically, TSA has conducted regulatory 
compliance inspections, covert (undercover) testing of selected 
security procedures, and vulnerability assessments at selected 
airports. These evaluations--though not yet complete--have identified 
perimeter and access control security concerns. For example, TSA 
identified instances where airport operators failed to comply with 
existing security requirements, including access control-related 
regulations. In addition, TSA identified threats to perimeter and 
access control security at each of the airports where vulnerability 
assessments were conducted during 2003. In January 2004, TSA 
temporarily suspended its assessment efforts to conduct higher-priority 
vulnerability assessments dealing with shoulder-fired missiles. 
Although TSA plans to begin conducting joint vulnerability assessments 
with the Federal Bureau of Investigation, it has not yet determined how 
it will allocate existing resources between its own independent airport 
assessments and the new joint assessments, or developed a schedule for 
conducting future vulnerability assessments. Further, TSA has not yet 
determined how to use the results of its inspections, in conjunction 
with covert testing and vulnerability assessments results, to enhance 
the overall security of the commercial airport system.
    TSA has also helped some airports enhance perimeter and access 
control security by providing funds for security equipment, such as 
electronic surveillance systems. TSA has further initiated efforts to 
evaluate the effectiveness of security-related technologies, such as 
biometric identification systems. By December 2003, responsibility for 
funding most airport security projects had shifted from the Federal 
Aviation Administration to TSA. As a result, TSA is developing new 
policies to determine how to review, approve, and prioritize security 
project funding. However, we reported that TSA has not yet begun to 
gather data on airport operators' historical funding of security 
projects and current needs to aid the agency in setting funding 
priorities.
    Regarding reducing the potential security risk posed by airport 
workers, we found that, at the time of our review, TSA had not fully 
addressed all related requirements mandated by ATSA. For example, TSA 
required fingerprint-based criminal history records checks and security 
awareness training for most, but not all, airport workers called for in 
the act. We also found that TSA had not addressed the act's provision 
that requires airport vendors with direct access to the airfield and 
aircraft to develop security programs to address security measures 
specific to vendor employees. TSA said that expanding requirements for 
background checks and security awareness training for additional 
workers and establishing requirements for vendor security programs 
would be costly to implement.
    On the basis of our work, we recommended, and DHS generally agreed, 
that TSA better justify future decisions on how best to proceed with 
security evaluations, fund and implement security improvements--
including new security technologies--and implement additional measures 
to reduce the potential security risks posed by airport workers. In 
July 2004, TSA made several improvements in these areas, through the 
issuance of a series of security directives, including requiring 
enhanced background checks and improved access controls for airport 
employees who work in restricted airport areas.

Continued Partnerships and Risk Assessments Are Needed for Securing 
        General Aviation
    The Federal and State Governments and general aviation industry all 
play roles in securing general aviation operations. While the Federal 
Government provides guidance, enforces regulatory requirements, and 
provides some funding, the bulk of the responsibility for assessing and 
enhancing security falls on airport operators. In November 2004, we 
reported that although TSA has issued a limited threat assessment of 
general aviation, and the Federal Bureau of Investigation has said that 
terrorists have considered using general aviation to conduct attacks, a 
systematic assessment of threats has not been conducted. \18\ In 
addition, we reported that TSA had conducted vulnerability assessments 
at a small number of general aviation airports, but agency officials 
stated that conducting these assessments is costly and, therefore, 
impractical to do for the 19,000 general aviation airports nationwide.
    TSA intends to implement a risk management approach to better 
assess threats and vulnerabilities of general aviation aircraft and 
airports and, as part of this approach, is developing an online 
vulnerability self-assessment tool to be completed by individual 
airport managers. However, we found limitations in the use of the self-
assessment tool. Further, at the time of our review, these efforts had 
not been completed, and TSA had not yet developed a plan with specific 
milestones for implementing the tools and assessments. Without such a 
plan, it will be difficult for TSA to determine the proper allocation 
of its resources to the areas of greatest need and to monitor the 
progress of its efforts.
    TSA has also partnered with industry associations to develop 
security guidelines that enable general aviation airport managers to 
assess their own vulnerabilities to terrorist attack, and works through 
industry associations to communicate threat information. However, 
industry and state aviation officials we spoke with stated that 
security advisories distributed by TSA were general in nature and were 
not consistently received. In part this is understandable because, 
among other things, TSA relies on other federal agencies for threat 
information. However, we have found that applying risk communication 
principles--relaying only timely, specific, and actionable information, 
to the extent possible--provides organizations like TSA with the best 
opportunity to achieve desired results.
    We also found that TSA and the Federal Aviation Administration have 
taken a number of steps to address security risks to general aviation 
through regulation and guidance but still face challenges in their 
efforts to further enhance security. For example, TSA developed 
regulations governing background checks for foreign candidates for U.S. 
flight training schools and issued security guidelines for general 
aviation airports. However, we found limitations in the process used to 
conduct compliance inspections of flight training schools.
    Because of the importance of securing general aviation operations 
and to help address associated challenges, we recommended, and DHS 
generally agreed, that TSA take actions to better assess the 
possibility of terrorists' misuse of general aviation aircraft, better 
communicate terrorist threat information, and help mitigate security 
risks to general aviation operations.

TSA Established a Screening Partnership Program but Needs to Finalize 
        Performance Measures
    In November 2004, we reported on our preliminary observations of 
TSA's efforts to establish and implement a Screening Partnership 
Program, a program through which commercial airports can apply to TSA 
to use private rather than federal passenger and baggage screeners. 
\19\ Beginning on November 19, 2004, TSA was required by law to begin 
allowing commercial airports to apply to use private contractors to 
screen passengers and checked baggage. A federal workforce has 
performed this function since November 2002, in response to a 
congressional mandate that the Federal Government take over screening 
services from air carriers after the terrorist attacks of September 11, 
2001. A 2-year pilot program at five airports testing the effectiveness 
of private sector screening in a post-September 11 environment was 
concluded on November 18, 2004.
    In assessing TSA's efforts to implement a Screening Partnership 
Program, we found that TSA had completed or was developing key policies 
and procedures addressing program implementation and oversight, and was 
taking steps to communicate with stakeholders by developing 
informational guidance and soliciting information and suggestions. 
However, we found that some airport operators, private screening 
contractors, and aviation industry representatives identified the need 
for additional information regarding flexibilities airports and 
contractors would have to manage the program, liability in the event of 
a terrorist attack, and costs related to program participation.
    We also reported that consistent with risk management principles, 
TSA was developing performance measures to assess the performance of 
airports participating in the Screening Partnership Program and 
individual contractors performing the screening services. However, we 
found that specific performance measures had not yet been finalized and 
were not scheduled to be completed until mid-2005. TSA officials stated 
that once developed, performance measures for the Screening Partnership 
Program will be based on measures already developed by an independent 
consulting firm for the five airports that participated in the pilot 
screening program. These measures include how well screeners detect 
test threat objects, such as guns and knives, during screening 
operations. TSA also reported that it plans to develop performance 
measures evaluating how well private screening contractors comply with 
the terms of their contracts, which they intend to become part of a 
quality assurance plan. GAO has consistently supported program 
evaluation--including the development and use of performance measures 
to measure program outcomes--as an important tool in assessing whether 
programs are achieving intended goals.
    The President's budget request for Fiscal Year 2006 includes about 
$161 million for the five private contract screening airports. The 
administration expects contract screening operations to expand beyond 
the five airports currently using private screening contractors through 
2006. To date, one additional airport beyond the five that participated 
in the pilot program has applied to use private screening contractors. 
Beginning in May 2005, TSA will begin awarding contracts to private 
screening contractors. We are continuing to assess TSA's development 
and implementation of the Screening Partnership Program, to include its 
development of performance measures to assess screener performance.

TSA Has Begun to Increase Focus on Passenger and Transit Rail Security
    We have reported on the security of passenger and transit rail in 
the past, most recently during testimony before this Committee in March 
2004. \20\ At that time, we stated that following the September 11 
terrorist attacks, passenger and freight rail providers implemented new 
security measures or increased the frequency or intensity of existing 
activities, including performing risk assessments, conducting emergency 
drills, and developing security plans. We also reported that--because 
of a focus on commercial aviation security--TSA initially devoted 
limited attention to passenger and transit rail security. Since that 
time, TSA has begun to focus more attention on rail security needs and 
is in the process of assessing critical passenger rail assets--such as 
stations, tunnels, and bridges. The Federal Transit Administration also 
plays a role in rail security, including providing grants for emergency 
drills and conducting security assessments at the largest transit 
agencies. The Fiscal Year 2006 budget requests includes $8 million for 
rail security to support funding requirements for 100 surface 
transportation inspectors that will focus primarily on rail security. 
The budget request identified that the remaining $24 million of the 
surface transportation budget will support operational funding 
requirements, the development and implementation of performance-based 
standard and regulations, vulnerability assessments for critical 
assets, and security awareness training and exercises.
    We are currently reviewing TSA's efforts to strengthen passenger 
rail and transit security, including determining to what extent threats 
and vulnerabilities to rail systems have been assessed, what actions 
have been taken to strengthen security, and the applicability of 
foreign rail security practices to the U.S. rail system. Our review, 
among other things, will determine the extent to which federal rail 
security efforts are consistent with risk management principles to 
ensure that finite resources are allocated where they are needed most, 
and that security efforts are being coordinated to help avoid 
duplication and support integration. Our review will also identify any 
challenges involved with implementing measures to improve rail 
security, including practices used by foreign rail systems.

DHS Proposal to Integrate Common Functions is Commendable, but 
        Existing Challenges Will Need to Be Addressed
    DHS's Fiscal Year 2006 budget request proposes two key changes in 
DHS's organizational structure that are designed to achieve synergy and 
avoid duplication of effort. First, DHS proposes to create an Office of 
Screening Coordination and Operations within the Border and 
Transportation Security Directorate that would coordinate a 
comprehensive approach to several ongoing terrorist-related screening 
initiatives--in immigration; law enforcement; intelligence; 
counterintelligence; and protection of the border, transportation 
systems, and critical infrastructure. \21\ Specifically, the Office of 
Screening Coordination and Operations would consolidate nine screening 
activities, including six that are currently housed within a single TSA 
office. DHS expects this consolidation to save administrative overhead 
costs, thereby enabling the department to use those savings toward 
accomplishing the missions of the programs. In total, DHS is requesting 
about $847 million for the Office of Screening Coordination and 
Operations. Table 2 provides the budget request for the 6 screening 
activities that currently reside within TSA. \22\



    DHS identified 11 goals in creating the Office of Screening 
Coordination and Operations:

   enable consistent, effective, and efficient day-to-day 
        operations through the application of standards and use of 
        common services;

   assist in the development of policy for DHS-wide screening 
        and credentialing programs;

   create an integrated business strategy for DHS screening and 
        credentialing programs that enhances security, facilitates 
        travel, and safeguards privacy;

   reduce redundancy and close mission and technological gaps;

   manage investments of screening and credentialing programs 
        to ensure efficient use of assets;

   remove technological barriers to sharing screening 
        information within DHS;

   enable consistent status reporting of major screening and 
        credentialing programs;

   ensure consistent acquisition/contracting and program 
        management processes/disciplines are applied;

   establish a central clearinghouse to administer registered 
        traveler programs and worker credentialing programs;

   deliver clear and consistent messages to domestic and 
        foreign travelers and workers for increased compliance; and

   work with other federal agencies to improve and coordinate 
        screening standards.

    Second, DHS is proposing to consolidate its R&D efforts inside its 
Science and Technology Directorate. \23\ This office will house the 
current R&D activities that are currently spread across four DHS 
component agencies--TSA, U.S. Coast Guard, Customs and Border Patrol, 
and Information Analysis and Infrastructure Protection Directorates. 
The existing TSA R&D program consists of research and development 
(Transportation Security Laboratory), \24\ next-generation explosive 
detection systems, and air cargo research, and received a total of $178 
million in Fiscal Year 2005 appropriations. \25\ By consolidating these 
and other R&D programs under a single office, DHS is seeking to 
maximize the efficiency and effectiveness of its R&D efforts to allow 
the components to focus on their operational missions and eliminate 
duplicate management infrastructure. DHS's Fiscal Year 2006 budget 
request includes $1.4 billion for R&D.
    We applaud DHS's efforts to achieve efficiencies and cost savings, 
leverage resources and technology, and improve internal coordination 
and operations. As DHS works toward consolidating screening functions 
and initiatives within the Office of Screening Coordination and 
Operations, and the R&D functions within the Science and Technology 
Directorate, it will be important for DHS to define the 
interrelationships and commonalities among these programs, explicitly 
define roles and responsibilities, and identify data needs. 
Additionally, DHS will need to address the existing challenges that 
have been identified regarding the programs these offices will absorb. 
While these organizational changes should assist DHS in providing a 
solid foundation from which to manage and oversee its screening, 
credentialing, and R&D efforts, restructuring alone will not resolve 
all existing challenges or ensure the successful integration and 
achievement of DHS's goals. We have recently reported on challenges DHS 
and TSA are facing with regard to some of these programs, including 
Secure Flight, the Transportation Worker Identification Credential, and 
research and development activities. The sections below describe the 
challenges we identified.

TSA is in Early Stages of Testing and Implementing the Secure Flight 
        Passenger Prescreening System
    One challenge the proposed Office of Screening Coordination and 
Operations will face immediately is the continued development of a 
system to prescreen domestic airline passengers. The prescreening of 
passengers--that is, determining whether airline passengers pose a 
security risk before they reach the passenger screening checkpoint--is 
used to focus security attention on those passengers representing the 
greatest potential threat. Since the late 1990s, passenger prescreening 
has been conducted using the Computer-Assisted Passenger Prescreening 
System (CAPPS I). This system, operated by air carriers, compares 
passenger information against CAPPS I rules as well as a government-
supplied watch list that contains the names of known or suspected 
terrorists. \26\
    In the wake of September 11, concerns were raised over the 
effectiveness of CAPPS I. In 2002, TSA began developing a second-
generation computer-assisted passenger prescreening system, known as 
CAPPS II, which was intended to provide a more effective and efficient 
way to prescreen airline passengers. However, the development of CAPPS 
II faced a number of significant delays and challenges. As we reported 
in February 2004, key activities in the development of CAPPS II were 
delayed, complete plans identifying system functionality were not 
established, and TSA was behind schedule in testing and developing 
initial increments of the system. \27\ Further, we found that TSA had 
not yet fully addressed seven of the eight issues identified by 
Congress as key areas of interest, such as privacy concerns, passenger 
redress, and system oversight. We further reported that TSA faced 
challenges in obtaining the international cooperation needed to obtain 
passenger data, managing the expansion of the program's mission beyond 
its original purpose, and ensuring that identity theft--in which an 
individual poses as and uses information of another individual--cannot 
be used to negate the security benefits of the system.
    Moreover, in July 2004, the 9/11 Commission advised that 
improvements to the passenger prescreening system are required, noting 
that the watch lists used by the air carriers for the current 
prescreening system, CAPPS I, do not include all terrorists or 
terrorism suspects because of concerns about sharing intelligence 
information with private firms and foreign countries. \28\ The 9/11 
Commission stated that passenger prescreening should be performed by 
TSA and should use the larger consolidated watch list data maintained 
by the Federal Government. As a result of these problems and 
challenges, as well as widespread concerns with CAPPS II by Congress, 
the public, and other key stakeholders, DHS terminated the CAPPS II 
program and in August 2004 announced that it would develop a new 
passenger prescreening program called Secure Flight.
    Under Secure Flight, TSA will take over, from commercial airlines, 
the responsibility for checking passenger information against terrorist 
watch lists and the CAPPS I rules. TSA expects that Secure Flight, once 
implemented, will provide a number of benefits over the current 
airline-operated system. For example, TSA expects that Secure Flight 
will be more effective than CAPPS I in identifying terrorists because 
it will utilize an expanded watch list with more information than is 
currently available to air carriers. TSA also believes Secure Flight 
will reduce the number of passengers mistakenly identified as being on 
a terrorist watch list as compared with the current system. TSA is 
currently testing the ability of Secure Flight to perform watch list 
matching and applying CAPPS I rules. \29\ TSA expects that this phase 
of testing will be completed later this month. In addition, TSA plans 
to test the feasibility of using commercial data to improve the ability 
of Secure Flight to more accurately verify passenger identity. TSA 
expects to complete commercial data testing in early April 2005. \30\ 
On the basis of these test results, TSA plans to make policy decisions 
regarding the use of commercial data as part of Secure Flight. TSA also 
plans subsequently to test additional functionality and the operations 
of Secure Flight before implementation, regardless of whether it 
incorporates the use of commercial data as part of Secure Flight. At 
the conclusion of testing, TSA expects to implement Secure Flight with 
one or two air carriers in August 2005.
    Although TSA reported that it spent approximately $100 million on 
the development of CAPPS II, TSA considers much of that cost to be 
applicable to Secure Flight. This is because Secure Flight will 
leverage certain capabilities that had been developed for the CAPPS II 
program, such as the system infrastructure used to match passenger 
information against terrorist watch lists. However, in developing 
Secure Flight, TSA modified the CAPPS II infrastructure to remove 
certain features that were not authorized for Secure Flight. For Fiscal 
Year 2005, TSA was allocated $35 million for the development of Secure 
Flight. The President's Fiscal Year 2006 budget request includes 
approximately $94 million for Secure Flight development and 
implementation as well as crew vetting. \31\ This represents an 
increase of approximately $46 million for Secure Flight and 
approximately $3 million for crew vetting. These funds are intended to 
support continued testing, information systems, connectivity to 
airlines, and daily operations.
    As mandated by the Fiscal Year 2005 Homeland Security 
Appropriations Act (Public Law 108-334, Section 522), as well as in 
response to congressional requests, we are currently conducting a 
review of the Secure Flight program. \32\ Our review will highlight 
four key areas: (1) the status of Secure Flight's development and 
implementation, (2) any challenges to the system's effective 
implementation and operation, (3) processes in place for system 
oversight and program management, and (4) efforts to minimize the 
impact of Secure Flight on passengers and to protect passenger rights. 
As part of this review, we will examine the future costs associated 
with the development and implementation of Secure Flight. We will also 
determine if TSA has addressed the weaknesses identified in our 
February 2004 report on CAPPS II. We will issue a report discussing the 
results of our review by March 28, 2005.

TSA Faces Planning Challenges in Moving Forward with the Transportation 
        Worker Identification Credential
    The Office of Screening Coordination and Operations will also need 
to address the challenges TSA has faced in developing a Transportation 
Worker Identification Credential (TWIC). The TWIC program is intended 
to improve security by establishing an integrated, credential-based, 
identity management program for higher risk transportation workers 
requiring unescorted access to secure areas of the nation's 
transportation system. TSA expects that the Office of Screening 
Coordination and Operations will leverage separate screening processes 
within TWIC, such as in establishing watchlist checks on transportation 
workers and establishing access interoperability with transportation 
companies, and apply those practices to other screening activities.
    In December 2004, we reported on TSA's efforts to issue a worker 
identification card that uses biometrics, such as fingerprints, to 
control access to secure areas of ports or ships. \33\ We found that 
three main factors caused TSA to miss its initial August 2004 target 
date for issuing maritime worker identification cards: (1) TSA 
officials had difficulty obtaining timely approval of the prototype 
test from DHS because of competition for executive-level attention and 
agency resources, (2) extra time was required to work with DHS and 
Office of Management and Budget officials to identify additional data 
to be collected for cost-benefit and alternative analyses, and (3) 
additional work was required to assess the capabilities of various card 
technologies to determine which technology was most appropriate for 
controlling access in seaports. Because of program delays, some port 
facilities, recognizing an immediate need to enhance access control 
systems, are proceeding with plans for local or regional identification 
cards that may require additional investment in order to make them 
compatible with the TWIC system. Accordingly, delays in the program may 
affect enhancements to port security and complicate stakeholder's 
efforts in making wise investment decisions regarding security 
infrastructure.
    We also identified additional challenges that DHS will face as it 
moves forward with developing and operating the TWIC program, such as 
developing regulations that identify eligibility requirements for the 
card and instituting a comprehensive plan for managing the project. A 
documented comprehensive project plan will assist DHS in achieving 
mutual understanding, commitment, and performance of individuals, 
groups, and organizations that must execute or support the plan. 
Without such a plan--which is an established industry best practice for 
project planning and management--the program's schedule and performance 
is placed at higher risk. For example, additional delays could occur 
unless involved parties agree on efforts guiding the remainder of the 
project, stakeholder responsibilities, and associated deadlines. 
Additionally, without a plan to guide the cost-benefit and alternatives 
analyses--another industry best practice--risk is increased that DHS 
may not sufficiently analyze the feasibility of various approaches to 
issuing the card, an analysis needed to make informed decisions 
regarding the program. \34\ On the basis of our work, we recommended, 
and DHS generally agreed, that TSA employ industry best practices for 
project planning and management by developing a comprehensive project 
plan for managing the program and specific detailed plans for risk 
mitigation and cost-benefit and alternatives analyses. As DHS moves 
forward in developing TWIC, it will be important that it incorporates 
these best practices to help address the challenges it faces in 
developing and implementing a maritime worker identification card.
    DHS's Fiscal Year 2006 budget request includes about $245 million 
for TWIC. This amount is to cover the costs of personnel, contractors, 
equipment maintenance, software and license updates, background checks, 
fingerprint processing, and adjudication of results. DHS estimated that 
the $245 million will enable it to distribute roughly 2 million TWICs 
to transportation security workers needing access to high-risk areas of 
the transportation system by the end of Fiscal Year 2006. Additionally, 
DHS is seeking authority to recover these costs in their entirety 
through fees charged to the applicants.
    TSA is also exploring the cost-effectiveness of two other program 
alternatives: (1) a federal approach: a program wholly designed, 
financed, and managed by the Federal Government, and (2) a 
decentralized approach: a program requiring ports and port facilities 
to design, finance, and manage programs to issue identification cards. 
In February 2005, TSA officials stated that they do not expect to make 
a decision on which of the three alternatives to implement--the 
federal, decentralized, or TWIC program--until later in 2005. Officials 
stated that whichever approach is selected will be known as TWIC and 
will meet legislative requirements.

Further Planning, Risk Assessment, and Coordination Needed to Focus R&D 
        Efforts
    As DHS moves forward in integrating its R&D functions into a single 
office--a commendable goal--it will be important for the department to 
resolve the existing challenges facing its various R&D programs. 
Researching and developing technologies to detect, prevent, and 
mitigate terrorist threats is vital to enhancing the security of the 
nation's transportation system. In September 2004, we reported that TSA 
and DHS have made some progress in managing transportation security R&D 
programs according to applicable laws and R&D best practices. \35\ 
However, we found that their efforts were incomplete in several areas, 
including preparing strategic plans for R&D efforts that contain 
measurable objectives, preparing and using risk assessments to select 
and prioritize R&D projects, and coordinating with stakeholders. We 
also found that TSA and DHS delayed several key R&D projects and lacked 
both estimated deployment dates for the vast majority of their R&D 
projects and adequate databases to effectively manage their R&D 
portfolios.
    The Homeland Security Act requires DHS, through its Science and 
Technology Directorate, to prepare a strategic plan that identifies 
goals and includes annual measurable objectives for coordinating the 
Federal Government's civilian efforts in developing countermeasures to 
terrorist threats. Similarly, the National Academy of Sciences has 
stated that research programs should be described in strategic and 
performance plans and evaluated in performance reports. We are 
encouraged that TSA and DHS have prepared strategic plans for their 
agencies, and that TSA has prepared a strategic plan for its R&D 
program. However, we found that these plans do not contain measurable 
objectives for tracking the progress of R&D efforts. We recommended 
that TSA and DHS complete strategic plans containing measurable 
objectives for their transportation security R&D programs. According to 
DHS officials, the department is preparing a separate strategic plan 
for its R&D program that will include more specific goals and 
measurable objectives. DHS also stated that the Science and Technology 
Directorate's strategic planning process will include (1) determining 
strategic goals for the next 5 years, threats, and vulnerabilities, and 
(2) developing a list of prioritized projects for Fiscal Years 2005 
through 2010.
    In consolidating its R&D functions, it will also be important for 
DHS to use risk management principles in making R&D funding decisions, 
as required by ATSA. \36\ Although both TSA and DHS have established 
processes to select and prioritize R&D projects that include risk 
management principles, they have not yet completed vulnerability and 
criticality assessments, which we have identified as key elements of a 
risk management approach, for all modes of transportation. \37\ In the 
absence of completed risk assessments, TSA and DHS officials report 
basing funding decisions on other factors--such as available threat 
intelligence, expert judgment, and information about past terrorist 
incidents. TSA officials further stated that TSA's Chief Technology 
Officer receives daily intelligence briefings and that the agency uses 
threat information to select R&D projects to pursue. However, officials 
stated that they do not use formal threat assessments to make R&D 
decisions. In addition, the DHS Inspector General reported in March 
2004 that although many senior officials agreed that DHS's Science and 
Technology and the Information Analysis and Infrastructure Protection 
Directorates should closely coordinate, staff below them were not 
actively involved in sharing terrorist threat information or using the 
information to form the basis for selecting new homeland security 
technologies. On the basis of our work, we recommended, and DHS 
generally agreed, that TSA and DHS use the results of risk assessments 
to help select and prioritize their R&D efforts.
    In moving forward with the proposed integration of R&D functions, 
DHS will also need to enhance its efforts to coordinate with other 
federal agencies with respect to transportation security R&D, and reach 
out to industry stakeholders. ATSA and the Homeland Security Act 
require DHS to coordinate its efforts with those of other government 
agencies, in part to reduce duplication and identify unmet needs. 
Similarly, R&D best practices identify the importance of stakeholder 
coordination in identifying R&D needs. For TSA and DHS to select the 
best technologies to enhance transportation security, it is important 
that they have a clear understanding of the R&D projects currently 
being conducted, both internally and externally. During our review, we 
found limited evidence of coordination between TSA and DHS, or between 
these agencies and other federal agencies, such as the Department of 
Transportation. Without such coordination, DHS raises the risk that its 
R&D resources will not be effectively leveraged and that duplication 
may occur. Further, most transportation industry association officials 
we interviewed stated that TSA and DHS had not coordinated with them to 
obtain information on their security R&D needs. We recommended, and 
officials generally agreed, that TSA should develop a process with the 
Department of Transportation to coordinate transportation security R&D, 
such as a memorandum of agreement identifying roles and 
responsibilities, and share this information with transportation 
stakeholders.
    DHS will also need to address several additional challenges while 
moving forward in consolidating its R&D functions into a single office, 
including managing delays in key R&D projects, better estimating 
deployment dates, and conducting better tracking of its R&D portfolio. 
During our review, we found that progress on some R&D projects was 
delayed in Fiscal Year 2003 when TSA transferred about $61 million, 
more than half of its $110 million R&D appropriation, to support 
operational needs, such as personnel cost for screeners. As a result, 
TSA delayed several key R&D projects related to checked baggage 
screening, checkpoint screening, and air cargo security. For example, 
TSA delayed the development of a device to detect weapons, liquid 
explosives, and flammables in containers found in carry-on baggage or 
passengers' effects, as well as the development and testing of a walk-
through portal for detecting traces of explosives on passengers. We 
also found that although many of TSA's projects were in later phases of 
development, the agency had not estimated deployment dates for 133 of 
the 146 projects that it funded in Fiscal Years 2003 and 2004. While we 
recognize that deployment dates are not always predictable, we 
generally believe that R&D program managers should estimate deployment 
dates for projects that are beyond the basic research phase because 
deployment dates can serve as goals that the managers can use to plan, 
budget, and track the progress of projects. We also found that TSA and 
DHS did not have adequate databases to monitor and manage the spending 
of the hundreds of millions of dollars that Congress had appropriated 
for R&D. For example, for the 146 projects that it funded in 2003 and 
2004, TSA was not able to provide us information on anticipated 
deployment dates for 91 percent, the current phase of development for 
49 percent, and the amounts obligated and budgeted for 8 percent that 
were appropriated tens of millions of dollars in both Fiscal Years 2003 
and 2004. We recommended that TSA and DHS develop a database to provide 
accurate, complete, current, and readily accessible project information 
for monitoring and managing their R&D portfolios, and a vehicle for 
communicating R&D need with the transportation industry. In September 
2004, DHS stated that TSA had developed a system to track R&D projects' 
goals and milestones, acquisition, funding, testing, and deployment 
information.

Concluding Observations
    DHS and TSA have undertaken numerous initiatives to strengthen 
transportation security, particularly in aviation, and their efforts 
should be commended. Meeting the congressional mandates to screen 
passengers and checked baggage alone was a tremendous challenge--yet 
TSA successfully hired and deployed a federal screening workforce of 
over 40,000 and deployed equipment to screen checked baggage for 
explosives at over 400 commercial airports nationwide. In our previous 
work addressing transportation security, we identified future actions 
that TSA should take to enhance security within and across all modes of 
transportation. Throughout the course of this work, one theme 
consistently surfaced--the need for TSA to fully utilize and integrate 
a risk management approach into its decision making processes. Our work 
has shown--in homeland security and in other areas--that a 
comprehensive risk management approach can help inform decision makers 
in allocating finite resources to the areas of greatest need. We are 
encouraged that the President's Fiscal Year 2006 budget request 
discusses TSA's plans to implement a risk management approach in 
focusing its resources related to transportation security. However, we 
recognize that fully integrating a risk management approach into 
decision making processes is challenging for any organization. Further, 
in order to fully apply this approach, TSA must also address the 
challenges we have identified in our work related to program planning, 
risk assessments, and implementation and monitoring. Without rigorous 
planning and prioritization, and knowledge of the effectiveness of 
their transportation security programs, DHS and TSA cannot be sure that 
they are focusing their resources on the areas of greatest need, are 
addressing the most critical security requirements, and are ensuring 
the most efficient utilization of its resources.
    Mr. Chairman, this concludes my statement. I would be pleased to 
answer any questions that you or other members of the Committee may 
have.

Related GAO Products Released Since September 11, 2001
    Aviation Security: Preliminary Observations on TSA's Progress to 
Use Private Passenger and Baggage Screening Services, GAO-05-126. 
Washington, DC: November 19, 2004.
    General Aviation Security: Increased Oversight Is Needed, but 
Continued Partnership with the Private Sector Is Critical to Long-Term 
Success, GAO-05-144. Washington, DC: November 10, 2004.
    Maritime Security: Substantial Work Remains to Translate New 
Planning Requirements into Effective Port Security. GAO-04-838. 
Washington, DC: June 30, 2004.
    Aviation Security: Further Steps Needed to Strengthen the Security 
of Commercial Airport Perimeters and Access Controls. GAO-04-728. 
Washington, DC: June 4, 2004.
    Transportation Security Administration: High-Level Attention Needed 
to Strengthen Acquisition Function. GAO-04-544. Washington, DC: May 28, 
2004.
    Aviation Security: Private Screening Contractors Have Little 
Flexibility to Implement Innovative Approaches. GAO-04-505T. 
Washington, DC: April 22, 2004.
    Homeland Security: Summary of Challenges Faced in Targeting 
Oceangoing Cargo Containers for Inspection. GAO-04-557T. March 31, 
2004.
    Aviation Security: Improvement Still Needed in Federal Aviation 
Security Efforts. GAO-04-592T. Washington, DC: March 30, 2004.
    Rail Security: Some Actions Taken to Enhance Passenger and Freight 
Rail Security, but Significant Challenges Remain. GAO-04-598T. 
Washington, DC: March 23, 2004.
    Aviation Security: Challenges Delay Implementation of Computer-
Assisted Passenger Prescreening System. GAO-04-504T. Washington, DC: 
March 17, 2004.
    Aviation Security: Computer-Assisted Passenger Prescreening System 
Faces Significant Implementation Challenges. GAO-04-385. Washington, 
DC: February 13, 2004.
    Aviation Security: Challenges Exist in Stabilizing and Enhancing 
Passenger and Baggage Screening Operations. GAO-04-440T. Washington, 
DC: February 12, 2004.
    Homeland Security: Preliminary Observations on Efforts to Target 
Security Inspections of Cargo Containers. GAO-04-325T. Washington, DC: 
December 16, 2003.
    Aviation Security: Efforts to Measure Effectiveness and Strengthen 
Security Programs. GAO-04-285T. Washington, DC: November 20, 2003.
    Aviation Security: Efforts to Measure Effectiveness and Address 
Challenges. GAO-04-232T. Washington, DC: November 5, 2003.
    Airport Passenger Screening: Preliminary Observations on Progress 
Made and Challenges Remaining. GAO-03-1173. Washington, DC: September 
24, 2003.
    Maritime Security: Progress Made in Implementing Maritime 
Transportation Security Act, but Concerns Remain. GAO-03-1155T. 
Washington, DC: September 9, 2003.
    Aviation Security: Progress Since September 11, 2001, and the 
Challenges Ahead. GAO-03-1150T Washington, DC: September 9, 2003.
    Transportation Security: Federal Action Needed to Enhance Security 
Efforts. GAO-03-1154T. Washington, DC: September 9, 2003.
    Transportation Security: Federal Action Needed to Help Address 
Security Challenges. GAO-03-843. Washington, DC: June 30, 2003.
    Rail Safety and Security: Some Actions Already Taken to Enhance 
Rail Security, but Risk-based Plan Needed. GAO-03-435. Washington, DC: 
April 30, 2003.
    Federal Aviation Administration: Reauthorization Provides 
Opportunities to Address Key Agency Challenges. GAO-03-653T. 
Washington, DC: April 10, 2003.
    Transportation Security: Post-September 11th Initiatives and Long-
term Challenges. GAO-03-616T. Washington, DC: April 1, 2003.
    Transportation Security Administration: Actions and Plan to Build a 
Results-Oriented Culture. GAO-03-190 Washington, DC: January 17, 2003.
    Aviation Safety: Undeclared Air Shipments of Dangerous Goods and 
DOT's Enforcement Approach. GAO-03-22. Washington, DC: January 10, 
2003.
    Aviation Security: Vulnerabilities and Potential Improvements for 
the Air Cargo System. GAO-03-344. Washington, DC: December 20, 2002.
    Mass Transit: Federal Action Could Help Transit Agencies Address 
Security Challenges. GAO-03-263. Washington, DC: December 13, 2002.
    Aviation Security: Registered Traveler Program Policy and 
Implementation Issues. GAO-03-253. Washington, DC: November 22, 2002.
    Combating Terrorism: Actions Needed to Improve Force Protection for 
DoD Deployments through Domestic Seaports. GAO-03-15. Washington, DC: 
October 22, 2002.
    Airport Finance: Using Airport Grant Funds for Security Projects 
Has Affected Some Development Projects. GAO-03-27. Washington, DC: 
October 15, 2002.
    Mass Transit: Challenges in Securing Transit Systems. GAO-02-1075T. 
Washington, DC: September 18, 2002.
    Port Security: Nation Faces Formidable Challenges in Making New 
Initiatives Successful. GAO-02-993T. Washington, DC: August 5, 2002.
    Aviation Security: Transportation Security Administration Faces 
Immediate and Long-Term Challenges. GAO-02-971T. Washington, DC: July 
25, 2002.
    Aviation Security: Information Concerning the Arming of Commercial 
Pilots. GAO-02-822R. Washington, DC: June 28, 2002.
    Aviation Security: Vulnerabilities in, and Alternatives for, 
Preboard Screening Security Operations. GAO-01-1171T. Washington, DC: 
September 25, 2001.
    Aviation Security: Weaknesses in Airport Security and Options for 
Assigning Screening Responsibilities. GAO-01-1165T. Washington, DC: 
September 21, 2001.
    Homeland Security: A Framework for Addressing the Nation's Efforts. 
GAO-01-1158T. Washington, DC: September 21, 2001.
    Aviation Security: Terrorist Acts Demonstrate Urgent Need to 
Improve Security a the Nation's Airports. GAO-01-1162T. Washington, DC: 
September 20, 2001.
    Aviation Security: Terrorist Acts Illustrate Severe Weaknesses in 
Aviation Security. GAO-01-1166T. Washington, DC: September 20, 2001.
ENDNOTES
     \1\ EDS operates in an automated mode and use probing radiation to 
examine objects inside baggage and identify the characteristic 
signatures of threat explosives. ETD works by detecting vapors and 
residues of explosives. ETD requires human operators to collect samples 
by rubbing bags with swabs, which are chemically analyzed to identify 
any traces of explosive materials. References to ``explosive detection 
systems'' include both EDS and ETD systems.
     \2\ GAO, Homeland Security: A Risk Management Approach Can Guide 
Preparedness Efforts, GAO-02-208T (Washington, DC: October 31, 2001); 
and Combating Terrorism: Threat and Risk Assessments Can Help 
Prioritize and Target Program Investments, GAO/NSIAD-98-74 (Washington, 
DC: April 9, 1998).
     \3\ U.S. Department of Homeland Security, Performance Budget 
Overview Fiscal Year 2006, Congressional Budget Justification 
(Washington, DC: February 2005); and Homeland Security Budget-in-Brief, 
Fiscal Year 2006 (Washington, DC: February 2005).
     \4\ See GAO, Aviation Security: Systematic Planning Needed to 
Optimize the Deployment of Checked Baggage Screening Systems, GAO-05-
302SU (Washington, DC: February 4, 2005).
     \5\ Obligations are amounts of orders placed or contracts awarded 
during a given period that will require payment during the same or a 
future period. An administrative commitment is an administrative 
reservation of funds in anticipation of their obligation.
     \6\ In 2003, Congress authorized TSA to issue LOIs--a cost-sharing 
mechanism between TSA and the airports--to support funding the 
installation of in-line EDS baggage screening systems.
     \7\ This refers to the net present value saved over 7 years if 
received up front.
     \8\ GAO, Aviation Security: Challenges Exist in Stabilizing and 
Enhancing Passenger and Baggage Screening Operations, GAO-04-440T 
(Washington, DC: February 12, 2004).
     \9\ Federal Security Directors are responsible for providing day-
to-day operational direction for federal security at airports. The 
Federal Security Director is the ranking TSA authority responsible for 
the leadership and coordination of TSA security activities at the 
airport.
     \10\ TSA classifies the over 450 commercial airports in the United 
States into one of five security risk categories (X, I, II, III, IV, 
and V) based on various factors, such as the total number of takeoffs 
and landings annually, the extent to which passengers are screened at 
the airport, and other special security considerations. In general, 
category X airports have the largest number of passenger boardings, and 
category IV airports have the smallest.
     \11\ In May 2003, TSA hired a contractor to develop a staffing 
model for its screening workforce. TSA officials reported that the 
model was completed in June 2004, and all airports now have the 
capability to use the contractors' standalone software. TSA expects to 
install the software on its intranet by the end of February 2005, 
thereby providing headquarters with access to the staffing models used 
at airports.
     \12\ The Intelligence Reform and Terrorism Prevention Act of 2004 
(Pub. L. 108-458) requires TSA to develop standards for determining 
aviation security staffing at commercial airports no later than 90 days 
after its enactment--December 14, 2004. It also directs GAO to conduct 
an analysis of these standards, which we will initiate once the 
standards are developed.
     \13\ TSA defines a fully connected training computer as one that 
has the network image installed and is connected to the TSA broadband 
network.
     \14\ See GAO, Aviation Security: Private Screening Contractors 
Have Little Flexibility to Implement Innovative Approaches, GAO-04-505T 
(Washington, DC: April 22, 2004).
     \15\ An indirect air carrier is an entity, such as a freight 
forwarder, that engages indirectly in the air transportation of 
property on passenger aircraft.
     \16\ Known shippers are entities that have routine business 
dealings with freight forwarders or air carriers and are thus 
considered trusted shippers, in contrast to unknown shippers who have 
conducted limited or no prior business with a freight forwarder or air 
carrier.
     \17\ GAO, Aviation Security: Further Steps Needed to Strengthen 
the Security of Commercial Airport Perimeter and Access Controls, GAO-
04-728 (Washington, DC: June 2004).
     \18\ GAO, General Aviation Security: Increased Oversight Is 
Needed, but Continued Partnership with the Private Sector Is Critical 
to Long-Term Success GAO-05-144, (Washington, DC: Nov. 10, 2004).
     \19\ GAO, Aviation Security: Preliminary Observations on TSA's 
Progress to Allow Airports to Use Private Passenger and Baggage 
Screening Services, GAO-05-126 (Washington, DC: Nov. 19, 2004).
     \20\ GAO, Rail Security: Some Actions Taken to Enhance Passenger 
and Freight Rail Security, but Significant Challenges Remain, GAO-04-
598T (Washington, DC: March 23, 2004.)
     \21\ The mission of the Office of Screening Coordination and 
Operations would be to enhance terrorist-related screening through 
comprehensive, coordinated procedures that detect, identify, track, and 
interdict people, cargo and conveyances, and other entities and objects 
that pose a threat to homeland security.
     \22\ DHS's Fiscal Year 2006 request for the proposed Office of 
Screening Coordination and Operations also includes about $390 million 
for US-VISIT; $7 million for Free and Secure Trade, and $14 million for 
NEXUS/Secure Electronic Network Rapid Inspection, which are currently 
part of DHS's Office of Customs and Border Patrol.
     \23\ The Homeland Security Act of 2002 states that DHS is 
responsible for coordinating and integrating all research, development, 
demonstration, testing, and evaluation activities of the Department. 
Pub. L. No. 107-296, Sec. 302(12).
     \24\ TSA's Transportation Security Laboratory performs research 
and development related to civil transportation security.
     \25\ The budget proposal consolidates the bulk of TSA's research 
and development programs into the Science and Technology Directorate, 
resulting in a transfer of $109 million. TSA will retain $23 million 
for operational research and development activities in FY 2006.
     \26\ CAPPS I rules are behavioral characteristics associated with 
the way an airline ticket is purchased.
     \27\ GAO, Aviation Security: Computer-Assisted Passenger 
Prescreening System Faces Significant Implementation Challenges, GAO-
04-385 (Washington, DC: February 12, 2004).
     \28\ The 9/11 Commission Report: Final Report of the National 
Commission on Terrorist Attacks Upon the United States (Washington, DC: 
July 2004).
     \29\ In order to obtain data for testing, TSA issued an order in 
November 2004 requiring domestic airlines to provide passenger records 
for the month of June 2004.
     \30\ We have ongoing work assessing TSA's testing of commercial 
data and expect to issue a report later this month.
     \31\ The proposal to create the new Office of Screening 
Coordination and Operations would combine two screening programs that 
will use the same system infrastructure--Secure Flight and crew 
vetting. The crew vetting program matches names of aircraft pilots and 
flight and cabin crew against terrorist watch lists. Currently, these 
programs are run by the Office of Transportation Vetting and 
Credentialing.
     \32\ This review is separate from our ongoing work assessing TSA's 
commercial data testing efforts.
     \33\ GAO, Port Security: Better Planning Needed to Develop and 
Operate Maritime Worker Identification Card Program, GAO-05-106 
(Washington, DC: December 10, 2004).
     \34\ Best practices indicate that plans for activities such as 
cost-benefit and alternatives analyses should be developed to help 
facilitate data collection and analysis. These plans typically 
describe, among other things, the data to be collected, the source of 
these data, and how the data will be analyzed. Such plans are important 
to guide needed data analysis as well as prevent unnecessary data 
collection, which can be costly.
     \35\ GAO, Transportation Security R&D: TSA and DHS Are Researching 
and Developing Technologies, but Need to Improve R&D Management, GAO-
04-890 (Washington, DC: September 30, 2004).
     \36\ Pub. L. 107-71, Sec. 112(b)(1)(B). Additionally, under the 
Homeland Security Act, DHS is required to establish R&D priorities for 
detecting, preventing, protecting against, and responding to terrorist 
attacks (Pub. L. 107-296, Sec. 302(5)(B)), and to prepare comprehensive 
assessments of the vulnerabilities of the nation's key resources and 
critical infrastructure sectors, one of which is transportation (Pub. 
L. 107-296, Sec. 201(d)(2)).
     \37\ GAO, Homeland Security: Key Elements of a Risk Management 
Approach, GAO-02-150T (Washington, DC: October 12, 2001).

    The Chairman. Thank you very much.
    If there is no objection, I would like to set a time limit 
of 7 minutes on each Senator, and we'll bounce back for another 
round, if that is required.
    Admiral, I was pleased to talk to you last evening about 
some of these subjects. And I do thank you for your courtesy of 
coming and changing your schedule, as I said.
    You have an enormous responsibility. This is not just 
transportation of airline security, it is the total 
transportation security of the whole country. But we seem to be 
putting emphasis only on the air passengers to contribute to 
the cost of this security that we've insisted on putting in 
place throughout the transportation system. Do you have any 
plans to put fees on any other portion of the transportation 
system as we go forward with these plans that you've documented 
in your statement and Ms. Berrick has commented upon?
    Admiral Stone. I have no plans, right now, to assign 
additional fees. It's my understanding----
    The Chairman. I'm talking about other than airline 
passengers. Is anyone else going to pay, other than the 
taxpayer and the airline passengers?
    Admiral Stone. In the other modes of transportation, sir? 
Is that what----
    The Chairman. In terms of putting up the security system we 
have that covers rail, bus, air, everything--I presume that is 
what your statement says. That total transportation programs of 
the United States are subject to your jurisdiction, and you 
have taxes only on the airline passengers. Now, do you plan on 
putting fees or taxes on any other person that uses some of 
those transportation systems?
    Admiral Stone. We have no plans to put additional fees on 
any of those other modal areas, other than those that I 
understand currently exist.
    The Chairman. Tell me why. I mean, all of them are covered 
by your security system. Trains are covered by your security 
system. Boats are covered by your security system. Why should 
only airline passengers contribute beyond taxpayers for the 
security system?
    Admiral Stone. I think a user-fee approach with all those 
modes of transportation merits review for the very aspect of 
this theme that it really has to be a shared responsibility. 
Right now, the general taxpayer has a share of roughly 57 
percent of the aviation screening. And this just adjusts it 
down to 20 percent. There's always going to be that percentage 
of sharing. And so, I would agree that each mode of 
transportation merits review for what type of fees are paid 
for, both by users as well as the general taxpayer.
    The Chairman. Do you have plans for any additional security 
measures that apply to automobiles, in general, upon our 
highways?
    Admiral Stone. I do not, sir, for automobiles.
    The Chairman. Is that a subject that's left totally for 
local and state jurisdiction?
    Admiral Stone. Currently, I do not have visibility on 
whether or not the states and local jurisdictions are reviewing 
the automobile piece of that. Our responsibilities for 
highways, though, are very clear. And, therefore, the $20 
million Highway Watch Program, which we work with ATA, American 
Trucking Association, is the foundation of that. With regard to 
fees for automobiles in support of that, I have no plans for 
that.
    The Chairman. Well, let me tell you a little story that I 
heard in one of the airports. I'll not say which one it was, 
because I don't want you to get people running out and asking 
too many questions about it. But one of the security people in 
an airport that I flew into told me that he had noticed an 
automobile in their parking lot several times that had a very 
distinctive license plate. And the person appeared to be doing 
things erratically and was obviously from the Middle East. He 
decided to put that license plate up on the Net. And a couple 
of weeks later, he got a call from a distant city, all the way 
across the country, saying that they had seen this license 
plate, wanted to know what did he know about the people that 
were involved. Well, he told them why he had done it. He just 
believed the automobile was suspicious in what it was doing. 
And they tracked that automobile in the other city. And when it 
came back, he got notice, all along the line, of how that car 
was coming across the country. And when they finally found it 
back in its original city, it did do some things that were 
fairly much out of the ordinary, and they picked this person 
up. It turned out that was an employee of the airport, and, 
under questioning, he had not flown, because he's on the no-fly 
list. But they had tracked him using license plates.
    Now, aren't we missing a whole area of security threats by 
screening only people on airports, only people that get on and 
off airplanes? We know there was a terrible disaster that came 
from airlines being used as weapons of mass destruction, but 
aren't the people who are capable of doing that using other 
means of transportation now? They're not flying. They're on the 
no-fly list. Now, don't you have any plans for extending this 
system of security?
    Admiral Stone. We do. In fact, every morning we spend about 
2 hours reviewing the report from the Terrorist Screening 
Center; to use the example you just gave, in which that type of 
information on suspicious cars, license plate, law-enforcement 
action--is reviewed by TSA each morning, from an intermodal 
point of view--trains, mass transit, rail, highway, pipeline 
security. All of that intelligence in the Terrorist Screening 
Center is integrated into a 2-hour morning brief where we look 
at each mode of transportation, what the threats are, and how 
they interrelate to one another. And so, that very approach 
of--it's all related, it has to be intermodal, and the 
Terrorist Screening data bases apply not just to aviation, but 
need to be looked at across all modes. And so, that morning 
brief is the centerpiece of what we do, because it gets at that 
very issue of domain awareness and being able to followup on 
leads and how they connect to one another.
    Ms. Berrick. And, Mr. Chairman, if I could add to that, GAO 
is currently doing several reviews looking at other modes of 
transportation, and the difference between aviation and other 
modes is that other modes of transportation are inherently open 
to promote the flow of goods and people. For example, we're 
looking at rail security. So in looking at rail security, TSA 
will need to consider different security measures that would be 
appropriate for that environment. And one of the issues we're 
looking at is what's being done in other countries to secure 
their rail systems, and can that be applied to the United 
States.
    You asked earlier about taxes for other modes of 
transportation. Right now, for other modes of transportation, 
the transit operators are primarily funding security 
enhancements. They get some grants, and they also get some 
assistance from the Department of Transportation. But, 
primarily, they're shouldering the burden for security 
improvements.
    The Chairman. Thank you very much. My time's up. I intend 
to go further in this when it comes around to my time again. It 
just seems to me that other people, beyond airline passengers, 
ought to be paying for this security. Taxpayers, obviously. We 
don't even call these taxes. We call them fees now, right? But 
they're taxes, as far as the airline passengers are concerned. 
But there's no such burden on other people who use other forms 
of transportation, and I think that's wrong.
    Senator Inouye?
    Senator Inouye. Thank you very much.
    I'd like to followup on your questioning. Of the amount 
raised by this passenger fee, how much do you anticipate 
raising?
    Admiral Stone. The passenger fee, a total for Fiscal Year 
2006 would be $3.7 billion, 73 percent of the screening costs.
    Senator Inouye. Of that amount, what is the new fee?
    Admiral Stone. The new fee would raise from $2.50 to $5.50, 
the one-way flight, and up to a cap of $8 for segment flights.
    Senator Inouye. Of the amount being raised, how much is 
being spent for airline security?
    Admiral Stone. The $5.2 billion overall is the fee for 
aviation security, of which the passenger fee, if enacted, 
would be 73 percent of that total. The airlines' fee would 
maintain consistency with this fiscal year, at 7 percent, and 
then the general taxpayers' fee would drop to 20 percent of 
that overall amount.
    Senator Inouye. In other words, you're telling us that none 
of the increase will be spent for other modes of 
transportation?
    Admiral Stone. Yes, sir. I'm saying that this all goes 
toward the aviation screening bill of $5.2 billion, and it just 
adjusts the share between passengers and the general taxpayer.
    Senator Inouye. And for the other modes, taxpayers are 
paying 100 percent?
    Admiral Stone. And in the other modes of transportation, as 
was indicated, there are various fee adjustments, but the TSA 
does not, in the Department, intend on recommending additional 
fees at this time in those modes of transportation.
    Senator Inouye. So the fees are being paid by the general 
taxing population.
    Admiral Stone. By the general tax population and some 
degree of user fee, depending on the mode.
    Senator Inouye. Your recent reorganization, where you put 
the maritime, land, and aviation operations into an Office of 
Intermodalism----
    Admiral Stone. Yes, sir.
    Senator Inouye.--will this improve maritime and rail 
transportation security?
    Admiral Stone. Yes, sir, I believe it will. We've taken 
what was previously an organization at TSA that had a block for 
aviation and then a block called maritime and land, and we 
combined them and broke them down in accordance with Homeland 
Security Presidential Directive number 7, which has the modes 
of transportation--mass transit, rail, highway, pipeline, 
aviation, maritime, and shipping and postal--in order to give 
more of an intermodal focus. It also helps stakeholders that 
are looking at TSA know where to come in, in order to be 
serviced for their specific questions, be it mass transit or 
rail or highways.
    So we see that this will be a powerful signal of our intent 
that we are responsible across transportation sectors. We have 
specificity with regard to those modes, and the modal plans 
that are coming out on April 1st, which are constructed by 
threat, criticality, vulnerability, and then the appropriate 
risk mitigation measure, I think, will integrate extremely well 
with that new alignment.
    Ms. Berrick. And if I could----
    Senator Inouye. Besides sending a powerful signal, will it 
improve the operations?
    Admiral Stone. I believe it will. It really helps us 
understand the entire domain by having that sort of a 
realignment and focus on those modes.
    Ms. Berrick. If I could add, Senator, we believe that the 
intent behind the restructuring, which is to achieve 
efficiencies and avoid duplication of effort, is a good 
approach. However, the organizational change alone isn't going 
to ensure its success. They have to make sure that those 
coordination and commonalities among the programs are 
evaluated.
    And, also, several of these programs, we've identified 
existing challenges that will need to be addressed. For 
example, in integrating the R&D efforts throughout the 
Department of Homeland Security, certain issues are going to 
need to be resolved that we've identified in the past. For 
example, having deployment dates for its R&D efforts, also 
having just a complete inventory of what all the R&D projects 
are throughout the Department, which we didn't see. So those 
issues will still need to be addressed in moving forward with 
this reorganization.
    Senator Inouye. This reorganization will bring about 
secure--I mean, efficiency, as you said. Will it mean cutting 
personnel or increasing personnel?
    Ms. Berrick. I don't know what the Department's decisions 
are regarding personnel, other than the functions are going to 
be----
    Admiral Stone. With regard to the proposed realignments for 
the Screening Coordination Office, the personnel that are 
currently engaged in that activity at TSA would transfer into 
that office and work them with their counterparts that would be 
coming in from Customs and Border Protection. And so, the 
bodies stay the same. The attempt to reduce the stovepipe 
approach, where you have, say, a program like international 
travel that Commissioner Bonner is working in that fashion 
today, and then we have Registered Traveler, and there's 
USVISIT. The Screening Coordination Office will be designed to 
bring those individuals together under that office and have one 
seamless program, rather than three stovepiped ones.
    Senator Inouye. How much would it cost to bring about this 
reorganization?
    Admiral Stone. For the Screening Coordination Office, it's 
a transfer of those funds from the respective agencies in 
there, so there's no additional cost involved. It's the 
transfer of those bodies and people into the Screening 
Coordination Office.
    And then for the research and development piece, the desire 
by the Department to integrate the laboratories so that you 
don't have one laboratory working on the project at the TSA lab 
and Atlantic City has no visibility on, to integrate that to 
reduce overlap and duplication, while, at the same time, 
empowering TSA to task that lab to achieve its mission, is the 
goal of that realignment.
    Senator Inouye. And, Ms. Berrick, do you approve of this 
reorganization?
    Ms. Berrick. We believe, again, that the intent behind the 
reorganization is a good one. And, again, the intent is to 
achieve efficiencies and avoid duplication of efforts. Because 
there are several screening systems throughout the Department, 
and several within TSA--six within TSA, specifically. So the 
intent is a good one, but the organizational change alone isn't 
going to make--ensure success and that those goals are 
achieved.
    Commonalities among the programs need to be fully evaluated 
to ensure that efficiencies are achieved. Also, there has to be 
much coordination. And, again, there were some existing 
problems with some of these programs before this reorganization 
was proposed, and those problems will still need to be 
addressed.
    Senator Inouye. And this intent will not address it?
    Ms. Berrick. I believe they're moving in the right 
direction, and I think the reorganization, in terms of trying 
to achieve efficiencies and commonality is a good idea. It's 
just the implementation that's going to be what's important.
    Admiral Stone. Sir, if I may add, and also to make sure, as 
we go about that, that we do no harm to the momentum that's 
been achieved in these programs, such as Registered Traveler 
and international pass, so I think Under Secretary Hutchinson 
and Admiral Loy have stated that the idea is not to do harm and 
slow down those programs. We need to move forward aggressively, 
but integrate them.
    Senator Inouye. Thank you very much.
    Admiral Stone. Yes, sir.
    The Chairman. Senator McCain?
    Senator McCain. I want to thank the witnesses.
    Ms. Berrick, from reading your report, it seems to me the 
area that you emphasize--and, I think, appropriately--is the 
risk-management aspect of TSA, identifying prioritizing, and 
managing risk. Is that correct?
    Ms. Berrick. Yes, it is, Senator.
    Senator McCain. And, Admiral Stone, would you agree with 
that?
    Admiral Stone. That the key is that we have a risk-based 
approach, I would agree with that, yes, sir.
    Senator McCain. And right now, in Ms. Berrick's view, the 
GAO's review, that's lacking.
    Admiral Stone. I don't agree with that. We have the 
Strategic Threat Assessment Report, which is a secret no-
foreign document that we have all of our programs linked to. I 
think we have our emphasis and our money going where the 
threats are.
    Senator McCain. Tell me, where's our area of greatest risk 
right now?
    Admiral Stone. I believe the use of an aircraft as a weapon 
to be able to be delivered anywhere throughout the United 
States, whether that's to a chemical plant or a nuclear plant 
or a economic center or a political center----
    Senator McCain. That's still our area of greatest risk, 
even though that's been the area of our greatest investment.
    Admiral Stone. I think it's the greatest risk due to the 
preponderance of threat streams that indicate that, despite our 
efforts, there's a desire to use a weapon as a delivery vehicle 
and also, I would add a second to that, an aircraft as a 
target. So both as a delivery system, as a target, I would list 
at the very top of our priority list, and that our--and, 
therefore, our strategy matches the threat and the risk.
    Senator McCain. Ms. Berrick, go ahead.
    Ms. Berrick. Thank you, Senator. With respect to conducting 
risk assessments, we do identify in our statement that TSA is 
moving in that direction and they've started developing tools 
to integrate this into their decision-making processes, but we 
don't think that they're fully there yet.
    You mentioned areas where there may be vulnerabilities. We 
did a review looking at general aviation, and there's 19,000 
general aviation airports across the country, and found that 
although there were some limited assessments of threats, a 
complete threat assessment wasn't conducted of the general 
aviation population, and there were also only limited 
vulnerability assessments that were conducted to determine, out 
of these 19,000 airports, which are the most vulnerable and 
which should we be focused on.
    And related to aviation security, we looked at airport 
perimeter security and access controls, and also identified 
areas for improvement in conducting vulnerability assessments 
within the airports themselves. Which airports are the most 
vulnerable? What should we do to improve access controls to 
protect the airports?
    Senator McCain. How did you view border security, Ms. 
Berrick, as a priority?
    Ms. Berrick. Border security is another area that we think 
a risk-management approach should be applied relative to 
aviation and the other modes of transportation. Until this 
approach is fully integrated into decision-making processes and 
analysis, it's hard to determine where the resources should be 
allocated. So I don't think right now we can answer the 
question--Should money be going to border security versus 
aviation versus any other mode?--until this is really 
integrated into the process and these assessments are done. And 
this is a very difficult thing to do for any organization that 
we've looked at, so it's definitely a challenge to integrate 
that.
    Senator McCain. Do you want to speak, Admiral?
    Admiral Stone. Yes, sir. I believe the key documents for 
TSA are the modal plans, the fact that we need to develop and 
provide to Congress, by 1 April, those modal plans that list 
each mode--mass transit, rail. Currently the stakeholders now 
are reviewing those so that we can benefit from their view of 
how that risk-mitigation plan should be developed. And that 
truly is the essence of a risk-based plan. If you've got a 
modal plan that looks at threat, criticality, vulnerability, 
and concrete steps to mitigate risk that has viable that has 
buy-in from the stakeholders, that's a powerful roadmap for how 
to secure transportation. So I believe that document is 
critical and why we're putting so much emphasis on it today.
    Ms. Berrick. I----
    Senator McCain. Well, as a--Ms. Berrick, go ahead.
    Ms. Berrick. I'm sorry.
    Senator McCain. Go ahead.
    Ms. Berrick. I just wanted to add that I would agree that 
that's where TSA needs to start, is with these modal plans. And 
from that flows other tools, risk-management tools, that they 
need to develop to integrate those into processes.
    Senator McCain. Admiral, one of my disappointments is that 
I can't identify, as a passenger, any significant improvements 
with the use of technology in the screening of passengers since 
TSA began its operations. Time after time in hearings before 
this Committee, I and other Members urge that we develop 
technology which will expedite the movement of millions of 
people every day in and out of airports. And so far I have not 
seen--now, I know explosive-detection devices have been put in, 
and I think baggage screeners have been put in, but, as far as 
the individual passenger is concerned, I've seen very little 
change, except now I have to take off my jacket, as well as my 
shoes. So I urge you, again, we've got to develop technology, 
or the airlines will never fully recover, as long as there is 
extreme inconveniences that passengers are experiencing. And 
I'll be glad to hear your response to that. But does it concern 
you that two million people are crossing our border every year 
in--coming into the United States? Isn't that a security 
concern?
    Admiral Stone. I believe it is. And I know that a lot of 
people are working real hard at Customs and Border Protection 
and the Under Secretary for Border Transportation Security to 
mitigate that risk.
    With regard to the issue of----
    Senator McCain. Go ahead.
    Admiral Stone.--technology, sir, the--I'd just highlight 
that. The $28 million, this year, so that we can have portals 
at some of our checkpoints and expand it in 2006 to get away 
from the intrusive torso pat-down, the use of technologies--
biometrics, iris scan, fingerprinting--for Registered Traveler, 
and then the Reveal technology, which was recently certified, 
in that we have $15 million and they're starting pilots at 
airports, which is a mini CAT-scan device. Those sorts of 
technologies, both in Registered Traveler, Reveal, and then the 
portals, are absolutely critical to easing the flow of people 
through checkpoints, to accelerate that, and----
    Senator McCain. When can we expect to see some of that?
    Admiral Stone. The three Reveal pilots should start next 
month, and then last for 60 days, and then we look at then 
having that--a list developed of where those airports should be 
that need that. Because it gets us away from the explosive-
trace devices, which are manpower intensive, and gives you 
higher quality security. So we're going to hear a lot about 
Reveal-type technologies in the coming months, and how that's 
our future. RT--today we signed the MOU with Orlando for the 
private-sector initiative, for how we can roll out Registered 
Traveler in a more accelerated manner.
    Senator McCain. What would be the effect, if any, of 
privatization of the screeners?
    Admiral Stone. For privatization----
    Senator McCain. In your view.
    Admiral Stone.--of our screening force? I think to do so in 
a sweeping manner would cause tremendous churn of the entire 
work force throughout the United States. We saw that churn as 
we went from private screeners to federalized screeners. So I 
believe the process, which is more thoughtful, where you 
provide a opportunity for an airport to decide what's best for 
them, and then allow them to decide if they want to revert back 
to a private screening regime, is the appropriate one.
    Senator McCain. And you would be setting standards of 
performance, because originally the reason why we went to--away 
from private screeners is because of the lack of standards and 
lack of performance, right?
    Admiral Stone. Right. We would be back in the business of 
having an oversight staff at an airport, much like San 
Francisco and Kansas City, where the Federal Security Director 
and his or her staff oversee the standards at that airport.
    Senator McCain. I thank the witnesses. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Dorgan?
    Senator Dorgan. Mr. Chairman, thank you very much.
    We all understand, I think, that transportation security is 
not optional, it's a requirement. The 9/11 attack, terrorist 
attack in this country using aircraft, and last year's 
devastating terrorist attack in Spain using the rail system, we 
all understand that this is not an option, it's a requirement. 
The question is how to do it.
    And I want to talk to you just a little bit about the fees. 
The way the fees have been applied, and I think would be 
applied, I think, are unfair, rather, to people in my part of 
the country, in rural areas. When Senator Boxer would fly from 
her--a California constituent--fly from Los Angeles to 
Washington, DC, they'll pay the two-and-a-half-dollar fee, but 
every North Dakotan who flies from North Dakota to DC will pay 
that twice, because they're using two segments. There is no 
nonstop service from Bismark to Washington, DC, or Fargo to 
Washington, DC. So we've constructed a fee that is 
fundamentally unfair, in my judgment, to people in rural areas, 
because they have to use more segments to get where they're 
going. Would you agree with that?
    Admiral Stone. In that scenario that you described, for 
user fees and how we've constructed it, I would agree that 
there's a greater fee for those that are put in a position 
where they have to fly with segmented flights, yes, sir.
    Senator Dorgan. And there is a greater fee, despite the 
fact that when they get to their connection point--in North 
Dakota's case, it's almost always Minneapolis--they don't place 
any burden on security there because they've already been 
screened through security at the airport origin, Bismark or 
Fargo or one of the North Dakota cities. So they're charged 
twice, because there are two segments, despite the fact they 
impose no additional burden on the security system at the point 
where they transfer. Do you agree with that?
    Admiral Stone. I would agree with that, the way you've 
described it, yes, sir.
    Senator Dorgan. And so, this unfairness will be exacerbated 
by a proposed increase in the fee. Do you agree with that?
    Admiral Stone. Exactly. Those that are traveling in the 
manner that you describe will have a higher fee to pay as a 
result of this adjustment, yes, sir.
    Senator Dorgan. So I don't know that--whether Senator 
Stevens was trying to make that point, but it seems to me, 
whether you're in Alaska or whether you're in North Dakota, or 
perhaps Arkansas, where you don't have many nonstop flights to 
the major hubs, we're always going to pay more, always perhaps 
double or triple the fees that are paid by people that are 
traveling from one large city to another, because they're going 
nonstop. They'll pay one fee. And we're going with one or two 
transfers, and we'll pay two or three fees. And so, I made the 
point when the fee was originally established, but increasing 
the fee will increase the unfairness for folks who live in our 
part of the country, rural areas, rural states. And so, I don't 
think much--it makes much sense to recognize an unfairness and 
then see if we can exacerbate it with an increase in the fee.
    So, I mean, we have to pay for all this. I agree with my 
colleague, Senator McCain. One way or the other, security is 
not an option, it's a requirement. And we have to pay for it. 
The question isn't whether, it's how. But, frankly, I don't 
like the notion of paying for it in a way that always, 
inevitably overburdens the folks in rural areas, where you 
don't have nonstop flights.
    So, Ms. Berrick----
    Ms. Berrick. Yes.
    Senator Dorgan.--your assessment of that?
    Ms. Berrick. I would like to let you know, Senator, that we 
think it's worthwhile to do an assessment of these fees. And, 
in fact, GAO has an ongoing review right now looking at the 
cost of providing security when the airlines had that 
responsibility, to help do this assessment. And we're going to 
be publishing a report in April of this year summarizing the 
results of that review, just to let you know that that's going 
to be coming forth.
    Senator Dorgan. All right. Well, I just want to make the 
point on fees, that there's a basic, inherent unfairness that 
exists, and the last thing we ought to do is exacerbate that 
with these proposals.
    I want to ask another question. I think it was a year or a 
year and a half ago, we had a Committee meeting that was 
closed, and we were presented secret material at that point. 
And perhaps the Chairman or the former Chairman can help me 
with this. I don't know whether it was the GAO or the Inspector 
General that provided us the results of an investigation of 
airport screening. It was done in secret. It has, to my 
knowledge, not been leaked, even after the Committee hearing. 
But it was an investigation at certain airports of these 
screening capabilities that existed. And most of the Members of 
this Committee walked out of that briefing just shell-shocked 
by what we had learned. It was unbelievable to me. And I, of 
course, will not, and cannot, disclose the results.
    But you, undoubtedly, know those results. I assume you've 
studied that.
    Ms. Berrick. Yes.
    Senator Dorgan. Was that an Inspector General or a GAO 
report?
    Ms. Berrick. It was both of us, actually.
    Senator Dorgan. OK.
    Ms. Berrick. We were both involved in that.
    Senator Dorgan. So you will recall the results. And I want 
to know, has anything changed since then? Because, if not, 
we've got real serious trouble here. That investigation 
provided information that, as I said, was just shocking to me.
    So where are we, from that point until now, Ms. Berrick?
    Ms. Berrick. In terms of the actual undercover testing, we 
also agree that that's a very important area, in terms of 
measuring performance on how well the screeners are doing. So 
we're continuing to look at it.
    There have been some structural changes, in that TSA is 
conducting more of this testing. The Internal Affairs Office, 
who does this testing, has been testing more airports than what 
they've done before. And, in summary, we've seen some 
improvements, but it hasn't been dramatic. In terms of the 
results----
    Senator Dorgan. The only way we can determine the 
capability of the screening procedures is to test it and 
attempt to foil it in the kind of investigations that have been 
done. And I'm just asking, is there a qualitative analysis or a 
qualitative assessment about the improvement from then until 
now? Because if there is not measurable improvement--and I 
think that's what you're suggesting--I think we've got real 
serious trouble here.
    Ms. Berrick. There are different ways to measure the 
performance of screeners. One is through this undercover 
testing. There's also a re-certification program that TSA 
requires each screener to go through every year to retest their 
skills. So that also provides data. There's also a system 
called the Threat Image Projection System, where it flashes 
images of threat objects on a screen to see if the screener 
will detect it. And there's also some other initiatives.
    So I think, in looking at performance of screeners, you 
have to look at all of those, collectively. The undercover 
testing is one indicator, and it's important, but there is some 
others, as well.
    Senator Dorgan. Mr. Stone, do you want to comment? However, 
if I might say this, that the testing that was done was done in 
a way that is designed to try to foil the system, a passenger 
who, by design, wants to bring a weapon onboard. That's the 
purpose of that kind of testing. And the fact is, the results 
were quite shocking. And so, I understand about improving 
screeners, looking at the monitor, and all that, but I'm much 
more interested in the undercover investigations in which 
they're trying to test by trying to foil the system and bring a 
weapon onboard. Obviously, that's where aviation security 
really counts, is making sure we get those folks and understand 
who they are and screen them out.
    Mr. Stone?
    Admiral Stone. I couldn't agree more, Senator. The issue of 
those tests is to look at what are the causal factors. It's not 
just exhortation in the workplace, telling screeners to do 
better and work harder. Much of it is the technology. If you're 
going to be able to detect a certain type of explosive, you 
need to learn from what your covert testing is telling you, and 
then make those investments. And so, that translation between 
what is the covert testing saying are the vulnerabilities, and 
what are you investing, is the key to it. And then the other 
piece, on those things that you can remedy, through training, 
through the Threat Image Projection System, with which we've 
had a 6 percent increase, and we measure it daily, know how our 
screeners are doing on those X-ray images that we measure every 
day the number of airports that are inspecting 100 percent of 
bags electronically, so we don't have equipment and people 
sitting out in an airport that aren't doing that, that are 
mitigating it and using alternative screening procedures. Every 
day, that report comes in now, it's analyzed, what are the 
causal factors? And we've got a dramatic change in the last 
year over our ability to ensure that 100 percent of all 
passengers are being screened, 100 percent of all bags are 
being electrically checked, covert test scores are being 
translated into programs.
    And we'd like to provide a brief to the Committee, at the 
appropriate time, on the last year, where we've gone on both 
security issues, as well as covert testing.
    Senator Dorgan. Mr. Chairman, I wonder if I might make a 
request. It's been, I think, a year and a half, or perhaps 2 
years now, since we had that analysis. I'm wondering whether 
the Committee might not want to request a new type of testing, 
undercover testing, and see if we can compare the qualitative 
change in 2 years. Has there been a change, or hasn't there 
been a change?
    Ms. Berrick. And if I could add, Senator, also, we are 
going to be publishing something. GAO will be publishing 
something within the next month that details the results of 
TSA's covert testing efforts. That would provide data over the 
year since they initiated the program til today on what the 
changes have been.
    Senator Dorgan. Will that be classified?
    Ms. Berrick. It will be.
    Senator Dorgan. I would hope we'd have a hearing on that.
    The Chairman. I think even the fact that we may hold other 
types of tests ought to remain classified, Senator.
    Senator Boxer?
    Senator Boxer. Thank you, Mr. Chairman.
    I want to talk about port security for a minute. We know 
that the U.S. Coast Guard has told us that the ports need $5.4 
billion over 10 years to pay for upgrades. And what we've got 
here in this budget is $600 million. And that $600 million is 
not only for port security, but for rail security and for 
energy facilities.
    I am stunned that this purports to be a budget that takes 
care of homeland security. How can you possibly defend that 
type of a number here, when we just about have enough to do a 
year's worth of port security, and then we're throwing in rail 
and energy facilities?
    Admiral Stone. The state and local government coordination 
and organization that's been set up in preparation to ensure 
that that $600 million is appropriately vetted through all the 
modes of transportation, including maritime. TSA's role in that 
is to be the intellectual capital to go and review that, to see 
what are the risks and how should those be racked and stacked 
within that organization. We believe that that approach is a 
sound one, that you want to make sure that the entity 
responsible for transportation security is providing the 
intellectual capital to vet where that 600 million should go. 
We believe that's a sound approach.
    Senator Boxer. Well, with all due respect, Mr. Stone--and I 
really do respect you, and I think you're working so hard to do 
the right thing--that was a really convoluted answer to a 
simple question, which is, is this enough money to deal with 
it? If you trust the Coast Guard--I assume you trust the Coast 
Guard--and they say they need, essentially 5.4 billion, 500 
million a year, just to meet the needs, and you haven't even 
thrown in there the rail security and the energy facilities 
security--and we know our nuclear power plants are sitting 
ducks at this stage. We worked so hard in this Committee to get 
some bills to the floor, which I understand the Chairman--our 
new Chairman is interested in trying to push them through the 
Senate, because a lot of the bills just sat at the desk there--
but I want to ask you, again--you gave an answer that said, 
``Well, we have a committee, and they're going to stack these 
projects in priority.''
    Admiral Stone. Right.
    Senator Boxer. Do you believe, in light of the fact that 
the Coast Guard said that they need 500 million for port 
security alone, that 600 million--that's supposed to take care 
of port security, rail security, and energy facilities 
security--is a large enough number?
    Admiral Stone. I thought your----
    Senator Boxer. Yes or no?
    Admiral Stone. I believe that that number is appropriated, 
based on risk, in that the modal plan that comes out on April 
1st from the Coast Guard, which is working with us on maritime 
modal plans, will show that, based on risk assessment, the 
money is going to the right place to mitigate risk. There's not 
enough money in the world, probably, to drive it down to zero, 
but I believe that that----
    Senator Boxer. Well----
    Admiral Stone.--approach is right.
    Senator Boxer. OK. We're spending a billion a week in Iraq. 
A billion a week in Iraq. And now our biggest concern is a 
terrorist attack, which we should be concerned about. We've got 
cells in this country. And we're spending a billion a week in 
Iraq, and we are spending 600 million on rail, port, and energy 
facilities security. I mean, it just doesn't make sense to me.
    I want to ask you about grade separations. I'm sure you 
read the terrible thing that happened when a mentally ill man 
caused a tragic train wreck in Glendale. People were going to 
work. They died. Because we have these horrific issues with 
grade crossings. He parked his car right on the track, he was 
going to commit suicide, then he ran out of the car, and a 
disaster ensued. We have so many of these unsafe situations 
across America in every single state of the union, plenty of 
them in California. Where can we go, what program can we tap, 
for solving these grade crossing problems, either by blocking 
them or funding them to make grade separations? So if we can't 
afford that, to at least block the right of way to cars. Where 
can I tell my people to go to look for Federal funds? Because, 
you know, the terrorists are always going to look to the weak 
link.
    Admiral Stone. I'm happy to look at that and have your 
people talk to TSA and our railroad node--we work very closely 
with the FRA--and find out where that----
    Senator Boxer. Is there a program for----
    Admiral Stone. For grade separation----
    Senator Boxer.--for grade----
    Admiral Stone.--crossings?
    Senator Boxer. Yes.
    Admiral Stone. Not that I'm aware of. But if there is a way 
that's linked to a terrorism nexus as a result of some sort of 
threat stream, we'll be happy to sit down and----
    Senator Boxer. Good.
    Admiral Stone.--talk through that.
    Senator Boxer. OK. I'd love to meet with you a little bit 
more----
    Admiral Stone. Sure.
    Senator Boxer.--on that.
    And the last question I had, Mr. Chairman, what transit 
grants now--because you did a lot of reshuffling--can be spent 
on canine teams? Because I think those are quite effective. 
Canine teams.
    Admiral Stone. Yes. The canine team transit grants, you're 
asking for specificity----
    Senator Boxer. Yes, where would they go--where would our 
people go? Our airport people, our rail people--what 
particular----
    Admiral Stone. We've got----
    Senator Boxer.--grant program----
    Admiral Stone.--we have a special branch. Canine is their 
sole function in life. They work for our Chief Operating 
Officer. It would be an outstanding place to go to find out how 
we can help mitigate risk and partner with those that need 
canine resources.
    Senator Boxer. Is there a special grant program for these--
that funds these canine----
    Admiral Stone. I'm not aware of any specificity on that, 
unless you are, on----
    Ms. Berrick. Right. I would add that it could come out of 
many different grant programs, because canines are used for 
many different sources. They're used on rail systems to sniff 
for explosives, they're used with air cargo. So it could come 
out of many different sources.
    With respect to your question on safety with rail 
crossings, I would recommend that FRA, which is the Federal 
Railway Association within the Department of Transportation, 
have a safety responsibility related to rail. But there is a 
close intersection between what the Department of 
Transportation does and FRA does and what TSA does, because 
safety and security intersects in many areas, and sometimes 
they could implement a safety measure, and it could have a 
negative impact on security. So there has to be close 
coordination between both groups.
    Senator Boxer. Well, Mr. Chairman, if I could--oh, he's 
gone.
    I would just say to my colleagues that this terrible 
situation that occurred on a grade crossing should be a wake-up 
call to all of us, because all of our states have these unsafe 
situations, where the cars can just park right on these rail 
crossings. And the fact that this case was a mentally disturbed 
individual is one issue, but it just shows a tremendous 
vulnerability here.
    I think it's safety and it's anti-terrorism. And so, we 
should pool our resources. And hope that, as we go along with 
legislation, Mr. Chairman, we can take a look at these grade 
crossings, because all someone has to do, a terrorist, for 
example, is park a car there and leave, and we've got a crisis 
of major proportions that unfortunately, wreaked havoc on us in 
California.
    Thank you very much.
    Senator Inouye. [presiding]: Thank you very much.
    Senator Nelson?
    Senator Ben Nelson. Thank you, Mr. Chairman.
    Admiral Stone, you mentioned risk assessment, and you said 
the greatest risk that we still have, as it relates to aircraft 
is a flying bomb, a targeted effort to fly an airplane and 
create some sort of mass destruction. I thought that securing 
the cockpit door--we're talking about commercial airlines now, 
and not general aviation--I think might apply to general 
aviation--but how can that be the concern today, with the 
locked cockpit door, without access to the controls? How can 
that be? How can that still be the number-one security risk 
that we're trying to plug, through airport security, where 
you've got to take off your coat, take off your shoes? Maybe 
you can explain that to me.
    Admiral Stone. When you look at the threat streams and see 
the desired intent to conduct those sorts of operations, and 
then you look at the criticality of it, and you do the 
assessments, and say, well, how critical would that be if that 
were to happen?
    Senator Ben Nelson. Oh, no, I think it would be very 
critical if it were to happen, but the question is, haven't we 
taken steps to prevent that from being a logical extension of a 
plane as a bomb?
    Admiral Stone. Yes, sir. So the vulnerability piece, we've 
greatly reduced through the layered security approach and 
hardened cockpit doors, federal flight-deck officers, FAMs, 
increase security regimes in our nation's airports. So we've 
greatly reduced the risk of that. However, when asked, well, 
what do we believe is still the risk that we face that we need 
to be mightily prepared for? That elevates it to the very top, 
based on the threat and the criticality.
    Senator Ben Nelson. But I hope we're not putting a lot of 
our emphasis into security to deal with something that has been 
largely thwarted by previous security measures. Because it 
seems to me checking the boarding pass twice--I don't know what 
that does to deal with the major threat that you're concerned 
about.
    Ms. Berrick. If I could add, there's two pieces to this, or 
several pieces, but two major, one is threat and one is 
vulnerability, and somewhat independent, but then they come 
together. You can do an assessment of threats, and the threat 
can still be there. I think where your question is going is 
actually how vulnerable is the aircraft if we have hardened 
cockpit doors, if we have Federal air marshals, if we have 
screening? When is enough enough? And----
    Senator Ben Nelson. Yes, because more of the same at more 
cost doesn't necessarily make me feel safer flying on the 
airplane.
    Ms. Berrick. And that's, I think, where the risk-management 
approach comes in, that you have to assess these threats and 
vulnerabilities and then decide, based on the threat and the 
measures that we have in place, should we be putting more money 
here or other places?
    Senator Ben Nelson. Well, I quite agree with you. I come 
from the insurance business, so I do understand risk 
assessment, cost-benefit analysis. And I don't see the 
relationship, taking off the coat, showing the boarding pass 
twice to an airport personnel at the beginning, going through 
the line, showing it as you walk through the security. Maybe 
you can explain to me how that isn't just a cost, how that 
relates to better security--maybe the vulnerabilities have been 
addressed, but how does that contribute to making me safer?
    Admiral Stone. I'd be happy to, Senator. The second threat 
that I talked about, as using the aircraft as a target, relates 
to what happened in Russia just a few months ago. And taking 
off the jacket was deemed as a risk mitigation----
    Senator Ben Nelson. But I go through the magnetometer----
    Admiral Stone.--so that you can see whether or not a person 
has something that looks bulky around them. In fact, as a 
result of having folks remove their jackets, now what we're 
finding is packets of cocaine strapped under the armpit. Every 
day, I get the report. In other words, there's been a number of 
things we have not observed as a result of not being able to 
have in place taking off the jackets and coats. So it's been 
enlightening to us about this issue, since those Russian 
aircraft were downed, what we've found through torso pat-downs, 
having jackets taken off. And so, we believe those are 
appropriate measures for us, because of the threat of the 
aircraft as a target, not only as a weapon.
    Senator Ben Nelson. Yes, but it may not be a security 
issue, it may be a drug issue. I'm not saying we ought to turn 
our eye away from that, but it hardly seems a justification for 
a fare increase, in effect, through this additional money. More 
costs should result in better security, and I'm not sure that 
that's the case.
    Can you explain to me why we have to show the boarding pass 
to a person at the front of the line, and then have to show it 
walking through the security, or is that classified?
    Admiral Stone. No, sir, I can explain that. I think there's 
an area for major improvement on----
    Senator Ben Nelson. I would hope so.
    Admiral Stone.--because the airline hires those employees, 
the ticket-checkers in the lines, and then you're showing that 
to a TSA employee at the checkpoint. We're proposing right now, 
and looking at, how we might be able to relieve the airline of 
that responsibility so that we can have a trained TSA screener 
look at that ID and then train that screener in the screener 
passenger observation technique that's currently being used up 
in Portland, Maine, as well as in Providence, Rhode Island, 
where we look at behavioral characteristics while they're 
checking that, and do a better job of that. So there is an 
opportunity for us there to reduce some of the pressure on the 
airlines for hiring that individual and raising the bar on 
security. And we know that the verification-of-ID piece is a 
vulnerability for us; thus, Secure Flight and the desire to do 
commercial data base testing to see if that adds value; thus, 
Registered Traveler, to see if we can get more people to 
volunteer to identify themselves----
    Senator Ben Nelson. Well, I agree with you. It seems to me 
that every time we do something that doesn't add to security, 
there's a cost associated with it, and now we want to raise the 
cost. I would feel a little bit better about your trying to 
raise the cost if you came in and said, ``Here's what we've 
done to bring down the unnecessary procedures that add to the 
cost.'' I think you'll probably bring those down, but I can 
almost guarantee you won't come back in and ask for a cost 
decrease.
    Admiral Stone. Yes, sir. If I could add, there's no cost 
increase in this budget. The issue of the fees is just the 
reapportionment of what percentage did passenger/user pay, as 
opposed to the general taxpayer. The cost remains the same.
    Senator Ben Nelson. But the broad base of cost isn't going 
to go down unless you streamline the process.
    I see my time is almost out.
    One final thing. As you say about preferred travelers, I 
want to make sure that this comes across right. If we're going 
to do risk assessments, is there a way to assess risk so that 
the people who represent less risk will get a different kind of 
treatment without it being egalitarianism, where you've got to 
treat everybody the same, because, if you don't, then it's not 
fair to other people? It's not about fairness here, it's about 
risk assessment. Is there a way that you're truly working to do 
that? Because I've been hearing about it for 3 years, I see 
nothing about it. I'm not looking to get unfair advantage. I 
just don't want us to spend our money doing something that 
doesn't make sense.
    Admiral Stone. I believe the Registered Traveler Program 
gets at that issue of----
    Senator Ben Nelson. When's it going to happen?
    Admiral Stone. Today we signed the MOU in Orlando, Florida, 
which is the sixth airport, which is the MOU that heads us down 
the road of how we can capitalize on the private sector to be 
able to accelerate that program. So it's at the very high end 
of list of things we need to get on with and get done, so 
you'll be hearing more about that from us.
    Senator Ben Nelson. Yes, maybe that will reduce that 
overall cost. I'm hoping that will happen.
    Ms. Berrick. If I could add one thing.
    The Chairman. Ms. Berrick, we do have to move on.
    Senator Ben Nelson. Thank you, Mr. Chairman.
    The Chairman. Senator Pryor?
    Senator Pryor. Thank you, Mr. Chairman.
    I'd like to followup, if I may, Admiral Stone, on a 
question raised by Senator Inouye a few moments ago, and he 
talked about TSA with the new fee structure. Is that going to 
raise--what, $1.5 billion?
    Admiral Stone. The difference between the $5.2 billion is 
the overall cost. And so, it reapportions what percentage the 
passenger pays, versus the general taxpayer.
    Senator Pryor. And how much will that raise? How much will 
the additional----
    Admiral Stone. It shifts the burden for the user, from this 
year, $1.7 billion; to $3.7 billion in 2006. So you'd go from 
36 percent user to 73 percent. And then for the general 
taxpayer, this year it's $2.6 billion; it'll go down to $1 
billion. And so, it'll go, for the general taxpayer, instead of 
paying 57 percent of that, it'll go down to 20 percent. That's 
the adjustment. The airline percentages stay roughly the same, 
at 7 percent.
    Senator Pryor. OK. Well, there are a number of groups and 
associations here in Washington that have sent us a letter, and 
one of the things, in the letter, it talks about--it raises an 
additional 1.5 billion from passengers and airlines. But, if I 
can quote the letter, it says, quote, ``It will do nothing to 
improve security or the efficiency of the agency,'' end quote. 
I'd like to hear your comment on that.
    Admiral Stone. I think that's misleading, in my view, that 
that's an additional generation of $1.5 billion. The amount 
stays the same. It's just a question of who's going to pay 
that, the general taxpayer or the passenger/user? And the 
amount that we're looking at having appropriated to us for 
aviation security goes to programs that there's tremendous 
value added, of mitigating the risk of what we see as two of 
the top threats that this nation faces, the use of aircraft as 
a delivery vehicle and the use of an aircraft as a target. And 
so, we believe that the statement that you're not going to be 
getting any more for that, you'll be getting 5.2 billion worth 
of aviation security at a very high end.
    Senator Pryor. And what you're committing to the Committee 
is that every dime you raise to the--those fees will go right 
into airport security.
    Admiral Stone. Yes. That $5.2 billion goes to aviation 
screening security.
    Senator Pryor. OK.
    Admiral Stone. Yes, sir.
    Senator Pryor. I'd like to change gears here and ask you 
about the explosive-detection system. We have a number of small 
airports in Arkansas. I know a lot of Members of the Committee 
have a number of small airports. We have a couple of, you know, 
larger airports, by our standards, where a majority of the 
passengers go through theirs, but they are central air service, 
airports, et cetera, out around the state. And I know other 
Senators have similar situations. But when I look at your 
budget, and I see that most of these smaller airports do not 
have an EDS system--is that correct?
    Admiral Stone. That's correct.
    Senator Pryor. And I'm not sure I see the dollars in the 
budget to get them a system without a pretty hefty local match. 
Is that correct?
    Admiral Stone. That's correct, sir.
    Senator Pryor. And it just seems to me that a terrorist 
could enter the system through a rural airport just as easily, 
or maybe more easily, than he could through one of the larger 
airports. And I just question the wisdom of that, where we're 
putting the burden on the smaller airports with lower volume of 
traffic. They can't generate the amount of revenue locally in 
order to provide for this system, yet they're not getting the 
assistance from the Federal Government. Could you comment on 
that?
    Admiral Stone. I think the issues for smaller airports is 
why this Reveal-type technology is critical, because we can 
then reduce the number of these explosive trace devices, which 
are personnel-intensive, and have a higher quality of security 
at much less cost than the more expensive inline systems.
    Senator Pryor. And what's the time frame on those?
    Admiral Stone. The pilots start next month, and go for 30 
to 60 days. Upon evaluation of those pilots at three sites, 
then we look at that and determine the rollout for how that 
would be able to be sent out to smaller airports.
    Senator Pryor. Looking at the budget, I'm afraid that we're 
creating a system of haves and have-nots. And, like I said, I 
think a threat could enter the system just as easily at a rural 
or smaller airport than one of the larger airports. So I would 
just caution you to try to keep your eye on that ball, if at 
all possible.
    And I know that there's been some discussion about the cap 
placed on the number of screeners. I would like to ask, first, 
how in your view, Admiral, how is the morale among the 
screeners at the airports?
    Admiral Stone. I think it varies from airport to airport. 
So I think I would give it as a good, overall; but, in some 
airports, very poor. And we've got leadership issues where 
we've----
    Senator Pryor. Are you addressing those? Are you addressing 
those issues?
    Admiral Stone. Aggressively.
    Senator Pryor. OK. And the reason I ask is because I've had 
a number of occasions where I go through airport screening, and 
I tell them what I do for a living, and, you know, they just 
pour out their heart and soul to me. And, I'll tell you, I just 
sense that, at some airports in particular, there's serious 
morale problems.
    Admiral Stone. I would agree, sir. And that focus on 
finding out, through our ombudsman program, through screeners, 
through IG reports, and going after that aggressively--because 
if you do not have a strong leader that cares about people, 
that airport will not be operated properly.
    Senator Pryor. Now, you put a cap on the number of 
screeners. Is that right?
    Admiral Stone. We have a 45,000 full-time equivalent cap on 
the number of screeners that we hire.
    Senator Pryor. OK. And has that been a good cap? Is that 
arbitrary? Does that make sense?
    Admiral Stone. Right now, we have a new model, called the 
Regal model, that we're briefing the Department of Homeland 
Security on, which is the model that was sent to each Federal 
Security Director to tailor it to his or her airport and 
provide us that. We're currently in the process of giving 
briefings and answering questions about that model to make sure 
that it doesn't have assumptions in it that are in error. But 
we believe that that 45,000 FTE number is one that needs to be 
revisited because of growth of airports. When you look at 
Boston Logan opening up a new terminal, Houston Intercon, as we 
go across the nation, we need to make sure that we're planning 
ahead on what needs to be done to meet those needs, while at 
the same time reducing our personnel requirements through 
technology in the workplace. So getting that model right is a 
high priority for us.
    Senator Pryor. And my last question might be considered a 
two-part question. It's about general aviation. And 
Transportation Security Administration Access Certificate--
TSAC----
    Admiral Stone. Yes.
    Senator Pryor. I've had a number of folks--companies 
contact me and say that they would like to participate in that, 
they'd like to see you move forward on that. So I'd have a 
question there about what's the timeframe on that. And, second, 
getting general aviation flights back into Reagan National 
Airport. We seem to get some calls out our offices about that, 
as well. So could you comment on both of those?
    Admiral Stone. Certainly. The approach at TSA is to look at 
three components. We're big believers in opening and 
maintaining access, maintaining an appropriate level of 
security, and then respecting privacy and freedoms. When you 
look at the questions that you asked about general aviation 
airports, the Transportation Security Access Certificate, we 
believe, provides enhanced access while maintaining appropriate 
security. And so, we're working with the MVAA and others to 
ensure that we have a game plan with them where individuals who 
volunteer then to become TSAC certified will then be able to 
have access.
    At general aviation at Reagan, we also have met with the 
Secret Service, and with DHS. We're planning on giving 
briefings to the new DHS leadership on a plan for a phased 
approach at Reagan, where we look at the threats. We believe 
this is a good time for us to lay out that plan and seek 
approval from DHS for phased approach at Reagan. We pledge to 
keep this Committee fully advised on how that planning ensues.
    Senator Pryor. Thank you.
    The Chairman. Thank you very much, Admiral.
    Senator Burns?

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. Thank you, Mr. Chairman.
    You know, I want to associate myself with Senator Dorgan, 
when he was talking about those fees in rural areas. We pay a 
higher fare, too. You can fly roundtrip between here and San 
Francisco twice what it costs me to fly one way from Great 
Falls, Montana. And yet you want more fees. What are you going 
to spend this $1.5 billion for?
    Admiral Stone. It's the same amount that currently is being 
collected from the general taxpayer, Senator. There's no 
increase in this amount. It's $5.2 billion. It just changes the 
proportion of what the user pays, versus the general taxpayer.
    Senator Burns. In other words, you get no more money----
    Admiral Stone. We do not, sir.
    Senator Burns. I want the Committee to remember when we put 
this whole thing together. We offered a series of amendments 
that wouldn't have created the TSA in the first place. We'd 
have put it in the Justice Department. And there was a reason 
for that. Because they had screeners and they had security 
people that they could go to, and we could immediately get it 
into place. That's No. 1. No. 2, they also had a computer 
system up. Now you've got a big old computer system that we've 
paid how much for?
    Admiral Stone. A computer system for----
    Senator Burns. Well, for your--don't you have references to 
people and passengers and all these things?
    Admiral Stone. We do.
    Senator Burns. You had to set up a separate computer system 
for that, didn't you?
    Admiral Stone. We have a performance management information 
system, yes, sir, to make sure that we're standard space and 
meet Congress' intent to being held accountable for meeting 
metrics, yes, sir.
    Senator Burns. Well, but, basically, the system was set up 
in order to access--to find and search out these people that 
want to do bad things to this society.
    Admiral Stone. The Terrorist Screening Center.
    Senator Burns. And we set up a completely different system, 
and we didn't have to do that. We already had it in the Justice 
Department. And so, anytime that you say ``increase fees,'' it, 
sort of, catches--it, sort of, catches my attention right away. 
And I don't see--we ought to be looking for some efficiencies 
in screening these people. There has to be a better way than 
what they're doing now. I don't know why you're jerking out all 
the tickets. It's kind of like Senator Nelson, I don't see that 
we're just--we're just not doing a very good job at that.
    And how does--do you have any assessment on what this will 
do to smaller markets?
    Admiral Stone. Our assessment, on the surveys that we had, 
do not indicate a dramatic impact on that. In other words, I've 
gotten--briefings have been given to me that show that smaller 
markets are not negatively impacted disproportionately to 
larger markets. But I'm happy to review those and make sure 
that we----
    Senator Burns. It's gotten--I mean, I don't know who's 
doing your reports, but it's got to impact rural markets a lot 
more than it--than the larger markets or the hubs. Because if 
you're at the end of the spoke, you're the one that's, sort of, 
closest to the ground. And it looks like we're picking up a 
disproportional part of that. And I'm also getting some 
disparity in figures on the percentages of how much the airline 
passengers are paying with regard to the total cost of the 
system.
    Most of the questions have already been answered, but I'm 
just--I just sit and assess, you know, and I'm going to have 
some--we're going to look at the airline industry and have some 
listening sessions. We're going to bring stakeholders together. 
We're going to find out what these--how it's working. I think 
your airline employee system of security--I'm not real sure 
that that's been fully explored or handled in this case, 
because I know we have some people that are working on the 
tarmac and on the flight line that probably couldn't pass a 
security screening.
    Admiral Stone. But you----
    Senator Burns. So----
    Admiral Stone. Oh, I'm sorry, Senator.
    Senator Burns. Go ahead.
    Admiral Stone. I was just----
    Senator Burns. Would you like to comment on that?
    Admiral Stone.--because I know how important that is. We 
have 1.3 million airport workers, and we've worked hand in 
glove with Triple-AE, and other stakeholders. Those are vetted 
through our Office of National Risk Assessment, those names. 
For the last year, that's been a high priority, to have 
fidelity to that, to make sure that there's linkages to 
terrorist data bases, to see if we've got a vulnerability in an 
airport. I just wanted to reassure you that that continues to 
be a high priority. I see, every week, the numbers of airport 
workers that have been vetted through that process to make sure 
we keep our eye on the ball on that.
    Senator Burns. Also, on this percentage of what the 
general--what money comes out of the general treasury or from 
the general taxpayer, they've got a stake in this too. Not only 
the airlines. You can't have the passengers pay the total fee 
because they are the ones at high risk, because they were a 
very small part of what happened on 9/11 in New York. So I 
think the general public also has an obligation of some 
financial responsibility of security, even if it is airlines.
    So, thank you, Mr. Chairman. I got most of my questions 
answered.
    Thank you very much for coming. I have a couple I might 
submit to you. I might write you a letter.
    Admiral Stone. OK, Senator. Thank you.
    The Chairman. Senator Lautenberg?

            STATEMENT OF HON. FRANK R. LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thanks, Mr. Chairman. And the--I would 
ask unanimous consent that my statement be included in the 
record as if read, my opening statement.
    The Chairman. Yes, sir, it will be.
    Senator Lautenberg. And I listened--I'm glad to see Admiral 
Stone here on the job. I don't know whether you look back and 
regret, but----
    Admiral Stone. Not at all.
    Senator Lautenberg.--to the good old days of being 
somewhere on a ship or down in the sea or somewhere, where it 
was easier. Well, you've got a huge task, and I reviewed 
something the 9/11 Commission said. I listened to something 
Senator Inouye earlier said and I compare the two. The 
Commission said, over 90 percent of the nation's $5.3 billion 
annual investment in the TSA goes to aviation to fight the last 
war. Now, that's not a very encouraging statement when we see 
what we've got ahead of us. But I think they're largely right, 
and we need to be ready to fight, heaven forbid, a war in the 
future. And we're not assured yet that we are doing so.
    Rather than strengthening things like rail security or port 
security programs, they're being kind of chopped away at and 
spread all over the Department of Homeland Security. Now, at 
Newark Liberty Airport, in my home state, very busy airport, 
and others, we're seeing the effects of not having enough 
screeners. Now, I think you reduced the force by about 6,000 
screeners in 2003, if I'm----
    Admiral Stone. In 2003----
    Senator Lautenberg.--correct.
    Admiral Stone.--yes, sir.
    Senator Lautenberg. What I'm going to show you here is a 
knife similar to the one that was discovered after a woman had 
gone through screening at Newark. And she then discovered the 
knife in her bag and said to her sister, who was accompanying 
her, ``Oh, my God, I forgot to leave this knife home.'' I don't 
want to make any jokes here, it's too serious, but she was 
given the knife by her brother because she was going out on a 
blind date in New Jersey.
    [Laughter.]
    Senator Lautenberg. And it doesn't tell you----
    The Chairman. Is that all you need there now?
    [Laughter.]
    Senator Lautenberg. I haven't tested the sharpness of this, 
but--anyway, the fact that, after all these years and all these 
expenditures and the effort that goes into the training--and 
you know that Newark is a place where we've been short of 
screeners and trying to push to get it built back up, and that 
something like this could go through. They ran it through a 
second time, and discovered the knife image very clearly there. 
The first time, apparently, the bag wasn't even screened, just 
passed through. So when we look at these things, you see the 
breaches.
    Mr. Chairman, I would have been on time this morning if I 
wasn't shut down at New York Airport, LaGuardia Airport, when 
the fellow ahead of me was the last one that they would take on 
the flight, saying that I had arrived at the gate too late. And 
I watched this guy turn in his ticket and go in, and they 
refused. Now, Senator Pryor said something about the response 
he gets from screeners and so forth, how they unburden 
themselves, and I get some of that, too. Most of the time, I 
get ignored.
    [Laughter.]
    Senator Lautenberg. So there I was this morning, trying to 
get here, but it almost made up for the 35 minute wait I had to 
go through security in Washington--Reagan National Airport last 
week. We're just not able to keep abreast of these things. And 
we worry, in our area, about the target appeal for terrorism 
that goes from Newark Airport to the Port of New York, and they 
say it's the most susceptible, most interesting target for 
terrorists in the entire country. And we have to do our 
evaluations more carefully on the fact that these grants ought 
to be given according to risk. This is a little apart from the 
subject at hand today.
    And so, what I want to do, Mr. Chairman, in order to 
expedite things, I just want to be sure what we're talking 
about when we look at the funding. We're going to increase our 
revenue flow by a billion-and-a-half dollars a year. Where--
exactly how is that going to be parceled out? What part of 
that's going to go to screeners. Do we know?
    Admiral Stone. There's not an increase, Senator. Our 
budget's $5.2 billion. And so, whether we change the 
proportions from the general taxpayer to the passenger, the 
budget is $5.2 billion.
    Senator Lautenberg. Right.
    Admiral Stone. So all it does is change----
    Senator Lautenberg. So I may have----
    Admiral Stone. Yes, sir.
    Senator Lautenberg.--misused the terminology. But the fact 
of the matter is that this is a fee----
    Admiral Stone. Yes, sir.
    Senator Lautenberg.--to increase the revenue. And we have a 
fairly astute Chairman here, and he knows a fee when he sees 
one, he knows a tax when he sees one. And a fee is only a tax 
when you have to pay it. Otherwise, it can be some abstract 
thing. But that is a tax increase of some significant 
proportion. And we thought that we had covered so much of this. 
With Senator McCain's view on technology, we've been testing 
things at Pomona Airport, you know, the FAA laboratory in New 
Jersey, for such a long time. And yet we get to a situation 
here where we're relying on people to do these jobs, we're 
relying on training programs, we're relying on directives. And 
we get a glitch like this. And I don't know whether we'll ever 
be able to deal fully with it, because we are, after all, human 
beings with frailties. But the effort has to be picked up.
    And one of the things, Admiral Stone that is--has been 
talked about, and that is, moving this to private hands. What's 
the status of that?
    Admiral Stone. Right now, we have what's called the 
Screener Partnership Program, or otherwise known as ``Opt-
Out,'' where we've provided protocols for an airport to decide 
whether or not they would like to submit for transition from 
federalized screeners to privatized screeners. November 19th, 
we met the deadline to have that information out. We've only 
had one airport approach us on that. That's Elko, Nevada, 12 
screeners. We're continuing to work with airports to discuss 
the program. And so, that opportunity is there. I think it's 
the right approach, to let airports choose for themselves. 
We're very proud of both our five privatized airports, as well 
as the 440 federalized airports. The standard's the same, and 
we're ensuring that our leadership maintains that. And that's 
the current state of the Screening Partnership Program.
    Senator Lautenberg. Well, we know what a hard job it was to 
get the private companies to do their work effectively, 
especially since rates were negotiated, then, principally by 
the airlines. And I think, frankly, I'd rather keep it in 
government hands. It is working, most of the time. We have to 
button up the difference, but, on balance, it's a pretty good 
crew out there. People work hard, they try their best. Whether 
they're sufficiently populated is our problem, not their 
problem, that they have enough people to do it.
    Ms. Berrick. Senator, if I could--the time is out. I don't 
know if I can comment on the 45,000 screeners. The Intel Reform 
Act is--mandated GAO to look at that screening cap, so we will 
be starting that within the next month, looking at that, 
looking at TSA's allocation across the airports.
    A couple of problems that we've found due to staffing was 
that, because of staffing, screeners couldn't receive all the 
training that they needed, because they were needed to man the 
checkpoints, or there weren't enough screeners to operate the 
explosive-detection equipment. So there are some negative 
impacts of not having enough staff, and that's one of the 
things we'll be looking at.
    Senator Lautenberg. Good.
    Admiral Stone. If I could mention, on the knife, I got--
just to reassure the Committee, the way this--these sorts of 
incidents take place--and they happen at many airports--the 
process is, that gets reported to TSA. An image of what the 
screener saw on this knife is provided to the leadership group 
to look at what the screener saw, how did they miss that. The 
ability of our screeners, when you see these images, to detect 
every single knife certainly is not there. That's for the 
layered approach. But we do, though, is look at every single 
incident, every morning, that takes place, look at the causal 
factors and what we're doing to remedy it.
    Senator Lautenberg. Thank you, Mr. Chairman.
    [The prepared statement of Senator Lautenberg follows:]

            Prepared Statement of Hon. Frank R. Lautenberg, 
                      U.S. Senator from New Jersey
    Mr. Chairman:
    The Transportation Security Agency (TSA) is most identified with 
aviation. But ``transportation'' encompasses much more than simply 
aviation. And as we focus on aviation security, we must not overlook 
major problems with port and rail security.
    As the 9/11 Commission stated, ``over 90 percent of the nation's 
$5.3 billion annual investment in the TSA goes to aviation--to fight 
the last war.''
    These are haunting words. But the 9/11 Commission is right--we need 
to be ready to fight the next war--and we are not.
    Rather than strengthening and coordinating rail security and port 
security programs, they are being chopped up and spread all over the 
Department of Homeland Security.
    And even after this Committee took the initiative to identify port 
security and rail security as priorities, the Administration has gutted 
the Office of Maritime and Land Security.
    I certainly hope that the Department of Homeland Security and the 
TSA will recognize that we need to place more focus on non-aviation 
transportation security.
    But as we work to increase security measures on these other modes 
of transportation, our aviation security system still needs a great 
deal of improvement--of course--still must effectively secure our 
aviation system.
    We need to be sure that screeners have the tools they need to do 
their jobs effectively. And we must make sure that there are enough 
security and screening personnel in high-traffic areas.
    At Newark-Liberty Airport in my home state, and in other busy areas 
across the nation, we are seeing the effects of not having enough 
screeners.
    Just this past Saturday, at Newark, a woman was able to get a steak 
knife through security. And last year, there were reports of screeners 
letting baggage go unchecked in order to keep the lines moving.
    So even with long delays for travelers, our security efforts are 
falling short.
    And equipment needs are not being met. Airports across the country 
need in-line explosives detection equipment to keep baggage moving. As 
long as people are forced to manually carry their checked baggage to 
the screening equipment, delays will continue to plague the system.
    Mr. Chairman, given these needs, I understand the need for 
additional funding for transportation security. But the budget burden 
needs to be shared. That is why I am concerned that the President is 
seeking a significant tax increase on airline passengers. The President 
wants to increase sales tax on families who travel and small business 
people, while the average millionaire is getting a $100,000 tax cut 
this year. It makes no sense.
    These are some of the issues we need to address. I look forward to 
hearing from the witnesses on TSA's budget for Fiscal Year 2006.
    Thank you, Mr. Chairman.

    The Chairman. Senator Lott?

                 STATEMENT OF HON. TRENT LOTT, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Lott. Thank you, Mr. Chairman, for having this 
hearing. And thank you, Admiral Stone, for the job you're 
trying to do. I do think a lot of progress has been made over 
the years. We gave you a real challenge and put markers on it, 
and you've tried to meet all of those.
    Having said that--that's a nice, pretty softball; here 
comes the low, fast, inside fastball--you're going to have to 
do more with less. You know, 5.56 billion is too much. You're 
going to have to use more common sense. I think you can do what 
you need to do with fewer people. You're going to have to go 
with innovation. I mean, simple--little, simple things, like 
the frequent flyer type--I don't know what you call it--but, I 
mean, how long does it take to make a decision? We've been 
yapping about that for a year. Get on with it. That's one of 
the things that--you know, I mean, it's amazing, this stuff at 
the Reagan National general aviation, that has been going on, 
to my own personal knowledge, for 3 years. I was told, by the 
head of Secret Service, in 2000 and--I can't remember what--
2002, I guess it was, ``By May, we'll have that resolved.'' Now 
we've got a chicken-and-egg deal, ``Oh, well, it's Secret 
Service.'' ``No, it's TSA.'' ``No, it's somebody else.'' Just 
do it. Quit fumbling around with it. That's the kind of thing 
that costs money.
    Now, I certainly am opposed to the new fees. I don't think 
you've made a case for them. And I'll do everything I can to 
shoot them down. I think I'll have a lot of help in that.
    Now, you say, ``Well, if we don't get the fees, it just 
means that the taxpayers pay for it.'' Yeah, well, maybe. 
Unless we can find ways to spend less, overall. So it may add 
to the deficit, but maybe we can reduce the number. But I don't 
think you've made a case for more money. I think you all are 
too fat, and I think you're wasting money all over the place. 
And that's why I think you need to do more with less.
    And, beside that, who's supposed to pay these fees? Is it 
the passengers, or is it the airlines? The answer is, well, the 
passengers. But the airlines say, well, they have to eat it.
    Now, if you're going to go with these kinds of fees, maybe 
someday we're going to have to come up with a way where the 
passengers pay these security fees separately, I think they do 
that in other parts of the world, and get the airlines out of 
it. Make sure that the passengers know they're paying a 
security fee, and that--and they have to pay it. And don't pass 
it on to the airlines.
    Now, you know, I have airlines that have said, ``Yeah, that 
sounds good, but, you know, technologically how would you do 
it?'' You'd have to have machines, I guess, to do that. But 
you've got to think about something, some way to deal with 
this.
    If you're going to have fees, more fees, less fees, 
whatever, I'd like for passengers to know what they're paying 
for. They don't think they're paying for it now. They think the 
airlines are just eating it. I don't--but--so I think if you're 
ever going to--even the fees you have, assuming you're not 
going to get the new fees, we need to come up with a way for--
where the passengers pay these fees separately. Maybe we can't 
do it. And if we don't do it, you're not going to get more 
fees.
    You got any reaction to any of that?
    Admiral Stone. Well, the--I thought the wisdom of that, of 
having a 2.5 fee and establishing that, yes, a fee is good, and 
that that money then can be used directly for aviation 
security, was--my comment would be, very wise for Congress to 
have established that. And now all we're doing is saying that 
the general taxpayer today is paying 57 percent of that, and 
the user is only paying 36 percent, the airlines, 7. Let's 
leave the airline right where they're at, at 7 percent, and 
just pass the burden from the general taxpayer to the user 
who's actually benefiting from that, but keep it 20 percent for 
the general taxpayer, because there is a national security 
piece to it.
    Senator Lott. Is there some way, technologically, we can do 
that, get it out of the price of the airline tickets and get it 
onto the passenger?
    Admiral Stone. I'm not aware of that, no, sir. But I'll be 
happy to make sure that I find out.
    Senator Lott. If we don't do that, they don't know they're 
paying it. It just adds more burden on the airlines.
    Admiral Stone. We see that the airline is just a pass-
through to the passenger, and don't concur with the airlines 
saying that the fact that they say it's 7 percent between 2005 
and 2006. It really is just taking it from the taxpayer and 
putting it on the user.
    Senator Lott. Well, if we're going to--if the user's going 
to pay more, there needs to be a way for them to do it. You 
know, the only person in aviation that's really got a good deal 
these days is the passengers. They're doing great. You know? 
They've got nice planes, good transportation, and a low, low, 
low price for their tickets. They're doing great. And the 
airlines are slowly losing altitude. Or maybe fast losing 
altitude. So I think you need--ask somebody to take a look at 
how could we make sure the passengers pay this fee, if there's 
going to be one, and that they know that that's what they're 
doing. I want them to know. And then if they don't want to fly 
because they don't want to pay the security fee, fine. But I'd 
like for them to have that option.
    Admiral Stone. Yes, sir.
    Senator Lott. Mr. Chairman, since I'd like to hear the next 
panel, I'll stop at that point.
    Thank you very much, both of you.
    Admiral Stone. Thank you, Senator.
    Ms. Berrick. Thank you.
    The Chairman. Senator, that raises an interesting question 
about the next panel. And I did have a discussion with the next 
panel. We still have--I still have some questions for this 
panel, but we can submit them for the record, if that's what 
you'd like to do. But we have had a request now from the Air 
Transport Association, Airline Pilots Association, the Travel 
Industry Association, and Interactive Travel Services 
Association, and Regional Airlines Association, Air Travelers 
Association, and the National Business Travelers Association to 
listen to them with regard to these fees. So the question I 
would just, if you'll permit me, Admiral and Ms. Berrick, but 
let me ask the people who are the next witnesses whether they 
would prefer to appear this morning or appear with a panel of 
those people I just mentioned, at a later date.
    Ms. Goodwin, Mr. Barclay, Mr. May, what do you say?
    Mr. May. I'm happy to go with the judgment of the 
Committee. We're perfectly prepared to show up at a later date, 
Senator.
    Senator Lott. We know what their answer's going to be. It 
won't take long to say no.
    [Laughter.]
    The Chairman. That's true.
    Well, I believe we'll proceed with the other hearing, then. 
But I do want to say I am going to submit some questions. I'm 
not sure but what we're--our screening that's taking place now 
is really driven so much by the past and not really in tune 
with the future.
    Now, for instance, I saw a display of a fellow with 52 
cards that sit about five feet away from a person holding a big 
carrot, and he sliced off a piece of that carrot just by 
throwing the cards. I saw another person take a credit card and 
cut through what would be the thickness of a person's neck in 2 
seconds, much faster than a knife could do it.
    We seem to be really zeroing in, How can we pick up knives? 
Has any knife been the cause of an attempted hijack since 9/11?
    Admiral Stone. Not that I'm aware of, no, sir.
    The Chairman. But we're spending a lot of money to get 
them, aren't we?
    Admiral Stone. We sure are, sir. In the wake of the box 
cutters----
    The Chairman. Are they the threat now? Isn't the threat now 
chemicals and substances and the ability to deal with trying to 
use a plane as a weapon--notwithstanding the fact that there 
are air marshals and they can't get through the door to the 
pilots, hasn't the system changed now? Do we really need to 
spend more money trying to pick up knives and fingernail files?
    Admiral Stone. I would agree with you, the threat's 
changed, and that the focus on box cutters and knives and the 
regulations pertaining to that should be revisited.
    The Chairman. Well, I'm going to end this. But I've got to 
tell you, in my state, you know, we only have one main road, 
and we have a railroad. No one on the road and no one on the 
railroad pays any fees, but every time you get on an airplane, 
you pay a fee now. As a matter of fact, in most instances, to 
get in from the rural areas, you'd have to get on two, maybe 
three, planes to get to Anchorage. Now, there's a maximum they 
have to pay in 1 day, as I understand it. You're going to 
increase that maximum by three dollars.
    Admiral Stone. Yes, sir.
    The Chairman. So those of us that don't have trains and 
roads and buses and taxis, who commute from Kenai, in Alaska, 
which is about 50 miles south of Anchorage, they commute back 
and forth. They pay this fee twice a day. If you commuted 
across the river up there in New York or New Jersey, you 
wouldn't pay any security fee, yet you're a great deal more of 
a risk to the nation's security than you are if you're 
traveling from Kenai to Anchorage and back every day for work.
    I think this fee system is very burdensome on people in 
rural areas. And for that reason, I hope to have another 
hearing on the whole subject of fees. But, right now, I want to 
thank the two of you for what you've done, and coming today.
    I do think we have some other questions we have to ask you. 
For instance, I don't see anything in this proposal to fund the 
letters of intent that were issued for baggage screening 
devices. And there's a whole priority list, as I understand it. 
Our airport in Anchorage, the tenth busiest airport, we're 15th 
in the security list. Little questions like that, I'd like to 
have some time to ask you.
    What are we doing with regard to the situation where a 
woman gets on a--I saw this--a woman's getting on a plane in 
Sitka, going 25 minutes to Juneau, elderly lady, a grandmother, 
obviously, with three kids. Her name popped up, so she goes 
through all of this stuff and she's going to be in a plane less 
time than it took to go through the screening process. Now, 
shouldn't there be some differences for intrastate travel in a 
state like mine? You don't search people that are getting on 
buses. You don't search the people getting in taxis. Yet we use 
airplanes for taxis, and we're searched every time we get on a 
plane.
    Now, I think that this whole system is not sensitive to the 
situation of the passenger. It's just one size-fits-all. You 
know, you can go up to Nome, two planes a day, you've got two 
shifts a day, and they're going to search those people going on 
the planes and--as a matter of fact, the people getting off 
have been searched, too. And they're just going within their 
own state and couldn't be a threat to anybody's economy or 
security.
    I really think this thing needs really an intensive look. 
And we intend to continue these hearings. We intend to dig into 
this and find out why--why do we all have to wear the same pair 
of shoes to get on an airplane in different parts of the United 
States? And why don't the people who are the greatest risk, the 
ones that don't fly, the no-fly people--they're in our 
communities--how are we going to ferret them out?
    This is why we insisted on keeping the jurisdiction over 
this TSA. Our jurisdiction covers all means of transportation, 
yet it seems that your main focus is airline transportation, 
primarily because of what happened on 9/11. And that is a 
serious, serious thing, but we've done everything we can to 
prevent that from re-happening. But I don't see what we're 
doing to prevent something even worse from happening, in terms 
of chemical substances, biological substances, and, really, the 
protection of massive areas, as opposed to imposing fees on 
people who use commuters every day just to go back and forth in 
smaller states, to make their living.
    Do you have any final statement, my friend?
    Senator Inouye. One short question. How does our security 
system compare with the security systems in Europe and in Asia? 
Are we better? Worse?
    Admiral Stone. I have a view of that, which is that we have 
the best security system in the world, that the criteria we 
use, for instance, on our----
    Senator Inouye. So, in other words----
    Admiral Stone.--checked bags----
    Senator Inouye.--in other words, the aircraft coming in 
from Britain is not as secure as the one that goes to Britain.
    Admiral Stone. We don't grant equivalency for passenger 
screening, for instance, from the UK to the U.S. In other 
words, they can't land in the sterile area and then board a 
flight from New York to Denver without going through our 
passenger screening. Those bags are also re-screened, whether 
it's from France, the UK, Japan. We believe our screening 
systems that we use, as well as our passenger screening, set 
the mark on where they should be. And so, we're committed to--
--
    Senator Inouye. But the plane coming in from Paris could be 
loaded with explosives.
    Ms. Berrick. There are different procedures between what 
the U.S. employs and what other foreign countries do, and I 
think there are things that we can learn from what other 
countries are doing, because they've been dealing with 
terrorism for many years, and aviation is an area--rail 
security is also an area--and there are differences in how 
passengers are pre-screened, in terms of their names being 
matched against terrorist watch lists----
    Senator Inouye. Is our system much more efficient than the 
other systems?
    Ms. Berrick. I don't think the assessment has been done to 
answer that question. There are differences between the two 
systems.
    Admiral Stone. I would agree. But from an efficiency point 
of view----
    Senator Inouye. Who spends----
    Admiral Stone.--there is a lot to be learned.
    Senator Inouye.--more money on it?
    Ms. Berrick. I don't know the answer to that question, in 
terms of funds spent.
    Senator Inouye. Thank you.
    The Chairman. Thank you very much. We appreciate your time. 
The Committee will be sending you some questions. I apologize 
for cutting you short.
    Admiral Stone. Thank you, Mr. Chairman.
    Mr. Berrick. Thank you, Mr. Chairman.
    The Chairman.--pursuing some of these items in Subcommittee 
to surface transportation, their security problems.
    We now have--the next panel of witnesses, if we will--oh, 
they're right there. If they say they want to testify. Do you 
want to testify today, Chip?
    I want to ask, again, the airline people, the Association 
of Executives and the Port Authorities--it was my intention to 
convene another hearing. Do you want to be heard today?
    Mr. Barclay. Mr. Chairman, Jim May has already left, so----
    The Chairman. Good.
    Mr. Barclay.--I think we'd better go with another day.
    [Laughter.]
    The Chairman. We'll convene another day of hearings. Thank 
you very much.
    [Whereupon, at 11:44 a.m., the hearing was adjourned.]

                            A P P E N D I X

Prepared Statement of Jean Godwin, Executive Vice President and General 
           Counsel, American Association of Port Authorities
    Good Morning. I am Jean Godwin, Executive Vice President and 
General Counsel for the American Association of Port Authorities 
(AAPA). I thank you for inviting us to testify before your Committee on 
the Port Security Grant Program and the FY06 proposed budget. AAPA is 
an alliance of the leading public ports in the Western Hemisphere and 
our testimony today reflects the views of our U.S. Members. AAPA has 
had a long history of involvement with the Commerce, Science and 
Transportation Committee, including passage of the Maritime 
Transportation Security Act (MTSA) and the Coast Guard reauthorization 
legislation, which both serve as authorizing legislation for the Port 
Security Grant program.
    The Port Security Grant program was established after 9/11 to 
provide much-needed help to port facilities to harden security to 
protect these vital ports of entry from acts of terrorism. Since its 
inception, the program has given out $565 million in grants for 1,200 
projects, with Congress providing an additional $150 million in FY05. 
Overall only one-sixth of all projects have been funded, showing the 
great need for this program. Through four rounds of grants, funds were 
provided to coastal states, including the port-dependent states of 
Alaska and Hawaii. But its value to this nation is not just to coastal 
states. With 95 percent of our overseas trade flowing through our 
ports, all states and all citizens would be impacted by a shutdown of 
our seaports.
    The Port Security Grant program has also been subject to numerous 
reorganizations, some of which are expected to be highlighted in the 
Inspector General's report to be issued today. Originally the program 
was housed in the Maritime Administration, then it moved to the 
Transportation Security Administration (TSA) and, as part of last 
year's budget, the Administration moved the program to the Office of 
State and Local Government Coordination and Preparedness. As part of 
this move last year, the Department agreed to keep the program as a 
separate entity and to keep TSA, Coast Guard, MarAd, and Customs 
involved in the management and selection of these competitive grants.
    In FY06, the Administration proposes yet another change--
elimination of the port security grant program, and creation of a broad 
grant program to protect facilities in the critical infrastructure 
plan. This runs counter to the intent of this Committee. Last year, 
this Committee included a provision in the Coast Guard reauthorization 
bill to update the authorization of the program. The Act maintained 
that there would be a separate program specifically for port security 
to be based on the MTSA.
    The new Targeted Infrastructure Protection program would lump port 
security into a program with trains, trucks, busses and other public 
transit and ties these grants to the goal of protecting critical 
infrastructure based on relative risk, vulnerability and needs. This 
move would pit an underfunded border protection program against 
underfunded domestic transportation protection programs. AAPA has great 
concerns and encourages your Committee to voice opposition to this new 
structure.
    Our economy, our safety and our national defense depend largely on 
how well we can protect our seaports. According to the 9/11 Commission 
Report, opportunities to do harm are as great, or greater, in maritime 
as they are at airports. Ports are also the only industry within this 
new Targeted Infrastructure Protection program that has a statutory 
mandate to comply with--the MTSA--and the only one for which there is a 
congressionally authorized grant program, which was also created by 
this Committee. A separate line item is essential to ensure that ports 
continue to be a targeted priority in our country's war again 
terrorism. Cargo doesn't vote and it is often not fully recognized for 
the value it provides to this country in state and federal 
infrastructure plans. While critical infrastructure protection is 
important, using it as the sole criteria for making decisions on 
funding for port security is a bad idea.
    We must focus on protection at all seaports since ports serve as an 
international border and an incident at one would surely impact all 
ports. The MTSA has a system established to identify risks and 
vulnerabilities, and while some may question some of the DHS decisions 
on certain grants, the overall criteria of tying the grants to the MTSA 
is one that AAPA supports. This was not done in the first few rounds 
because the MTSA was not in effect yet. We urge DHS to refocus the 
program on the MTSA, while including a cross-check to the critical 
infrastructure plan and to keep this as a separate program, like the 
firefighter grants.
    We also urge this Committee to take a leadership role in advocating 
for stronger funding for the current port security grant program in the 
FY06 Appropriations process. The Coast Guard has estimated that ports 
would have to spend $5.4 billion over a 10-year period to comply with 
the new MTSA. AAPA urges a funding level of $400 million in FY06. There 
is still much to be done to continue our progress in securing America's 
ports. Adequate federal funds will help us avoid an infrastructure 
crisis in the future.
    Ports are currently planning for a huge increase in trade in the 
future. Industry analysts predict that within the next 15 years, that 
the approximately two billion tons of cargo that U.S. ports handle will 
double. But ports are also challenged by the new security mandates of 
the MTSA and the need to continue to make improvements. Therefore, 
ports are using current dollars to pay for security, rather than 
capital investments needed to handle the future growth in international 
trade. We need the Federal Government to provide its share of these 
improvements now, so that our ports are secure today and will be able 
to meet the challenges and opportunities of accommodating the world 
trade needs of tomorrow.
    Finally, AAPA would like to voice its strong support for the 
Transportation Worker Identification Credentialing (TWIC) program. We 
urge increased funding for this program and encourage DHS to make the 
necessary policy decisions to implement this program quickly. The MTSA 
required all ports to control access to their facilities, but our U.S. 
member ports are still waiting for the TWIC requirements before 
installing new technologies.
    Thank you for inviting us to testify on this critical 
transportation security issue. Ports stand ready to do their part in 
protecting America. We urge your Committee to voice your support for a 
strong appropriation in FY06 for a separate line item for the Port 
Security Grant Program.
    Thank you. I would be happy to answer any questions.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                          Hon. David M. Stone
Transportation Worker Identification Credential (TWIC)
    Question 1. What is the current status of your efforts to develop 
and implement a biometric maritime Transportation Worker Identification 
Credential program?
    Answer. The Transportation Security Administration (TSA) continues 
implementation planning for the Transportation Worker Identification 
Credential (TWIC) by focusing on: (a) lessons learned from the current 
Phase III-Prototype to refine requirements further; and (b) developing, 
in conjunction with the Coast Guard, a rule to implement the TWIC 
program for the maritime mode in accordance with Sec. 70105 of the 
Maritime Transportation Security Act of 2002.
    The National Maritime Security Advisory Committee (NMSAC) met for 
the first time in March 2005. That committee agreed, as a matter of 
priority, to assist federal regulators in the development of the TWIC 
rulemaking. Since this Committee is regulated under the Federal 
Advisory Committee Act, they may advise TSA during the rulemaking 
process. A task statement has been delivered to the Committee with a 
30-day deadline for comments. NMSAC comments will provide consolidated 
recommendations and concerns from a board group of maritime industry 
stakeholders including: port officials; port facilities; shipping 
operators; shore side and maritime labor; offshore maritime industry; 
small passenger vessel operators. The NMSAC recommendations will be 
considered during the drafting of the NPRM.

    Question 2. What steps have been taken to resolve issues with 
stakeholders, such as how to share costs of the program, eligibility 
requirements, and policies for adjudicating card applications appeal 
and waiver requests from workers denied a card? If the program is moved 
out of TSA to a new organizational home within DHS, what assurances can 
you provide that the TWIC program will not be further delayed?
    Answer. TSA recognizes the need to develop partnerships across the 
transportation industry to communicate program objectives and progress 
and to establish a forum for industry feedback. In accordance with the 
Department's policy of stakeholder outreach, TSA is consulting with 
industry partners and affected stakeholders during the execution of 
various phases of the program.
    TSA is evaluating opportunities for reciprocity where current 
identification and vetting programs exist and collaborating with a 
myriad of stakeholders and port security officials facing investment 
decisions. TSA is developing standards-based technical specifications 
for smart card readers, as well as developing interfaces and technical 
specifications to facilitate integration with commercial physical 
access control systems. Additionally, TSA is actively seeking cost-
effective and efficient options for providing identity management 
services by identifying and leveraging existing capabilities in both 
the Federal Government and private sector.
    Notably, TSA is partnering with the State of Florida to meet the 
requirements of the Florida Uniform Port Access Credential (FUPAC). The 
TWIC prototype serves as the identity management system for Florida's 
12 deepwater ports, allowing them to comply with Florida statute. This 
federal-state-industry relationship helps demonstrate TSA's commitment 
to work with our stakeholders to deploy an effective solution.
    TSA has developed a comprehensive stakeholder communications plan 
that includes the following channels:

   Online Materials: External stakeholders can access the TWIC 
        Stakeholder Brief, a Frequently Asked Questions document, and 
        other materials via the Internet at http://www.tsa.gov/public/
        display?content=09000519800276d6.

   TWIC E-mail Address: The TWIC program receives email via the 
        e-mail address posted on the TWIC website 
        ([email protected]). Messages primarily inquire about the 
        TWIC program status, participation requirements and 
        opportunities, and timeline. TSA's response directs the 
        requester to the TWIC website where the information is listed 
        or, if necessary, a specific response is drafted and approved 
        at the appropriate level before being transmitted to the 
        requester.

   Integrated Process Teams (IPTs): IPTs are comprised of 
        government and program office support personnel with industry 
        and business process expertise. The teams maintain a local 
        facility focus and presence to ensure prototype sites receive 
        the necessary support during the various phases of the program.

   Direct Stakeholder Outreach: Since early 2002, TSA has 
        conducted selected industry and government events, conferences, 
        and symposiums to reach a broad cross section of national-level 
        stakeholders, with interactive presentations, panel discussions 
        and listening sessions.

   National Maritime Security Advisory Committee (NMSAC): The 
        NMSAC responded to its first task statement in June 2005 by 
        providing a comprehensive set of recommendations in response to 
        key questions on TWIC implementation in the maritime mode. The 
        industry input is well aligned with the TWIC implementation 
        currently being considered for the rulemaking.

   Public Meetings: During the TWIC maritime rulemaking 
        process, TSA and the Coast Guard intend to hold public meetings 
        to address important stakeholder concerns such as eligibility 
        criteria as well as a waiver and appeal process. TSA recognizes 
        the sensitivity of these issues and potential impact to the 
        current labor force and will continue to consider stakeholder 
        input as proposed rulemaking proceeds. Additionally, the rule 
        will be subject to a public comment period during which 
        stakeholders can provide TSA additional feedback.

    The President's FY06 budget proposes that TWIC will align with the 
newly formed Office of Screening Coordination and Operations (SCO). 
Consolidating screening within the SCO is expected to bring improved 
rationalization and integration of screening assets as well as greater 
efficiency and effectiveness in the Department's ability to screen 
multiple populations. Implementation of SCO will not effect the current 
TWIC schedule Credentialing and biometrics programs, such as TWIC, have 
been recognized as critical to DHS' mission as they will enable 
identity verification of individuals accessing sensitive areas of the 
transportation system. This capability is crucial in enabling our 
critical maritime infrastructure (facility and vessel owners and 
operators currently regulated under the MTSA) to make adjustments in 
screening processes in order to maintain maximum security.

    Question 3. What are the Department's plans for expanding the TWIC 
program beyond our ports to other transportation sectors and 
facilities? How will the TWIC program work for transportation sectors 
that already have specific ID or background check requirements?
    Answer. The initial implementation plan for the TWIC program 
focuses on maritime workers as the primary TWIC population. TSA will be 
able to use its experience with the prototype and with implementing 
TWIC at ports to develop a risk-based approach to determine how to 
leverage and interact with identification and background check 
processes and information in other transportation modes.

        TSA announced the award of the TWIC Phase III Prototype on 
        August 10, 2004, for a total of $12.3 Million. The prototype is 
        scheduled to last for 7 months, or until March 10, 2005. 
        According to TSA's August press release, TSA is supposed to 
        issue between 150,000 and 200,000 cards to transportation 
        workers at over 40 sites, including all 14 deepwater ports in 
        the State of Florida.

    Question 4. The March 10 conclusion of this prototype has passed. 
How many TWIC cards has TSA issued, and at how many sites?
    Answer. The period of prototype activities was extended to June 30, 
2005 when the contract modification discussed in our response to 
Question 7 below was issued. As of June 3, 2005, approximately 15,000 
workers were enrolled and 7,000 TWIC cards were produced at 26 
prototype locations. The secure credentials for Florida port workers 
will be produced and issued once the necessary identity vetting and 
threat assessments are complete and the new card production facility is 
up and running.

    Question 5. How much has TSA actually expended on this project?
    Answer. As of May 31, 2005 approximately $16.2M was spent to 
conduct the TWIC Phase III-Prototype.

    Question 6. How much has TSA's contractor received to date?
    Answer. As of May 31, 2005, the Prototype contractor, BearingPoint, 
received $11,002,231.

    Question 7. The total announced value of the contract on August 10, 
2004 was $12 Million. Have additional change orders been added to this 
original task? What were they and how much were they for? What is the 
total value with all change orders of the contract?
    Answer. Change orders totaling approximately $12M were issued to 
satisfy unanticipated requirements. These requirements included: TSA 
compliance with Homeland Security Presidential Directive 12 (HSPD-12); 
procurement of standards-based biometric readers; obtaining card 
production and system hosting services; and extending the contract's 
period of performance to ensure continuity of operations for Florida 
and our East and West Coast stakeholders. The total cost of the 
contract (base plus modifications) is $24,546,183.

    Question 8. It is my understanding that many of the TWIC phase III 
Prototype sites were very eager to get the cards issued to their 
employees. What has become of security at all the sites that have not 
yet been stood up for the TWIC prototype?
    Answer. With or without TWIC, facilities are required to implement 
security measures, including the control of access to their facility in 
accordance with 33 CFR Subchapter H and their Coast Guard approved 
Facility Security Plans. The TWIC is a high assurance identity 
credential that can be used in local facilities to enhance security for 
providing physical access to secure areas. As the TWIC becomes 
available to MTSA regulated facilities and vessels, the level of port 
security will be enhanced as a result of enabling biometric identity 
verification for the port worker population.
Office of Maritime and Land
    Question 1. In the most recent re-organization of TSA two weeks 
ago, I see you consolidated the functions of the Office of Maritime and 
Land and Aviation Operations to what is now known as the Office of 
Intermodalism. Exactly how many reorganizations has the agency 
undertaken since it's inception into the Department of Homeland 
Security? How will these changes improve non-aviation transportation 
security?

    Question 2. Can you explain how this reorganization plan and the 
changes to TSA purposed in the President's budget proposal will result 
in stronger non-aviation security initiatives? Will funding and staff 
dedicated for non-aviation security increase or decrease under the new 
reorganization? How will the Department ensure continuity and 
accountability for non-aviation security under the DHS's new 
organizational structure?
    Answer. TSA recently realigned its organizational structure to 
provide better support for surface transportation security activities. 
This structure realigns our functions ensuring our success in meeting 
the strategic goals of the Department of Homeland Security and is 
consistent with the Department's overall efforts to conform with 
Homeland Security Presidential Directive-7. TSA's Maritime and Land 
Security program is included in the President's FY 2006 Budget request. 
TSA's security efforts for all non-aviation transportation modes, 
including rail, mass transit, highway, postal and shipping, pipelines, 
and maritime (in close partnership with the Coast Guard) going forward 
will be covered by a new appropriation category titled ``Surface 
Transportation Security.'' Operational staffing and funding that were 
previously under the Maritime and Land program are included within this 
appropriation. Staffing levels for surface transportation security 
staff and rail inspectors would be maintained at FY 2005 levels under 
the FY 2006 request.
    An Assistant Administrator for Intermodal Programs has been 
designated to assume programmatic responsibility for staffing, 
training, equipping, and managing programs for all transportation modes 
(aviation, rail, mass transit, highway, postal and shipping, pipeline, 
and maritime).
Transportation Security Grants
    Question 1. How will the consolidation of transportation 
infrastructure grant programs improve compliance with the statutory 
requirements of Maritime Transportation Security Act of 2002?
    Answer. A consolidated Targeted Infrastructure Protection Program 
(TIPP) will allow greater flexibility to the Secretary to allocate 
funds according to the greatest risk so that we may best enhance the 
ability of the owners and operators of key transit systems and port 
assets to prevent and respond to large scale incidents.
    In FY05, the Office of State and Local Government Coordination and 
Preparedness (SLGCP) provided $315 million through several initiatives 
to enhance the security of the Nation's transit systems, railroads, 
ports, and highways. For FY06, TIPP will build on these enhancements by 
shifting to a discretionary approach for all program elements. In 
coordination with other DHS components and other federal entities 
(including IAIP, TSA, Coast Guard, and the Maritime Administration 
(MARAD), the $600 million requested in the President's FY06 budget for 
an integrated, discretionary grant program will enable SLGCP: (1) to 
better supplement State, local, and private sector infrastructure 
protection efforts based on threat, vulnerability, and criticality; (2) 
to further enhance the linkages between critical infrastructure 
protection and regional planning efforts; and (3) to ensure that the 
program is consistent with applicable laws and regulations, such as the 
Maritime Transportation Security Act (MTSA).
Airline Passenger Fee Hike
    Question 1. I have many concerns about the TSA plan to raise 
security fees on airline passengers, but clearly the additional $1.5 
billion it is intended to bring forth is central to the 
Administration's effort to increase homeland security spending across 
all federal government agencies by $1.4 billion in FY06. If the 
Congress does not support this change, what steps will TSA and DHS take 
to address the funding shortfall? Will agency programs be cut?
    Answer. The sharing of aviation screening costs between industry, 
passengers, and government is essential to ensure that there is 
sufficient funding for existing and emerging threats to the integrity 
of the aviation security infrastructure. The proposed increase is 
intended to shift the burden of paying aviation screening services from 
the general taxpayer to the airline passenger. The Department will work 
with Congress to ensure that security priorities are met.
Explosive Detection System (EDS) Letters of Intent (LOIs)
    Question 1. It appears the $250 million requested for EDS is still 
only enough to pay off existing LOIs and do perhaps one or two small 
pilot tests. How do we clean up the operational mess in airport lobbies 
plus provide more cost effective and secure checked baggage security 
solutions if we continue to fund at only a maintaining level for 
airport construction?
    Answer. The President's FY 2006 budget reflects the Department of 
Homeland Security's most critical needs and includes funding which 
supports the eight existing Letters of Intent (LOI) airports. TSA is 
currently developing a long-term plan to determine the appropriate 
level of in-line system integration activities for LOI and non-LOI 
airports. TSA has also engaged in intensive research and development 
initiatives to identify and certify improved explosives screening 
technologies that should increase throughput and detection capacity, 
and potentially reduce infrastructure and space requirements. This 
could reduce the need for in-line systems and/or the present high cost 
of those systems. TSA will continue to work with non-LOI airports and 
air carrier officials to ensure that TSA can use equipment already in 
place to maintain 100 percent electronic screening during ongoing 
terminal construction projects.
    In addition, TSA is developing a schedule to replace explosives 
trace detection (ETD) systems with EDS pursuant to Section 4019 of the 
Intelligence Reform and Terrorism Prevention Act of 2004. With the 
recent certification of the Reveal GT-80 system, TSA is developing a 
strategy for determining the cost effectiveness of deploying these 
smaller, less expensive units to those airports that are currently 
using ETD equipment primarily.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                         to Hon. David M. Stone
    TSA's budget request includes an increase of $15 million to pay for 
passenger screening activities at the five pilot airports that use 
private security firms. Ever since we set up the federal screening 
workforce, I have heard an endless stream of statements from our House 
counterparts and OMB that said the private sector could do it better 
and cheaper. Yet, this substantial increase for FY06 would appear to 
invalidate these claims.
    Question 1. What is TSA getting for its extra $15 million? Will 
these airports get additional screeners or services? Or is this funding 
to cover exactly the same services you were getting last year?
    Question 2. If you are getting the same level of services for $15 
million, what was the contractors' explanation of why they needed the 
increase?
    Answer. In directing TSA to establish a contract screening pilot 
program (PP5), the Aviation and Transportation Security Act (ATSA) 
required that the level of screening services and protection provided 
at the PP5 airports be equal to or greater than the level provided at 
an airport with federal screeners. Similarly, contract screeners must 
receive compensation and other benefits that are not less than the 
compensation and other benefits provided to federal personnel. In 
accordance with these requirements, TSA strives for a level playing 
field between airports with private contract screeners under PP5 and 
the Screener Partnership Program (SPP) and airports with federal 
screeners. Consequently, as each airport considers whether to continue 
with federal screening or to apply for the SPP, it can base its 
decision on its own preferences and criteria rather than considerations 
of security, resources, or level or service.
    The additional $15 million requested is reflective of the increased 
cost of providing screening services at the levels required under ATSA 
for the PP5 airports. In particular, the request was necessary to meet 
unanticipated inflationary increases of screener wages, health care, 
uniforms, state-mandated workers compensation costs, and consumables. 
It is not funding services in addition to those provided in previous 
years except where consistent with changes in the Standard Operating 
Procedure made effective throughout the Nation's commercial aviation 
system.
    In FY 2005, a reprogramming increase of $23M was made to support 
the cost of providing PP5 airports with the level of screening required 
for all commercial airports under ATSA. This reprogramming supported 
increased insurance premium costs for worker's compensation; terrorism 
and health insurance premiums; ATSA-guaranteed screener pay parity; and 
operational requirements relating to flexibilities granted to 
contractors in the areas of recruitment, hiring, and training.
    Since the authorized spending for FY 2005 is $152.65 million with 
the reprogramming, the FY 2006 budget request of $146.15 million 
represents a $6.5 million decrease. The reduction is due in part to the 
normalization of workers' compensation costs now that the PP5 airports 
have three full years of operating history. It is anticipated that the 
FY 2006 funds requested will be sufficient to cover anticipated costs.

    Question 3. If TSA is not getting anything more for its money, 
please tell me how private screeners are less costly at the same time 
you are paying more for their services.
    Answer. TSA believes that it is getting value added from conducting 
the private screening pilot program at the five airports. The private 
screening companies were awarded ``cost plus award fee'' contracts to 
provide them maximum operating flexibility to create and implement 
innovations and operating efficiencies. This contractual arrangement 
also meant that TSA reimbursed contractors for costs incurred in 
developing initiatives to improve or streamline operations. Some of 
these initiatives are currently being studied by TSA to determine their 
applicability to federalized airports. TSA has regarded the private 
screening pilot program as a unique opportunity to continuously 
operate, evaluate, and innovate, whereby lessons learned are 
incorporated into operations not only at pilot airports that utilize 
private screeners but throughout the system. Notably, TSA learned in 
part from the PP5 program that strong FSD management is a key factor in 
driving good screener performance regardless of whether the screeners 
at a particular airport are federal screeners or private contract 
screeners. As a result, TSA has empowered FSDs all across the country 
with greater tools and flexibility to manage operations at the local 
level, and FSDs are now more intimately involved in the recruiting, 
hiring, assessment, and training of screeners.

    Question 4. Finally, if Congress does not appropriate this $15 
million, will the funding be transferred from other TSA activities?
    Answer. $15 million is necessary to maintain existing airport 
operations at their current level. A decrease in funding would have a 
severe impact on operations at each of the PP5 airports. TSA would be 
forced to either reduce screening operations or look for other 
flexibilities that may be available to fund these activities
Aviation Security Fee
    Question 1. Do you believe that transportation security costs 
should be borne only by those who use the services?
    Answer. TSA has implemented a passenger and an airline fee as 
mandated by Congress in the Aviation and Transportation Security Act 
(ATSA). Prior to the attacks of September 11, air carriers were 
responsible for aviation security, and air carriers and passengers 
shared these costs directly. In enacting ATSA, Congress intended not 
only for the Federal Government to assume direct responsibility for 
aviation security but also for the costs of providing such services to 
be shared by industry, users (passengers), and the Federal Government. 
The proposed increase in the passenger security fee, TSA proposes will 
better allocate the fee burden among industry, passengers, and the 
Federal Government to reflect the workload imposed on TSA by the direct 
users of the aviation security system. The net effect of the increase 
and decrease in fees would be to raise security fee collections from 
about $2.6 billion annually to about $4.1 billion annually. This amount 
would recover almost all of the funding associated with TSA aviation 
screening costs. There would still be over $1.4 billion of TSA costs 
funded by general taxpayers.

    Question 2. Why didn't the Administration propose any fees on any 
other mode of transportation? Should these modes--ports, shippers, 
rail, etc who are asking for more and more federal resources for 
security be asked to pay for some of their security needs?
    Answer. With the exception of certain credentialing and vetting 
programs, TSA does not currently collect fees for surface 
transportation security measures. Unlike aviation where TSA has a 
Congressionally-established role in providing direct security services 
and fees are collected, TSA's role in security for surface modes is 
more indirect and largely accomplished through developing standards and 
regulations and providing oversight. The regulated parties implement 
the actual security measures in compliance with the standards 
established by TSA. Therefore, the industry and its customers will most 
likely incur the cost of such security measures through direct 
expenditures to comply with standards, as opposed to incurring them 
through fees.
    There are currently several areas in which TSA has--or will have--a 
more hands-on role that warrant--or will likely warrant--implementation 
of user-fees. Pursuant to a provision included in the Department of 
Homeland Security Appropriations Act, 2004, the Department may charge 
reasonable fees for providing credentialing and background 
investigations in the area of transportation. TSA anticipates 
collecting fees to administer credentialing and background check 
programs for alien flight school student pilots and HAZMAT truck 
drivers. TSA also anticipates that existing fee authority could be 
applied to transportation workers under the transportation worker 
identification credentialing program and to volunteer passengers under 
the Registered Traveler program.
    As future specific security measures are implemented in non-
aviation modes, TSA will consult with Congress regarding appropriate 
fees to recoup the Federal funding attributed to the effort. In 
general, fee authority is conferred only to the extent that fee 
collections are necessary to fund specifically identified services 
provided by the Federal Government. An agency is generally not 
permitted to collect fees in amounts that would exceed the cost of 
providing those services.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                          Hon. David M. Stone
    Question 1. What aviation security screener personnel functions are 
being performed by Federal Security Directors and which functions are 
being performed by offices at TSA headquarters, or by contractors to 
such offices? Does TSA have plans for empowering FSD's with further 
personnel-related authority (staffing, hiring, firing, etc.)?
    Answer. TSA implemented Next Generation Hiring (also known as de-
centralized or local hiring) to enable Federal Security Directors 
(FSDs) to directly influence the hiring process while maintaining 
systematic, consistent, regulatory-compliant employment practices. 
Under this model, the FSD at each airport has the power to establish 
individualized strategic hiring plans, recruit and interview its own 
candidates, make formal job offers, swear in and orient new employees 
to federal employment, and provide them with initial and recurrent 
training.
    To support this effort, TSA established Local Hiring Centers (LHCs) 
in 20 cities across the country. The LHC serves as a key resource in 
supporting an airport in meeting its hiring needs in a timely and 
efficient manner by filling in where airport resources are not 
available to conduct the steps in the hiring process. Introduced at the 
end of calendar year 2004, TSA is already realizing the benefits of 
this approach to hiring. Airports are reporting that candidates who 
accept positions are more committed to their employment with TSA as 
evidenced by an increase in Entry-on-Duty (EOD) Show Rates (i.e., the 
percentage of new hires who are scheduled to report for duty who 
actually do report) and a decrease in Quick Separation Rates (i.e., the 
percentage of new hires who resigned within one month of EOD).
    Also, in 2004, TSA gave FSDs the authority to take disciplinary 
actions without first obtaining approval from Employee Relations staff 
at Headquarters. This authority was launched with training, toolkits, 
and workbooks providing guidance to ensure all disciplinary decisions 
are made with full adherence to TSA policy, including merit principles 
and considerations of fundamental fairness (i.e., without regard to 
favoritism, nepotism, political affiliation, race, color, religion, 
national origin, sex, reprisal, marital status, age, disability or 
sexual orientation) and with proper regard for employees' privacy and 
constitutional rights.
    TSA Headquarters continues to provide coordination and facilitation 
of the entire screener on-boarding process. Activities include 
providing technical direction to recruitment, hiring, and training 
contractors; providing and maintaining data management systems and 
information; coordinating and overseeing the conduct of Phase I 
Assessment computerized tests, medical evaluations; background 
investigations (including criminal history and financial credit 
checks); and certifying candidates as being technically qualified. TSA 
Headquarters also continues to oversee contractor activities of those 
phases of the hiring process at airports that have chosen not to 
utilize Next Generation Hiring.
    At this time, TSA does not have any plans for additional delegation 
of personnel authority to the local level.

    Question 2. Is TSA still using the same contractor for hiring 
screeners that failed to initially conduct criminal background checks 
on a number of screeners, leading to later discovery that 85 felons 
were employed by TSA?
    Answer. TSA no longer contracts with NCS Pearson for hiring 
screeners. In December 2002, the contract for recruiting and assessing 
screeners was awarded to CPS Human Resource Services, and a contract 
for hiring and conducting personnel transactions was awarded to 
Accenture. Since neither company provides the background investigation 
services, TSA has now contracted with a separate company, Kroll, to 
conduct the background investigations.
    Kroll provides TSA with the full preliminary background checks, 
consisting of a review of a fingerprint report which is done through 
the Office of Personnel Management (OPM), a credit report, and a 
National Crime Information Center check. When a case file is complete, 
the results from Kroll and OPM are posted on a secure website. This 
information is available to be adjudicated against current TSA 
suitability standards in order to make an initial decision regarding 
the person's suitability to be a TSA employee. This determination 
occurs before any candidates are certified as ``qualified'' by CPS and 
before a job offer is given by Accenture. This initial investigation 
prevents an individual with an objectionable record from attaining 
employment with TSA. A full investigation is later completed with OPM 
following employment with TSA.

    Question 3. Has TSA committed to funding an in-line explosive 
detection system at Newark Liberty International Airport? If so, when 
will it be functional and what will the federal share of the costs be? 
If not, does TSA have any plans for funding the project at Newark 
Liberty International Airport?
    Answer. TSA is developing prioritization criteria that will 
identify the airports that are the highest priority for receiving an 
in-line system. When the prioritization criteria are developed, TSA 
will generate a list of candidate airports. Once the list is generated, 
TSA will be able to estimate total costs. Additionally, TSA has 
approved $10 million in Other Transaction Agreements (OTA) funds for 
Newark Liberty International Airport.

    Question 4. What steps has TSA taken to acquire security cameras in 
checked baggage areas and address instances of baggage theft and damage 
in areas out of public view?
    Answer. The President's Fiscal Year 2005 budget included an 
estimated $14,000,000 for Electronic Surveillance Systems (ESS) at 
airport checked baggage screening (CBS) areas. TSA, in partnership with 
selected airports, generally purchases and installs ESS equipment with 
the understanding that airports maintain the ESS equipment after 
installation.

    Question 5. What efforts is TSA making to improve security of 
airport access and control of secure areas? Is the Administration 
committed to funding projects like the ``secure area tracking pilot 
project,'' a demonstration project concerning technology to track and 
monitor hazmat vehicles and fuel trucks in secure areas, at Newark 
Airport?
    Answer. TSA is committed to improving airport access and control of 
secure areas and has generated a draft guidance package to comply with 
49 U.S.C. 44903(h)(5) (as amended by Section 4011(a)(2) of the 
Intelligence Reform and Terrorism Prevention Act of 2004). This package 
is consistent with ongoing Administration and DHS direction on 
government-wide biometric standards as required by Homeland Security 
Presidential Directive-12 (HSPD-12). It is also consistent with all 
relevant biometric standards agreed to by the National Institute of 
Standards & Technology (NIST), the American National Standards 
Institute (ANSI), the International Standards Organization (ISO), and 
the Radio Technical Commission for Aeronautics (RTCA) standards related 
to airport access control systems.
    Per Congressional direction, TSA has developed the Biometrics 
Guidance document, and it is currently undergoing DHS-wide review. The 
guidance document will provide vendors and airports performance 
expectations for technologies developed to support airport access 
control systems. Vendors will be able to submit their technology 
products to TSA for evaluation and TSA will then publish the results of 
these evaluations through the issuance of a qualified products list 
(QPL). In addition, airports will be able to use the QPL to determine 
what products will best meet their needs. TSA will continue to support 
an evaluation process in order to continually update the QPL with the 
latest technology solutions.
    In addition, per Congressional direction, TSA is also continuing 
work on the 20-airport access control pilot program. TSA has completed 
the first 10 pilot projects and has initiated 5 additional projects. 
Project design plans for the remaining 5 airports are nearing 
completion and will be announced once they are finalized. TSA is 
currently preparing a report that will capture the technology 
performance data gathered during the first 10 pilot projects. The 
completed report will be made available to industry so the data may be 
used in the decision-making process when selecting potential access 
control solutions to meet their needs. The report will be updated with 
the information gathered during the remaining 10 projects once they 
have concluded.
    TSA does have an ongoing R&D project in partnership with the Port 
Authority of New York and New Jersey, which includes the development 
and evaluation of technology that tracks fuel trucks operating within 
Newark International Airport's (EWR) secure area. The project includes 
technology that tracks the vehicle, validates the identity of 
authorized operator, and ensures that the vehicle is operated only in 
authorized areas. An alarm is sent to the control center if a vehicle 
is taken into an area for which the vehicle is not authorized even if 
it is operated by an authorized driver. This alarm allows law 
enforcement to respond immediately.
    TSA has also awarded $1.67 million for EWR to purchase and deploy a 
state-of-the-art video surveillance system for detecting and tracking 
persons and vehicles that breach the airport perimeter. The 
surveillance system will string together images taken at various angles 
by different cameras to create a single picture with an unrestricted 
view of the impacted area.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. David Vitter to 
                          Hon. David M. Stone
    The nation depends on Louisiana's port system, which is the largest 
combined port system in the United States, carrying nearly 500 million 
tons of waterborne commerce annually. That is over 20 percent of all 
waterborne commerce in the United States. So, with an important port 
system in my state, I am very concerned with the proposal to combine 
all the different infrastructure protection grants into one combined 
Targeted Infrastructure Protection. I am fearful that without a 
dedicated funding source for port security, ports may be short-changed 
when competing with other different infrastructure systems.
    Question 1. Can you provide any assurances that our nation's port 
system will not be under-funded if the Congress accepts this proposal?

    Also, ports and other forms of transportation infrastructure have 
vastly different needs and each have a very different set type of 
security threats. For example, the security treats to rail transit are 
not that similar to the threats to waterborne commerce.

    Question 1a. How would a combined program be able to be efficiently 
administered with so many vastly different types of infrastructure 
competing for the same funding source?
    Answer. DHS is committed to providing the resources needed to 
secure our Nation's critical infrastructure, including seaports and 
port facilities. The Targeted Infrastructure Protection Program (TIPP) 
at the Office of State and Local Government Coordination and 
Preparedness (SLGCP) proposed in the President's FY 2006 budget would 
consolidate grants to protect critical national infrastructures such as 
seaports, mass transit, railways, and energy facilities into a single, 
comprehensive program based on need, risk, and consistency with 
national priorities. TSA will continue to provide SLGCP with subject 
matter expertise for transportation security. TSA realizes that the 
challenges regarding port security are specific to that mode just as 
other modes of transportation have their own unique needs. Accordingly, 
TIPP would allow DHS to allocate funds to areas where intelligence 
indicates the greatest risks exist.
    The President's FY 2006 budget request represents an increase of 
approximately $235 million above the FY 2005 appropriated level for all 
infrastructure protection, including port security, mass transit 
security, and buffer zone protection efforts among others.
    In addition, under the SLGCP's Urban Areas Security Initiative 
(UASI), the President proposes to provide over $1 billion in 2006 funds 
to urban areas at greatest risk of a terrorist incident. The UASI 
Program provides financial assistance to address the unique planning, 
equipment, training, and exercise needs of high-threat, high-density 
urban areas, and to assist them in building an enhanced and sustainable 
capacity to prevent, respond to, and recover from threats or acts of 
terrorism.
    Another $1 billion would be awarded to States under the State 
Homeland Security Grant Program (HSGP). These funds may be used to 
support homeland security and emergency operations planning, equipment, 
training, and exercises as determined on the basis of risk, need, and 
consistency with national priorities.
    Both UASI and HSGP funds could be used to supplement TIPP funds in 
the protection of critical infrastructure.
    Other DHS programs also target port security, including:

   The Container Security Initiative (CSI) screens cargo before 
        it reaches the U.S. Currently there are U.S. Customs and Border 
        Protection (GBP) inspectors in 36 international ports of trade 
        working alongside our allies to target and screen high-risk 
        cargo before it reaches our shores. The President requested 
        $138.9 million to continue to support CSI in FY 2006.

   Customs and Border Protection (CBP) Targeting Systems aid in 
        identifying high-risk cargo and passengers. The 2006 budget 
        includes a total of $28.3 million for these system initiatives, 
        a $5.4 million increase.

   The Customs Trade Partnership Against Terrorism (C-TPAT) 
        creates partnerships along the entire supply chain, from the 
        factory floor, to foreign vendors, to land borders and 
        seaports. The 2006 budget includes an increase of $8.2 million, 
        for a total of $54.3 million for G-TPAT. The increase will 
        enhance our ability to conduct additional supply chain 
        validations.

                                  
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