[Senate Hearing 109-849]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-849
 
THE DEPARTMENT OF HOMELAND SECURITY'S BUDGET SUBMISSION FOR FISCAL YEAR 
                                  2007

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 1, 2006

                               __________

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs



                    U.S. GOVERNMENT PRINTING OFFICE
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

           Michael D. Bopp, Staff Director and Chief Counsel
            Jennifer A. Hemingway, Professional Staff Member
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
         A. Patricia Rojas, Minority Professional Staff Member
          Jason M. Yanussi, Minority Professional Staff Member
                  Trina Driessnack Tyrer, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Collins..............................................     1
    Senator Lieberman............................................     3
    Senator Coleman..............................................     5
    Senator Levin................................................     6
    Senator Bennett..............................................     7
    Senator Dayton...............................................     8
    Senator Voinovich............................................     9
    Senator Lautenberg...........................................    10
    Senator Warner...............................................    11
    Senator Pryor................................................    12
    Senator Akaka................................................    32
Prepared statement:
    Senator Carper...............................................    45

                                WITNESS
                        Wednesday, March 1, 2006

Hon. Michael Chertoff, Secretary, U.S. Department of Homeland 
  Security:
    Testimony....................................................    13
    Prepared statement...........................................    49
    Responses to questions submitted for the Record..............    68

                                APPENDIX

Letter dated February 10, 2006, submitted by Senator Dayton......    46
Chart titled ``Container Security Initiative''...................    47
Chart titled ``Radiation Portal Monitor (RPM) Deployments at 
  Seaports''.....................................................    48


                       THE DEPARTMENT OF HOMELAND
                      SECURITY'S BUDGET SUBMISSION
                          FOR FISCAL YEAR 2007

                              ----------                              


                        WEDNESDAY, MARCH 1, 2006

                                       U.S. Senate,
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:34 a.m., in 
room SD-342, Dirksen Senate Office Building, the Hon. Susan M. 
Collins, Chairman of the Committee, presiding.
    Present: Senators Collins, Voinovich, Coleman, Bennett, 
Warner, Lieberman, Levin, Akaka, Dayton, Lautenberg, and Pryor.

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Chairman Collins. The Committee will come to order.
    Good morning. Today, the Committee will review the 
Department of Homeland Security's budget submission for fiscal 
year 2007. I am very pleased to welcome Secretary Chertoff back 
to the Committee.
    Three years ago today, the Department first opened its 
doors. As we review the implications of this budget proposal 
for our homeland security, we must do so in the context of both 
the accomplishments and the deficiencies of the past 3 years.
    The 2007 budget proposal requests $42.7 billion in funding, 
an overall increase of 6 percent. The President's budget 
includes a number of funding increases that will help the 
Department make America stronger and the American people safer.
    For example, it provides increases for Customs and Border 
Protection and Immigration and Customs Enforcement to better 
secure our borders and to help bring an end to the ``catch and 
release'' practice of not detaining those who are here 
illegally and who are caught by law enforcement officers. It 
also prioritizes intelligence gathering and analysis at the 
Department.
    In addition, the budget would create an office within the 
Department to oversee the security of chemical facilities. This 
is of particular interest to me as I have held four hearings on 
chemical security and have introduced bipartisan legislation 
with Senators Lieberman, Coleman, Carper, and Levin to 
authorize the Department to establish performance-based 
standards to enhance the security of our chemical plants.
    But there are other aspects of this budget that I find 
troubling. The mission of DHS cannot successfully be 
accomplished from Washington alone. The Department must rely on 
a strong partnership with State and local governments. Yet the 
Administration proposes to cut grants to State and local 
governments, to police, to firefighters, and to other first 
responders.
    These grants helped train and equip our first responders 
and include providing them with funds for interoperable 
telecommunications equipment. As we have seen time and again, 
from September 11 to Hurricane Katrina, this training and 
equipment are essential to an effective front-line response to 
catastrophes.
    There are other areas where I believe the funding is 
insufficient. Although this budget recommends a 4 percent 
increase for the Coast Guard, this amount is inadequate given 
the enormous expansion of the Coast Guard's responsibilities 
for homeland security since September 11 as well as the 
proposed new mission for the Coast Guard of being responsible 
for the National Capital Region Air Defense.
    Nor does the budget adequately fund the Coast Guard's non-
homeland security missions. Indeed, under the proposed budget, 
the Coast Guard would suffer cuts in areas such as search and 
rescue, maritime safety, and environmental protection. The cuts 
to search and rescue are particularly incomprehensible in light 
of the Coast Guard's extraordinary, heroic performance during 
Hurricanes Katrina and Rita.
    I am also very concerned that the proposed budget maintains 
the Deepwater Program as a 25-year acquisition project, causing 
us to continue to spend tremendous sums on legacy assets that 
are near or past their service life.
    And I will note that the Coast Guard, in response to 
inquiries from Senator Lieberman and myself in years past, has 
estimated that you could save literally more than a billion 
dollars by accelerating the Deepwater Program to a 10-year 
recapitalization.
    The silver lining of the reaction to the pending sale of 
Peninsular and Oriental (P&O) to Dubai Ports World is that it 
has served to highlight another critical issue, and that is 
port security. Last November, Senators Murray, Lieberman, 
Coleman, and I introduced the GreenLane Maritime Cargo Security 
Act based on our years of work and investigations into port 
security.
    This comprehensive legislation authorizes $835 million for 
programs and initiatives to better secure our Nation's ports. 
It provides strong direction to the Department regarding the 
crucial next steps in supply chain security.
    Regrettably, the Administration's budget shortchanges port 
security. It does not dedicate a separate funding stream for 
port security grants, whereas our bill would provide $400 
million for that purpose. The budget request folds port 
security in with all other transportation and critical 
infrastructure grants, thus providing no assurance of funding 
to strengthen the security of our ports through port security 
grants.
    I would note that this budget proposal was developed in the 
aftermath of Hurricane Katrina. While the Committee's 
investigation of Katrina has highlighted many outstanding 
performances, such as by the Coast Guard, our investigation has 
also revealed a great many failures across the partnership of 
government agencies at all levels charged with disaster 
preparation and response.
    The failures at the Department of Homeland Security are 
profound and disturbing since the Department bears the ultimate 
Federal responsibility for effective preparation and quick 
response. I am encouraged, therefore, that the Department is 
requesting $50 million for a National Preparedness Integration 
Program, a new initiative designed to strengthen the Nation's 
capacity to prepare for and respond to natural and other 
disasters. I look forward to discussing with the Secretary how 
this new initiative and the overall budget will help produce 
far better results than we saw with Hurricane Katrina.
    Finally, of course, we come to FEMA. From the delayed, 
uncoordinated, and ineffective response to Katrina to the 
recurring and ongoing waste, fraud, and abuse that afflict the 
relief programs, the performance of FEMA during this disaster 
has been a disaster itself.
    The budget provides for a 10 percent increase to begin 
strengthening FEMA. But I remain concerned that the problems 
Katrina exposed require not only more resources, but also 
better leadership and a more integrated culture at DHS.
    A budget is primarily about money, but it is about more 
than just money. It is about priorities. As we review a budget 
that will carry the Department of Homeland Security into its 
fourth year, we must ensure that the priorities will truly 
advance the goal of a stronger, safer America.
    Senator Lieberman.

             OPENING STATEMENT OF SENATOR LIEBERMAN

    Senator Lieberman. Thanks, Madam Chairman, for that 
excellent statement.
    Good morning, Secretary Chertoff. Mr. Secretary, in my 
opinion, the Administration's proposed budget for homeland 
security is shortsighted and short-funded, given the dangers, 
both natural and terrorist, that this Department was created to 
confront.
    A new hurricane season begins exactly 3 months from today. 
And of course, the threat of terrorism never stopped, as we 
have seen in London, Madrid, Bali, and so many other places, 
despite the best efforts to prevent it. The fact is that a 
terrorist attack could happen almost any place at any time.
    And therefore, the Department of Homeland Security must be 
more ready than it is now, in my opinion, to detect, prevent, 
and respond. Yet this budget actually makes cuts in areas 
history has shown are most crucial, certainly when responding 
to a disaster.
    The Administration's proposed Department of Homeland 
Security budget cuts $802 million from programs for first 
responders and cuts $233 million from the Coast Guard for its 
traditional missions.
    It was, after all, State and local first responders and the 
Coast Guard who were among the greatest heroes of Hurricane 
Katrina. They must be given the funds they need to better 
prepare for and respond to the next disaster.
    This budget, as Chairman Collins has said, also fails to 
accelerate the Coast Guard's Deepwater integrated system 
program, ignoring evidence that such acceleration will not only 
provide better security and response, but save the Federal 
Government a lot of money in the long run.
    Despite the very necessary attention finally being paid to 
port security as a result of the Dubai Ports World deal, this 
budget, in my opinion, fails to address adequately the damage 
that terrorists can do in containers carried to America aboard 
ships. It provides no new money for the U.S. Customs and Border 
Protection's Customs-Trade Partnership Against Terrorism 
Program, leaving just 80 inspectors with the responsibility of 
assessing the security practices of about 10,000 applicants 
under this program.
    And it provides just $35 million for X-ray or other imaging 
prototypes that will be deployed at just five ports of the many 
ports in this country for cargo inspection next year. At this 
pace, we will not have all the Nation's ports covered by the 
necessary imaging equipment for at least another 5 years.
    I am deeply concerned by the Administration's proposal once 
again to force ports, chemical plants, and rail and transit 
facilities to compete with each other, along with public 
utilities, telecommunications, and financial networks, for 
scarce security resources through a consolidated grant program.
    I also believe the border security priorities outlined in 
the budget are, to some extent, misplaced and do not reflect a 
realistic assessment of all of the avenues of infiltration 
terrorists are likely to use to get into this country.
    Finally, as Chairman Collins has said, the budget 
inadequately addresses some of the failures of FEMA that 
Hurricane Katrina exposed, failures that the Administration's 
own report acknowledges and that, of course, our Committee 
investigation has already detailed.
    Those are my criticisms. But as in the last few years, I 
have felt a responsibility to work with my staff and others who 
follow questions of homeland security to come up with some 
estimate of what we think would adequately fund this 
Department. And I have expressed those in a letter that I am 
sending to the Budget Committee chairman, Senator Gregg, and 
the ranking member, Senator Conrad. And I will give you, 
Secretary Chertoff, a copy of those recommendations and ask 
your consideration of them.
    In sum, they would have our government invest an additional 
$8 billion in homeland security needs government-wide next 
fiscal year, with about $6.3 billion of that going to the 
crucial programs that are in the Department of Homeland 
Security.
    Very briefly, to highlight a few of those areas that I 
would make recommendations in, one is to restore $802 million 
to first responder programs and then add an additional $1.2 
billion to help improve the State and local capabilities, 
particularly in the area of interoperable communications, which 
everybody acknowledges are critically deficient now.
    I would recommend adding $1.7 billion in spending on 
security for chemical plants, ports, and other critical 
infrastructure systems like rail and transit. I would give FEMA 
an additional $465 million to specifically improve its 
readiness, response, and recovery capabilities in areas that 
Katrina exposed as flawed.
    I would provide the Coast Guard with an additional $1.1 
billion, primarily to accelerate that Deepwater Program to 
modernize and replace the Coast Guard's fleet, which, 
unfortunately, is one of the oldest in the world.
    I would increase the budget for Immigration and Customs 
Enforcement by $158 million so that the agency can station more 
visa security officers overseas, provide more training for 
consular officers, and identify additional criminal aliens who 
are in jail and should be deported from the United States.
    And finally, I would recommend investing an additional $752 
million next year in aviation security so that we can better 
detect explosives in checked bags or carried on by passengers.
    Can the Department get by with the budget that the 
Administration has recommended? Yes, it can. But getting by is 
not enough in an age of terrorism and an age of continuing 
natural disasters post-Katrina. We have an urgent need, in my 
opinion, to invest more now so that we will be safer sooner and 
into the future.
    The fact is there is no cheap way to be better prepared. We 
know that from our work with regard to our military. It takes 
money. More money, in my opinion, than this budget offers. But 
it is money that will be very well spent because it will bring 
the greater protection that the American people need.
    Thank you, Madam Chairman.
    I look forward to your testimony, Mr. Secretary.
    Chairman Collins. Thank you. Senator Coleman.

              OPENING STATEMENT OF SENATOR COLEMAN

    Senator Coleman. Thank you, Madam Chairman. I am going to 
make very brief comments.
    I first want to associate myself, Madam Chairman, with your 
comments and the concerns that you have specifically raised, 
the things that you have found troubling--grants, State and 
local governments, first responders, the importance of 
additional resources to the Coast Guard, and then, 
significantly, port security. And I will talk about that during 
my question and answer time.
    I just want to say this, Mr. Secretary. I think you have 
the toughest job in the President's Cabinet. The reality is 
that there are challenges that we face overseas every day in 
Iraq, but the Secretary of Defense isn't on the line 
personally. There are challenges that we face in the 
environment. There are challenges we face in transportation. 
Challenges we face across the board.
    But your neck is on the line personally when things don't 
go right with Katrina. We see it when we have concerns about 
what is happening with port security. And so, I want to 
recognize that.
    I also want to note that I had the opportunity recently to 
visit our border areas in San Diego. I was in Arizona looking 
at the testing of the unmanned vehicle, UAVs. Our border folks 
are doing a much better job than we give them credit for. It is 
a stunning challenge. Much better job than we give them credit 
for.
    So I want to say that as I then get into areas of concern, 
and there are areas of concern. Clearly, the situation with the 
UAE has highlighted the issue of port security, which many of 
us have been working on for a long time.
    And as we look at this budget, my concern is that we are 
still not putting the resources in areas where we know we have 
problems. We can't be looking back to the last challenge, which 
we had when we were dealing with aviation security. We have 
also got to look ahead. You can't just fight the last war.
    I had a chance to be in Hong Kong, and Hong Kong privately 
funded, they screen each and every container, each and every 
container. Ten thousand trucks a day dropping containers in, 
and we are still doing a targeting system.
    There isn't money in the budget for testing and validation 
of the automatic targeting system. There isn't money in the 
budget for the ISIS system, the system that would allow us to 
screen each and every container.
    There are still concerns about the ability to bring a 
nuclear device into this country. I think we are at about 40 
percent of cargo being screened through radiation portal 
monitors. I worry that, as I look in the budget, there is, 
perhaps, an overly optimistic estimation of where we are going 
to go in the next couple of years, and the resources aren't 
there.
    So, again, I want to say that I appreciate what you are 
doing. I appreciate the difficulty of what you are doing. But 
it is important, and the reason your neck is on the line is 
that we can't afford failure, and we have to make sure the 
resources are there. And so, in my questioning, I will 
highlight some of those areas.
    But I also do want, as I said, to compliment the work that 
we have seen in Customs and Border Patrol and other areas that 
your folks are doing every day on the front line.
    Thank you, Madam Chairman.
    Chairman Collins. Thank you. Senator Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Madam Chairman.
    Welcome, Mr. Secretary. First, let me say that I fully 
agree with our Chairman, our Ranking Member, in terms of the 
shortfalls in your budget. Senator Lieberman went through a 
list of needed additions to the budget. The Chairman has also 
indicated where the budget is short, and I will fully be 
supportive of trying to add to your budget for these essential 
needs, including port security and interoperable communications 
equipment, first responder support.
    You also in the budget severely shortchange two areas that 
I have a particular interest in. One is the northern border, 
the longest border we have. Nonetheless, we find that the 
resources have not been provided as promised.
    It was just a couple of years ago--actually, in March of 
last year--that I asked you whether or not you were going to be 
opening up the five northern border airwing locations, which 
are so essential to air interdiction and enforcement 
capabilities along the northern border. You assured me that 
there would be one each year added. That has not happened.
    There were two sites, particularly in southeastern 
Michigan, which you were going to consider. We have not seen 
those commitments relative to the northern border airwing 
carried out.
    The Coast Guard budget is of tremendous concern to us. 
There is a great emphasis on the Deepwater Program, and the 
Chairman indicated that she would like to speed up that 
program. And we would surely support that. But there is almost 
nothing in that program for the Great Lakes.
    We instead are losing boats in the Great Lakes. The Great 
Lakes is our longest coastline. I don't know whether that is 
recognized in homeland security, whether or not the Great Lakes 
and the St. Lawrence Seaway together, by far, is our longest 
coastline. We are exceedingly vulnerable because we have such 
good relations with Canada. That opens the vulnerabilities to 
us.
    And yet, when it comes to the Coast Guard budget, we see a 
reduction in the budget and in the commitment to replace ships 
that are being lost in the Coast Guard for the Great Lakes. 
That is totally unacceptable to us.
    And so, during my question period, we are going to be 
focusing on the northern border and on the Great Lakes and 
pressing you on why it is that with all of the needs that we 
have that there is such a disadvantageous position that the 
budget places the Great Lakes in, despite the fact that it is, 
with the northern border, our longest border and, with the 
Great Lakes, our longest coastline.
    Thank you.
    Chairman Collins. Senator Bennett.

              OPENING STATEMENT OF SENATOR BENNETT

    Senator Bennett. Thank you very much, Madam Chairman.
    Mr. Secretary, listening to this litany, I wonder why we 
haven't had a whole lot of attacks, problems in 3 years. We 
haven't had any since September 11.
    The combination of the Department of Homeland Security and 
the Department of Defense and the intelligence community has 
succeeded in keeping the terrorists from our shores. They have 
been forced to turn to Madrid or London or Saudi Arabia or 
other places for their attacks, and they are currently making 
their stand in Iraq.
    So with all of your difficulties--and I repeat, I am the 
one who predicted this Department wouldn't work for at least 5 
years regardless of who headed it and regardless of how much 
money it had just because of the challenge of putting it 
together--someone, somehow, somewhere must have been doing 
something right to have kept us safe to the degree we have been 
since the September 11 attack.
    I have some questions that I will raise during the question 
period. I welcome you here. I am grateful for your explanation 
of the P&O, Dubai Ports World thing. I have no problem with 
that.
    My first reaction was that which everybody had. My gosh, we 
are going to turn the ports over to the Arabs? Then you get 
into the details, and clearly, Dubai is an ally in the war on 
terror. The Dubai Ports World is an organization upon whom we 
are dependent for our naval activities around the world. 
Without their excellent providing of ports where naval ships 
can put in with complete security and safety, we would have 
more examples of the USS Cole kind of thing.
    So I simply welcome you here, and while I have some of the 
same questions that some of my colleagues have, I acknowledge 
the fact that when you step back from it and look at the 
overall picture, we can't ignore the fact that the United 
States has survived since September 11 without an additional 
attack on our shores.
    And for that, we can be grateful to you and Secretary Ridge 
and all of the people in your Department, the intelligence 
community, and the Department of Defense for the great job they 
have been doing, in spite of all of the problems that have been 
legitimately raised here by my colleagues.
    Chairman Collins. Thank you. Senator Dayton.

              OPENING STATEMENT OF SENATOR DAYTON

    Senator Dayton. Thank you, Madam Chairman.
    I would like to associate myself with all of the remarks 
that have preceded me, and I think Senator Bennett's comments 
are well founded. I am waiting in my lifetime to see the front 
page headline ``Government does something well.'' And we don't 
acknowledge those successes, and you certainly deserve credit.
    And the many thousands of dedicated men and women working 
with you, under you, who are devoting their careers, their 
lives to protecting this country and doing so with a vigilance 
that I think we all need to respect and show due gratitude for.
    When I was commissioner of economic development on a much 
smaller scale in Minnesota in the governor's cabinet, I said 
that working for a governor, as you work for the chief 
executive, is like having a constituency of one. I was 
responsible to him and to his final decisions and upholding 
those.
    In this case, however, I think you have a broader 
constituency, which is all of the American people. And I worry, 
as the Chairman and particularly the Ranking Member, I think, 
outlined very well, that this budget is deficient and that it 
doesn't represent the best interests of all of that broad 
constituency.
    I think the border security is one of critical concern. I 
agree with Senator Levin as it relates to the northern border, 
although I want to acknowledge that there has been some modest 
improvements in the northern border in Minnesota, and I 
appreciate that. I hope those will continue.
    I worry about the first responder prioritization, as some 
call it. I call it triage because some of the first responders, 
the local units, the government in Minnesota have been zeroed 
out of funding. And we sent them a first message that they 
should devote thousands of person-hours, which they have in a 
very dedicated way, to being ready to respond, and then we turn 
around and tell them a year or two later, ``Well, you are not a 
priority. So you don't have any money.''
    I think that is a very wrong message. And when you look at 
a bunch of trailers sitting in Hope, Arkansas, rotting away, it 
is hard to explain to first responders, local government 
officials in places like Ramsey County, Minnesota, why they 
don't deserve any funding whatsoever and how that fits into a 
homeland security set of priorities. So I do look forward to 
your testimony in that regard.
    And I would just note also that I believe we are going to 
take up in the next couple of weeks immigration reform, a 
serious crisis. Badly needed, long overdue. But if we don't 
have your border security, particularly in the southern border 
as it relates to the border with Mexico, if we don't really 
deal with that directly and with whatever additional 
resources--manpower, person power, security, technology, 
whatever is necessary--we are going to defeat our own efforts 
at reform.
    And in Minnesota, I know the methamphetamine epidemic is 
truly that, and the flood of pure methamphetamine is coming 
now, I am told by local law enforcement, directly from Mexico 
into a northern State like Minnesota. It has got to be 
happening elsewhere in the country. I think we have a crisis of 
security in our borders, and I hope this budget, if it doesn't 
address that, can do so remedially with this Committee.
    Thank you, Madam Chairman.
    Chairman Collins. Thank you. Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you, Madam Chairman.
    Welcome back to the Committee. I would like to thank you 
for your leadership and the leadership of your colleagues in 
the Department. As was already stated, the combining of 
agencies to create the Department of Homeland Security is a 
monumental management challenge, more significant than when we 
put the Defense Department together five decades ago.
    And so, you have a full plate and have had many challenges. 
I want to make sure that you understand and that your family 
understands that we do appreciate the effort that you have made 
to do this job for the American people.
    I think, to a degree, many of the comments made here are 
very well taken. We have a real dilemma here. We want 
everything to be secured, but if you add it all up, it would 
bankrupt the country. I have said on many occasions that Osama 
bin Laden is probably one of the happiest people in the world 
because what he wanted to wrought in the United States he has 
accomplished, and that is the fear of terror.
    If we do everything that everyone suggests to enhance 
security, we will bankrupt the country. Our problem is that we 
need to understand that our resources are limited. And we 
can't, as a Nation, look to the non-defense discretionary 
budget as the place where we are going to save money.
    In other words, the discretionary non-defense budget has 
been almost flat-funded. You have proposed a 6 percent increase 
in the DHS budget. But if you take out the money that TSA is 
supposed to collect from the airlines, and you don't get it 
this year, in fact, the 6 percent increase is substantially 
reduced.
    When you, as the Secretary, go to the Office of Management 
and Budget, I would like to know, do you give them your full 
budgetary requirements? Or do they tell you, ``Mr. Secretary, 
we don't want to see any more than a 3 percent or 4 percent 
increase?''
    I think the Members of this Committee ought to know that 
you have to deal with OMB, and I don't know whether you are 
going to be able to be candid with us today regarding your 
agency's budgetary requirements.
    I don't understand in a country with the Iraq war and with 
homeland security costs why this Nation is talking about making 
tax cuts permanent. We need more money to get the job done, and 
the American people understand it.
    But our head is in the sand, folks. It is in the sand. I am 
a former mayor and former governor. I have had to go through 
the budget process. Our Federal Government must balance its 
expenses and revenues.
    We are asking Secretary Chertoff to do almost an impossible 
job because we are not giving him the resources that he needs 
to get the job done. We are not doing it because when he goes 
to OMB, they tell him, ``This is the amount you are going to 
have.'' Perhaps you can discuss that in your testimony.
    But we ought to look at the bigger picture and decide what 
it is that we really need to do and then set priorities in 
terms of how we use our resources. We can't afford everything 
that all of us are talking about here today. We don't have the 
money for it.
    When I was mayor of Cleveland, we had to make hard choices 
between police, fire, and choices between other things. You 
come up with a reasonable budget, and you allocate the 
resources as best you can.
    The most important thing, Mr. Secretary, is that we have 
not had an event in the United States of America since 
September 11. I thank you, and I thank the other people 
involved in protecting our Nation. We all want to make sure 
that we don't have another event.
    So I would just like to say that as we go through this 
hearing, I would like to have some real candor from you. I am 
concerned, for instance, in FEMA, you have lost 500 people. And 
nearly half the people you have remaining are eligible for 
retirement. How are you going to handle it?
    You have management positions in that agency that are left 
unfilled. You have to have enough people to accomplish FEMA's 
mission. And how are you going to get that job done?
    If I were a FEMA employee and I had a chance to retire, I 
would get out of there quickly. I am out there busting my back, 
trying to get the job done, and all I do is read about the fact 
that FEMA is a terrible organization. I come home to my 
children and to my wife, and they say, ``You work for that bum 
agency.'' You know?
    These are practical things that we are dealing with here 
today, and I think we need to get real here at this Committee, 
and we have to get real in the U.S. Senate about the resources 
that we need to get the job done and stop putting our head in 
the sand as we have done for too long a period during the last 
several years.
    Thank you.
    Chairman Collins. Senator Lautenberg.

            OPENING STATEMENT OF SENATOR LAUTENBERG

    Senator Lautenberg. Thank you, Madam Chairman.
    Senator Voinovich just raised a ray of hope that goes a 
long way with me. When we talk about further permanence of tax 
cuts and we talk about our needs, these two things just don't 
square.
    I sat on this Committee--Mr. Secretary, I am glad to see 
you--and I want to recall for this Committee's review how hard 
we both worked to get grants given on a risk base. And we had a 
vote, and there was only one person who voted for making it 
risk based, and that was me. Nobody else. Nobody else here 
thought that was the way to do it, despite the fact that you, 
sir, and the 9/11 Commission said absolutely that is a critical 
condition. And finally, I think we are getting closer there.
    But when I look at the responsibility that we have in the 
Senate and our government and, as we heard Senator Voinovich 
describe it, almost an impossible task, but that doesn't mean 
you don't work at it. And the fact of the matter is that never 
before have we ever had a single day in America when we lost 
almost 3,000 citizens in a terrorist act.
    And the fact that we have been spared such a happening 
again shows good work, shows hard work, but it also doesn't say 
that we can breathe easy. And if that is the way we look at 
this and say, OK, one single attack on our people or our soil 
can kill as many as died that day.
    And I look at the port of New York/New Jersey, where our 
interests primarily are, and been told by the FBI that in that 
2-mile stretch from Newark airport to the New York/New Jersey 
harbor, a chemical attack could kill as many as 12 million 
people, how dare we say, well, OK, we are going to mix in port 
security with other things and let you scrap it out, kids, and 
divide it up so that we look pretty good from the 
Administration standpoint. ``There is more money in there. What 
are you talking about?''
    The fact is it is a dereliction of duty. And I am pleased 
to hear my colleagues on both sides of the aisle talk about the 
need that we have and that we must fill if we are going to do 
our job honestly and correctly.
    The Coast Guard, we keep giving them more assignments and 
less money to do things with. They are a very important part of 
our protection mechanism.
    And so, when I look at what we budget to protect lives in 
Iraq, and I respect protecting those lives. I hate to see it 
when 20 or 30 children or women are killed, Iraqis, by other 
Iraqis. But when I think of rebuilding, trying to rebuild Iraq, 
and I think of trying to rebuild New Orleans, and I think of 
trying to protect almost 300 million Americans in the best way 
we can, the budgets are quite differently calculated.
    Mr. Secretary, one question was asked of you. Are you 
relegated to spectator position when it comes to the budget? Or 
can you, or dare you, fight to do the job, the entire job that 
is in front of you?
    I know that you try hard, and we respect your efforts. But 
we have to get more, in good conscience, to protect our people.
    Thank you, Madam Chairman.
    Chairman Collins. Senator Warner.

              OPENING STATEMENT OF SENATOR WARNER

    Senator Warner. Thank you very much, Madam Chairman.
    I welcome you this morning, Judge. And I happen to be one 
that thinks you are doing a fine job, and just hang in there.
    The question of cyber security has been a subject that I 
have been intensely interested in. If I may say with a little 
immodesty, about 5 years ago, I actually set up a program of 
scholarships using the defense budget for young people to get a 
4-year curricula paid education if they, in turn, would give 
2\1/2\ years back to some Federal entity dealing with cyber 
security.
    I saw where you achieved a $7 million increase in the cyber 
security account, and I am wondering as to your own views as to 
the risks associated with that critical subject and how your 
Department is proceeding?
    At the appropriate time, I will put those questions to him. 
But I thank you very much, Madam Chairman.
    Chairman Collins. Thank you. Senator Pryor.

               OPENING STATEMENT OF SENATOR PRYOR

    Senator Pryor. Thank you, Madam Chairman.
    Welcome back to the Committee, Mr. Secretary. It is good to 
have you here.
    In this budget, I am pleased to see that FEMA is getting a 
10 percent increase, but I am still concerned about that 
agency's organization and leadership. I am concerned that the 
Coast Guard is only getting a 4 percent increase, given their 
new responsibility for the Deepwater Program, for example.
    We have a very small Coast Guard presence in our State 
because we are not a coastal State. But I am very impressed 
with the work the Coast Guard has done since I have been in the 
Senate. Very impressed. And I just think it is one of those 
agencies that we should give more resources to as we give them 
more responsibility.
    I am also a little bit dismayed in the cuts--well, more 
than a little bit dismayed in the cuts for programs for State 
and local first responders. In fact, there are two programs--
the Law Enforcement Terrorism Prevention Program and the State 
Homeland Security Grant Program--if you just add those two 
together, I think they are getting a $317 million cut.
    So I feel like that is too much, but I would love to hear 
your rationale on that and hear your view of the budget 
pressures that you are under.
    And also I just want to recall a conversation that we had 
with Secretary Ridge. I had a line of questions with him, and 
we talked about this a number of times with him, either 
publicly or privately. And that is when Homeland Security was a 
brand-new Department--it is kind of like what Senator Bennett 
said--I felt that it really was an opportunity, but also a 
challenge, to set Homeland Security up as a model agency.
    And I know that is easy to say and hard to do. But I am 
just not sure yet that Homeland Security has lived up to that 
promise. I hope that it is moving in that direction, but I 
think it has had a few bumps in the road along the way. And 
certainly, I hope for the very best for the Department of 
Homeland Security and hope for the very best for your 
leadership there. Thank you.
    Chairman Collins. Thank you, Senator.
    I would advise my colleagues that the lights on the clock 
are not working. The vote has begun. I would suggest that we 
recess at this point and then come back and proceed with the 
Secretary's testimony.
    The Committee will be in recess for 15 minutes. Thank you.
    [Recess.]
    Chairman Collins. The Committee will come to order. Our 
witness today is Secretary of Homeland Security Michael 
Chertoff.
    Secretary Chertoff, I want to thank you for appearing 
before the Committee today to present the Department's budget 
prepared after a year of very significant events for the 
Department. I also want to join my colleagues in thanking you 
for your leadership. This is an extraordinarily challenging 
job, and we look forward to hearing your testimony today.

  STATEMENT OF THE HON. MICHAEL CHERTOFF,\1\ SECRETARY, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Secretary Chertoff. Thank you, Madam Chairman, Senator 
Lieberman, and the other Members of the Committee. It is always 
a pleasure to appear, and it is always a pleasure actually to 
deal with you personally. We get to talk from time to time 
about how we are trying to shape this still very young 
Department.
---------------------------------------------------------------------------
    \1\ The prepared statement of Secretary Chertoff appears in the 
Appendix on page 49.
---------------------------------------------------------------------------
    I am going to be brief because I know that people have a 
lot of questions. But this is a period of a number of 
milestones. It is the third anniversary of the Department being 
stood up. It is a little bit more than a year since I was 
confirmed and sworn in.
    At the time I went through my hearing, I remember people 
asked me, ``Well, how do you feel giving up a lifetime 
appointment for this?'' And now I realize that in this job, a 
year is a lifetime. So I guess I have come out ahead.
    I do think what I want to do is lay out some of the 
principles that I think we are trying to apply in continuing 
the job of building the Department and making it work as well 
as it can, making it a model Department, and then talk very 
briefly about four priority areas.
    I have a written statement I would request the Committee 
accept for the record.
    Chairman Collins. Without objection.
    Secretary Chertoff. And I certainly want to be clear that 
my focus on four priorities doesn't mean to exclude other 
things, but it is simply a recognition of a limit of time.
    I agree with I think what Senator Lautenberg said and what 
Senator Dayton said about not breathing easily. I take a lot of 
comfort in the fact that we haven't been attacked successfully 
in this country in the last 4 years. That is a tribute to the 
work done in many departments--our Department, the Department 
of Justice, and the Department of Defense.
    And I think we have had some instances where but for that 
very fine work, we might have had different results. But it 
does not mean we can be complacent. And I am still focused very 
deeply on the issue of what we can do to elevate our ability to 
prevent, protect against, and, if necessary, respond to 
terrorism.
    The basic principles I think we bring to what we do here 
are four. First of all, we have to be systematic. We have to 
think about the objectives we are trying to achieve, assess 
what are the elements we need to get to the objective, and then 
make sure we adequately fund and build the capabilities to meet 
the objective.
    Second, we have to be integrated. We are not fully 
integrated yet. I think one of the lessons of last year was 
integration was incomplete. And to be honest with you, I think 
there were some people who resisted integration.
    And I think, in a very painful way, we have learned the 
lesson that we have to complete the job that this Committee and 
this Senate and this Congress told us to do, which is to build 
a single department. And that means the hesitancy in some 
quarters has to be put to one side, and we have to now 
understand we are going to be one department and function as 
one.
    Third, I think Senator Voinovich was correct in observing 
at some level the challenge in dealing with security is 
recognizing that there is a limitless demand for security. The 
city of New York, I think, has 30,000, 40,000 police officers. 
I am sure if it had 400,000, it would be even safer.
    We always balance. And the way we balance in this 
Department is risk management. We try to focus on the highest 
priority risks and then apply our resources to those, 
recognizing that we can't guarantee against all risks. And I 
think one of the things I have tried to do in the last year is 
to have a mature conversation with the American people about 
what we can do and what we can't do and what is reasonable to 
expect and what is not reasonable.
    Finally, again, to echo Senator Voinovich, who has just 
walked in, I think the fourth principle we have to have in this 
job is respect for the people who do the work. They do an 
outstanding job, and I do worry about morale. I worry about the 
fact that, for example, people with FEMA--many of whom did just 
a tremendous job--are subject to ridicule, not individually, 
but the component is the butt of jokes.
    I think we obviously owe them increased resources, and we 
have a lot more in this budget for that. But we also need to 
recognize the accomplishments.
    And part of what I want to do in this opening statement is 
talk about some of the things we have done right because 
although I am the first to admit we have more to do, and I said 
it last summer in this Committee, I think it is important to 
say we have done a lot. And I think the people of this country 
should hear that from me, and the people from this Department 
should hear me saying it.
    So let me turn to four areas. First, port security. Port 
security is very much in the news. I know you know, and I am 
going to make it clear publicly, that we have been focused on 
port security as a significant issue for the last year.
    One of the things I talked about in my 2SR review was the 
need to extend the issue of the security envelope, secure 
freight, so we would have better visibility and better control 
over cargo in the maritime domain at an earlier point in the 
supply chain. And that is something we are still very much 
focused on as an end state.
    Part of what I want to do is, in fact, I am planning to go 
out to Hong Kong, as I told Senator Coleman, at the end of this 
month to look at their prototype. We are monitoring the 
prototype. I have to caution everybody that it is still a 
concept. They are putting containers through, but they are not 
necessarily assessing them in the way one would have to assess 
them in real life.
    We are going to have to ultimately test this against the 
real-life demands of balancing the time it takes to really look 
at what you are screening versus the time you want to spend 
lingering before you load the vessel. But it is an important 
issue.
    One thing I would like to address is the criticism I see 
sometimes when people talk about the amount of money we spend 
on port security. Often, there is a kind of apples to raisins 
comparison. People compare air security, aviation security, 
include the payroll for the screeners, include the capital 
expenses. But then when they look at port security, they only 
look at the amount of money spent in grants.
    But if you look at the line items for port security and the 
U.S. Coast Guard and money on CSI, C-TPAT, and Customs and 
Border Protection, and what we are doing at S&T and what we are 
doing in the Transportation Security Administration, you will 
see that last year, in 2006, we had almost $2.5 billion, with a 
``B,'' spent on matters related to port security.
    This year, the 2007 request ups that to $3.1 billion, and 
that includes a significant chunk for the Coast Guard, a little 
over $2 billion in port security for the Coast Guard. If we get 
the 2007 budget, we will have spent almost $10 billion on port 
security-related funding since 2004.
    And I think that is not only a very important statement, 
but I think important to bear in mind when we compare the money 
on aviation security. Because we need to make sure we are 
comparing personnel costs and capital costs in an apples to 
apples way against both accounts.
    Now we have more to do. We have to complete the process of 
deploying our Container Security Initiative. And let me show 
you where we are with this. The Container Security Initiative 
is currently rolled out at 42 ports. That covers 74 percent of 
the container cargo that comes into this country during the 
course of a year. At the end of this fiscal year in October, we 
will add an additional eight ports, and that will give us 
approximately a little over 80 percent.
    What this chart is going to show you,\1\ first of all, is 
there has been a dramatic increase since March 2002, when this 
began. It will also show you that we have focused our attention 
on those ports which have the maximum volume of containers 
being shipped out. And that makes sense. I mean that is where, 
again, being risk managers, we want to be focused first.
---------------------------------------------------------------------------
    \1\ The chart titled ``Container Security Initative'' appears in 
the Appendix on page 47.
---------------------------------------------------------------------------
    A second element of our strategy is radiation portal 
monitors, which I think was brought up in one of the opening 
statements. And here again, this is part of what we call our 
layered defense for the ports.\1\ But we began this program in 
February 2003, and if you see where we expect to be in October 
2006, it will be 66 percent of the cargo that comes in 
containers through our seaports will be taken through radiation 
portal monitors.
---------------------------------------------------------------------------
    \1\ The chart titled ``Radiation Portal Monitor (RPM) Deployment at 
Seaports'' appears in the Appendix on page 48.
---------------------------------------------------------------------------
    Now that is not to say the job is done yet. We are 
projecting getting to over 95 percent at the end of fiscal year 
2007. But I have to say two thirds at the end of this fiscal 
year is certainly an accomplishment, and it certainly takes us 
a lot further than we were, for example, in February 2005, when 
I think there was a somewhat critical GAO report saying we only 
had a small percentage of containers going through.
    We also have approximately 90 percent of that cargo going 
through the land ports is going through radiation portal 
monitors. So these are a couple of things we are doing that I 
think are measurable accomplishments. We have put a lot of 
money into a Domestic Nuclear Detection Office that is designed 
to take us to the next level of research in terms of 
technology. But it is also designed to make sure we are 
integrating our detection system.
    The right way to do this is to make sure our intelligence 
and our operations and our technology are treated as a single 
system. And the Domestic Nuclear Detection Office, which I am 
pleased to say that Congress has now funded in 2006 and which 
we have asked for considerable funding in 2007, is going to do 
just that.
    Let me turn to FEMA. As someone observed, we envision a 10 
percent increase in FEMA's budget over last year. And if we 
include the amount of money that was provided in the 2006 
supplemental, we will be adding 240 FTEs to FEMA. These are 
going to be looking at some very critical support functions. 
Procurement staff, pre-disaster mitigation grants, strengthen 
financial and acquisition management--things which are designed 
to address some of the shortfalls in capability we had during 
what was, by any measure, an extraordinary year last year.
    But I want to go beyond dollars to talk very specifically 
about what we are doing for hurricane season because we have 3 
months to hurricane season, and we have a gulf that is in the 
process of being rebuilt. And that will pose special 
challenges.
    We are in the process now of contracting, getting the 
procurement people onboard and contracting for logistics 
capabilities for this hurricane season. That means not only 
filling up and resupplying the caches or stockpiles of material 
that we have, but making sure we have contracts for surge 
capacity. And most importantly, for the first time, building 
into those contracts requirements for real-time visibility to 
the movement of goods that we did not previously have. So that 
is one thing we are going to be doing.
    Second, we are working on upgrading our call center 
capacity to get up to a surge ability of 200,000 calls if we 
were to need that for registration. We have already put into 
place a mechanism for verifying identity and verifying or 
acting against fraudulent Social Security numbers on our 
telephone registration system that matches what we previously 
had in our computerized Web-based system.
    We are in the process of acquiring enhanced communication 
capability. I have tasked our communications people by June 1 
to have a fully developed and resourced communications 
capability that we can put into any afflicted area that can 
use, for example, aircraft or Coast Guard cutters as relay 
stations to relay radio traffic, as well as to support our own 
teams of law enforcement trained individuals who will go in 
self-sustained to be able to give us real situational awareness 
on the ground.
    So those are some of the things we are doing in the area of 
FEMA.
    Chemical security. As I think we have said previously, and 
I will reiterate again, we support the idea of a chemical bill 
that in an intelligent and risk-based way gives us the 
authority necessary to make sure that we bring chemical 
companies up to standard. That is a tiered approach looking at 
the nature of the risk. It would put a burden, obviously, on 
the industry to come up to standard.
    Much of the industry, I think, wants to do that, but I 
recognize some do not. And I think that the industry, at this 
point, would welcome a sensible regulatory regime. We have been 
working with the Committee on this. I would very much like to 
see a chemical security bill passed this year. I think it is 
overdue.
    It will require us to be sensible to recognize that not 
everybody is going to be happy with every element of the bill. 
But if we pitch it right, we will actually produce a positive 
result, which I think will make the American people not only 
have more faith in us as government actors, but more confidence 
in their own safety.
    Finally, border security. I am pleased this year to come up 
with a budget with 1,500 additional Border Patrol agents, 
which, on top of the 1,500 we got in this last year, will bring 
us up to almost 14,000 by the end of fiscal year 2007.
    But it is not just about agents, it is about increased 
technology. We are, for the first time, putting together an 
integrated strategy with ICE and CBP to acquire technology. We 
hope to start that this fiscal year. That will give us really 
the ability to leverage our personnel with respect to 
intercepting illegal migrants at the border.
    Another critical element of this is ending catch and 
release. I said I was going to make this my objective this 
fiscal year. We are on track to getting that accomplished. We 
have not only additional beds we received from Congress in the 
last year, but we are asking for 6,700 additional detention 
beds for the next fiscal year, which would increase our 
capacity to make sure we do not release people who should be 
removed from the country.
    I have to be honest and tell you we track this very 
carefully. We are trying to use the Secure Border Initiative as 
a prototype for a whole new way of organizing the Department in 
which we are very clear about mission, very clear about 
assignment, and we build very clear metrics so we can track on 
a weekly basis everything that we do.
    In fact, I am now, both with our FEMA retooling and our 
border activity and our preparedness activities, getting weekly 
reports with metrics, which allow me to hold people accountable 
in a very specific way for what they are doing.
    The two obstacles we are going to face with respect to 
detention beds relate to a court injunction that is preventing 
us from expedited removal for a certain category of people we 
apprehend. We are in court. We are trying to get that 
injunction, which is 11 years old, modified to let us do what 
we have to do. I will be pleased to answer questions about 
that.
    And we also have some countries that don't take their 
illegal migrants back. We can only make this work if we are 
able to send people back. If we have to occupy beds for months 
at a time without being able to remove people, it becomes 
simply impossible financially to do it, plus I think after 6 
months there is an argument that there will be a legal 
requirement we release people.
    I won't name the countries here, but I will tell you that 
we are going to be working very aggressively. Diplomatically, I 
have spoken to the Secretary of State about this. I intend, 
when I go to Asia, to be raising this issue to make sure that 
countries that want to trade with us understand they have to 
live up to their obligation to take people back. They cannot 
simply put the burden on us to house people who are illegal 
migrants.
    There are many other things that I could talk about, but I 
know that you all have a lot of questions. I want to thank you 
again for hearing me, and I look forward to answering 
questions.
    Chairman Collins. Thank you for your testimony.
    We are going to begin a round of 8 minutes per Senator, and 
I would ask everyone, and I will likewise, to stick to the time 
because we have so many Senators present today.
    Secretary Chertoff, you mentioned in your statement that 
some of the component agencies of your Department have resisted 
integration. And as you are well aware, there are some who have 
concluded that DHS is simply too big, too unwieldy. It just 
doesn't work.
    Fueling that perception have been a number of serious 
communications gaps. We talked about that, as you are painfully 
aware, with Katrina, where vital information about the levees 
did not reach you and other top officials when it should have.
    Similarly, this week we learned that an important Coast 
Guard memo raising red flags about the Dubai purchase did not 
reach your deputy nor Mr. Baker, your designee on the Committee 
reviewing the transaction.
    I want to make clear that I don't think the answer to those 
problems is to break up the Department, although others do. 
What are you doing to foster better internal communications to 
ensure that vital information reaches you and other top 
officials since this has happened more than once?
    Secretary Chertoff. I think there are two separate issues. 
I mean, the FEMA issue was a much more fundamental problem. And 
the way we deal with this is, first of all, the purpose of our 
2SR reorganization was precisely to flatten the organization, 
get the component heads more closely in touch with the 
secretary and the deputy secretary. And then create cross-
cutting functions in the same way that the Defense Department 
does when they manage the various different kinds of elements 
that you do to have a joint command.
    So what we do now, by way of example, is now we have weekly 
component meetings with the component heads, where we discuss 
the whole range of departmental issues. We have cross-cutting 
functions like preparedness, where our under secretary works 
with all of the different components on a regular basis, making 
sure we are integrated.
    We have a policy office, which we have--again, as part of 
2SR--put into place, which now has an integrated planning 
capability. And a perfect example of that is our Secure Border 
Initiative.
    Every week, I sit down with the heads of Customs and Border 
Protection, Border Patrol, ICE, or their deputies, and we look 
over an integrated plan that they have all contributed to 
building under the auspices of the planning element of our 
policy office. So that everybody has ownership in the mission. 
That is building the kind of culture of preparedness that we 
need.
    Another thing that we need to do is build jointness down in 
the organization. And I am interested in building a set of 
career paths that actually encourage people to be cross-
designated into other departments or detailed into other 
components.
    We do that, for example, with the Coast Guard now. We use 
the Coast Guard in a lot of areas. We do it with the Secret 
Service. And I think much of the military has done it.
    Over time, that will give us the kind of real integration 
as a single department, which we need to really realize the 
fruits of this creation.
    Chairman Collins. As I mentioned in my opening statement, I 
am very concerned about the cuts in funding to State and local 
governments, to first responder groups, because they are your 
essential partners. And as we learned during Katrina, if you 
don't have strong partners at the State and local level, our 
ability to respond will be lessened considerably.
    In that regard, I am particularly concerned about the 
reduction in the Emergency Management Performance Grants 
Program. This program has been around for many years. The 
budget proposes $15 million less than was enacted last year.
    And emergency managers are deeply concerned with this 
funding level, particularly since many believe that an 
inadequate State emergency management capability was exposed by 
Katrina and that if you don't invest at that level, you risk a 
repetition of the response in Katrina.
    What is the rationale for cutting the emergency management 
grant program as well as other money that goes to State and 
local officials and first responders?
    Secretary Chertoff. I think, as you know, of course, that 
the amount we have allocated in the budget this year is the 
same that was allocated last year.
    Chairman Collins. But less than was enacted.
    Secretary Chertoff. But less than was enacted by about $13 
million. I would also have to observe, to put it in context, 
that we do have $50 million for our preparedness initiative, 
which is, in fact, designed to work with emergency managers in 
the 50 States and 75 biggest urban areas on their evacuation 
and emergency plans.
    So we should look at the whole complex of grants that are 
available for these kinds of planning and preparedness 
functions in evaluating the kinds of resources that are 
available. I would say in general, though, if you look at what 
we are doing, we tend to move away from grants that are 
personnel cost focused. And it is a philosophical issue.
    Generally, we believe grants ought to be focused, with some 
exceptions, on building capabilities. That means capital 
investments, training, equipment. But not on, for example, 
recurring personnel operational costs or the kind of training 
that is generally done on a regular basis, just as a matter of 
being an ordinary first responder.
    We recognize also that in the context of our State homeland 
security grants and our UASI grants there are funding sources 
available that can be used if a State or locality feels it 
wants to put some money into things that will help the 
emergency managers and first responders.
    The other thing I would have to observe is this. We have a 
lot of money in the pipeline, and I don't mean this to be 
critical because the money has been obligated. But quite 
wisely, it hasn't all been expended because if you are smart, 
you don't pay the contractor or the person who is supplying the 
equipment before they give you the equipment or perform the 
contract.
    But what that means is that we haven't necessarily seen the 
full fruits of what we have already invested. And with the 
total amount of grant funding we are putting in this year, we 
are going to be up to $17 billion in grants, of which we have 
$3 billion that was enacted last year that we still are in the 
process of giving out and about $5.5 billion in the pipeline.
    So I recognize all of these programs have value. But I 
think what we are trying to do is reconfigure them in a way 
that actually is more disciplined and more risk based.
    Chairman Collins. I will just leave you with the comments 
of an emergency manager director from Maine who pointed out 
that there is a 50 percent State match for the emergency 
management grant program.
    He wrote to me, ``To imply that the funding of personnel 
under the EMPG is not a traditional function of the Federal 
Government is astonishing given that this program has been in 
existence since the 1950s. If that is not a traditional 
function, I am puzzled what is.''
    Secretary Chertoff. I guess the one thing I would say is we 
haven't zeroed it out. So I would agree that I don't want to be 
taken to say it is not a function. But we are trying to level 
it, let us put it that way. Put it at level.
    Chairman Collins. Senator Lieberman.
    Senator Lieberman. Thanks, Madam Chairman.
    Mr. Secretary, let me begin just by going back briefly. At 
the conclusion of our hearing on February 15 in regard to 
Hurricane Katrina, you said that you would provide answers to 
the Committee's post-hearing questions by the close of business 
yesterday.
    Obviously, I know you are busy, but we are nearing 
conclusion of our investigation, trying to write the report. 
And as of this morning, we still haven't received the answers. 
Can you tell us when?
    Secretary Chertoff. Yes. I looked at them yesterday. They 
were drafted. I wasn't satisfied. They relate to matters some 
of which are within my own personal knowledge, and I think that 
requires me to put a degree of attention to the detail that I 
might not do if I were speaking institutionally.
    I would expect to be working on them today, and I would 
expect to have them finished tomorrow.
    Senator Lieberman. Fine. OK, I understand, and I appreciate 
it. We look forward to getting them.
    I share the Chairman's concern about the grants to State 
and local governments and first responders. And I just want to 
very briefly say in response to your two responses, there is a 
significant amount of money in the pipeline. You are right. But 
as you said, and I think this is the important distinction, 
just about every dollar of it has been obligated at the local 
level. So it is not additional money that is available to be 
spent, and the State and local responders do have a real crying 
need for that.
    Second, my guess is you are right that there has been $18 
billion provided to State and local governments since September 
11. But as you probably know, there was that bipartisan panel, 
headed by our former colleague Warren Rudman, that issued a 
report in 2003 and concluded that if the then-current level of 
investment in these programs remained unchanged, the country 
would fall about $100 billion short of what was needed to 
adequately prepare.
    And I would add, just to put it in context, that original 
estimates by David Boyd, director of Project SafeCom at the 
Department of Homeland Security, put the total cost of just the 
interoperability needs of State and local first responders at 
$18 billion. So I think we have a lot more that we can and 
should do.
    I want to focus on port security, if I may. It is now more 
than 4 years since September 11 and then the adoption early in 
2002 of the Maritime Transportation Security Act, which 
required the Department to issue minimum security standards for 
port facilities in our country.
    To my knowledge, those standards have not yet been issued. 
Can you explain why and what schedule you are on now?
    Secretary Chertoff. If you would just excuse me for a 
moment?
    The problem is there were so many different plans. I know 
that there is a report that was due to Congress that I think we 
sent up yesterday, which is maybe what you are referring to. 
What I will do is get back, if we are talking past each other, 
I will find out the status of that. But we sent up a report 
that was due under the statute with our baseline security 
assessment on ports, I think, went up yesterday.
    Senator Lieberman. OK. I will look forward to that with 
some interest and respond to you when I see it and see if it 
fulfills that need.
    I want to go back and just go over a little bit about what 
you indicated about inspection of containers coming in. Because 
the percentages that you gave us are dramatically different 
from the numbers we are dealing with, and I think we may be 
talking here about apples and oranges. And I want to clarify it 
because I certainly am under the impression that we inspect 
only 5 or 6 percent of the containers coming into American 
ports.
    And I always like to point out, which I think most people 
in the country don't realize, that we still receive well over 
90 percent of the goods that come into America by ship. So 
these ports are very important, and there are a lot of 
containers coming in.
    You said that 72 percent of the cargo coming into the 
country will go through radiation portal monitoring, and I want 
you to just help us understand that because I believe we still 
have a lot we have to do. I know that you are making progress. 
But just compare those apples and oranges.
    And obviously, this is all about detecting weapons of mass 
destruction, dirty bombs--including, potentially, nuclear 
devices in containers coming on ships.
    Secretary Chertoff. I am happy to do that. I want to make 
sure I am clear because this is always an area where we have to 
make sure we are consistent in the way we use terms. It is 
correct we inspect about 5 to 6 percent of the containers that 
come in. We screen 100 percent.
    I know you know--the public doesn't always understand--that 
screening means we assess the risk of the container.
    Senator Lieberman. So just talk about how we do that. It is 
obvious we don't physically open every one of them.
    Secretary Chertoff. Correct.
    Senator Lieberman. Nor does every one of the containers go 
through either radiation or something else.
    Secretary Chertoff. Well, let me begin overseas.
    Senator Lieberman. Yes.
    Secretary Chertoff. Let me indicate that, of course, when 
we have the Container Security Initiative, we actually do the 
screening and a lot of the inspection overseas. And that is 
really, ultimately, where we want to go. I mean, we would 
prefer never to have to inspect here because we would like it 
all to be done overseas before the container gets loaded.
    But what we do is we take--the details are classified--but 
we take information about such things as the manifest, the 
shipper, the destination, the source of funding, other kinds of 
characteristics, past patterns of shipping from the same 
shipper. We have some shippers in the C-TPAT program, where we 
have greater visibility into them.
    And based on that and some other characteristics, we score 
the containers in terms of the risk attached to that particular 
container. Sometimes that is driven by specific intelligence, 
and that factors into it. Containers above a certain score are 
inspected.
    Senator Lieberman. Meaning they are opened?
    Secretary Chertoff. Meaning they will first be--we use like 
an X-ray to look inside, to see what is in the container----
    Senator Lieberman. Right.
    Secretary Chertoff [continuing]. And measure the density. 
And then, in many cases, if that doesn't resolve an issue, and 
depending on the score, we will open and actually look inside 
the containers and at the material inside. The radiation portal 
monitor is yet another layer of defense.
    Senator Lieberman. And that is what is 72 percent of the 
cargo?
    Secretary Chertoff. I think I said 66 percent by the end of 
this fiscal year will go through----
    Senator Lieberman. All right.
    Secretary Chertoff. Well, let me make sure I have the 
right--I am not sure if it is 66 or 72. There are two different 
figures. Do you have the charts?
    Senator Lieberman. Well, that is OK.
    Secretary Chertoff. It is either 66 or 72 percent. You may 
be right. It may be 72 percent go through the radiation portal 
monitor. What that is--OK, it is 65 percent by the end of 
October.
    Senator Lieberman. OK. But in any case, that is a lot 
higher than the 6 percent number that we have in our minds.
    Secretary Chertoff. Right. That is not inspection.
    Senator Lieberman. Not inspection. Right.
    Secretary Chertoff. The radiation portal monitor is a large 
device through which a container is driven. If the container 
emits radioactive particles, it is captured on the device.
    Senator Lieberman. Right.
    Secretary Chertoff. Which can also determine, either at the 
port or reaching back to Washington to our targeting center, 
the particular type of isotope. There is a lot of material that 
comes in that emits radioactive particles that is harmless like 
marble. Other stuff doesn't.
    Senator Lieberman. Yes. And forgive me for interrupting. My 
time is just about up, and I want to stick to the time. This is 
to detect nuclear devices or a dirty bomb?
    Secretary Chertoff. Correct.
    Senator Lieberman. So what does the 6 percent number mean?
    Secretary Chertoff. The 6 percent is where we go further, 
and we either do an X-ray inside the container to look at the 
container or we open the container.
    Senator Lieberman. OK. My time is up. I would just say, 
finally, that Steve Flynn, who we all know is an expert, former 
Coast Guard, has said that to get the kind of security we need, 
we ought to have imaging systems, need new container imaging 
systems for every two portal monitors.
    And I want to say, finally, I don't see that only including 
in the budget $35 million for the imaging equipment compared to 
$180 million for the portal monitors. This is an area I urge 
you to really go back and take a look at, and I hope the 
appropriators do, too. Because this is one where we ought to 
raise our guard as quickly as possible and as comprehensively 
as possible so we diminish as close to zero as we can the 
possibility of bringing in a nuclear weapon or a dirty bomb.
    Thank you. Sorry, Madam Chairman.
    Chairman Collins. Thank you. Senator Coleman.
    Senator Coleman. Thank you. I am going to follow up on 
Senator Lieberman's comments about--it is actually supply chain 
security, not ports. It is supply chain security, and that is 
really the critical issue there.
    Before I do that, I do want to associate myself again with 
the comments of the Chairman regarding State and local grants 
and the concerns there. I also want to raise the issue of--I 
mentioned I had been in Arizona and looked at the UAVs, which 
really are a force multiplier.
    You are at 15,000 feet, 5 miles up, and you have total view 
of the area which you are scanning. You can direct Customs and 
Border Patrol folks to a specific area using incredible 
technology.
    I know we are testing one. Obviously, representing a 
northern border State, having the ability to have that kind of 
control of eyes at that distance would make a difference. I 
think the budget is simply one per year. And I know it is in a 
testing phase. But if it pans out, I would hope that you would 
take a look at that.
    As you said in your testimony, technology is important. I 
don't see that in the budget for that technology, and I hope 
there is flexibility should these things pan out.
    Let me go back to the issue of supply chain security, just 
to be very clear. We look at 1 in 20, it is 1 in 20 of the 11 
million containers that come in through our ports, 11 million. 
One in 20 gets that extra review. We have this automatic 
targeting system.
    And step back before that. We have both a voluntary system, 
C-TPAT, working with the private sector, and then we have the 
Container Security Initiative, which our folks are working hand 
in hand at those ports, so we push the defenses back so we are 
fighting part of the battle not as waiting until it gets here, 
but in other countries. So a couple of questions about that 
system.
    First, let me go to the radiation portal monitors. My 
concern is that, today, at least the figures I had is that we 
roughly screen between 35 and 40 percent today of maritime?
    Secretary Chertoff. Correct.
    Senator Coleman. So today 35 to 40 percent are being 
screened. They go through a system, and you have the portal 
monitor there, and they give you a reading, and then you have 
to make some determinations. You have false positives on 
occasion, depending on what is being shipped. You have to 
compare it to shipping matter. But only 35 to 40 percent.
    So, in 3 years, we have deployed 181. And from what I 
understand from your testimony that in less than 2 years, we 
intend to deploy 440 to get to this higher figure. Is that a 
realistic timetable, and is the money in the budget to do that?
    Secretary Chertoff. It is. We expect by the end of this 
fiscal year to be up to--again, let us put the chart back 
up.\1\ I don't want to just go by memory. We are looking at 
getting coverage of 65 percent of the volume, which would be 
294 ports by October 2006. And by October 2007, there is money 
in the budget to take it up to essentially 96 percent or close 
to 100 percent.
---------------------------------------------------------------------------
    \1\ Chart titled ``Radiation Portal Monitor (RPM) Deployments at 
Seaports'' appears in the Appendix on page 48.
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    But I also want to indicate that as part of our Domestic 
Nuclear Detection Office, we are actually looking to start the 
next generation of these detectors. Detectors that would be 
better able to determine if there is material that is being 
shielded, that would be less likely to give us false positives 
because it would be more precise about the particular isotopes.
    And I should also point out that we have, although they are 
not quite a technologically advanced as these monitors, we have 
hand-held monitors and devices and pagers that are also used at 
the ports to detect radioactive material.
    Senator Coleman. Let me talk about the automated targeting 
system. First, the system, as I understand it, was really one 
that was originally developed for smuggling, for drug smuggling 
specifically, maybe for human trafficking. But not for weapons 
of mass destruction.
    And I know the GAO, we have looked at this, and there are 
questions about whether the system has been validated, whether 
it can incorporate real-time intelligence. There have been a 
number of questions.
    Is there any money in the budget to test and validate this 
automated targeting system?
    Secretary Chertoff. As I sit here, I don't know if there is 
a specific item for validation. I mean, obviously, we do want 
to continually validate the system. Part of the validation is 
experience. We are always, when we do open containers or we do 
inspect, that validates in the sense of we can determine 
whether we have been right or not.
    Another way to validate is to determine if people get 
smuggled in, and occasionally we do miss something that 
suggests we are not where we need to be, it has to be adjusted. 
I have been to the targeting center, though, and as we get more 
data, it gets better.
    Now I will tell you there is an additional step we need to 
take as part of the supply chain. We need to start to get more 
information earlier. It will get better as we know more about 
the cargo. It also gets better as we get more shippers into the 
C-TPAT program because if you get a known shipper that has 
always got a routine and you know what is in the shipments, and 
if they are committed to having real security on a container, 
that really gives you an ability to eliminate that as a serious 
risk.
    So I don't want to suggest we are at the point where we can 
say, great, we are done. We have done a lot. But we do have to 
push this out further, and I have actually talked to some of 
the shipping companies about things we might do in that regard.
    Senator Coleman. Regarding C-TPAT, let me just kind of 
focus on that a second. I do not see any increase in the budget 
for supply chain specialists. The C-TPAT requires voluntary 
participation. But one of the concerns we had--and I give you 
credit, Mr. Secretary, for addressing those concerns--is we 
have to validate that these companies are doing what they said 
they were going to do.
    We are, in effect, giving them almost a free pass. Not 
totally, but you factor that in, and they are less likely to 
have their stuff inspected if they are part of this system. So 
how do you propose to have the goal of validating companies, 
and I think the goal is within 3 years, if there is no increase 
in supply chain staff or the specialists?
    Secretary Chertoff. Well, I think our total C-TPAT/CSI 
funding has gone up several million dollars. I am sorry, $16 
million. In addition, we have a better human capital plan now.
    Currently, we have either validated or are in the process 
of validating approximately two thirds of the certified members 
of C-TPAT. So that is as of this February. If we continue at 
this rate, we should get most of them validated by the end of 
the calendar year or in the next calendar year.
    Senator Coleman. The GAO was worried about the validations, 
and I think they talk about woefully behind schedule.
    Secretary Chertoff. Yes. And I think there were some 
lessons learned and incorporated in responding to that.
    Senator Coleman. Let me just talk about then the ability to 
look at individual containers, and we have talked about the 
system in Hong Kong. Which is not just the ISIS system, not 
just an ability to scan cargo, but it is really a package. You 
have optical recognition scanners. You look at what is on the 
cargo. You compare that to manifest. You have the radiation 
portal monitor. So, in this case, each and every container is 
validated.
    Is the money in the budget? And I appreciate the fact that 
you are personally going to go and take a look at that. But 
that really should be the goal. The goal is, if it is possible 
and technology makes it possible, to some way actually look at 
each of the containers that come into the country.
    Hong Kong, those 10,000 trucks a day, and they are moving. 
It is like a moving CAT scan is really what it looks like. Can 
we make this a concept in reality at all our ports?
    Secretary Chertoff. Well, first of all, ideally, we want 
the concept overseas. That is the best of all possible worlds. 
And I know that we are working with this concept. We are 
looking at the concept. What I want to caution about is, my 
understanding is, that while they move the cargo through, they 
don't actually assess in the way we would really want to assess 
in real life.
    And having watched the VACUS machines operate, the X-ray 
machines operate, you have to have an operator who knows what 
to look for, and it takes a few minutes. And the question is 
when we finally put in an operator and make it operational, 
will it prove to be practical in terms of the throughput?
    I would love to see it be practical. If it is practical, it 
is the kind of thing we ought to move to. In this case, I think 
the company itself has funded this. And I certainly think it 
would be a great idea if we could build an incentive structure 
to have the private sector pick up a lot of the cost of this 
because, after all, it benefits the private sector, and that 
means the taxpayer doesn't have to pick up the bill.
    Senator Coleman. I would have just a last comment in regard 
to that. The interesting change that I have seen is that years 
ago, the private sector, if it was going to add $3 to $5 to the 
cost of a container, they weren't interested. The private 
sector has come to us, come to me, and said, ``Hey, we would 
like to see this across the board.'' Because they recognize the 
risk if something goes wrong.
    And so, the idea of adding $5, $8, perhaps even $10 a 
container to get this kind of security guarantee is something 
that I think is much more possible today than it was before.
    Secretary Chertoff. I agree with that.
    Senator Coleman. Thank you. Thank you, Madam Chairman.
    Chairman Collins. Senator Levin.
    Senator Levin. Thank you, Madam Chairman.
    First, I would like to talk to you about interoperable 
communications equipment. This Committee has put a lot of 
emphasis on that. We have put initiatives in the budget and in 
the appropriations bills for it. I and others have made a 
special effort to talk about interoperable equipment with 
border States so that we can communicate with Canada and Mexico 
as well as internally.
    You indicated, I believe last year in written responses to 
our questions prior to your confirmation, that you do support 
the goal of focused spending for interoperable equipment, and 
you were going to study the issue further. The Administration's 
response to Hurricane Katrina contains language that says we 
should develop a national emergency communications strategy 
that supports communications interoperability. Where are you?
    Secretary Chertoff. We have a program called RapidCom, 
which has deployed interoperable communications systems in the 
10 largest cities in the country at the command level, meaning 
not every firefighter or policeman has the ability to talk to 
another firefighter or policeman. But at the command level, 
meaning lieutenant or whatever the equivalent is in the 
firefighting service, they can talk to one another.
    The challenge is this, and some of it has to do with this 
issue of bandwidth. I know there is a question about whether a 
part of the spectrum is going to be made available for this 
kind of communication. I think that is maybe an FCC issue.
    But we have a series of different systems now migrating 
into the digital world that are being built by different 
vendors. The challenge is, first of all, in the short run, we 
do have technology that allows different systems to bridge 
through gateways, technological gateways, and we have to get 
the money out to do that.
    But the long-term solution is we have to settle on a 
system. It is a little bit of a delicate issue because if you 
pick a particular system, there is a proprietor who has an 
interest in it.
    Senator Levin. Do we have a designated funding source to 
address this challenge?
    Secretary Chertoff. I think once we get a system in place 
and we have gateways that we have designated, the grant funding 
that we have under State homeland grants, under UASI grants, 
and under other kinds of grants are specifically available 
under our targeted capabilities list.
    Senator Levin. But do we now have a designated funding 
source in this budget or not?
    Secretary Chertoff. Well, as part of the grant system, the 
State grants, there is not a separate line item for----
    Senator Levin. I think there was a commitment to do that, 
and I am just wondering whether you are going to carry out that 
commitment?
    Secretary Chertoff. Well, I think we are doing it through 
our national capabilities goal or national preparedness goal, 
which identifies as one of the funding items that we will fund 
under these grants interoperable communications.
    Senator Levin. So, in other words, there is no funding 
source? It is obviously one of the eligible programs. But as of 
right now, at least, there is no funding source that is line-
item designated, as I understand it.
    Secretary Chertoff. Well, I want to be clear. Our research 
is funded through S&T. In other words, we do fund our research. 
The State ability to buy gateways is funded through the State 
grant systems. They have to elect to ask for the money.
    Senator Levin. OK. Secretary, a year ago, you indicated 
that you were going to be opening up five northern border 
airwing locations. These are critically important in terms of 
air and marine interdiction, enforcement capabilities along the 
northern border. The longest border in this country is the 
northern border, but it is shortchanged significantly.
    Now there was a commitment to open up an additional one 
each year. That was not kept last year. Is it going to be kept?
    Secretary Chertoff. I am told the following is the 
schedule. And that Plattsburg, New York, and Bellingham, 
Washington, were opened in 2005, fiscal year 2005. Great Falls, 
2006. Grand Forks, North Dakota, is 2007.
    Senator Levin. Fine. You have the funding to open up one 
per year then. Is that the short answer?
    Secretary Chertoff. Right. And Detroit, Michigan, I think 
the site assessment is complete, and it will be open next year 
as well.
    Senator Levin. Great. Thank you.
    There is 100 U.S. deep draft ports on the Great Lakes, six 
connecting waterways to the Great Lakes that must handle cargo 
during the ice season. So we have a problem of ice breaking in 
the Great Lakes. We have 17 million tons of raw materials 
shipped on the lakes during periods of ice cover, which help to 
keep steel mills going in winter time.
    The program that you have, the so-called Deepwater Program, 
will have you acquire or modernize 200 vessels for the coast, 
the East and West Coasts and the Gulf Coast, but none for the 
Great Lakes. In fact, we are losing a ship.
    Now given the fact that we have the longest coastline on 
the Great Lakes, we have this ice-breaking problem, instead of 
a program such as Deepwater, which I support, to modernize and 
acquire new vessels, you have a loss of a vessel on the Great 
Lakes. I just want to let you know you can comment if you want 
briefly, but I am going to run out of time.
    It seems to me you are clearly shortchanging the Great 
Lakes in this area. The Coast Guard is critically important to 
us. Their vessels are critically important to us. But there is 
a program for modernizing and acquiring vessels for the coast, 
the East and West Coast and Gulf Coast, but none for the Great 
Lakes.
    Can you give us a brief answer as to whether you are going 
to try to remedy that?
    Secretary Chertoff. I believe, but I need to verify this. I 
believe that there will be a replacement ship for the one that 
has been removed. But let me make sure the Coast Guard double 
checks that.
    Senator Levin. Well, in general, though, there is such a 
disproportion here that you have between the East and West 
Coast and the Great Lakes. And when you were up for 
confirmation, this was an issue I talked to you about. You said 
that you would become more aware of the Great Lakes as our 
longest coastline. We just don't see that reflected in your 
agency's programs. I will make that statement and go on to 
another issue, even though that is critically important to us.
    You have spent a lot of time here, Mr. Secretary, in terms 
of container security. We have a major container security issue 
in Michigan that is festering. It is a big problem. It is the 
municipal waste trucks that come in from Canada that cannot be 
adequately inspected.
    Now those are the facts. This is municipal waste. We have a 
large number of these trucks that are coming to Michigan. We 
have about 99,000 of these trucks a year dumping Canadian trash 
in our landfills. Now we resent that because they have more 
land than we do in Ontario. We think also there is an 
environmental issue because it is using up landfills.
    But I want to just focus on the security issue. We asked 
your IG about 2 years ago to give us a report on the 
vulnerabilities since these municipal waste/trash trucks cannot 
be adequately inspected. I, along with Senator Stabenow and 
Congressman Dingell, asked for this report. It has just come.
    It is so supportive of our position that apparently the IG 
is afraid of making it public because it will show 
vulnerabilities apparently in our security system. And so, it 
is put down ``for official use only.'' I am not allowed to 
quote from it today.
    But it shows such vulnerabilities, I have to tell you--I 
won't quote from it--supporting what our position is purely on 
security issues that it is marked for official use only. And 
all I can do is plead with you, first of all, to read it. I 
don't know if you have read it?
    Secretary Chertoff. I haven't received it yet.
    Senator Levin. I would ask my colleagues to read it and 
support an amendment which says that if you can't inspect 
containers coming into this country, if there is no practical 
way to inspect them, we have simply got to say until they can 
be inspected, we are not going to allow them.
    And I would hope that you would read this report and that 
you would support that amendment. We talk about inspecting 
containers, and we should, obviously. We have I don't know how 
many tens of millions of containers coming in. We have 12,000 
trucks entering Michigan each day. They can be inspected, 
except for the municipal waste trucks, where there is no 
effective way of inspecting them.
    And we know that there are drugs that go into those trucks 
because we have been able to, apparently by chance almost, find 
drugs in those trucks. We know that there is medical waste that 
is in those trucks, where we have been able, just by luck, to 
find a shipment of that.
    But we are talking about chemical, biological materials 
being placed into waste, municipal waste not by the Canadian 
government, obviously--not with their knowledge or consent--but 
by someone who wants to do damage to us. And there is no 
effective way to inspect them, and we are going to ask for your 
Department to either give us an unclassified report, which will 
say what is in this classified or official use only report.
    And in any event, to support language in our law which will 
tell Canada, sorry, we are not able to practically inspect that 
waste. You are going to have to keep your waste and find a dump 
site for it yourself.
    So that is my request to you, and I would hope that you 
would promptly respond to it.
    Secretary Chertoff. I certainly look forward to reading the 
report and getting back to you on it.
    Senator Levin. Thank you. Thank you, Madam Chairman.
    Chairman Collins. Senator Bennett.
    Senator Bennett. Thank you very much.
    Mr. Secretary, I am interested in your progress with 
respect to port security, perhaps picking up on conversation I 
have had with Senator Lautenberg. As you make your analysis of 
where you are focusing priorities, high risk, do you take into 
account the proximity of a particular port to a high-risk 
situation?
    For example, a port in Hawaii has a proximity to a naval 
base at Pearl Harbor. But a port in New Jersey has a proximity 
to a chemical plant that, as Senator Lautenberg has said, could 
kill millions of people.
    You are examining cargo and shipping practices for risk, 
but in terms of places coming in, is there a priority in the 
Department of, well, we are more concerned about going into 
Port A because there is a chemical industry around Port A or 
there is a refinery around port A that is very vulnerable. Do 
you have that kind of analysis?
    Secretary Chertoff. We do take that into account in several 
respects. We do, obviously, with respect to our grant funding. 
We have been focused on categorizing risk to ports in precisely 
that way in terms of how we do port grants.
    The Coast Guard, in terms of doing the port security plans 
and assessing the security of the port itself, takes into 
account the location of the port and what the consequences and 
vulnerabilities are. With respect to our targeting in terms of 
container cargo, I don't know that--I want to be a little 
careful because I don't want to get into details I shouldn't 
say publicly. There are a lot of factors that go into that mix.
    Obviously, with smuggling something in a container, the 
concern is not only that someone is going to do something at 
the port. The concern is they are going to take it out of the 
port and get into a city with it, and that is----
    Senator Bennett. Yes.
    Secretary Chertoff. But the short answer is, in many 
respects, we do take account of those factors.
    Senator Bennett. OK. Katrina demonstrated that a hurricane 
hitting in one part of the country had a significant economic 
impact, where if it had been X number of miles to the right or 
the left, it would have had a somewhat less impact because 
Katrina took out a refinery capacity that didn't exist 
elsewhere along the coast.
    Senator Warner talked to you about cyber security. As you 
know, that is an area I have been very concerned about. And I 
was pleased with the announcement of the creation of the 
position of the assistant secretary for cyber security and 
telecommunications. But I am unhappy that position hasn't been 
filled.
    Can you share anything with the Committee as to where you 
are in trying to find that particular individual?
    Secretary Chertoff. I can tell you that I am unhappy it 
hasn't been filled. We are talking to a number of people. I 
have talked to a number of people. Some have chosen not to be 
candidates because the amount of money you can make in the 
private sector makes what we can pay pale by comparison.
    Senator Bennett. Yes. Particularly in this discipline. I 
understand that.
    Secretary Chertoff. But we do have some people we are 
pursuing because I do think it is important that we fill this, 
and in particular it is important we fill it because the way we 
conceived the position actually unifies IT and 
telecommunications. And I think that recognizes a convergence 
of those two elements in real life, which I think is an 
important step to consider.
    Senator Bennett. OK. Thank you.
    Let us talk about immigration for a minute. I am a strong 
supporter of the President's position with respect to temporary 
workers. And it is my impression, and I say to my constituents, 
if we had an effective guest worker program or temporary worker 
program, that would free up the Border Patrol to concentrate on 
terrorists, drug dealers, and criminals.
    And for support of that, I go back to the experience of the 
Bracero Program of the 1950s, when people came over the 
southern border, came and went--and it is the ``went'' part of 
it that we want to encourage--with relative ease. We had a 
Border Patrol that was much smaller but could focus on criminal 
activity and not on those that were coming over to pick celery 
or strawberries or something during harvest season.
    Have you done any studies on what kind of change a guest 
worker program would make in terms of the Border Patrol 
activity and Border Patrol effectiveness dealing with 
terrorists, criminals, and drug dealers?
    Secretary Chertoff. Yes. We have actually spent a lot of 
time talking about this because we view the whole issue of 
border security as part of a system, and I think you are 100 
percent right. Without a temporary worker program, we actually 
wind up impeding the flow, the circularity, the flow of people 
in and out. It means we are spending a lot of time chasing 
individuals who really don't want to do anything else except 
come and do a day's work and then go back home or maybe go back 
home on the weekend.
    And that means that our resources are spread more thinly 
than if they could focus on people who don't want to come to 
work, but want to come to smuggle drugs or commit crimes or 
commit acts of terror.
    From my standpoint, and I know the business community wants 
a temporary worker program, but I have a much more limited 
objective. I want to have effective border enforcement. And I 
don't think you can have effective border enforcement at 
anything approaching a reasonable cost if you don't allow us to 
bleed off the legitimate workers into a regulated non-amnesty 
program so we can focus on the people we are worried about.
    Terrorism and crime across the border is really the core of 
what we ought to be focusing our Border Patrol on.
    Senator Bennett. Yes. Well, I have seen that in Salt Lake 
City in the previous administration. We are not a border State. 
But the Salt Lake City police chief said 80 percent of our drug 
arrests and 50 percent of our murders involve illegal aliens.
    They get across the border. They go past the border State, 
where there is a degree of sensitivity and enforcement, come 
inland to Utah, and I have had the experience--I hasten to say 
in the presence of Salt Lake City police officers--being out on 
a ride along with the police. I have had the experience of 
buying cocaine on the streets of Salt Lake City from one of 
these illegal immigrants, who was arrested within 90 seconds 
after we had made the purchase. But that was just a live 
demonstration.
    And at that time, the INS official said, well, you are not 
a border State, so we don't really need to have that many folks 
there. It was a dramatic demonstration to me of how important 
it is to focus there.
    Because I know there are plenty of chambermaids in the ski 
resorts in Utah who are changing sheets, who probably are 
undocumented, who do not represent any kind of a challenge. And 
if we are spending all of our time focusing on them and 
allowing the drug dealers on the streets of our cities, we have 
the wrong priority. So I appreciate the way you are making that 
kind of distinction. Thank you, Madam Chairman.
    Chairman Collins. Thank you. Senator Akaka.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you, Madam Chairman. And I want to add 
my welcome to the Secretary to the Committee.
    Madam Chairman, I have a number of questions, but I would 
like to have my opening statement included in the record.
    Chairman Collins. Without objection.
    [The prepared statement of Senator Akaka follows:]

                  PREPARED STATEMENT OF SENATOR AKAKA

    Thank you, Madam Chairman. Today's hearing comes only a week after 
Secretary Chertoff appeared before our Committee to discuss the role of 
the Department of Homeland Security (DHS) in the government's response 
to Hurricane Katrina. I join Chairman Collins in welcoming the 
Secretary to this morning's review of the Department's FY07 budget 
proposal.
    It is our responsibility to ensure that the Department has the 
necessary resources, in terms of funding and personnel, to carry out 
its mission of protecting the Nation from both natural and man-made 
disasters. Unfortunately, one of the first comprehensive tests for DHS 
came in the form of one of our most tragic natural disasters: Hurricane 
Katrina. All aspects of the Department, including senior leadership, 
preparedness and response capabilities, and policy and planning, were 
stressed and strained--many to the point of failure.
    In many ways, today's hearing is a follow-up to the Katrina 
investigation this Committee will conclude shortly. Over the past 6 
months, we have identified areas of weakness and uncovered serious 
management challenges, while recognizing those entities that performed 
well. We must now ensure that the Department has the tools needed to 
avoid the mistakes of the past.
    Unfortunately, after reviewing the President's FY07 budget proposal 
for the Department, I do not believe the Administration has aligned its 
budget priorities in the right order. I am especially concerned about 
the diminished support for State and local emergency management and 
homeland security professionals who are our first line of defense.
    We know that adequate funding of State and local homeland security 
initiatives are key to making sure that the people of our home States 
are protected against natural disasters. That is why I object to the 
Administration cutting almost $400 million from State and local 
homeland security assistance programs. Last year, Congress appropriated 
$2.965 billion. The FY07 budget proposes $2.57 billion for the same 
programs.
    The budget proposal would also reduce the Assistance to 
Firefighters Program (FIRE Act) by a staggering 55.3 percent and the 
Emergency Management Performance Grants (EMPG) by 8.1 percent even 
though the EMPG program suffers an annual shortfall of $260 million. I 
look forward to discussing with Secretary Chertoff why these important 
all-hazards grant programs, which are so vital to my home State of 
Hawaii, have been cut. These cuts are especially perplexing in light of 
the Secretary's acknowledgment last week that the Department must 
emphasize all-hazards preparedness.
    Throughout the debate over the creation of the Department, I 
cautioned that combining the various functions of the legacy 
departments could adversely impact the Nation's ability to deal with 
natural disasters. Part of my concern was because I believe that this 
Administration undervalued the Federal Emergency Management Agency's 
(FEMA) disaster mitigation programs, which helps communities prepare 
for and respond to disasters.
    Despite my belief that the establishment of the Department would 
hamper the Federal Government's ability to respond to disasters, it was 
my hope that DHS would develop an anticipatory culture of preventing 
and responding to disasters. Perhaps there will be a change in attitude 
given the $100 million increase to pre-disaster mitigation as well as 
moderate increases to both FEMA and the Department's new Preparedness 
Directorate. However, we cannot wait for catastrophic events like 
Hurricane Katrina to force this Administration into taking mitigation 
programs seriously.
    With hurricane season only 3 months away, I am dismayed that the 
Department continues to ignore its enabling statute by failing to 
establish regional offices. Time and again, I have discussed with DHS 
officials the need for regional offices. I am particularly concerned 
because Hawaii, an island State, has no neighbors--no resources outside 
of what is available within the State--to respond to a natural or man-
made disasters. At last week's hearing with Secretary Chertoff, I asked 
that he review the Department's relationship with the U.S. Pacific 
Command (PACOM) because my State of Hawaii is the only State that does 
not come under the protection of the U.S. Northern Command (NORTHCOM). 
This is why a consolidated DHS presence in the form of a regional 
Pacific office based in Hawaii is critical. I know that DHS has 
proposed establishing Federal Preparedness Coordinators in major 
metropolitan areas, but they are not a substitute for regional offices. 
I urge that consolidated regional offices be funded through the FY07 
budget.
    Secretary Chertoff, it is the responsibility of the Department of 
Homeland Security to provide unity of national effort before, during, 
and after catastrophic events. Over the past year, DHS has failed to 
function as a cohesive entity, let alone coordinate necessary Federal, 
State, and local efforts. Nearly 3 years after its inception, DHS 
should be experienced in all aspects of planning and integration to 
achieve unity of national effort. As we debate next year's budget, we 
must remember that for the good of this great Nation and its people, 
the Department of Homeland Security must not fail again.
    Thank you, Madam Chairman. I look forward to working with you, and 
I look forward to discussing the Department's budget proposal today.

    Senator Akaka. Mr. Secretary, in looking at your fiscal 
year 2007 initiatives, particularly your Office of Policy, your 
budget requests an $8 million increase in that Office of 
Policy. Some of these funds, according to your justification, 
will be to establish a committee on foreign owned investments 
in the United States.
    I understand that this will be the Department's counterpart 
to the frequently discussed in the past few days Treasury 
Department's Committee on Foreign Investments in the United 
States that we call CFIUS. And in a briefing to this Committee, 
the Department's Assistant Secretary for Policy, Stewart Baker, 
stated that DHS has been an active, even ``aggressive'' member 
of CFIUS and was heavily involved in the Dubai Ports World 
review.
    In light of Mr. Baker's statement, Mr. Secretary, could you 
explain what the Department intends to use these additional 
funds for that it is not currently able to accomplish?
    Secretary Chertoff. We currently fund that out of our 
infrastructure protection component. That is the way it has 
been funded since the Department stood up. And the idea here is 
to actually enhance its resources, move it to the Office of the 
Assistant Secretary--hopefully soon to be an under secretary--
for Policy, which would then give that person a somewhat easier 
ability to operate across all of the components in order to 
gather information for purposes of our participation in CFIUS.
    So we essentially would be taking some of the people and 
some of the function out of infrastructure protection and 
moving them, but I think it would add a little extra resources 
as well.
    Senator Akaka. Could you tell me how these funds and 
resources would be enhanced?
    Secretary Chertoff. I think we were talking about maybe an 
additional FTE. I have to double check that. One additional FTE 
on top of the individuals that we would be transferring from IP 
to policy.
    But I should make clear that when we have a CFIUS 
transaction that has to be reviewed, we obviously talk to a 
number of different components, and the people in the 
components, as part of their ordinary work, are expected to 
assist the CFIUS people in terms of their review.
    So I mean, you have people who are full-time dedicated or 
substantially dedicated, and then you have people who, on an 
as-needed basis, will contribute information, views, facts, or 
whatever else needs to be taken into account.
    Senator Akaka. I want to know about DHS's fiscal year 2006 
request of $50 million to establish DHS regional offices. In 
our last hearing with you, I did mention about regional 
offices. Just last week, the White House called for the 
establishment of DHS regional offices in its Katrina report.
    I understand that some may think that regional offices 
would create an extra level of bureaucracy. However, I want you 
to understand, Mr. Secretary, that from the perspective of 
Hawaii, as I have mentioned before--which is 2,500 miles from 
the Mainland, with no contiguous States to rely upon in the 
event of a disaster and has a 6-hour time difference with 
Washington, DC--the benefits of a regional office outweigh the 
potential costs. And we need a point of contact out there in 
the Pacific as well.
    I would appreciate it if you could clarify for the record 
whether DHS agrees with the White House and intends to 
establish a regional office system?
    Secretary Chertoff. I think I have previously said that I 
did believe we needed to have a regional preparedness function 
to be married up to FEMA in the FEMA regions. The exact 
configuration of that I don't think is finally settled, but I 
am not talking about a huge bureaucracy.
    We are talking about the FEMA people in the region, 
preparedness people who would be planners, and then I think we 
have an agreement with the military that they would designate 
some of their planning folks to co-locate. The idea being that 
we would have in every region a cell of operators, planners, 
and military planners who would build the plans to deal with 
emergencies or crises at a closer level with State responders.
    We do endorse that idea, and we do intend to execute on 
that. And we are, in fact, in the process of trying to identify 
the people who are going to want to take this function on.
    Senator Akaka. Do you have an idea when you may be 
finalizing that proposal?
    Secretary Chertoff. I think probably in the next month or 
two.
    Senator Akaka. Mr. Secretary, the Homeland Security Act 
required that the Secretary of Homeland Security submit to 
Congress a report for consolidating and co-locating regional 
offices of the 22 agencies that formed DHS by November 2003.
    We still have not received this report, which makes it 
difficult for the Appropriations Committee to assess how to 
allocate funding for regional offices. Will you commit to 
provide this report to Congress?
    Secretary Chertoff. I am not sure what the report refers 
to. There was originally a conception, I believe this was 
before my time, of a kind of regional DHS office that would 
encompass all of the components. I want to be clear that is not 
what we are talking about doing here.
    What we are talking about doing here is a regional office 
that would be what I call a much smaller footprint and that 
would be focused on preparedness, response, and planning but, 
for example, wouldn't be involved with Border Patrol, or we 
wouldn't control Coast Guard.
    In other words, we are not going to have mini DHS 
secretaries in the various regions. So I am not quite sure what 
the report is. It may be that the original proposal that was 
reflected in the report has been overtaken by events. I will 
find out and let you know.
    We will be able, though, to brief Congress on what our plan 
is in terms of these regional planning, preparedness, and 
response offices within the next couple of months, I think.
    Senator Akaka. Yes. May I just point out that this report 
is called for in Section 706 of Public Law 107-296.
    Madam Chairman, I know my time has expired.
    So thank you very much, Mr. Secretary.
    Chairman Collins. Senator Voinovich.
    Senator Voinovich. Mr. Secretary, I would like to talk 
about people, human resources. I chaired a joint hearing of the 
Subcommittee on Oversight of Government Management with the 
House Subcommittee on Civil Service back on March 29, 2001. And 
at that hearing, we had a report on U.S. security in the 21st 
Century, and I would like to quote from that report.
    It says that ``As it enters the 21st Century, the United 
States finds itself on the brink of an unprecedented crisis of 
competence in government. The maintenance of American power in 
the world depends on the quality of U.S. Government personnel, 
civil and military, at all levels. We must take advantage, 
immediate action in the personnel area to ensure that the 
United States can meet future challenges.''
    And a former Secretary of Defense, James Schlesinger, who 
was one of the people that testified, said, ``In other words, 
it is the commission's view that fixing personnel problems is a 
precondition of fixing virtually everything else that needs 
repair in the institutional edifice of U.S. national security 
policy.''
    Since that time, we have had September 11. You are now part 
of the whole issue of national security. I want to congratulate 
you on including in your budget money for implementation of 
your MAXHR program, which is your new personnel system. I think 
it is really imperative that you underscore how important that 
is to the Budget Committee so that you can move forward to deal 
with the human capital challenges that you have in the 
Department of Homeland Security.
    I believe that if we are going to be successful in this 
century that the Federal Government is going to have to be the 
employer of choice in the 21st Century. Quite frankly, we are 
not yet there today.
    I would like to agree with our Chairman and Ranking Member 
in regard to Emergency Management Performance Grants. Just as 
personnel is very important to you, I believe that we are 
underfunding EMPG and that our States don't have the manpower 
to do the job that they are supposed to do.
    I understand that you are going to get a report back on the 
preparedness of the various States, and I would hope that you 
would consider whether part of the reason why some of the 
States are not adequately prepared is that they don't have the 
people to get the job done to follow through with a readiness/
preparedness plan.
    Regarding the issue of interoperability equipment, the 
question was raised, is there going to be money in the budget 
that is earmarked so that States can go forward with meeting 
interoperable communications needs? Because I think what we 
found in Katrina was that there was no interoperability of 
communication. It was one of the things that really stopped 
responders from doing the job that they were supposed to do. Is 
there money for it?
    Secretary Chertoff. There is money in the budget for our 
research in science and technology. And there is grant money 
available through the homeland security grants and the UASI 
grants for interoperability. Now the State has to choose to do 
that.
    If the State applies for money and doesn't want to use the 
money for that, we haven't designated a particular item and say 
you have to use this for interoperability. Some States may feel 
that they are covered in terms of the way that they have their 
local law enforcement involved.
    There is clearly a technological step that we have yet to 
make, which is settling on the architecture for the particular 
digital communication system that everybody would acquire. The 
challenge in doing that, as I started to say, is there are 
proprietary systems that don't talk to each other.
    Without getting into an area that is delicate because there 
are going to be a lot of people with a lot of money at stake 
listening carefully to see if I am tipping my hand somewhere, I 
think we are going to have to figure out a way--it is like 
railroad track. Ultimately, we are going to have to figure out 
what the gauge of the track is so everybody can build the same.
    Senator Voinovich. Well, the question I have is, how much 
money is going to be available to interest the States to fund 
interoperability? As governor of Ohio, I spent $271 million to 
implement the MARCS system. Since then, Governor Taft has 
continued to buildup the MARCS system, increasing the number of 
State dollars to over $300 million. Additionally, 
municipalities have continued to make interoperable 
communications a priority, bringing the total funding to over 
$500 million State-wide with the assistance of the State 
Homeland Security grant funding.
    It is no wonder that Ohio has a strong communications 
system. Now they are working to expand beyond voice and get 
into data. I would suggest that Ohio could be used as a model 
for other States. But, if there isn't adequate funding from the 
Federal Government, many of the States aren't going to put the 
money into interoperable communications. Mr. Secretary, are you 
suggesting it is solely the State's responsibility to fund 
these programs, without Federal assistance?
    Secretary Chertoff. No. I am saying there is money 
available. The State will have to choose, in requesting money 
under the grant program, to use it for interoperability. It 
turns out that, in fact, the No. 1 item requested by States and 
funded in our grant programs is interoperable communications. 
But the State has to make the judgment.
    If the State of Ohio decided, for example, that they are 
where they want to be with that and they would rather have 
their grant funds used for something else, as long as that 
something else was within our targeted capabilities list----
    Senator Voinovich. Ohio is choosing to use over half of the 
State Homeland Security grant money for interoperability.
    Secretary Chertoff. Well, that is great.
    Senator Voinovich. For clarification, Ohio has spent over 
$300 million on interoperability. But, I am concerned that you 
are basically saying that DHS will help States with the 
technology, but the majority of funding is going to have to 
come from the States. That is a large investment.
    Secretary Chertoff. No, our Federal grant funding--the 
grant funding that we give them under our programs can be used 
by them for this purpose. All I am saying is when they ask for 
the money, they have to choose----
    Senator Voinovich. Well, the grant program, Mr. Secretary, 
doesn't even scratch the surface, if you are talking an 
investment already in excess of $300 million. That is an 
enormous sum of investment by a State.
    If you are going to have a good response system on the 
local level, you have to have the manpower that puts the 
program in place, and they have to make a commitment. The plan 
has got to be there. And then the people who are working on it 
have to be able to communicate with each other. Establishing 
this network requires substantial investment. We must ensure 
that the Federal Government can support this investment in 
interoperability.
    The last thing I would like to ask you about is the issue 
of FEMA. I am really concerned about the condition of FEMA's 
workforce. My understanding is that FEMA's workforce has 
suffered a significant erosion, that the agency has lost as 
many as 500 employees since its merger with DHS, and that these 
people haven't been replaced.
    I further understand that the staffing at your senior 
career levels is particularly lacking. For instance, 8 of your 
10 regional directors are working in an acting capacity. And 
all three of FEMA's top Preparedness, Response, and Recovery 
Division directors have left the agency since 2003. And as of 
October 2005, FEMA had 17 vacant senior executive positions.
    You can't successfully operate FEMA without the people that 
are necessary to get the job done, having the right people with 
the right knowledge and skills at the right place. How are you 
going to handle this situation?
    Secretary Chertoff. This is a huge issue. And you know, I 
don't want to underestimate the nature of the problem because 
it is one thing to put money into a system and another thing to 
get people for the system. You have to be able to attract 
people. And I will not deny that certainly when there is a lot 
of negative publicity, it doesn't make a lot of people want to 
migrate.
    We are looking very closely now at putting together a top 
management team to get in place within a very short period of 
time. Right now, of course, we have an acting director who is 
very capable and is very well respected. But underneath that, 
we have to build some other people.
    So we are doing some active recruiting. There may be some 
promotion within. Above and beyond that, we have to get about 
the business of hiring. And I will be honest with you in saying 
that I think FEMA was so overwhelmed in the first few months 
after Katrina, just keeping its head above water--no pun 
intended--dealing with emergent needs, that the kind of stuff 
you need to do to run the agency was really put on the back 
burner.
    We are putting our procurement and our human capital people 
into FEMA in effect to help them do this recruiting and help 
them get up and running. But I will acknowledge to you that 
this is an area that I am concerned about.
    Chairman Collins. Senator Dayton.
    Senator Dayton. Thank you, Madam Chairman.
    Mr. Secretary, I want to acknowledge at the outset that you 
inherited the badly broken systems of immigration control and 
border security when you arrived. Any government which cannot 
assure the integrity of its country's borders and control of 
the people and the products which enter is failing its most 
fundamental responsibility to its citizens.
    And despite the efforts of your Department, from all 
accounts, there is a continuing flood of illegal people and 
illegal products and especially illegal drugs flooding our 
country.
    And Senator Coleman and I have met with local officials in 
Minnesota, small communities that are literally desperate. I 
mean, they are overwhelmed by the trafficking of drugs, by the 
illegal immigrants that are in the communities, by the 
predators that are dealing.
    And ironically, with the action of the Minnesota 
legislature and some other States to ban Sudafed and some of 
the other products indigenously, the result has been that even 
more potent methamphetamine, I am told, is coming in, flooding 
into our communities in Minnesota from the Mexican border.
    So I realize the commerce of this country depends on 
business as usual. But this is business as usual. Business as 
usual means that we are hemorrhaging our children and 
sacrificing their lives, literally, to continue a convenient 
flow of goods across the border.
    What do we need to do, even conceptually, what would we 
need to do to stop--I don't mean just mitigate, but stop the 
flow of illegal people and illegal drugs into this country? We 
have to, in my mind, define what it is we would have to do, and 
then we can decide whether or not we are willing to do that. 
But we are just playing games here, and these people are out 
for our lives.
    Secretary Chertoff. I am going to come back to what I said 
to Senator Bennett because I think that the problem of illegal 
migrants coming in is different than the problem of drugs.
    Senator Dayton. I agree.
    Secretary Chertoff. If we can build a comprehensive 
strategy, which is a secure border, plus work site enforcement, 
plus a temporary worker program so that we can focus our border 
resources not on people who want to come and make beds at the 
Quality Inn, but people who want to come in with drugs, we will 
then have actually applied the resources we have where I think 
most people want to see them applied.
    Without a temporary worker program, we have to chase 
everybody who comes in illegally. And that means, by 
definition, our percentage of ability to capture illegal drugs 
that come in or other criminals that come in is less.
    Senator Dayton. Sir, I don't want a percentage. I want to 
know what conceptually we would have to do. Do we need 20,000 
more people? Do we need a fence?
    Secretary Chertoff. I don't think a fence----
    Senator Dayton. What do we need to do to put a stop--let us 
talk about the illegal drug trafficking, which is just 
destroying these communities.
    Secretary Chertoff. I think we need to siphon off the 
migrant problem into a temporary worker program, focus our 
border resources on the border. But it is also the Coast Guard 
who has to play a big role in this. A lot of the stuff is flown 
by air over the border, and they have landing strips on this 
side.
    And the other thing, of course, is you have to break the 
organizations, the drug organizations, in this country, and 
that means increased prosecution, drug prosecutions, take their 
assets, put them in jail for long periods of time. Find ways to 
discourage users, which means sometimes we require forfeiture 
of vehicles and things that people are using when they are 
buying drugs.
    Senator Dayton. Who is responsible, if we talk about just 
the interdiction? We talk about the Coast Guard. I agree. We 
talk about the border. We talk about landing strips. Who is 
responsible?
    Secretary Chertoff. We are responsible----
    Senator Dayton. The top official in the Federal Government 
who is responsible for stopping the flow of illegal drugs into 
the United States?
    Secretary Chertoff. Well, we are responsible at the border. 
In terms of prosecution and internal enforcement, we share 
responsibility with DEA and FBI and, obviously, State and local 
law enforcement. There is a national drug czar, John Walters, 
who has, I guess, the integrated planning and integrated 
strategy portfolio. The Defense Department plays a role in 
support of us in terms of interdiction. We have a lot of assets 
out there.
    You have to use every level of American national power to 
do this. It is, yes, we have to do better at the border, better 
at the Coast Guard. But if we aren't, for example, drying up 
the demand by seizing assets of people who buy drugs or by 
really cracking down on people who sell drugs with long jail 
terms, then we are just asking someone to stick their finger in 
the dike to hold back the flood. So I think all of us are going 
to have to push harder on this.
    Senator Dayton. Well, with all due respect, I need to know 
what ``push harder'' means. I need to know in quantifiable 
terms, in terms of the budget, whether this budget is adequate 
to do that--really make a difference, really change, reverse 
the status quo or not.
    Secretary Chertoff. Well----
    Senator Dayton. Because, sir, it is just not--I would like 
to bring you to Worthington, Minnesota, and talk with the mayor 
and talk with the police officers who are overwhelmed. Who have 
cut-throat criminals who are making mega dollars off of the 
people in that community, and they are overwhelmed. And they 
can't deal with that. They don't have first responder money, in 
addition, but that is a separate issue.
    It is our responsibility, yours and mine, to stop this 
epidemic. And if we don't do it, no one else will do so. So I 
need to know specifically and backed up with resources, people, 
and dollars. And if it means bringing border migration to a 
halt, that is something we ought to look at.
    At least we ought to know what it would take to do that, to 
have zero tolerance for this kind of flood of a dangerous drug, 
it is much more, a daily threat. It is not just a threat, it is 
more a reality than a terrorist attack. I mean, it is a 
terrorist attack. It is a continuing terrorist attack, and we 
are just looking the other way.
    Secretary Chertoff. A fence at the border would not deal 
with this problem because what would happen is you would get 
people coming up on the coast. You would get people flying 
across the border.
    I mean, there is a large piece of this that is the border, 
but a lot of it is the demand inside the United States. If 
people didn't use the stuff, no one would be bringing it in. 
And I have spent a lot of years doing drug cases and doing drug 
enforcement, and the problem has always been the same. You have 
to do everything at once.
    If you simply say, well, we have to shut the border down, 
that is not going to do the trick. It has to be interior 
enforcement, strong prosecution, and you have to focus on the 
users. You have to start to make users pay a price if they 
continue to fuel the market for illegal drugs.
    Senator Dayton. Well, I would like and request a response, 
and I will put it in writing, what ``everything at once'' 
means. Thank you.
    Also, my time is almost up, but I am going to give you, in 
conclusion, a letter regarding Roseau, Minnesota.\1\ I 
mentioned this the last time that you were here. They applied 3 
years ago, this city that was flooded in northwestern 
Minnesota. They applied 3 years ago for one grant that was 
finally approved by the FEMA Region V office. They have another 
one, $619,000, that was denied. They began the application 
process in March 2003. The city flooded in June 2002. They were 
denied this in December 2005. They are now in an appeals 
process.
---------------------------------------------------------------------------
    \1\ The letter submitted by Senator Dayton appears in the Appendix 
on page 46.
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    I mean this is crazy. Three years of a process for a city 
that is trying to rebuild itself. So I would ask if you could 
give that your personal attention, please?
    Secretary Chertoff. I will.
    Senator Dayton. Thank you, Mr. Secretary. Thank you, Madam 
Chairman.
    Chairman Collins. Senator Lautenberg.
    Senator Lautenberg. Thank you, Madam Chairman.
    Mr. Secretary, since breaking through the complications of 
cargo, of containers, of manifest, etc., it is a fairly complex 
job and that is in the screening process. I think that it is 
fair to say that we have to look to whatever means we can 
within the law or change the law to make sure that we have 
exhausted our view of those who are coming into our port area. 
And that is brought out by this Arab Emirate attempt to come 
into ports across the country.
    And what I am proposing to put in legislatively is 
something that says the management of the port, of the port 
area, will have a responsibility, a mandated responsibility to 
check the history or the background of those who are applying 
for a lease, whether it is a transfer of a lease or a new lease 
or a purchase of property. For them also to be included in the 
loop so that there is an opportunity for them, if they find 
anything, to deny a lease extension or a lease transfer or a 
purchase of property.
    Do you think something like that can be of help?
    Secretary Chertoff. Well, it is hard for me to react in the 
abstract. I can tell you that the Coast Guard and TSA, 
actually, under legislation that currently exists is in the 
process of putting in place background checking requirements 
for people at the ports.
    Whether the port authorities--which I guess are really 
State agencies. I know New York/New Jersey is a bi-State 
agency. I think Maryland is a State agency. Whether they ought 
to have a separate authority may be a matter of State law as to 
whether they do because they are really State entities.
    So I guess the answer is I am always interested in looking 
at something and reacting, but it is hard to do it in the 
abstract.
    Senator Lautenberg. All right. I would like to attach it to 
the receipt of Federal money.
    You and I agreed, and I think our colleagues as well, that 
when it comes to the port areas that risk assessment ought to 
be the criteria by which we guide our decisions for grants. Now 
according to your staff in the fiscal year 2005 port security 
grant program, the most recent program, risk-based threat 
assessment was used.
    In the awards program, the port of Memphis received $6.5 
million. The port of New York and New Jersey received an almost 
identical amount of $6.6 million.
    Now I have a list of the tonnages and the number of 
containers and so forth, and I don't find Memphis on here at 
all. And I don't want to pick on Memphis. But how is that 
justified?
    Secretary Chertoff. There are two parts to the program. I 
am going to have to say this, and it might make some people a 
little unhappy back at home. There is an eligibility based on 
risk. There is also an investment justification. You have to 
come up and you have to say very specifically what do you want 
to spend the money on.
    And we have the captain of the port, the Coast Guard person 
in charge, and another committee of people locally evaluate the 
investment justifications and rate them. Sometimes a port that 
might, in terms of risk, be high up doesn't really put together 
a very good investment justification. We get something like 
``give us money, and we will do something with it.'' I am 
exaggerating. And that won't cut it.
    I mean, part of what we are going to--and this is not the 
easiest thing in the world to tell people is--part of what we 
are going to say is that risk is the threshold. High risk 
should get money. And certainly, New York/New Jersey is in the 
highest risk category. But you can't just then stand and put 
your hand out and say, ``Well, give me money.'' You have to 
have a specific investment justification and make sense. And it 
will be reviewed by the captain of the port and other people 
from Customs to really kick the tires.
    Senator Lautenberg. All right. I get the message, and since 
time is short. But we are going to take the liberty of checking 
this thoroughly from our office, including a review of the 
Coast Guard's agreement or assessment of risk.
    Mr. Secretary, something I want to ask you about, and that 
is how do you verify the reliability of vendors or the 
authenticity of accounts payable? Let us say for FEMA, for 
Katrina. How do you check those things?
    And the reason I ask that question is it was just noted 
that the Defense Department is going to pay Halliburton $250 
million that was, according to the auditors, an unjustified 
expense. Now that is a breach of certainly decent management or 
trust the likes of which are rarely seen.
    But we are not surprised when it comes from Halliburton. I 
would like to know what happens with FEMA and any of your 
Departments when it comes to taking care of this?
    Secretary Chertoff. This is a procurement issue. Shortly 
after I got onboard a year ago, I asked the IG to come in and 
give us an assessment of what he thought we needed to do to 
improve our procurement process. Because my observation over 
time has been these problems most often arise when you have 
started the procurement process in a sloppy way, or you haven't 
fully thought out what you want to procure, and then you keep 
adding change orders and you keep adding things to the 
contract, and you wind up getting disputes.
    We are enhancing our procurement office. We have just 
brought a new procurement officer onboard to replace our old 
one. And we are trying to drive, through a combination of the 
procurement office and our investment review board, to a much 
more systematic procurement process, getting the IG involved 
early on in the process of designing our system.
    So, hopefully, we don't have these huge problems where, at 
the end of the day, there is a real disconnect between what the 
vendor thinks we are asking for and what we think we are 
getting, which tends to--I don't know the particulars of this 
case. But my experience is that tends to lead into some bad, 
bad stuff.
    Senator Lautenberg. Right. Well, I wanted to highlight that 
because this information was just in the newspapers, and the 
auditors say don't pay it. And the Department of Defense says 
we are going to pay it any way, $250 million.
    According, Mr. Secretary, to the American Association of 
Port Authorities, even if all $600 million of new grant 
programs are given, we still have a $400 million shortfall in 
the level required to keep our ports safe. How do you deal with 
that if those are the facts?
    Secretary Chertoff. That is obviously port authority 
operators tend to think that they need more money than they 
get. I doubt you could find a single sector of the business 
world or the infrastructure world that doesn't say we could use 
more money.
    I think that if you look at the total amount of spending on 
ports, recognizing how much of----
    Senator Lautenberg. You are justifying the $400 million 
shortfall and attribute it to crybabies?
    Secretary Chertoff. Well, I am saying that I don't 
necessarily buy into the fact that $1 billion is the necessary 
amount. I understand they are taking that position.
    But I think we have put a lot of money into port security, 
including the Coast Guard and Customs and other things, and I 
think that often does not get counted by the port authority 
people because they don't see it. It is not coming to them, but 
it is part of what pays for everything around them, including 
the guns and the boats that they see on the waterway.
    Senator Lautenberg. Thank you. Thanks, Mr. Secretary.
    Thank you, Madam Chairman.
    Chairman Collins. Thank you.
    Mr. Secretary, once again, you are in luck. The Senate has 
begun four stacked votes, and we have only a few minutes 
remaining in the first vote. So I am going to ask my 
colleagues, rather than doing a second round of questions, to 
submit questions for the record.
    I had hoped to ask questions relating to the TWIC card, the 
PASS card system, chemical security, your views on the 
composition of the CFIUS committee, and fire grants. There are 
so many other issues, but they will have to wait for another 
day.
    Secretary Chertoff. And also I would be delighted to come 
by and just chat about some of these issues informally.
    Senator Lieberman. Fine.
    Chairman Collins. Thank you.
    Senator Lieberman. Thanks for your testimony. I also will 
be adding to the homework of you and your staff, Mr. Secretary, 
with additional questions. Thank you.
    Chairman Collins. The hearing record will remain open for 
15 days.
    Thank you very much for your testimony, Secretary Chertoff.
    Secretary Chertoff. Thank you.
    Chairman Collins. This hearing is adjourned.
    [Whereupon, at 12:15 p.m., the Committee was adjourned.]

                            A P P E N D I X

                              ----------                              


                  PREPARED STATEMENT OF SENATOR CARPER

    Thank you, Madam Chairman. And thank you, Secretary Chertoff, for 
taking the time once again to appear before this Committee.
    This is a critical time for the Department of Homeland Security. 
While we may have made some progress in areas like aviation security in 
recent years, it should be clear to all of us now--6 months after 
Hurricane Katrina--that it will take time, patience, strong leadership, 
and, in all likelihood, significant resources before this Department 
can become what we intended it to be when we sat in this room after 
September 11 and began the process of putting it together.
    It seems like this Department has been forced to respond to one 
crisis after another since it was created. First there was the need to 
secure our airports. Then, in the wake of a series of bombings in 
Europe, a call from many of us--myself included--for more attention to 
rail and transit security.
    More recently, there's been more attention on immigration and 
border security issues. That's reflected in the budget we'll be 
examining today. I suspect that now there might be an effort to get 
more resources for port security.
    I'm sure we'd all like to be able to spend more money in all of 
these areas. That's not realistic, however. I look forward to hearing 
from Secretary Chertoff, then, about how the Department of Homeland 
Security is setting priorities. Just as important, I look forward to 
hearing more about how the Department is saving money and effort and 
improving outcomes by better integrating the work of the various 
agencies that make it up.
    There are some parts of this budget I like but there's also much of 
it I don't like. For example, I still don't see a strong enough 
commitment to non-aviation security--especially port, rail, and transit 
security. Plus, I believe States like Delaware would be significantly 
hindered in their preparedness efforts if the President's proposals on 
first responder aid and other grant programs were to be enacted.
    All of that said, I look forward to working with you, Mr. 
Secretary, and with my colleagues on this Committee to ensure that the 
Department of Homeland Security is focusing on the right priorities 
and, despite the rough time it's had in recent months, is still on the 
path towards becoming an integrated, more efficient entity that will 
make us better able to prevent another September 11.

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