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



 
 ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 
                                  2007

                              ----------                              


                        WEDNESDAY, APRIL 5, 2006

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:40 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici, Craig, Bond, Allard, Murray, 
Dorgan, and Landrieu.

                      DEPARTMENT OF DEFENSE--CIVIL

                         DEPARTMENT OF THE ARMY

                       Corps of Engineers--Civil

STATEMENT OF JOHN PAUL WOODLEY, JR., ASSISTANT 
            SECRETARY OF THE ARMY (CIVIL WORKS)

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. The hearing will please come to order. 
Because of schedule problems, we are going to let some Senators 
speak out of order. Senator Bond would like to make an opening 
statement at this point. I yield to you, Senator.

                STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Mr. Chairman, I thank you very much for your 
kind courtesies.
    Mr. Woodley, we have had long discussions about the need 
for locks on the Mississippi and Illinois Rivers, and one of 
these days I hope we will have an authorization coming out of 
our Environment and Public Works Committee which will allow 
this committee to do the vitally important work it should do in 
funding our vitally needed Nation's infrastructure.
    I have here in my hand an article from the Wall Street 
Journal which I would share with you and those with whom you 
discuss. It's called ``As Utilities Seek More Coal, Railroads 
Struggle to Deliver.'' It reports that their shipping fees are 
going up a reported 20 to 50 percent. The Department of 
Transportation predicts that commercial shipping volume over 
the next 20 years will increase by 70 percent. Most people, at 
least outside Washington, recognize the bulk commercial freight 
cannot be emailed, so transportation capacity is an issue that 
will demand leadership, and the sooner the better.
    Last month Secretary Johans of the Department of 
Agriculture, Deputy Connor, and Chief Economist Dr. Keith 
Collins testified before the Appropriations Committee. Mr. 
Woodley, if you and your team are not routinely in touch with 
Collins I would be very disappointed. Dr. Collins has been 
Chief Economist or in that office serving at least four or five 
presidents.
    He testified again that any 50-year study is highly 
speculative, noting that even the 10-year forecasts USDA does 
are speculative and that 10 years is heroic enough. However, he 
is clear that they do not see stalled or dwindling or flat 
export activity through the gulf. In fact, he said they see a 
substantial increase, in testimony previously he said 40 to 45 
percent in corn alone, and he sees a good long-term market for 
grains and oilseeds in the world and he noted that having 
efficient infrastructure will help make that possible.
    As we all know, the demand for goods, agricultural goods, 
one item transported on the rivers, depends upon 
transportation. In good years ag exports exceed imports by $30 
billion, bringing great economic boost to the breadbasket of 
America as well as helping our balance of payments.
    Secretary Johans agreed firmly that the existing lock 
system, built 70 years ago, has proved an important and wise 
investment and that should be obvious even to the fiercest 
opponents of commercial shipping.
    Mr. Woodley, with help of able staff I want to introduce 
you to Major Charles L. Hall, Rock Island Engineer from 1927 to 
1930. He advised President Hoover and Congress in 1929 that the 
proposed system, the one which currently exists on the 
Mississippi River, was not economically feasible and argued 
that ``limited barge traffic did not indicate that a viable 
barge industry would develop.'' Fortunately, President Hoover 
and the Congress ignored the advice and President Hoover said 
modernization would ``put the rivers back as great arteries as 
commerce after a half century of paralysis.''
    Now, with 80 million tons moved annually and two-thirds of 
our exported grain moving through that system, it is clear that 
the Congress and President Hoover were wise to ignore the 
expert advice of Major Hall. I suspect and fear that the Major 
may have a grandchild working dutifully somewhere, maybe at the 
Office of Management and Budget.
    So I ask that you let history help inform your future 
decisions and that you consider that we must not only try to 
predict the future, but shape the future. In some cases, 
opinions of experts deserve to be very strongly considered just 
before they are very thoroughly rejected. I believe that some 
80 members of the Senate believe that we should pass a Water 
Resources Development Act which will enable my good friend the 
outstanding chairman to act appropriately in this subcommittee.
    I thank you, Mr. Chairman, for your comments.
    Senator Domenici. Well, I thank you for your comments, and 
I just want to ask you, since you are one of the proponents, 
and quite properly and appropriately, of the WRDA bill, what is 
your--in 2 minutes, what is holding it up?
    Senator Bond. Initially there were objections from the 
Office of Management and Budget. We had an opportunity to go 
above their heads to policymakers who have a broader 
perspective and they agreed that the Office of Management and 
Budget would not threaten a veto. Currently there are, as I 
said, 80 signatures on a letter to the Republican and 
Democratic leaders saying that we need to move the bill. There 
are still holds in the Senate from people who want us to go 
back to the horse and buggy days and rely on overcrowded 
railroads and tremendously crowded highways to ship not only 
grain for the export market, but the tremendous amount of 
commercial commodities.
    Senator Domenici. Those are Senators?
    Senator Bond. Those are Senators.
    Senator Domenici. We do not know who they are at this point 
and you cannot get them released. We are stuck.
    Senator Bond. We intend to do everything we can and ask the 
leaders to call for a vote if the holds are not relieved and 
not pay attention to the holds, and we hope that the Office of 
Management and Budget will not follow Major Hall and have a 
last minute reconversion to their opposition.
    Senator Domenici. All right.
    Senator Bond. Thank you, sir.
    Senator Domenici. Having said that, the Democrats are 
present. When I opened they were not. I apologize for that. It 
was only 3 minutes, Senator, and then you came.
    I am not going to have any opening statements. I think we 
are going to run out of time. Any opening statements desired on 
your side? I knew Senator Bond had to say something or else we 
would have a----
    Senator Dorgan. Did he talk about the Missouri River 
management? If so, I will have an opening statement.
    Senator Domenici. No.
    Senator Dorgan. If not, I will not.
    Senator Domenici. No. But I knew if I did not----
    Senator Bond. I will be sure and cc you.
    Senator Domenici. I knew if I did not let him speak the way 
he wanted to we would have problems.
    How about over here?

                   STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, I have a very brief 
statement.
    Senator Domenici. Let us do it.
    Senator Allard. Mr. Chairman, first of all I want to thank 
you for holding the hearing. The Corps of Engineers does a 
great deal for the country, as well as for Colorado, but I must 
express my disappointment with the fact that funding to 
complete the Fountain Creek watershed study was not included in 
the President's proposed budget again this year. The study was 
originally contracted at $2.9 million with a 50 percent 
Federal, 50 percent local funding split. The locals have long 
ago put in over $1.4 million, but the Federal Government has 
not lived up to its side of the bargain.
    In what should be the final year of the study, it mystifies 
me why the Corps did not place enough value on the study to 
include it in the budget request. But I will have questions on 
that later on, Mr. Chairman. Thank you for your tolerance.
    Senator Domenici. Thank you very much.
    On the Democrats' side, Senator Mary Landrieu.

             PREPARED STATEMENT OF SENATOR MARY L. LANDRIEU

    Senator Landrieu. Mr. Chairman, I have a statement for the 
record, but I do want to say that I will come back after the 
vote. I have a series of questions that really do need answers 
today based on the situation that we are facing in the gulf 
coast and some charts I want to share with you, Mr. Chairman, 
and the committee about the backlog of current projects.
    [The statement follows:]

             Prepared Statement of Senator Mary L. Landrieu

    Mr. Chairman, thank you for calling this hearing to review the 
President's budget for the Army Corps of Engineers.
    Before I comment on any specific budget matters, I wish to express 
my appreciation for being a member of this subcommittee. Its 
jurisdiction over both energy and water are matters of monumental 
concern to my State of Louisiana, the Gulf Coast, and our Nation. Now 
is a critical time for action on these issues.
    Because of these monumental issues and because of the relationships 
with you and Senator Reid that we have built, I sincerely look forward 
to working with both of you. I appreciate the time that each of you 
have taken over the years to join me in Louisiana to see the Nation's 
worst coastal erosion as well as successful projects such as the SELA 
flood control project.
    For many years, Congress has received the administration's request 
for funding for the Civil Works program of the Army Corps of Engineers 
and has increased this request. In recent years, Congress has 
appropriated approximately 10 percent to 15 percent more funding. Once 
again, the administration has requested less funding for fiscal year 
2007 for the Corps than was provided by Congress for the current fiscal 
year.
    Simply stated, the administration's fiscal year 2007 budget request 
for the Corps puts the Nation at risk, and we cannot be complacent. 
Hurricanes Katrina and Rita shred that curtain of complacency and gave 
the Nation a look at the inadequate infrastructure as it relates to 
water management and flood protection. We must act.
    Underfunding infrastructure puts our Nation at risk. Hurricanes 
Katrina and Rita exposed this risk. These storms were not the real 
culprits. Instead, the real culprit was the failure to fund a levee 
system that would have protected us against hurricanes such as these.
    This failure caused the deaths of more than 1,000 people in 
Louisiana alone. More than 215,000 homes were destroyed with thousands 
more damaged. Countless businesses, churches, and schools were wiped 
out. The cost of recovering from this levee failure will be hundreds of 
billions of dollars. The cost will be far more than it would have cost 
to build the infrastructure that would have prevented this catastrophic 
loss.
    The impact of the administration's inadequate Corps funding 
requests are also felt throughout the Nation on vital projects causing 
a delay in their completion and resulting benefits. Many of these 
projects are physically located in Louisiana but greatly impact the 
entire Nation.
    For example, numerous hurricane protection and flood control 
projects in Louisiana are intended to protect millions of Americans 
living in coastal Louisiana. These projects are also intended to 
protect energy infrastructure that supplies oil and gas throughout the 
Nation.
    The existing backlog of authorized projects combined with the WRDA 
authorizations currently under consideration amount to more than $50 
billion. Yet, the administration asks for only $1.5 billion for 
construction in fiscal year 2007. At this pace, it will take at least 
35 years to construct the backlog of projects assuming no inflation and 
no new projects are added during that time.
    Hurricanes Katrina and Rita showed that we have not provided enough 
funding for levees and pumps. The current cost of recovering from the 
destruction caused by these storms shows that it is more expensive to 
pay for re-building than for prevention.
    Another component of protecting Louisiana and the Nation is the 
coastal restoration effort to save America's Wetland.
    The Louisiana Coastal Area comprises one of the Nation's largest 
expanses of coastal wetlands. As an environmental treasure, it supports 
a diverse collection of migratory birds, fish, and other species. As a 
productive natural asset, the Louisiana Coastal Area supports an 
extensive energy infrastructure network responsible for an estimated 20 
percent of our Nation's energy and provides over 20 percent of the 
seafood consumed in the United States. Additionally, offshore oil and 
gas production off of Louisiana's coast is one of the U.S. Treasury's 
largest revenue sources. This production contributes approximately $6 
billion a year to the Federal Government, and this amount is rising.
    Despite these significant national contributions made by the 
Louisiana Coastal Area and its resulting standing as America's Wetland, 
it accounts for 90 percent of the Nation's total coastal marsh loss. 
This destruction puts all of its national benefits at risks. 
Accordingly, the Corps along with the State of Louisiana has been 
engaged in the development of a comprehensive coastal restoration plan. 
Hopefully, implementation of this plan will begin soon, and this 
Congress will provide the Corps with the funding necessary to do the 
job. I will continue to work with all of you toward achieving this 
vital goal.
    Another example of a project physically located in Louisiana having 
national implications is the Inner Harbor Navigation Canal (IHNC) lock 
project. This project at the Port of New Orleans was wrongly zeroed out 
in the President's budget. Congress first authorized the replacement of 
this lock in 1956! It is a project of national significance that 
impacts trade in over 25 States on a daily basis. In fact, over 16 
million tons of cargo move through this lock each year. Additionally, 
its completion directly relates to closing the Mississippi River Gulf 
Outlet which has destroyed more than 27,000 acres of wetland and 
thereby eliminated a hurricane buffer to metro New Orleans.
    In closing, Hurricanes Katrina and Rita show us that we must invest 
more in our infrastructure. We either heed their warning or peril.
    Finally, Mr. Chairman, I thank you for your continued leadership on 
the Nation's water issues. I look forward to the testimony of our 
witnesses and the opportunity to question them when appropriate.

    Senator Domenici. Senator Craig.

               PREPARED STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, I will ask unanimous consent 
that my full statement be a part of the record, but I want to 
recognize when a job well done is well done and completed, and 
I want to thank the Corps for their completing of the channel 
improvement project on the Snake River between Idaho and 
Washington. Critical importance to the aid of transportation in 
that region. I want to thank you for the work done.
    Thank you, Mr. Chairman.
    Senator Domenici. Your statement is made a part of the 
record.
    [The statement follows:]

               Prepared Statement by Senator Larry Craig

    First, I want to take a moment and thank all of those in the U.S. 
Army Corps of Engineers who have served their country in Iraq. I also 
want to commend those who served their fellow Americans in the wake of 
devastating hurricanes. It has been a trying year for many, and I 
appreciate the support you have provided those in need.
    I also want to thank the Army Corps of Engineers for all the work 
they have done in many of our rural communities to get drinking and 
wastewater infrastructure updated. In my State, rural water 
infrastructure is an increasing need, with many rural communities 
struggling with funding and expertise to fulfill their responsibility 
of providing safe and reliable drinking water. As infrastructure 
continues to age and water quality standards rise, an agency like the 
Corps becomes more and more vital, and I hope to continue working with 
the Corps to see our water infrastructure meets the appropriate 
standards.
    Additionally, I want to thank the Corps for completing the channel 
improvement project on the Snake River between Idaho and Washington. 
This project has aided farmers by providing a safe, efficient means of 
shipping to meet demands, not only for our country, but also other 
countries as well. As gas prices continue to rise and roads become 
increasingly crowded, barges will serve as a critical and efficient 
means of transporting commodities, and I will continue working with the 
Corps on similar projects.
    I have a couple of concerns, one of which is the change in the 
Corps' budgeting practices. In the past, the Corps enjoyed considerable 
flexibility and were able to reprogram funds fairly easily, but with 
the changes, that will no longer be the case. At the appropriate time, 
I'll have a question about that issue.
    I look forward to hearing your testimony.

    Senator Domenici. Senator.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Yes, Mr. Chairman. I just wanted to welcome 
Secretary Woodley and General Strock. Thank you for your 
testifying today. I think what happened in the last few months 
in Senator Landrieu's State and elsewhere really showed all of 
us how important the work is you do and how important it is 
that we maintain that.
    I want to compliment you for the three district offices 
that operate in my State. We have a really varied landscape 
when it comes to Corps projects. We have got hydroelectric, 
flood control, navigation, irrigation, and the Army Corps work 
is really essential to our economy and to our ability to 
maintain the critical infrastructure in our community. We have 
the Portland District that is maintaining the Columbia River 
dredging and the jetties, repairs to the jetties, critical for 
safety. The Seattle District is working on some really complex 
flooding issues and the Walla-Walla District is providing some 
really important engineering expertise for us for the waste 
treatment plant out of Hanford.
    So I want to compliment you on that work, but I just want 
to say I have another hearing, but I want to say publicly I am 
deeply concerned about the investment to our infrastructure, to 
the Corps. We have got to do better than what we have been 
presented, because we have to continue, as I think the Senator 
from Louisiana well knows, to maintain the critical 
infrastructure we have and to make the important investments in 
our Nation's future. So I will join with all of you in working 
towards that direction.
    Thank you, Mr. Chairman.
    Senator Domenici. Very well. Thank you.
    Well, I have a long analytical statement that, it would not 
help here. The atmosphere has been so nice that it would make 
things look very, very bad. Just suffice it to say that I think 
the way you handled the budgeting is a mess, and I do not think 
that you can expect us to do it the way you recommended.
    You are short of money and we know that. The President did 
not fund--did not put in as much as we need. But the way you 
went around, went about trying to make the money work in my 
opinion has made matters worse. So do not look for us, for it 
coming out the way you recommended. It is going to come out, 
but with no damage, we hope.
    My statement and Senator Cochran's statement will be made 
part of the record.
    [The statements follow:]

             Prepared Statement of Senator Pete V. Domenici

    Good afternoon--the hearing will come to order.
    Today, the subcommittee will take testimony on the fiscal year 2007 
budget request for the U.S. Army Corps of Engineers.
    Our panel will consist of witnesses from the U.S. Army Corps of 
Engineers.
    Testifying for them will be: John Paul Woodley, Principle Deputy, 
Assistant Secretary of the Army for Civil Works, and Lieutenant General 
Carl A. Strock, Chief of Engineers for the U.S. Army Corps of 
Engineers.
    Mr. Woodley, General Strock, thank you for appearing before us 
today.
    The President's budget for the Corps of Engineers proposes $4.73 
billion, which is $596 million below the fiscal year 2006 enacted of 
$5.33 billion after rescission.

                      PERFORMANCE-BASED BUDGETING

    The Corps' budget was again prepared using performance-based 
budgeting. I have several concerns with developing the budget in this 
manner. This method seems to concentrate budget development at OMB 
rather than at the District level where it belongs.
    Again for fiscal year 2007, the Remaining Benefits to Remaining 
Costs Ratio is the primary criteria for prioritizing funding decisions. 
There does seem to be more of an effort to ensure obvious national 
priorities were not overlooked, but no attempt to capture traditional 
items of importance to Congress.
    For example, no attention has been given to workforce distribution 
in project selection. Congress has repeatedly demonstrated a desire for 
a geographically diverse Corps of Engineers organization. In order to 
maintain that distribution, a suite of projects needs to be selected to 
maintain the workforce at a stable level. The budget request does not 
consider this factor.

                          PROJECT SUSPENSIONS

    The administration has budgeted $41.4 million to suspend/terminate 
10 construction projects that have been budgeted in the past in order 
to redirect resources to complete high-priority projects. However the 
532 projects and studies that were included in the fiscal year 2006 
Energy and Water Act are not addressed by the fiscal year 2007 Budget 
Request. It is as if termination of these items are either free or 
Congress's problem. I believe when the President signs an appropriation 
bill, all of those studies and projects become the joint property of 
the administration and Congress. Treating Congressional priorities 
differently will lead to consequences.

                 MAJOR ISSUES BY APPROPRIATION ACCOUNT

    The General Investigations account is a disaster. Of the $94 
million requested, only $16.7 million is provided for ongoing study 
efforts nationwide. This compares to $102 million in the current fiscal 
year.
    The budget request shifts projects totaling $342 million from the 
Construction, General account to the Operations and Maintenance, 
General account. Beach renourishment due to navigation impacts, 
Endangered Species Act (ESA) compliance, beneficial use of dredged 
material and major rehabilitations are the categories of the items 
shifted.
    A large portion of the shifted funds is Endangered Species Act 
compliance items. An example is Columbia River Fish Mitigation. In 
fiscal year 2006 this was an $85 million CG line item. In fiscal year 
2007, it is distributed across eight O&M projects for the Columbia 
River. There is no easy way to determine how much funding is for these 
mitigation activities and how much is for O&M. It is all considered 
O&M.
    The other category of funding shifted to O&M is for major 
rehabilitations of locks and dams. Gentlemen, I have been around long 
enough to remember when these projects were funded in the O&M account. 
We moved them to the Construction, General Account and allowed half the 
costs to come from the Inland Waterway Trust Fund because they were not 
being sufficiently budgeted in O&M. Now, because of the backlog in the 
CG account, you are proposing to move them back to O&M. Why not try 
budgeting sufficient funding for them rather than playing three-card 
monte?
    There were a couple of increases proposed in your budget for fiscal 
year 2007.
    The budget proposes $173 million for the Regulatory Program versus 
$158 million enacted after rescission, a 9.5 percent increase. This 
account has increased from $117 million since fiscal year 2000, by far 
the largest percentage growth in any Corps account over the same 
period, yet complaints about permits seem to be on the rise. I have 
been made aware several issues in New Mexico over the last 3 months. 
General Strock, you and I will need to have further discussions about 
this at another time.
    The General Expenses account traditionally funds the Corps 
Headquarters and Division offices is proposed at $164 million, a 7.9 
percent increase. However, this includes $6 million for the Office of 
the Assistant Secretary of the Army. When you compare the fiscal year 
2006 enacted General Expenses of $152 million to the fiscal year 2007 
proposal of $158 million, it is only a 3.9 percent increase.
    Secretary Woodley, I understand that this $2 million increase in 
your budget over the fiscal year 2006 enacted of $4 million is to cover 
joint costs previously covered by the Department of the Army.
    As you are aware, this office was funded in a separate account in 
the fiscal year 2005 and 2006 Energy and Water Acts. Prior to fiscal 
year 2005, your office was funded in the Defense Army OMA account. I 
think we should look at moving funding for your office back to the 
Defense Army OMA account due to your other duties as Assistant 
Secretary in addition to the Corps Civil Works Program.
    You should know that I will oppose the regionalization of the O&M 
budget for fiscal year 2007. This method of displaying O&M effectively 
disguises the underfunding of O&M projects and allows the Corps the 
ability to freely move funds around. It appears that you invented a 
whole new way to aggregate and appropriate O&M just so you could get 
around the Congress's fiscal year 2006 reprogramming guidance.
    The fact that you went to this much trouble in this budget proposal 
demonstrates our need to seriously reexamine reprogramming guidance as 
we prepare the fiscal year 2007 bill.
    Finally, we will need to revisit contracting and reprogramming 
issues for fiscal year 2007. It is clear to me, that the language 
agreed to in fiscal year 2006 is not improving the management of the 
Civil Works program. If anything, it appears to be hindering getting 
work accomplished.
    Secretary Woodley, General Strock, your full statements will be 
made a part of the record. I would ask that you summarize your 
statements.
                                 ______
                                 
               Prepared Statement of Senator Thad Cochran

    Mr. Chairman, I thank you for holding this hearing and thank the 
witnesses for their willingness to appear today before the Energy and 
Water Subcommittee.
    While I understand that this hearing is being held to consider the 
President's budget request for fiscal year 2007, I must mention at the 
outset the good work of the Corps of Engineers in my home State of 
Mississippi in the wake of Hurricane Katrina. I know there have been 
some concerns over the speed with which the Corps has had debris 
removed and the number of out-of-State companies that are leading the 
debris removal effort.
    The Vicksburg District has been thoughtful in their proposal to use 
Mississippi contractors for smaller, more manageable contracts. The 
Government Accountability Office recently agreed that set-aside 
contracts are allowed in Mississippi, and this action will result in 
local people leading local debris removal contracts. I think this is 
good for recovery and good for Mississippi victims as well as 
businesses in our State. Thank you for this assistance.
    I understand that the Corps of Engineers continues to use a 
performance based budgeting formula, which has led to the proposal to 
terminate 10 projects this year. Last year you proposed to terminate 35 
projects. This means that important projects that were previously 
budgeted for by the Corps are, under this budget submission, not going 
to move forward.
    Another area of concern is the language that was included in the 
fiscal year 2006 Energy and Water Appropriations bill regarding the 
Corps of Engineers' use of the continuing contract clause and their 
reprogramming guidelines. My constituents in Mississippi are already 
feeling the negative impacts of this language, and it is my 
understanding that the Corps will likely carry over large amounts of 
the historic funding levels provided in the current year's 
appropriations bill.
    I appreciate the efforts of the Corps of Engineers but worry about 
inadequate funding of important missions under your jurisdiction. The 
Corps is charged with improving safety and security for our Nation's 
citizens, and I hope that this committee will provide the resources 
necessary complete these missions.

                  STATEMENT OF JOHN PAUL WOODLEY, JR.

    Senator Domenici. Having said that, we are ready for you to 
speak. I gather that you want to do it in the normal order; is 
that correct, where you want the Honorable Paul Woodley to 
speak first and then the General? Is that what we want to do?
    General Strock. Yes.
    Senator Domenici. All right. Mr. Secretary, make your 
statement brief. It will be made part of the record.
    General, we look forward to hearing from you next. Make 
your statement long. It will be made a part of the record also.
    Mr. Woodley, please proceed.
    Mr. Woodley. Thank you, Mr. Chairman. I appreciate the 
opportunity to testify today and ask that the full statement be 
put in the record.
    Our 2007 budget includes about $4.7 billion----
    Senator Domenici. Pull the mike up a little. Thank you very 
much.
    Mr. Woodley [continuing]. A 5 percent increase from last 
year. We provided a 5-year budget plan along with the other 
budget justification materials, including three potential 5-
year funding scenarios for planning purposes and analytical 
purposes.
    The budget includes an increase of about $280 million for 
construction projects compared to the fiscal year 2006 budget. 
The funding is allocated according to guidelines that emphasize 
economic returns, reduction of risk to human life, and 
ecosystem restoration benefits.
    Mr. Chairman, the budget provides $173 million to the 
Corps' regulatory program to protect wetlands and other waters 
of the United States. This represents a $15 million increase 
compared to fiscal year 2006 appropriations and a 20 percent 
increase in budgeted funding for the regulatory program over 
the last 3 years. The funding will be used to reduce permit 
processing times, improve aquatic resource protection through 
monitoring and compliance activities, and advance watershed 
approaches to permitting.
    The budget also reassigns about $340 million of work at 
existing projects from the construction account to the 
operation and maintenance account. This reassignment improves 
accountability and oversight, reflects the full cost of 
operation and maintenance, and supports an integrated funding 
strategy for existing projects.
    The operation and maintenance budget has been revamped and 
is presented by major river basin and mission areas. This lays 
the groundwork for improved management of appropriated funds 
and more strategic formulation of future budgets.
    The budget includes increased funding for preparedness, 
response and recovery activities related to flood and coastal 
storm emergencies. The budget does not include funding for 
recovery from last year's hurricanes since supplemental 
appropriations are being sought to provide that funding.

                           PREPARED STATEMENT

    In summary, Mr. Chairman, the budget and the 5-year plan 
incorporate performance budgeting principles, allocate funding 
to activities with the highest returns, and advance important 
national objectives.
    Thank you very much.
    [The statement follows:]

              Prepared Statement of John Paul Woodley, Jr.

    Mr. Chairman and distinguished members of the subcommittee, thank 
you for the opportunity to testify before the subcommittee, and to 
present the President's budget for the Civil Works program of the Army 
Corps of Engineers for fiscal year 2007.

          OVERVIEW OF FISCAL YEAR 2007 ARMY CIVIL WORKS BUDGET

    The fiscal year 2007 budget for Army Civil Works provides funding 
for development and restoration of the Nation's water and related 
resources within the three main Civil Works program areas, namely, 
commercial navigation, flood and coastal storm damage reduction, and 
aquatic ecosystem restoration. The budget also supports hydropower, 
recreation, environmental stewardship, and water supply services at 
existing water resources projects owned or operated by the Corps of 
Engineers. Finally, the budget provides for protection of the Nation's 
regulated waters and wetlands; cleanup of sites contaminated as a 
result of the Nation's early efforts to develop atomic weapons; and 
preparedness, response, and recovery activities related to flood and 
coastal storm emergencies.
    The budget does not fund work that should be the responsibility of 
non-Federal interests or other Federal agencies, such as wastewater 
treatment, irrigation water supply, and municipal and industrial water 
supply treatment and distribution.
    The fiscal year 2007 budget includes new discretionary funding of 
$4.733 billion, the highest civil works budget transmitted to Congress 
by any President. The estimate for fiscal year 2007 outlays is $5.846 
billion. Enclosure 1 displays the current estimate for the distribution 
of new discretionary funding among eight appropriation accounts, eight 
program areas, plus executive direction and management, and five 
sources including the general fund of the Treasury and trust funds. 
Enclosure 2 is a crosscut between appropriation accounts and program 
areas.
    A 5-year budget development plan (FYDP) is being provided, as 
called for in the fiscal year 2006 Energy and Water Development 
Appropriations Act Conference Report. The FYDP includes three scenarios 
or projections--one based on the President's proposed fiscal year 2007 
budget, one above that level, and one below that level. The projections 
are formula driven. They do not represent budget decisions or budget 
policy beyond fiscal year 2007 but they can provide perspective on the 
Army Civil Works program and budget.

                 EMERGENCY SUPPLEMENTAL APPROPRIATIONS

    To date, the Corps has received $3.3 billion in emergency 
supplemental appropriations to address the impacts of the 2005 
hurricane season. In addition, on February 16 of this year the 
President transmitted to Congress his request for $1.46 billion in 
additional emergency supplemental appropriations to strengthen and 
improve hurricane and storm protection in the greater New Orleans 
metropolitan area.

                      PERFORMANCE-BASED BUDGETING

    The fiscal year 2007 budget builds upon lessons learned from the 
2005 hurricane season, one of which is the importance of setting 
spending priorities to meet water resources needs that are the most 
compelling from a national perspective.
    One of my priorities for the Army Civil Works program is to develop 
the Civil Works budget and manage the program based on objective 
performance measures. The fiscal year 2007 budget reflects significant 
progress toward this goal, by focusing funding those activities that 
are expected to provide the highest net returns to the Nation.
    The fiscal year 2007 budget also supports performance-based 
budgeting by funding ongoing efforts to develop better risk-based 
facility condition indices and asset management systems. These 
analytical tools will improve our ability in the future to develop 
long-term asset management strategies and establish priorities for the 
operation, maintenance and management of Civil Works assets. Our goal 
is to begin using these improved analytical tools within 2 years.
    The focus on Civil Works program performance has a number of 
foundations. First, the Civil Works Strategic Plan, which was updated 
in 2004, provides goals, objectives, and performance measures that are 
specific to program areas as well as some that are crosscutting. 
Second, each program area is assessed using the Program Assessment 
Rating Tool (PART). Both the Civil Works Strategic Plan and the PART-
based program evaluations are works in progress and will continue to be 
updated.
    The Environmental Stewardship sub-program and the Formerly Utilized 
Sites Remedial Action Program were assessed in the most recent 
assessment period (2005). Based upon the findings of these program 
assessments, the Corps is taking follow-up actions to address 
identified problems. Summaries of all completed civil works program 
assessments can be found on the administration's new website, 
www.ExpectMore.gov.
    Budget decisions link to performance in a number of ways. First, 
alternative funding levels relate to alternative performance targets, 
or levels of outputs and outcomes, as measured by the program area 
metrics. Second, related metrics and decision guidelines (see 
``Construction,'' below) are used to rank work within each account or 
within each program area.

                    CIVIL WORKS PROGRAM IMPROVEMENTS

    The fiscal year 2007 Civil Works budget proposes five program 
improvements, as discussed below.
Funding Activities in the Operation and Maintenance Account
    In addition to introducing the concept of watershed and system 
budgeting for operation and maintenance, described in detail below, the 
budget proposes to fund four types of operation and maintenance-related 
activities in the Operation and Maintenance account, rather than in the 
Construction account as has been the case in the recent past. It is 
appropriate to assign responsibility for these activities to the 
Operation and Maintenance program, both because of the nature of the 
work and because of its integral connection to operation and 
maintenance. This reassignment improves accountability and oversight, 
reflects the full cost of operation and maintenance, and supports an 
integrated funding strategy for existing projects. Total fiscal year 
2007 funding for the activities being reassigned to the Operation and 
Maintenance program is about $340 million. The four types of activities 
are described in greater detail below.
    First, the Operation and Maintenance account would fund activities 
to comply with Biological Opinions at existing projects pursuant to the 
Endangered Species Act. These activities facilitate the Corps 
continuing to operate its existing multi-purpose projects, principally 
in the Columbia and Missouri River Basins. The compliance costs would 
be allocated among the project purposes of the operating projects.
    Second, the account would fund rehabilitation of existing projects. 
Rehabilitation work would compete for funding on a level playing field 
with other operation and maintenance activities. The O&M program would 
consider each potential investment and develop recommendations based on 
a long-term strategy for maintaining the existing infrastructure. Fifty 
percent of the costs of rehabilitations for inland waterway projects 
would be derived from the Inland Waterways Trust Fund, just as was the 
case when they were funded in the Construction account.
    Third, the account would fund the construction of facilities, 
projects or features that use maintenance dredging material. These 
include beneficial uses of dredged material for island and marsh 
creation, shore protection, and other environmental purposes pursuant 
to the Section 204/207/933 Continuing Authority Program and specific 
authorizations (such as for the Poplar Island, Maryland, project). 
These also include dredged material disposal facilities for material 
from maintenance dredging (including Indiana Harbor, Indiana, which had 
been line-item budgeted in the Construction account). Funding for the 
dredged material disposal facilities would be derived from the Harbor 
Maintenance Trust Fund, just as was the case when they were funded in 
the Construction account.
    Fourth and finally, funding in the account would be used to replace 
sand lost from shores due to the operation of Federal navigation 
projects (navigation mitigation). This activity would be carried out 
pursuant to specific authorizations for shore protection projects that 
involve navigation mitigation, and pursuant to the Section 111 
Continuing Authority Program. The budget proposes that funding for 
navigation mitigation be derived from the Harbor Maintenance Trust 
Fund. The estimated amount for fiscal year 2007 that would be derived 
from the trust fund for this purpose is $27 million.
    Accompanying the budget is proposed appropriations language that 
would clarify that these activities are to be funded in the Operation 
and Maintenance account. For example, the budget proposal includes a 
provision, which the Congress adopted in the fiscal year 2005 Energy 
and Water Development Appropriations Act, indicating that among the 
purposes for which funding is provided is ``for the benefit of 
federally listed species to address the effects of civil works projects 
owned or operated by the Corps''. The budget language also provides 
that funding for ``eligible operations and maintenance'' is to be 
derived from the Harbor Maintenance Trust Fund. Consistent with section 
201 of the Water Resources Development Act of 1996, eligible operations 
and maintenance activities include not only harbor dredging but also 
the dredged material disposal facilities and navigation mitigation 
discussed above.
Watershed and System Budgeting for Operation and Maintenance
    Although the concept of watershed and system budgeting and program 
execution for operation and maintenance (O&M) was adopted too late in 
the budget cycle to be fully implemented in formulating the fiscal year 
2007 budget, the O&M budget is presented on a watershed/system basis 
and, if Congress concurs on the benefit of planning and carrying out 
the O&M program in accordance with system-wide priorities, then during 
fiscal year 2007 the O&M program would be managed by watershed and 
business program, rather than primarily project-by-project.
    Proposed fiscal year 2007 funding is consolidated according to 
Civil Works program areas, such as commercial navigation and flood and 
storm damage reduction, for each of the 21 major river basins in the 
United States, as established by the U.S. Geological Survey. The 
specific projects that would receive funding in each basin also are 
identified by name. For future fiscal years, the budget not only will 
be presented by basin or system, but also will be developed in the 
first place based on basins and systems. Should operation and 
maintenance work be funded in the manner presented, managers in the 
field would be better able to adapt to uncertainties and changed 
conditions throughout the fiscal year, consistent with budget and 
appropriations decisions.
Repayment of the Judgment Fund
    We are proposing that funds that (1) were appropriated in fiscal 
year 2006 or a prior year, (2) are not needed for the purpose for which 
they were appropriated, and (3) are carried over unobligated to fiscal 
year 2007 be reprogrammed to begin to repay the Department of the 
Treasury's Judgment Fund. The repayments would be for judgments against 
the United States that were paid by the Fund on Civil Works projects. 
Currently over $150 million is owed to the Judgment Fund for Civil 
Works projects.
Expenses Account
    The Expenses account funds the management and executive direction 
expenses of the Army Corps of Engineers, both at its Headquarters and 
Major Subordinate Divisions, as well as support organizations such as 
the Humphreys Engineer Center Support Activity, the Institute for Water 
Resources, and the Finance Center. In addition, the fiscal year 2007 
budget proposes that, beginning in fiscal year 2007, the Office of the 
Assistant Secretary of the Army for Civil Works--including some 
indirect and overhead costs not previously allocated to this office--be 
funded in an expanded Expenses account, rather than in its own separate 
account or as part of the account funding the other Army Secretariat 
offices.
Reprogramming and Contracting
    The budget proposes reauthorization of sections 101, 106, and 108 
of the Energy and Water Development Appropriations Act, 2006, with 
certain changes. These sections established rules in law for fiscal 
year 2006 on reprogramming and continuing contracts. I would like to 
emphasize the programmatic need for one of these changes, namely, that 
we would no longer require each partially funded contract for operation 
and maintenance to be a continuing contract, so that the Corps would 
have the flexibility to use other contracting tools in the O&M program, 
such as base-plus-options contracts.

                           STUDIES AND DESIGN

    The fiscal year 2007 budget concentrates funding on the 55 most 
promising studies and preconstruction engineering and design (PED) 
activities. For the navigation and flood and storm damage reduction 
studies, performance was assessed based primarily on likely economic 
benefits and costs. For PED activities for such projects, the estimated 
ratio of remaining benefits to remaining costs is known, and PED 
activities were funded for projects with ratios of 4.0 to 1 or greater 
at a 7 percent discount rate. For aquatic ecosystem restoration studies 
and PED activities, performance was assessed based on the likelihood of 
projects that would meet the criteria in the construction guidelines.
    The budget provides $94 million for the Investigations account and 
$1 million for investigations within the Mississippi River and 
Tributaries account. Among the $95 million total, $25 million is for 
the Louisiana Coastal Area study of coastal wetlands restoration; $20 
million is for a national inventory of flood and storm damage reduction 
projects; $13 million is for other project-specific studies including a 
new study needed to support continued land acquisition to further 
reduce the risk of flood damage in the Atchafalaya Basin; $4 million is 
for project-specific PED; $15 million is for research and development; 
and $18 million is for other coordination, data collection, and study 
activities.
    One of my priorities is to improve analytical tools to support 
water resource planning and decision-making. The budget supports this 
with robust funding for the Navigation Economic Technologies research 
program and for the development of benefit evaluation methods for 
aquatic ecosystem restoration.

                              CONSTRUCTION

    In recent years, many more construction projects have been 
authorized, initiated, and continued than can be constructed 
efficiently at any one time. This has led to the postponement of 
benefits from the most worthy projects, which has significantly reduced 
overall program performance. To remedy this situation and to achieve 
greater value to the Nation from the Civil Works construction program, 
the budget focuses significant funding on the projects that yield the 
greatest return to the Nation, based upon objective performance 
criteria.
    The budget again proposes performance guidelines to allocate funds 
among construction projects, including significant refinements to the 
performance guidelines proposed in 2006. The most significant of these 
changes is the addition of a non-economic performance criterion 
covering flood and storm damage reduction projects that address a 
significant risk to human safety.
    Under the guidelines, the budget allocates funds among construction 
projects based primarily on the remaining economic benefits of projects 
relative to their remaining costs, their contributions to reducing 
life-threatening inundation hazards, and the extent to which they cost-
effectively contribute to the restoration of nationally or regionally 
significant aquatic ecosystems where the ecosystems have become 
degraded as a result of Civil Works projects or to a restoration effort 
for which the Corps is otherwise uniquely well suited. The 2007 
performance guidelines are at Enclosure 3.
    The funded construction projects include 6 considered to be 
national priorities; 14 projects in their final year of construction 
(including 1 dam safety project); 10 other dam safety, seepage, and 
static instability correction projects; 1 high priority newly funded 
project (Washington, DC and vicinity, which will reduce the risk of 
flood damage to the museums on the National Mall, the Franklin Delano 
Roosevelt Memorial, and the World War II Memorial and eliminate the 
temporary closures at 23rd Street and Constitution Avenue, NW, and 2nd 
and P Streets, SW in downtown Washington, DC); and 60 other ongoing 
projects. Ninety-one projects are funded altogether.
    After adjusting for the work reassigned to the Operation and 
Maintenance account, the budget provides an increase in construction 
funding of about $280 million compared to the fiscal year 2006 budget. 
This robust funding level enables work on most of the 91 projects, as 
well as on the ongoing projects reassigned from the construction 
program to the operation and maintenance program, to proceed at between 
80 percent and 100 percent of the maximum rate that the Corps can 
efficiently spend funds in fiscal year 2007.
    For low priority projects that are scheduled to have a construction 
contract underway at the beginning of fiscal year 2007, the budget 
provides funding either to complete each ongoing contract, or to 
terminate it and pay the Federal share of settled claims, whichever is 
estimated to be less costly. The budget includes $50 million for this 
purpose, $42 million in the Construction account and $8 million in the 
Mississippi River and Tributaries account.

                       CIVIL WORKS PROGRAM AREAS

    The Army Civil Works program includes eight program areas, plus 
oversight/executive direction and management. The eight program areas 
are commercial navigation, flood and coastal storm damage reduction, 
aquatic ecosystem restoration, recreation, hydropower, water supply, 
emergency management, and the regulatory program. Budget proposals for 
the eight program areas are discussed below.
Emergency Management and Flood and Coastal Storm Damage Reduction
    The budget for Emergency Management and Flood and Coastal Storm 
Damage Reduction reflects a sharpened focus on flood and hurricane 
preparedness and damage reduction.
    The budget provides $20 million in the Investigations account for a 
national inventory and database of flood and storm damage reduction 
projects, and for developing and testing methods to assess the 
structural and operational integrity and the associated risks of such 
projects. This effort will dovetail with the Corps' ongoing risk 
assessment for its portfolio of dams.
    The budget provides $81 million in the Flood Control and Coastal 
Emergencies account for planning, preparedness, and response to flood 
and storm emergencies, and for rehabilitation of damaged flood and 
storm damage reduction projects. This is an increase of $11 million 
over the fiscal year 2006 budget. Our experience during the 2005 
hurricane season underscores the need for securing funds in advance for 
such purposes, and we urge the Congress to include this funding in the 
annual Energy and Water Development Appropriations Act.
    The budget continues to support Federal participation in the 
initial phase of authorized beach nourishment projects for storm damage 
reduction and ecosystem restoration purposes. The budget continues the 
policy of funding Federal involvement in long-term, follow-on periodic 
renourishment only to the extent that the operation and maintenance of 
Federal navigation projects is the reason for the sand loss on 
shorelines.
Commercial Navigation
    The amount budgeted for the construction and rehabilitation of 
inland waterway projects, $394 million, is the highest amount ever 
included in a Civil Works budget. This funding will help ensure the 
continued efficiency and reliability of our principal inland waterways. 
Work will begin on rehabilitation of Lock and Dam 27, Illinois and 
Missouri, and Markland Lock and Dam, Indiana and Kentucky. The budget 
focuses operation and maintenance funding for the inland waterways on 
those segments that support high volumes of commercial traffic, 
including the Mississippi, Ohio, and Illinois waterways.
    The budget gives priority to the operation and maintenance of 
harbors with high volumes of commercial traffic. The budget also funds 
harbors that support significant commercial fishing, subsistence, 
public transportation, harbor of refuge, national security, or safety 
benefits.
    As discussed earlier, the budget provides funding under the 
operation and maintenance program for authorized beach renourishment 
work to the extent needed to replace sand lost due to Federal 
navigation operation and maintenance. This work is now part of the 
commercial navigation program area.
Aquatic Ecosystem Restoration
    The budget includes $164 million for the Corps contribution to the 
Everglades restoration effort. Of this amount, $35 million is for the 
Corps to continue to participate financially in the Modified Water 
Deliveries project, along with the National Park Service. Within this 
amount, the budget also includes funds to initiate additional work on 
the Kissimmee River, continue the pilot aquifer storage and recovery 
projects program, continue other planning and design work on the 
Comprehensive Everglades Restoration Plan, and examine flows in the 
vicinity of Lake Okeechobee.
    The budget provides $27 million for the Upper Mississippi 
Restoration Program, including $3 million for a study needed to 
establish priorities for the next 10 years for this nationally 
significant effort. To address the continuing loss of wetlands along 
the Louisiana coast, the budget provides $20 million to continue 
planning and design for the Louisiana Coastal Area aquatic ecosystem 
restoration program and $5 million for the science program supporting 
this effort.
    As discussed above, the budget proposes that measures at operating 
projects to comply with Biological Opinions pursuant to the Endangered 
Species Act be funded from the Operation and Maintenance account and 
allocated among project purposes.
Regulatory Program
    The President's budget provides $173 million to the Corps 
Regulatory Program to protect wetlands and other waters of the United 
States. This represents a $15 million increase compared to fiscal year 
2006 appropriations, which would result in a total increase of 20 
percent in funding over the last 3 years. One of my priorities for the 
Civil Works program is to improve the effectiveness of aquatic resource 
protection and the efficiency of permit reviews and decision-making. 
The added funds will be used to improve permit processing times, 
increase aquatic resource protection, and advance watershed-based 
approaches.
    Investing in the Regulatory Program is a win-win proposition. The 
added funds will enable most public and private development to proceed 
with minimal delays, while ensuring that the environment is protected 
consistent with the Nation's water quality laws.
Recreation
    The fiscal year 2007 budget proposes a recreation modernization 
initiative for Civil Works recreation facilities, based on a promising 
model now used by other major Federal recreation providers such as the 
National Park Service and the Forest Service. The administration has 
proposed legislation for the Corps to use additional fees and other 
revenues to upgrade and modernize recreation facilities at the sites 
where this money is collected.
    Specifically, the legislation includes authority for the Corps to 
charge entrance fees and other types of user fees where appropriate, 
and to cooperate with non-Federal park authorities and districts. The 
Corps would use collections above a $37 million per year baseline to 
provide facility modernizations and upgrades.
Hydropower
    The budget provides funding for hydropower operation and 
maintenance costs, as well as funding for ongoing replacements at three 
hydropower projects. Unlike the budgets of recent years, the budget 
does not propose that Federal power marketing administrations directly 
fund the costs of hydropower operation and maintenance.
Environmental Stewardship
    Corps of Engineers-administered lands and waters cover 11 million 
acres. That is equal in size to the area of the States of Vermont and 
New Hampshire. The budget proposes a total of $89 million for 
environmental stewardship for these resources. Funded activities 
include shoreline management, protection of natural resources, 
continuation of mitigation activities, and protection of cultural and 
historic resources.
Oversight and Executive Direction and Management
    The fiscal year 2007 budget provides $164 million for the Expenses 
account. This account funds executive direction and management 
activities of the Corps headquarters, the Corps division offices, and 
related support organizations that pertain to Civil Works.
    In addition, $6 million of the funding for the Expenses account is 
for the Office of the Assistant Secretary of the Army (Civil Works). 
This amount is needed to cover not only the Assistant Secretariat share 
of costs that are usually allocated among offices in the Headquarters, 
Department of Army, but also the appropriate share of centrally managed 
and ordinarily non-allocated costs. The inclusion of funding for these 
purposes is in accordance with the direction in the fiscal year 2006 
Conference Report.
    The Budget proposes to finance audits through the Revolving Fund. 
The costs would be allocated among and then charged back to the 
benefiting accounts as a normal cost of doing business.

                     PRESIDENT'S MANAGEMENT AGENDA

    The Army Civil Works program is pursuing five government-wide 
management initiatives, as are other Federal agencies. These are 
competitive sourcing, strategic management of human capital, financial 
management, e-government, and budget-performance integration. The Army 
Civil Works program also is participating in the initiative for real 
property asset management.
    The Office of Management and Budget scores the status of each 
agency in implementing each initiative. Like most agencies, the Army 
Civil Works program started out with ``red'' stoplight scores across 
the board. On four initiatives--all but competitive sourcing and human 
capital--Civil Works status is still red. We are working to improve our 
progress and status and welcome your support of our efforts.

                               CONCLUSION

    At $4.733 billion, the fiscal year 2007 Army Civil Works budget is 
the highest Civil Works budget in history.
    The budget reflects progress in performance-based budgeting, as 
called for in the President's management agenda. In developing this 
budget, we made explicit choices based on performance. The emphasis on 
the completion of high-performing construction projects, preparedness 
for and mitigation of flood and hurricane hazards, and improved 
execution of the Regulatory Program, for example, reflect a 
performance-based approach.
    The Army Civil Works budget for fiscal year 2007 will enable the 
Civil Works program to move ahead with more resources to pursue 
investments that will yield good returns for the Nation in the future. 
The budget represents the wise use of funding to advance worthy, 
mission-based objectives. I am proud to present it.
    Thank you, Mr. Chairman and members of the subcommittee, for this 
opportunity to testify on the President's fiscal year 2007 budget for 
the Civil Works program of the Army Corps of Engineers.

  ENCLOSURE 1.--DEPARTMENT OF THE ARMY CORPS OF ENGINEERS--CIVIL WORKS
                    BUDGET SUMMARY, FISCAL YEAR 2007
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Requested New Appropriations by Account:
    Investigations.....................................     $94,000,000
    Construction.......................................   1,555,000,000
    Operation and Maintenance..........................   2,258,000,000
    Regulatory Program.................................     173,000,000
    Flood Control, Mississippi River and Tributaries...     278,000,000
    Expenses...........................................     164,000,000
    Flood Control and Coastal Emergencies..............      81,000,000
    Formerly Utilized Sites Remedial Action Program....     130,000,000
                                                        ----------------
      TOTAL............................................   4,733,000,000
                                                        ================
Requested New Appropriations by Program Area:
    Commercial Navigation..............................   1,926,000,000
    Flood and Coastal Storm Damage Reduction...........   1,291,000,000
    Environment........................................     539,000,000
        (Aquatic Ecosystem Restoration)................    (320,000,000)
        (FUSRAP).......................................    (130,000,000)
        (Natural Resources)............................     (89,000,000)
    Hydropower.........................................     285,000,000
    Recreation.........................................     267,000,000
    Water Supply.......................................       2,000,000
    Emergency Management...............................      86,000,000
        (Flood Control and Coastal Emergencies)........     (81,000,000)
        (National Emergency Preparedness)..............      (5,000,000)
    Regulatory Program.................................     173,000,000
    Executive Direction and Management.................     164,000,000
                                                        ----------------
      TOTAL............................................   4,733,000,000
                                                        ================
Sources of New Appropriations:
    General Fund.......................................   3,791,000,000
    Harbor Maintenance Trust Fund......................     707,000,000
    Inland Waterways Trust Fund........................     197,000,000
    Special Recreation User Fees.......................      37,000,000
    Disposal Facilities User Fees......................       1,000,000
                                                        ----------------
      TOTAL............................................   4,733,000,000
                                                        ================
Additional New Resources:
    Rivers and Harbors Contributed Funds...............     445,000,000
    Coastal Wetlands Restoration Trust Fund............      75,000,000
    Permanent Appropriations...........................      18,000,000
                                                        ----------------
      TOTAL............................................     538,000,000
                                                        ================
      Total New Program Funding........................   5,271,000,000
------------------------------------------------------------------------


   ENCLOSURE 2.--DEPARTMENT OF THE ARMY--CORPS OF ENGINEERS--CIVIL WORKS BUDGET, FISCAL YEAR 2007--CROSSCUT BETWEEN APPROPRIATION ACCOUNTS AND PROGRAM
                                                                          AREAS
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Aq.
                                        Navigation   Flood/  Recreation    Eco.     Env.   FUS-RAP   Hydro-   Water    Emerg.    Reg.     ED&M     TOT
                                                     Storm                 Rest   Stewrd.            Power    Supply   Mgmt.    Prog.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Investigations........................         23        34  ..........       37  .......  .......  .......  .......  .......  .......  .......       94
Construction..........................        596       653  ..........      278  .......  .......       28  .......  .......  .......  .......    1,555
Operation/Maint.......................      1,270       387        253   .......       84  .......      257        2        5  .......  .......    2,258
MR&T--I...............................  ..........        1  ..........  .......  .......  .......  .......  .......  .......  .......  .......        1
MR&T--C...............................         14       111  ..........        5  .......  .......  .......  .......  .......  .......  .......      130
MR&T--M...............................         23       105         14   .......        5  .......  .......  .......  .......  .......  .......      147
FUSRAP................................  ..........  .......  ..........  .......  .......      130  .......  .......  .......  .......  .......      130
FC&CE.................................  ..........  .......  ..........  .......  .......  .......  .......  .......       81  .......  .......       81
Regulatory............................  ..........  .......  ..........  .......  .......  .......  .......  .......  .......      173  .......      173
Expenses..............................  ..........  .......  ..........  .......  .......  .......  .......  .......  .......  .......      164      164
                                       -----------------------------------------------------------------------------------------------------------------
      TOTAL...........................      1,926     1,291        267       320       89      130      285        2       86      173      164    4,733
--------------------------------------------------------------------------------------------------------------------------------------------------------

 ENCLOSURE 3.--DEPARTMENT OF THE ARMY--CORPS OF ENGINEERS--CIVIL WORKS 
 BUDGET, FISCAL YEAR 2007--PERFORMANCE BUDGETING GUIDELINES FOR CIVIL 
                           WORKS CONSTRUCTION

    The budget for the construction account allocates funds based on 
the following seven performance-based guidelines, which improve the 
overall performance of the construction program by redirecting funds to 
high-performing projects and limiting new construction starts.
    1. Project rankings within mission areas.--All ongoing, 
specifically authorized construction projects, including projects 
funded in the Mississippi River and Tributaries account, will be 
assigned based upon their primary purpose to one of the main mission 
areas of the Corps (flood and storm damage reduction; commercial 
navigation; aquatic ecosystem restorations) or to hydropower. Projects, 
except for aquatic ecosystem restoration projects, will be ranked by 
their remaining benefits divided by their remaining costs (RBRC), 
calculated at a 7 percent real discount rate. Aquatic ecosystem 
restoration projects will be ranked by the extent to which they cost 
effectively contribute to the restoration of a nationally or regionally 
significant aquatic ecosystem that has become degraded as a result of a 
Civil Works project, or to a restoration effort for which the Corps is 
otherwise uniquely well-suited (e.g., because the solution requires 
complex alternations to the hydrology and hydraulics of a river 
system).
    2. Project completions.--Each project with an RBRC of 3.0 or 
greater that can be completed in the budget year with a final increment 
of funding will receive the balance of funding needed to complete 
construction and related administrative activities. Likewise, each 
aquatic ecosystem restoration project that cost-effectively contributes 
to the restoration of a nationally or regionally significant aquatic 
ecosystem that has become degraded as a result of a civil works 
project, or to a restoration effort for which the Corps is otherwise 
uniquely well-suited, and that can be completed in the budget year with 
a final increment of funding will receive the balance of funding needed 
to complete construction and related administrative activities.
    3. Projects with very high economic and environmental returns.--The 
projects with the highest RBRCs (or that are the most cost-effective in 
contributing to the restoration of a nationally or regionally 
significant aquatic ecosystem that has become degraded as a result of a 
Corps project, for aquatic ecosystem restoration) will receive not less 
than 80 percent of the maximum level of funding that the Corps can 
spend efficiently in each fiscal year.
    4. Projects with a low priority.--All ongoing flood and storm 
damage reduction, commercial navigation, and hydropower constructions 
projects that have RBRCs below 3.0, except for flood and storm damage 
reduction projects that are funded in the budget to address significant 
risk to human safety, will be considered for deferral. All ongoing 
aquatic ecosystem restoration projects that do not cost-effectively 
contribute to the restoration of a nationally or regionally significant 
aquatic ecosystem restoration that has become degraded as a result of a 
Civil Works project, and do not cost-effectively address a problem for 
which the Corps is otherwise uniquely well-suited, and are less than 50 
percent complete will be considered for deferral. Where a project 
considered for deferral was previously budgeted, the budget will 
include funding to cover the cost of terminating or completing each 
ongoing contract, whichever is less. Budget year and future year 
savings from project suspensions (after covering the cost of 
terminating or completing ongoing contracts) will be used to accelerate 
the projects with the highest net economic and environmental returns.
    5. New starts and resumptions.--The budget will provide funds to 
start up new construction projects, and to resume work on ongoing 
construction projects on which the Corps has not performed any physical 
work under a construction contract during the past 3 consecutive fiscal 
years, only if the project would be ranked in the top 20 percent of the 
ongoing construction projects in its mission area that year.
    The term ``physical work under a construction contract'' does not 
include activities related to project planning, engineering and design, 
relocation, or the acquisition of lands, easements, or rights-of-way. 
For non-structural flood damage reduction projects, construction begins 
in the first fiscal year in which the Corps acquires lands, easements, 
or rights-of-way primarily to relocate structures, or performs physical 
work under a construction contract for non-structural project-related 
measures. For aquatic ecosystem restoration projects, construction 
begins in the first fiscal year in which the Corps acquires lands, 
easements, or rights-of-way primarily to facilitate the restoration of 
degraded aquatic ecosystems including wetlands, riparian areas, and 
adjacent floodplains, or performs physical work under a constructions 
contract to modify existing project facilities primarily to restore the 
aquatic ecosystem. For all other water resources projects, construction 
begins in the first fiscal year in which the Corps performs physical 
work under a construction contract.
    6. Other cases.--All other ongoing construction projects will 
receive not more than the amount needed to meet earnings permitted 
under ongoing multi-year contracts and related costs, except for flood 
and storm damage reduction projects that are funded in the budget to 
address significant risk to human safety, which will receive at least 
the funding needed to pay contractor earnings and related costs.
    Dam safety assurance, seepage control, and static instability 
correction projects that are funded in the budget for construction will 
receive the maximum level of funding that the Corps can spend 
efficiently in each fiscal year.
    Projects that are funded in the budget for construction will 
receive the amount needed to ensure that they comply with treaties and 
with biological opinions pursuant to the Endangered Species Act, and 
meet authorized mitigation requirements.
    7. Ten percent rule.--Up to a total of 10 percent of the funding 
available for construction may be allocated to ongoing construction 
projects regardless of the guidelines above. However, this may not be 
used to start up or resume any project.
    The budget proposes that the administration and the Congress apply 
these guidelines to the Corps construction account and to the 
construction activities in the Mississippi River and Tributaries 
account.

    Senator Domenici. Thank you very much.
    General.
STATEMENT OF LIEUTENANT GENERAL CARL A. STROCK, CHIEF 
            OF ENGINEERS
    General Strock. Mr. Chairman and members of the committee: 
I am honored to be testifying before you today with the 
Honorable John Paul Woodley on the President's fiscal year 2007 
budget for the Army civil works program. If I may, I would like 
to briefly summarize the key points of my testimony and include 
my complete statement for the record.
    Senator Domenici. Please do and that will be done.
    General Strock. Good, sir.
    This budget is a performance-based budget that reflects the 
realities of the national budget, supporting the Nation's 
recent natural disasters and the global war on terror. This 
budget focuses construction on funding of 63 projects that will 
provide the highest returns on the Nation's investment, 
including 11 dam safety projects. Funds will be used for 
critical water resources infrastructure that improves the 
quality of our citizens' lives and provides a foundation for 
national economic growth and development.
    The budget incorporates performance-based metrics for 
continued efficient operation of the Nation's waterborne 
navigation, flood control, and other water resource management 
infrastructure, fair regulation of wetlands, and restoration of 
important environmental resources.
    There are six national priority construction projects 
funded in the construction program. They are: the New York-New 
Jersey Harbor Deepening Project; the Oakland River--the Oakland 
Harbor Deepening Project; construction of Olmstead Locks and 
Dam in Illinois and Kentucky; the Florida Everglades and South 
Florida Ecosystem; the Side Channels of the Upper Mississippi 
River System; and Sims Bayou in Houston, Texas; and two others, 
the Missouri River Restoration and the Columbia River 
Restoration, both funded in the operations and maintenance 
account.
    This budget also provides the quality of recreation 
services through stronger partnerships and modernization. The 
budget provides approximately $65.3 million to complete 14 
projects, including one dam safety project, in 2007. As part of 
a comprehensive strategy to reduce the construction backlog, 
the fiscal year 2007 budget funds projects that provide the 
highest returns and are consistent with current policies. In 
all, 91 projects are funded so that we can provide benefits to 
the Nation sooner.
    The fiscal year 2007 budget includes $2.258 billion for the 
operations and maintenance program and I can assure you that I 
will continue to do all that I can to make these programs as 
cost effective and efficient as possible.
    Domestically, more than 8,000 volunteers from around the 
Nation have deployed to help citizens and communities on the 
gulf coast in the aftermath of Hurricanes Katrina, Rita, and 
Wilma. Even now, more than 6 months after Hurricane Katrina, 
2,000 USACE volunteers continue to execute our FEMA-assigned 
disaster recovery missions along the gulf coast and to 
accomplish the critical restoration work of the New Orleans 
Area Levee System.
    Internationally, the U.S. Army Corps of Engineers remains 
committed to the monumental task of helping to rebuild the 
infrastructure and economies of Iraq and Afghanistan, and more 
than 1,700 USACE volunteers have deployed to Iraq since 2003. 
They continue to make progress toward this Nation's goals of 
restoring the security and quality of life for all Iraqis and 
Afghans as they pursue democracy and freedom.
    The Corps' Gulf Regional Division has overseen the 
initiation of 3,000 reconstruction projects and the completion 
of more than 2,100. These projects make a difference in the 
everyday lives of the Iraqi people and are visible signs of 
progress.
    The water resources management infrastructure has improved 
the quality of our citizens' lives in support of the economic 
growth and development of this country. Our systems of 
navigation, flood, and storm damage reduction projects and 
efforts to restore aquatic ecosystems contribute to our 
national welfare.

                           PREPARED STATEMENT

    In closing, the Corps is committed to selflessly serving 
the Nation and I truly appreciate your continued support in 
this end. Thank you, Mr. Chairman and members of the committee. 
This concludes my statement.
    [The statement follows:]

        Prepared Statement of Lieutenant General Carl A. Strock

    Mr. Chairman and distinguished members of the subcommittee, I am 
honored to be testifying before your subcommittee today, along with the 
Assistant Secretary of the Army (Civil Works), the Honorable John Paul 
Woodley, Jr., on the President's fiscal year 2007 budget for the United 
States Army Corps of Engineers' Civil Works Program.
    My statement covers the following 3 topics:
  --Summary of fiscal year 2007 Program Budget,
  --Civil Works Backlog,
  --Value of the Civil Works Program to the Nation's Economy, and to 
        the Nation's Defense.

               SUMMARY OF FISCAL YEAR 2007 PROGRAM BUDGET

Introduction
    The fiscal year 2007 Civil Works Budget is a performance-based 
budget, which reflects a focus on the projects and activities that 
provide the highest net economic and environmental returns on the 
Nation's investment or address significant risk to human safety. The 
Civil Works Program, including the Direct and Reimbursed programs, is 
expected to involve total spending (Federal plus non-Federal) of $7.3 
billion to $8.3 billion. The exact amount will depend on assignments 
received from the Federal Emergency Management Agency (FEMA) for 
hurricane disaster relief and from the Department of Homeland Security 
for border protection facilities.
    Direct Program funding totals $5.271 billion, consisting of 
discretionary funding of $4.733 billion and mandatory funding of $538 
million. The Reimbursed Program funding is projected to involve an 
additional $2 billion to $3 billion.
Direct Program
    The budget reflects the administration's commitment to continued 
sound development and management of the Nation's water and related land 
resources. It incorporates performance-based metrics for the 
construction program, funds the continued operation of commercial 
navigation and other water resource infrastructure, provides a needed 
increase in funding for the regulation of the impacts of development on 
the Nation's wetlands, and supports restoration of nationally and 
regionally significant aquatic ecosystems, with emphasis on the Florida 
Everglades, the Upper Mississippi River, and the coastal wetlands of 
Louisiana. It also improves the quality of recreation services through 
stronger partnerships and modernization.
    The budget emphasizes the construction and completion of water 
resources projects that will provide a high return on the Nation's 
investment in the Corps' primary mission areas. There are 91 projects, 
including 6 national priority projects; 14 projects in their final year 
of completion (including 1 dam safety project); 10 other dam safety 
assurance, seepage control, and static instability correction projects; 
1 high priority newly funded project (Washington, DC and vicinity, 
which will reduce the risk of flood damage to the museums on the 
National Mall, the Franklin Delano Roosevelt Memorial, and the World 
War II Memorial and eliminate the temporary closures at 23rd Street and 
Constitution Avenue, NW, and 2nd and P Streets, SW in downtown 
Washington, DC); and 60 other ongoing projects. The focus of this 
budget is on providing the highest net economic and environmental 
returns on the Nation's investment and addressing significant risk to 
human safety.
Reimbursed Program
    Through the Interagency and Intergovernmental Services Program we 
help non-DOD Federal agencies, State, local, and tribal governments, 
and other countries with timely, cost-effective implementation of their 
programs, while maintaining and enhancing capabilities for execution of 
our Civil and Military Program missions. These customers rely on our 
extensive capabilities, experience, and successful track record. The 
work is principally technical oversight and management of engineering, 
environmental, and construction contracts performed by private sector 
firms, and is fully funded by the customers.
    Currently, we provide reimbursable support for about 60 other 
Federal agencies and several State and local governments. Total 
reimbursement for such work in fiscal year 2007 is projected to be $2.0 
billion to $3.0 billion. The exact amount will depend on assignments 
received from the Federal Emergency Management Agency (FEMA) for 
hurricane disaster relief and from the Department of Homeland Security 
for border protection facilities.

                          CIVIL WORKS BACKLOG

    The budget addresses the construction backlog primarily by 
proposing that the administration and the Congress use objective 
performance measures to establish priorities among projects including 
potential new starts, and through a change in Corps contracting 
practices to increase control over future costs. The measures proposed 
include the ratio of remaining benefits to remaining costs for projects 
with economic outputs; the extent to which the project cost-effectively 
contributes to the restoration of a nationally or regionally 
significant aquatic ecosystem that has become degraded as a result of a 
Civil Works project or to an aquatic ecosystem restoration effort for 
which the Corps is otherwise uniquely well-suited; and giving priority 
to dam safety assurance, seepage control, static instability 
correction, and projects that address significant risk to human safety. 
With the exception of up to 10 percent of the available funds that 
could be allocated to any project under construction regardless of 
performance, resources are allocated based on Corps estimates to 
achieve the highest net economic and environmental returns and to 
address significant risk to human safety. Over time, this approach 
would significantly improve the benefits to the Nation from the Civil 
Works construction program.
    We believe that narrowing the focus of our effort to fund and 
complete a smaller, more beneficial set of projects will improve 
overall program performance and bring higher net benefits per dollar to 
the Nation sooner. That is why the budget proposes only one new, high 
priority construction start and accelerates completion of the highest-
return projects.
Maintenance Program
    The facilities owned and operated by, or on behalf of, the Civil 
Works Program are aging. As stewards of this infrastructure, we are 
working to ensure that it continues to provide an appropriate level of 
service to the Nation. Sustaining such service poses a technical 
challenge in some cases, and proper operation and maintenance also is 
becoming more expensive as this infrastructure ages.
    The operation and maintenance program supports the operation, 
maintenance and security of existing commercial navigation, flood and 
storm damage reduction, and aquatic ecosystem restoration works owned 
and operated by, or on behalf of, the Corps of Engineers, including 
administrative buildings and laboratories. Funds are also included for 
national priority efforts in the Columbia River Basin and Missouri 
River Basin to support the continued operation of Corps of Engineers 
multi-purpose projects by meeting the requirements of the Endangered 
Species Act. Other work to be accomplished includes dredging, repair, 
and operation of structures and other facilities, as authorized in the 
various River and Harbor, Flood Control, and Water Resources 
Development Acts. Related activities include aquatic plant control, 
monitoring of completed coastal projects, and removal of sunken 
vessels.
    The Operation and Maintenance program for the fiscal year 2007 
budget consists of $2.258 billion in the operation and maintenance 
account and $147 million under the Mississippi River and Tributaries 
program. To improve accountability and oversight, reflect the full cost 
of operating and maintaining existing projects, and support an 
integrated investment strategy, the fiscal year 2007 Civil Works budget 
transfers several activities to the O&M program from the construction 
program. This budget also organized operation and maintenance 
activities by river basin and by mission area to set the stage for 
improved management of Civil Works assets and more systematic budget 
development in future years. Furthermore, we are searching for ways to 
reduce costs and thereby accomplish more with available resources.
    The fiscal year 2007 budget also supports performance-based 
budgeting for the operation and maintenance program by funding ongoing 
efforts to develop better risk-based facility condition indices and 
asset management systems. These analytical tools will improve our 
ability in the future to develop long-term asset management strategies 
and establish priorities for the operation, maintenance and management 
of Civil Works assets. Our goal is to begin using these improved 
analytical tools within 2 years.
  value of the civil works program to the nation's economy and defense
    We are privileged to be part of an organization that directly 
supports the President's priorities of winning the global war on 
terror, securing the homeland and contributing to the economy.
The National Welfare
    The way in which we manage our water resources can improve the 
quality of our citizens' lives. It has affected where and how people 
live and influenced the development of this country. The country today 
seeks economic development as well as the protection of environmental 
values.
    Domestically, more than 8,000 USACE volunteers from around the 
Nation have deployed to help citizens and communities along the Gulf 
Coast in the aftermath of Hurricanes Katrina, Rita, and Wilma. Even 
now, more than 6 months after Hurricane Katrina, 2,000 USACE volunteers 
continue to execute our FEMA-assigned disaster recovery missions along 
the Gulf Coast, and to work on rebuilding the New Orleans-area levee 
system.
    As to Hurricane recovery--the Corps of Engineers is repairing 
significant damages to reaches of federally constructed levees, 
floodwalls and other features, repairing damaged pumping stations that 
were constructed or modified as a part of the Southeast Louisiana Urban 
Flood Control project, and repairing non-Federal levees and pump 
stations. Along the three outfall canals, we are installing interim 
closure structures and temporary pumps until a more permanent solution 
can be implemented. We have also initiated analyses that will explore 
options to improve protection along the Louisiana and Mississippi 
Coasts.
    Mr. Chairman, we continue to work with you, this subcommittee, and 
other members of Congress on the authorization and funding proposed by 
the administration for modifications that will strengthen the existing 
hurricane protection system for New Orleans.
Research and Development
    Civil Works Program research and development provides the Nation 
with innovative engineering products, some of which can have 
applications in both civil and military infrastructure spheres. By 
creating products that improve the efficiency and competitiveness of 
the Nation's engineering and construction industry and providing more 
cost-effective ways to operate and maintain infrastructure, Civil Works 
Program research and development contributes to the national economy.
The National Defense
    Internationally, the U.S. Army Corps of Engineers remains committed 
to the monumental task of helping to rebuild the infrastructures and 
economies of Iraq and Afghanistan. Corps' Civilians and Soldiers 
continue to make progress toward this Nation's goals of restoring the 
security and quality of life for all Iraqis and Afghanis as they pursue 
democracy and freedom.
    More than 1,700 USACE volunteers have deployed to Iraq since 2003. 
The Corps' Gulf Region Division has overseen the initiation of nearly 
3,000 reconstruction projects and the completion of more than 2,100. 
These projects make a difference in the every day lives of the Iraqi 
people, and are visible signs of progress.
    In Afghanistan, the Corps is spearheading construction projects for 
the Afghan national army and national police, supporting USAID, and 
executing important public infrastructure and humanitarian projects.

                               CONCLUSION

    The Corps of Engineers is committed to staying at the leading edge 
in service to the Nation. In support of that, we are working with 
others to transform our Civil Works Program. We're committed to change 
that leads to open, transparent modernization, and a performance-based 
Civil Works Program.
    Thank you, Mr. Chairman and members of the committee. This 
concludes my statement.

    Senator Domenici. Thank you very much.
    Now, I want to make a little announcement which I think we 
all know up here, but let us make sure you know out there. The 
Majority Leader has indicated to us Republicans that at 3:15 he 
would like all Republicans present on the floor of the Senate. 
He is going to address the issue that is before the Senate. And 
we will try to be there. That is not mandatory for you all.
    Senator Dorgan. Is it advisable?
    Senator Domenici. It is whatever you will do.
    What I would suggest, if you have no desire to go down and 
be part of that, I am willing to say you proceed if you be 
careful and do things right, and I am sure you will.
    Now, we are going to--with your permission, I think we are 
going to use the time between now and 3:15 without yielding to 
you all and then give it to you. Everything will turn off. When 
we give it over to you, it will turn off 15 minutes after you 
take over. It will turn off, everything. So you will have 15 
minutes also. I am kidding you.
    The two Senators on this side, you want to split a little 
time and leave me a little at the end?
    Senator Allard. I do not think I will take too long. I just 
have two or three important questions.
    Senator Domenici. Proceed, Senator.
    Senator Allard. I want to get back to this Fountain Creek 
Watershed Study in Colorado. How much has been expended by the 
Federal Government to conduct that study to date?
    General Strock. Sir, we have spent $65,000 through fiscal 
year 2003.
    Senator Allard. Not anywhere near a match of 50 percent of 
what local governments have spent, is that correct?
    General Strock. Yes, sir.
    Senator Allard. Please share with me how you set priorities 
for the budget and why the funding for the Fountain Creek Study 
wasn't included this time around?
    Mr. Woodley. Senator, in general the priorities within the 
general investigations account were set in accordance with the 
same priorities that are used with respect to the construction 
account, on the concept that the one would lead into the other. 
But this year our general investigations allocation was very 
severely constrained because it was largely devoted to two very 
large efforts that we are undertaking, one with respect to the 
Louisiana Coastal Area Restoration Study and the other is in a 
$20 million request for a nationwide study and inventory of 
flood control structures, and in particular levees. So that put 
enormous constraints and very, very many very worthy studies 
were not able to be included in this year's budget request.
    Senator Allard. Is that the same problem we are running 
into with the tamarisk removals? There are tamarisk removal 
projects I think all over the West. It is a water-drinking 
tree.
    Mr. Woodley. Yes, sir, I am very familiar with salt cedar.
    Senator Allard. And you do not have any plans to conduct 
any more of those removal projects in the West?
    Mr. Woodley. I would have to get back to you on that. I 
will tell you that I would advocate for that. That is a very 
important--and indeed, the chairman and I have visited the 
Bosque in his home State, in which a great part of our effort 
that is ongoing along that watershed at Albuquerque is to 
remove the tamarisk salt cedar. It is something we are finding 
all over our properties and I think I would advocate for a 
concerted national effort to rid our areas of that.
    Senator Allard. I think that is going along the Rio Grande 
in New Mexico. We have got the Rio Grande in Colorado and we 
also have the Arkansas and Colorado Rivers. So I am 
particularly interested in your responding as far as the 
Colorado projects in the West. I would like to get that 
information when you get a chance.
    Mr. Woodley. Absolutely, yes, sir. I will get back to you 
on that.
    Senator Allard. Very good.
    Then I will stop right there, Mr. Chairman, so you and the 
other members can----
    General Strock. Senator, if I could quickly amend my answer 
to you. The $65,000 I cited was through 2003, but since that 
time, in 2004 and 2005, we have had a total of $937,000 against 
the project.
    Senator Allard. Nine hundred thirty-seven thousand dollars?
    General Strock. And in 2006 $125,000, for a total of 
$1,032,000, which is matched by the State, and that is where we 
are now.
    Senator Allard. Yes, okay. I appreciate that. Thank you.
    Senator Domenici. General, I am going to talk about Katrina 
a little bit. I am sure that the distinguished Senator from 
Louisiana is going to follow up on a lot of this, but I want to 
go through as much as I can, and what I do not get through I am 
going to submit to you to answer.
    First of all, General, can you give us a quick status 
update on the current rebuilding efforts?
    General Strock. Yes, sir. Currently our main target is by 
June 1 of this year to have the entire system restored and 
repaired to where it was when Katrina hit, and we are on target 
to do that, sir.
    Senator Domenici. I have been told that the United States 
Geological Survey says that the storm surge from Hurricane 
Katrina is the greatest recorded storm surge to ever hit the 
United States. Can you confirm this was in fact a large 
hurricane that struck, contrary to what may have been said? And 
is that, is what I have just said, true?
    General Strock. Sir, I cannot personally confirm that. I 
have heard that cited, but I have not heard that directly from 
the USGS. But I do understand that is the case. I know that it 
was such a large system and storm surge, that it destroyed most 
of the gauges that would tell us what actually occurred.
    Senator Domenici. So do you think the USGS can confirm this 
or do you think they cannot, what I have just said?
    General Strock. I am sure they can, yes, sir. I have 
absolute confidence in the USGS, yes, sir.
    Senator Domenici. If we want that we should get it from 
them?
    General Strock. Yes, sir.
    Senator Domenici. Along with everyone else, I have read 
articles from various experts about the levee failures in New 
Orleans. Most of those experts have indicated that the Corps 
was aware of potential problems with the levees as designed and 
constructed. Further, there has been considerable comment that 
the levees should have withstood the effects of Katrina.
    General, I need to know from you, what is the Corps' 
response? Is there any fire to go with all this smoke or is 
this speculation from self-described experts without access to 
real concrete data?
    General Strock. Sir, that is a tough one to answer. I think 
that if you look at the history of these projects, the Lake 
Pontchartrain study, which is the one, the project which 
actually failed during the event, was authorized in 1965, so 
there have been literally generations of people involved in 
this. To say that at some point in this there may have been 
some concerns expressed about adequacy of designs and so forth, 
I really do not know.
    I can tell you that as an institution we were not aware of 
any particularly hazardous situations. Each time we are 
confronted with that, we do look into that and ensure that we 
did not have previous knowledge of any potential 
vulnerabilities in the system.
    Senator Domenici. Can you give us for the record a brief 
overview of the findings from the inter-agency performance 
evaluation team to date?
    General Strock. Yes, sir. For the record or here, sir? 
Here. Sir, I would be happy to expand in the record, but I can 
tell you that we have gotten to the point now where the IPET 
has reached some conclusions about the performance of the 
system. Specifically, in the 17th Street Canal area we have now 
concluded that we did have a problem with the design of the 
structures there, something we had hoped would not be the case, 
but now must confront that as a reality.
    That finding is being reviewed by the American Society of 
Civil Engineers and we expect their response to that soon. So 
that is one of the most significant findings to date.
    Other findings that the IPET has arrived at have to do with 
the storm surge in the Mississippi River gulf outlet, ``MRGO,'' 
and the conclusion on that is that it does contribute to some 
degree in storm surge on the inner harbor, but to a very small 
degree. Point-two of a foot is being attributed to MRGO and I 
think that is an important aspect to consider in the future.
    But sir, the most dramatic conclusion is that, yes, we had 
a design problem and that there may be other elements in the 
system designed along that way that need to be addressed.
    Senator Domenici. As I understand the current situation 
concerning the levee rebuilding, funding provided through 
enacted supplemental appropriations will complete the levee 
system as currently authorized. This includes rebuilding levees 
to the authorized levels, that is to the authorized level of 
protection, I should say, as well as repairing non-Federal 
levees and pump stations. This system was not completed before 
Katrina; is that correct?
    General Strock. Sir, the system was not completed before 
Katrina. There are several projects involved in this, about six 
in all. Our estimate is that we have sufficient funding to 
complete those systems by September 1, 2007, and with the third 
supplemental to provide some enhancements like those you 
discussed.
    I must caveat somewhat, though, sir, because the IPET 
results call into question the flood walls that we are using, 
we may have to replace some of the flood wall sections. 
Replacement of flood walls is not currently in our current 
estimates, with some small exceptions in the inner harbor area. 
So there may be an additional requirement to rebuild flood 
walls as we get into this. But generally speaking, we feel like 
we have sufficient funding.
    Senator Domenici. I am not going to have time to go through 
this very difficult and bothersome issue of the $6 billion 
authorization that has been alluded to by Director Powell and 
what should be done with it. Suffice it to say that I will 
submit to you three, four questions regarding that whole 
situation. Would you answer them as soon as you can?
    General Strock. Yes, sir.
    Senator Domenici. Then I have a number of questions on 
continuing contracts and reprogramming, which were very 
difficult for us to handle in this budget. We had a very hard 
time as we tried to put it together. I will submit those to you 
and you can answer them as soon as possible.
    General Strock. Yes, sir.
    Senator Domenici. Now, having done that, I am going to 
yield the gavel to you, Senator, and you do it as you see fit 
between the two of you, and we may return and we may not. But 
would you close it if we do not?
    Senator Dorgan. Senator Landrieu, what did you want to say?
    Senator Landrieu. Before Senator Domenici leaves, I just 
wanted to thank him for his focus on this Katrina-gulf coast 
issue. He has really been focused, as has his staff, with 
trying to come up with solutions as well as suggestions. So 
thank you, Senator, and I will have some others to follow up.
    Senator Domenici. I did not mean to be critical. The 
General understands. These questions I am asking have to come 
out and we have to decide how to fix this, and it is very 
difficult to explain to the public and we need your help in 
explaining it. The authorized level and all this business, it 
does not mean much to people, but it is very, very much the 
order of the day for us on where we spend, why we spend, what 
we did not spend. So we need to work together on it.
    General and Mr. Secretary, thank you. Thanks for your help 
in New Mexico, too. I skipped over that. Particularly, I thank 
you for the Acequias funding. Since you funded it, I am not 
going to ask you whether you can say it or not. Normally I try 
to find out if you can pronounce it, but if you can put the 
money in I do not care whether you can pronounce it or not.
    Thank you very much.
    General Strock. Thank you, sir.
    Senator Dorgan. Senator Domenici, thank you very much, and 
we will ask our questions and then adjourn the hearing, after 
we have done some legislative business.
    Senator Landrieu. You do it, we will fix it.
    Senator Dorgan [presiding]. At any rate, we appreciate the 
courtesy of Senator Domenici.
    Let me ask a couple of questions, and state first that at 
the moment the Red River is running north. It is flooding, well 
above flood stage at Wapaton, crested now, we believe, 
yesterday in Fargo. It is now being steered through the city of 
Grand Forks.
    This budget requests the final $12 million for the flood 
control project in Grand Forks. We appreciate that. We have 
spent a lot of money on flood control projects up and down the 
Red River. That is I think a success story for the Corps of 
Engineers and we appreciate very much the work the Corps has 
done and believe that this is the last contingent of money that 
is required to complete the Grand Forks flood control project. 
So I want to say, especially in areas where we have seen really 
excellent work by the Corps, that we appreciate that, because 
we are experiencing this flood. I think it is the third highest 
in history, these crests, not so far from the 1997 crest in 
which the entire city of Grand Forks was evacuated. It is a 
pretty aggressive flooding.
    Let me ask General Strock and Secretary Woodley about a 
parochial issue, but nonetheless an important one, the Fort 
Stevenson Marina Project at Fort Stevenson in North Dakota. The 
Corps of Engineers built a marina at Fort Stevenson and in half 
of the years you have not been able to see the water from the 
marina, so it has been unusable. I have been up there many 
times.
    We finally created a circumstance where the Corps said they 
will move over--it is about 1 mile--and do a deeper water 
marina. It is not something that would break the bank, but the 
Corps made a commitment to do that. They were going to 
reprogram funds to do it. Now I think there is a question of 
whether the Corps is prepared and willing to proceed.
    Can you tell me what the current thinking of the Corps is 
and what your commitment is?
    General Strock. Sir, what I do have on that is that we 
estimate that it is about an $11 million requirement to 
accomplish the movement of the marina. And yes, water is down, 
as it is throughout the northern reservoirs. And I would 
assume, since we have identified the cost associated, we feel 
like we can do it. But we simply do not have the money to do 
that now.
    Senator Dorgan. When Mr. Rob Vining was making the 
commitment on behalf of Corps, he talked about using 
reprogrammed funds.
    General Strock. Yes, sir.
    Senator Dorgan. It actually was $5 million. Back then the 
cost was around $5 million or $6 million to do this. I do not 
know how the Corps has gotten this to an $11 million project. 
But the problem is these folks have a marina that's unusable. 
It is the Corps' marina. The regulation of the water--instead 
of retaining water in the upper reservoirs, we have been 
flushing it out so that my friend from Missouri can run his 
barges down south. So folks who want to use a marina at Fort 
Stevenson do not have a marina to use, and moving a very short 
distance would give them a deep water marina and it would not 
cost a great deal. The Corps of Engineers actually built the 
first one. We have not been able to use it every other year.
    So it seems to me the Corps has a responsibility to provide 
the money to move this.
    General Strock. Sir, I can certainly provide you a better 
informed answer for the record on why the cost has shifted. If 
we are relying on reprogramming, I think you understand the 
limits on reprogramming right now that have been placed on the 
Corps, and it is very difficult to find both sources and then 
get approval of moving money. That may be a factor in not being 
able to move ahead on this.
    Sir, we certainly recognize the challenges of the drought. 
It has been going on for many, many years and we are trying to 
operate the system in accordance with the master manual, which 
has been recently revised and approved. And we do know that it 
does cause problems for everyone in the system, not just the 
upriver States but the downriver as well.
    Senator Dorgan. Well, General, I am going to submit a list 
of questions about this. But I do think the Corps has a 
responsibility at Fort Stevenson and I do not know how you meet 
it. We have a presidential budget now that cuts $0.5 billion. I 
know you are getting some emergency funding, but in terms of 
regular funding a cut of $0.5 billion when you have unmet 
needs, you have commitments that have been made that are not 
now apparently going to be kept, that is a pretty 
unsatisfactory response to tell to the folks up in the northern 
part of the reservoir.
    The upstream benefits of tourism, recreation, fishing are 
ten times the size of the downstream benefits of barging, and 
yet we continue to see that water rush out of those gates 
headed downstream.
    You and I have more to talk about, I think, as well as the 
Secretary, about how we meet the responsibility to the people 
who have been told by the Corps that the Corps would move that 
Fort Stevens marina.
    General, let me talk about a subject that you are not going 
to want to talk about at all. But I have tried to do this by 
submitting questions last year. I have tried to do this by 
letter to you, and I have never gotten a satisfactory answer. 
That is the Bunnatine Greenhouse issue and the Rio contracts.
    I have as a result of magazine reports of what has happened 
at the Corps of Engineers, I have held policy committee 
hearings. Ms. Greenhouse has testified. She has been demoted, 
perhaps for that testimony or perhaps for other reasons, but 
she has been demoted. And she has said that--let me read her 
quote--``I can unequivocally state that the abuse related to 
the contracts awarded to KBR, a subsidiary of Halliburton, 
represents the most blatant, improper contract abuse I have 
witnessed during the course of my professional career.''
    It takes a lot of guts for somebody to say that. She was 
given excellent recommendations all along the way during her 
career, a remarkable public servant. People outside of your 
agency who know about contractors tell me that she is a first-
rate contract official in the Corps of Engineers. And for this 
candor she has lost her job, been demoted.
    I know there are legal issues in the Pentagon. You probably 
cannot respond to the legal issues, but you could respond at 
least by letter to me, and you could respond to the questions 
that I propounded last year during the hearing about what is 
going on here.
    I assume that you will probably want to say that she is 
wrong, there are no contracting abuses. I assume also that the 
inspector general is looking into all of this. What has been 
appearing in the popular literature, magazines and others, 
about this situation is deeply troubling to me--the RIO 
contract, the LOGCAP contracting, substantial evidence of 
abuse, waste, and even fraud in sole source no-bid contracts in 
Iraq.
    I have tried, both in letters and in submitted questions, 
to get candid responses from you and have been unsuccessful. 
Can you tell me why?
    General Strock. Sir, first of all I need to make sure that 
we have responded in a timely way to your questions, and I will 
have to go back and look at those responses. There are limits 
to what we can talk about in this and one of the most important 
aspects of this entire thing--and this may sound somewhat 
contradictory to the situation you just laid out--is that we 
have an obligation to respect the rights of the individuals and 
privacy of the individuals here. So my ability to talk about 
specific reasons for actions we took is very, very limited.
    Therefore I must simply say that we have a process that is 
very important to us. We followed the appropriate process in 
disposition of Ms. Greenhouse's case. And I think that has been 
reviewed on multiple times. She has been----
    Senator Dorgan. If Ms. Greenhouse would waive those 
provisions, if she would waive that and allow you to say 
whatever you wish, would you be willing to do that?
    General Strock. If that is possible, sir, and it was done 
in the right kind of way and I was cleared to do that, yes, 
sir, absolutely. I would be happy to do that. But it is all 
about protecting her privacy.
    Sir, in terms of the allegations, I can talk about those a 
bit. I was personally involved in many of those decisions and 
can look you right in the eye and say that we followed the 
rules that were in existence at the time to make all those 
calls. The Government Accountability Office has reviewed the 
award of those contracts and has found that they were done in a 
proper fashion. The Army Inspector General has also conducted 
an investigation. The DOD Inspector General has also conducted 
investigations. And to date we have not had any indication that 
things were not done properly in the award of those contracts.
    There have been many questions about the actual delivery of 
products and services under those contracts and in most cases I 
think the Government has shown to have acted in a reasonable 
and appropriate manner in adjudicating claims paid and all that 
sort of thing.
    So this entire thing has been looked at in many, many ways 
and many times and so far the results are that we did things in 
the proper way.
    Senator Dorgan. Well, General, I also have looked at some 
of them and had whistleblowers come and testify and it 
contradicts that answer. Food service, water quality. I will 
give you an example. I do not know whether you had these, the 
water quality contracts, on the bases. Was that yours?
    General Strock. Sir, I did not. This particular contractor 
has a number of contracts. One of them is the LOGCAP contract, 
which is managed by the Army Materiel Command, which provides 
for sustainment on military bases. Our contracts had to do with 
the reconstruction of the oil industry, so the food and water 
issues that you cite were not part of our contracts.
    Senator Dorgan. Yours were the RIO contracts?
    General Strock. Yes, sir, ours was RIO.
    Senator Dorgan. I just observe on the LOGCAP contracts that 
both the Department of Defense and Halliburton have been 
dishonest publicly about that. We now have internal documents 
from Halliburton that show that the responses by DOD and 
Halliburton were not honest.
    General Strock. And I cannot speak to that, sir.
    Senator Dorgan. My understanding from the inspector general 
on the issues surrounding the allegations Ms. Greenhouse made 
is that there has been a referral to the Department of Justice 
for a criminal investigation. Is that not accurate?
    General Strock. Sir, I do not know that. I know that there 
are a number of proceedings related to her case that are going 
on right now and I am involved in some of those. But I do not 
know if they have risen to the level of the Department of 
Justice.
    Senator Dorgan. I believe the inspector general has told us 
that in a letter.
    My point is not to badger you about this, except that there 
are questions that demand answers. The American people demand 
answers.
    General Strock. Yes, sir.
    Senator Dorgan. We are spending an enormous amount of money 
on these projects, contracts, the RIO contracts, LOGCAP 
projects, feeding troops, providing water to troops, equipment 
to troops, oil. The fact is there is a substantial amount of 
evidence there has been dramatic waste and abuse and in my 
judgment fraud. The Custer Battles issue comes to mind. I am 
not going to lay all this on your shoulders, but I am telling 
you it makes me sick when you take a look at what is going on 
and the waste of money, and nobody seems to care very much.
    All I am asking is that, with respect to those issues under 
your jurisdiction, that you respond fully to the questions we 
are asking. And if you cannot answer, I will ask Ms. Greenhouse 
if she will provide a waiver so that you can give us all the 
information.
    I know that you are going to leave this room and mutter 
things that I probably should not say out loud under your 
breath, because this is not what you want to hear at this 
hearing.
    General Strock. Sir, not at all. If I might, not at all. I 
share the same concerns you do. We have to treat people in the 
right ways, and I think we have done that. So no, sir, I am not 
going to mutter anything on the way out of the room.
    Senator Dorgan. One other question. The person that has 
been noticed in at least one publication to replace Ms. 
Greenhouse it appears to me has no contracting experience.
    General Strock. Sir, her replacement is Ms. Sandra Riley, 
who has come to us after about 40 years of Government 
experience. She did serve as a head of contracting agency, 
which is the same level of responsibility that I have within 
the Corps of Engineers, and she managed all the affairs for the 
Department of the Army and the Pentagon related to that.
    It is true that she is not an acquisition certified 
professional under the Defense Acquisition Improvement Work 
Force Act. But she has been given a waiver for some of the 
criteria and she has gone to school and is currently being 
brought up to speed on what it is she needs to know as a 
contracting official.
    She is really coming to us as a change agent, sir, which 
she has a reputation for in the Army, and she brings us 
leadership. It is part of the Army's intent that, like our 
general officers that can serve in many capacities, our senior 
civilians are expected to be true corporate leaders as well and 
do not necessarily need the specific experience and credentials 
of the particular area of the government that they are working, 
that they have oversight for.
    Senator Dorgan. General, with due respect, that seems 
illogical to me, to have to bring her up to speed with respect 
to knowledge. My colleague here from Louisiana has just 
experienced FEMA's failures. Seven of the top eleven positions 
in FEMA were staffed by cronies, I am sure who had good 
management experience, but did not know a thing about emergency 
response. So you put cronies in positions for emergency 
response, they did not know how to respond to an emergency.
    I am just making a point that Ms. Greenhouse, fairly or 
unfairly--I guess ultimately the facts will judge this--lost 
her job, was demoted, for speaking out about what she perceived 
to be abuses. She regularly had excellent recommendations, 
excellent performance evaluations, year after year, but has now 
been demoted and replaced by someone who has no experience or 
no substantial knowledge in contracting. That just seems 
unbelievable to me.
    General Strock. Yes, sir, I would not characterize her as 
having no experience, no substantial knowledge, but she is not 
certified as an acquisition professional at this point, that is 
true.
    Senator Dorgan. Well, we have more to exchange on that and 
I will do that by letter, General Strock. I hope and expect we 
want the same thing, that we want accountability and we want 
facts to speak for themselves.
    Let me close then on a positive note so that I can tell you 
again, we have--we are a semi-arid State. North Dakota would 
hold ten Massachusetts in land mass. We are a big, big State, 
and 642,000 people spread out. We have got a big Missouri River 
running in one part of it and we have got a Red River running 
north.
    We have a lot of water issues. We have got a flood in 
Devil's Lake that came and stayed, and it is a huge problem. We 
have got the need to move water from western North Dakota to 
replenish the Red River in times when it does not have enough 
water. At the moment it is busting out of its banks and 
flooding in three large communities.
    So having watched the Corps of Engineers in 1997 in action, 
I can tell you that the performance of the Corps to do well is 
critical to our surviving during floods and surviving during 
droughts. I have not talked at great length about the 
management of the Missouri River today, but that also is a 
significant part of our angst.
    But you have men and women working for the Corps of 
Engineers that work day and night at times when we are in 
crisis, and I hope you and the Secretary will communicate to 
them our appreciation for that. I know they are doing that now 
up and down the entire Red River valley and we want you to tell 
them thank you on behalf of a grateful citizenry.
    General Strock. Sir, thank you very much.
    Senator Dorgan. Senator Landrieu.
    Senator Landrieu [presiding]. Thank you, Senator Dorgan.
    Mr. Secretary and General Strock and others, I want to 
begin by acknowledging that you have been down to Louisiana, 
Mississippi, and the gulf coast many times since Katrina and 
Rita and the multiple levee breaks that ensued, and you have 
sent extra support and been attentive to our requests. So I say 
that just to acknowledge that in my view you personally have 
done what you can.
    But my questions will be about the constraints that you are 
operating under, which I think are very serious and actually in 
fact put the Nation at risk. I want to start with you, 
Secretary Woodley, if I could. Could you just for the record 
before this Appropriations Committee that has the task of 
funding critical civil works projects for energy and water for 
the country say again clearly for the record what we are going 
to be able to fund this year and what we are not, based on what 
is the backlog of authorizations? And if you do not have that, 
I think General Strock or others might.
    What is our current backlog of authorized critical projects 
that is not going to get funded based on the budget that you 
have submitted?
    Mr. Woodley. Senator, I want to preface what I say, I think 
I understand what you mean by the backlog. It is a term, it is 
a sort of a pejorative term for these, that I try to avoid 
because I regard those projects not as being projects in some 
kind of backlog, but rather it being opportunities that exist 
for investment on the part of the Nation in water resource 
development.
    Senator Landrieu. That is fine. Then what are the 
opportunities that we are not funding?
    Mr. Woodley. I believe that we have something in excess of 
400 different projects across the country that are eligible for 
Corps funding, and of those I believe that about 90 to 100 are 
actually receiving funding in the President's request.
    Senator Landrieu. With the number about $44 billion be 
about accurate, $44 billion, opportunities that are not funded?
    Mr. Woodley. That might--well, of course that would not be 
in any given year. That would be the total build-out for the 
entire amount.
    Senator Landrieu. That is correct.
    Mr. Woodley. But I cannot confirm the number, but it would 
not surprise me.
    Senator Landrieu. Well, let me then try. I am going to say 
a number and if you disagree with me for the record then you 
can get back in writing. But basically our records reflect, my 
records reflect, that we have about $44 billion in--let us use 
your word--opportunity to protect Americans from flooding, to 
promote navigation and economic development, and to protect 
wetlands, coastal restoration, et al., as described in the 
charge.
    And the way that I look at it and many Members of Congress 
is we are about $42 billion short, because in this budget we 
have approximately $1.5 billion for new construction, then x 
few billion for operations and maintenance.
    But I want to focus on, because all the hearings are, as 
you testified, we have 5 percent more money than last year. 
Since the last year number is irrelevant to the people that I 
represent, 1,200 of whom who have lost their lives because it 
was too low, 5 percent more does not have any relevance to me 
or to the people I represent or to the gulf coast. So I am 
going to try to focus us on what the real pending crisis is. 
That is that this budget is so far short of where this Nation 
needs to be in investments in civil works it is almost in my 
view not worth discussing.
    For the record, I want to be clear that there is 44--before 
we pass the next WRDA bill, which 88 of us have signed on to 
get passed, which will add how much, $10 billion to $13 billion 
in new authorized projects which everyone is clamoring for, we 
have $44 billion worth of projects that do not have a penny 
allocated to them in this budget.
    Now, that is the first point. The second point I want to 
make is I want to show you a little chart of why this is of 
significance for the country. I am going to provide this to the 
members. This is a chart that I got from the National Civil 
Works--American Civil Works Society. You can see it goes back 
to 1929. This is 2004, I guess. This is where the levees broke 
in New Orleans, the bottom of this long, dangerous, 
nonsensical, irrational, irresponsible, funding level. This is 
where they broke.
    You can see what happened in the early part of the century, 
and even just going back as recently as--this is a percentage 
of GDP. This is the investment gap in America today just on 
civil works. But it is not just civil works; it is all water 
projects, all flood control projects in the country. And this 
is a disgrace. This budget is a disgrace because of that.
    The paragraph that introduces this budget I would like to 
read, is an insult to me and the people that I represent: ``The 
fiscal year 2007 civil works budget is a performance-based 
budget which reflects a focus on the projects and activities 
that provide the highest net economic and environmental returns 
on the Nation's investment or address significant risk to human 
safety.'' That is an insult to the people I represent because 
it is a lie, because it does not.
    Now let me ask you this question. When the Corps conducts a 
feasibility study on hurricane protection projects, does the 
current law direct you or indicate to you that you have to 
conduct that feasibility study for life and property, or is it 
just for property? Do you take human life into your 
calculations, technically? Do you do, General Strock? To 
General Strock or really to the engineers. Go ahead.
    General Strock. Not per se, ma'am. We do not take that in 
as a factor. We use sort of a surrogate for that, which is we 
do consider economic development, and typically where there is 
economic development there are people. So the main driver is 
economics and tradeoffs there.
    Senator Landrieu. I just want to call to the attention of 
this committee that that is something that we are going to have 
to take a look at, because this comment about human life, human 
safety, is a stretch based on the fact that it is just 
extrapolated from economic data. So some of us are looking very 
closely at asking for human life to be a calculation in these 
studies because it may have a direct impact then on whether 
some of this gets built or not.
    But that is why I take issue with this, because it is not 
included right now--I know that for a fact--in your 
assumptions.
    General Strock. Ma'am, if I could just modify a bit. That 
is not our traditional method of valuing human life and human 
lives exposed, but this year we do have a criteria in the 
budget that for a given likelihood of an occurrence for a 
certain amount of flows, for the density of populations, we do 
consider projects as high-risk projects. It has to do with 
warning time, people in the flood plain, potential depth of 
flooding and velocities.
    So this year in looking at high risk projects that should 
be supported, we have taken that into account.
    Senator Landrieu. Well, I appreciate you taking that, that 
extra step, because in the current laws, which we are going to 
recommend be changed, that has not been in the past 
calculations. And besides these numbers being low, that is also 
a critical component, with populations moving closer and closer 
to water, whether they be coasts or along great rivers or 
lakes, et cetera. It becomes a real serious issue that makes 
these numbers that are pretty devastating even worse.
    Let me ask for some clarification on the $6 billion, and 
whoever can answer this the best. Last week our administration 
received what I consider a bombshell of an additional $6 
billion that is needed to meet the current authorization levels 
or the current safety levels or the certification, if you could 
explain which of those it is. How did you arrive at that figure 
and do you think it is accurate for southeast Louisiana? And I 
do not know who wants to take that. Maybe General Strock. You 
conducted the--
    Mr. Woodley. Actually, Senator, that figure had to do with 
the question that was raised to the Corps at the local level, 
at the district, on making assumptions with respect to the base 
flood elevation that may eventually be determined by the FEMA 
for the new flood maps. The question there was, can you give us 
a rough order of magnitude, a very-swiftly-arrived-at estimate 
of what the outside cost to raise those levees by a certain 
amount might be.
    We have--the only thing I can tell you is that we answered 
that question. Those figures have been--are being refined even 
now, so I would not----
    Senator Landrieu. So you are saying, you are saying that 
FEMA requested that information of you?
    Mr. Woodley. Yes, ma'am.
    Senator Landrieu. FEMA requested that information. How long 
did they give you to--when did they request it? And when you 
said you hurriedly put it together, did you put it together, 
General, in 2 weeks or 3 weeks or 5 weeks?
    Mr. Woodley. I would say perhaps even less than that. I am 
not exactly sure of the precise chronology, but it was a very 
swift question. It was based on, as far as I understand the 
estimate----
    Senator Landrieu. Did you take more than 48 hours to put it 
together? General, try to testify. How long did it take you to 
put that together----
    General Strock. Yes, ma'am. If I could just back up a bit 
and talk----
    Senator Landrieu [continuing]. And is it accurate?
    General Strock [continuing]. About the process here. Mr. 
Woodley cited the base flood elevations, which determine the 
100-year flood plain that is identified by FEMA. We participate 
and support FEMA with hydrologic studies to determine just what 
that flood plain should look like. So we are a supporting 
agency to FEMA in making that determination.
    We all recognize that after a storm of the magnitude of 
Katrina that it would impact the base flood elevations that 
would be applied post-Katrina, because Katrina is such a 
massive storm that it really influenced the record which is 
used to determine that.
    It was about the November time frame, I think, when we 
concluded what those base flood elevations should be, and in 
fact we have issued those advisory notices in all the counties 
and parishes along the coasts that were impacted except for the 
four in the New Orleans area. We did not at that time go 
forward because the initial feeling was that it was such a high 
elevation that it would make a dramatic impact. So what we 
asked is that we should delay the issue of those base flood 
elevations until we had time to really do some more refined 
analysis, and then also to consider the impacts.
    In the process, we determined that, given the base flood 
elevations that we arrived at, we could not certify most of the 
levee system around New Orleans to a 100-year level. It was not 
an important question on the gulf coast in Mississippi because 
there are no levees to certify. It is what it is. But when you 
are behind a levee, if you can certify the levee to a 100-year 
it essentially takes out the people and infrastructure behind 
that levee, it takes them out of the flood plain.
    So our ability to certify levees was then an important 
question. As we did that analysis, we determined that in most 
cases we could not certify the levees to 100-year protection 
levels, which essentially puts everybody in the flood plain and 
they act like the levee is not even there. So it has tremendous 
implications.
    As a result of that, we were asked what it would cost to 
raise the existing projects to 100-year level, and the number 
that Chairman Powell put out last week was a preliminary 
estimate which we are continuing to refine. I think that you 
will see at such point as a decision has been made on this that 
you will see that estimate should come down somewhat.
    Senator Landrieu. Okay, I accept that and I know that this 
number can be refined. We are actually hoping that it is 
refined. It is hard to get any money around here, let alone $6 
billion, so we are hoping it can be refined.
    But I just want to press this for just a minute. You said 
1-in-a-100-year flood. Would that roughly equate to category 2, 
3, 4, or 5 roughly? I know they do not match up, but if you had 
to chart it what would it be?
    General Strock. I cannot answer that. I am not sure there 
is a direct correlation between the flood plain and the 
categorization of storms. What that tells you is that in that 
area that there is a 1 percent chance in a given year that you 
will see a storm of that magnitude.
    Senator Landrieu. What do we have now in the other parts of 
the city? Is that the same 1 percent in 100 years?
    General Strock. Ma'am, about--well, first of all, I think 
70 or 80 percent of the city is already in the flood plain. 
This just adds more to that.
    Senator Landrieu. That is not what I am asking, what is in 
the flood plain. I am trying to ask--I am trying to establish, 
so I can compare apples to apples--the $6 billion which you 
have recommended, which will be refined, let us just say it is 
refined to $4.5 billion. That number, whatever it ends up 
being, is going to build category 2, 3, 4, or 5 levees around 
the areas that you have proposed, just roughly? There is no way 
for you to say whether they are 2's, 3's, 4's, or 5's?
    General Strock. I truly cannot answer that. I think that we 
are wrong in trying to describe these systems in terms of the 
category of storms they can protect against. That has been one 
of the challenges throughout, that we simply do not build the 
category system for hurricanes----
    Senator Landrieu. It may not be the accurate way, but I can 
tell you one of the things that I am going to press very hard 
as a Senator is to have some way. It does not have to be a 
category 1 through 5. It does not have to be 100 to 10,000. But 
I have to have some way to explain to people that the levees 
are going to be either 1 foot, 4 feet, 5 feet, or protect them 
from x.
    So I suggest if you do not like the way we are doing it, 
General, we have to come up with a way that is clear to people, 
that is transparent, that everybody understands, like this is a 
$1 bill, you know what a $1 bill is; this is a $10 bill, this 
is a $100 bill. We cannot give you a $100 bill; we are giving 
you a $1 bill. People are clear.
    We need that, so it does not matter to me. So I am going to 
leave that there, but I have to come back to this question. But 
let me try, without having the benefit of any levels or any 
storms, just say, ask you this way. Whenever we get this dollar 
amount, if we do not get this dollar--let me just put it this 
way. If we do not get this dollar amount that will be refined, 
what happens to those areas in four parishes? They either have 
to build up to about what height or what? You said--you did not 
release the heights. I am not asking you to. But the general 
height, is it 13 feet or 20 feet or 25 feet?
    General Strock. I would have to get back with you, ma'am. 
It varies by where you are in the city.
    Senator Landrieu. Could you give just a range of those four 
parishes that you looked at? I know you have it in your data. 
You had to have it.
    General Strock. Early on, I think in the November time 
frame, it was about 17 feet, something like that. The challenge 
here, ma'am, is that if the levees are not certified to a 100-
year level then FEMA acts as if they are not there at all. The 
fact is there are levees providing protection and you are not 
going to be fully inundated because there are levees there.
    What we are trying to do to articulate the level of risk is 
to show levels of inundation in a Katrina-like event that would 
occur on June 1, 2006 when we complete our current work, what 
we would see on September 1, 2007, and then, if we certify it 
at 100-year and we build the levees to that, what people could 
expect in different parts of the area in terms of depth of the 
water.
    That is how I think is the best way to articulate the risk 
associated with this.
    Senator Landrieu. Well, that may make sense to you, 
General, but we are struggling with trying to make that sense 
to 3 million people that live in south Louisiana and just need 
to know whether the hurricane levees are going to be at a 
category 3, 4, or 5 or some equivalent of that and whether it 
will work or not.
    But I am going to leave the testimony at: you are refining 
the number, it is a real need for these four parishes, and you 
have not requested it in the budget.
    General Strock. That is correct.
    Senator Landrieu. Secretary, can I ask you, does the 
President have any intention of requesting this or what do you 
think the status of that is?
    Mr. Woodley. I believe that that is a decision that has not 
yet been made by the President.
    Senator Landrieu. So we still can remain hopeful that 
perhaps it might be forthcoming. I will just remain hopeful 
today.
    Mr. Woodley. Yes, ma'am.
    Senator Landrieu. Is there anything that you--I just wanted 
to--I have 100 questions I could ask, but I wanted to try to 
hone in on the $6 billion, on the study, and on the general 
lack of funding, which I will conclude by saying that because 
of that chart I would suggest that Katrina and Rita have, I 
hope, ripped away the curtain of complacency, that we have had 
a false sense of security in this country about the investments 
that we are making. They are not adequate, and if we do not 
find a whole other paradigm we just cannot not only protect the 
people along the gulf coast, but we are investing so little of 
our gross national product in what I would think are essential, 
essential civil works projects, for not just trade and commerce 
but for humans, safety of human life. And the safety and 
protection of billions of dollars of investments that we have 
made all along the coast and all along the great river systems 
and all along the great lakes systems of America are at great 
risk, because this line is about off the chart. You cannot get 
much lower than where it is. You literally cannot go any lower 
on the chart. You would be off the page, down to zero. Would 
you hold it up again?
    There is nowhere down to go. And it represents less than, I 
think, one-tenth of what we spent in 1929 or 1930 and one-sixth 
of what we spent in the 1970's.
    This is what our delegation, just in conclusion, has been 
looking at, this precipitous falloff, and thinking we have a 
coast that has to be saved, wetlands that are washing away at 
an alarming rate, levee systems that are underfunded and 
underdesigned, and systems that have to give added money.
    So we have got to change this, and we have recommended for 
us a solution is getting revenue, offshore oil and gas revenue, 
to start investing in the gulf. We have even recommended 
sharing that with the other States to help them. Of course we 
have been rebuked. We cannot do that. So now we are down to 
just trying to find for Louisiana, Mississippi, Alabama, and 
Texas a new source of funding to help get these civil works, 
essential civil works projects, up.
    Because I said, this is where the levees broke. It is just 
a matter of time until they break again some other place 
because we are not investing nearly the money that we need to. 
In all fairness to this administration that I have been very 
critical of, this did not start with the current 
administration. It has been going on quite a long time.
    But I would say one final thing. The reason I am remaining 
somewhat critical is in these years we did not always have 
surpluses, but when we had surpluses we chose to do something 
else with them, and funding of civil works was not one of them.
    So we have a lot of work to do on this budget. Senator 
Domenici has been very, very kind to let us go on. But the $6 
billion issue has to get resolved. The way we define levee 
protection, you pick a way, tell us what to do so people 
understand it. Then the overall budget number for this budget 
is something we are going to have to work on.
    Do you want to add anything before we conclude?
    General Strock. Ma'am, the only thing I would add is, one 
of the ways that we can get at the business of articulating 
risk is using the money that you gave us in the third 
supplemental to create a national levee inventory and database, 
and this budget also requests additional funds for that. That 
would allow us to capture all the levees in this country from 
private through Federal and then to build a model that would 
allow us to articulate risk and reliability associated with 
those, and that will really frame the problem and the potential 
for investment and help us set priorities. So I think that is a 
wonderful step that needs to be done.
    Senator Landrieu. I thank you, General, for raising that. I 
wanted to get a status report. I would just ask you to submit 
it in writing, not to take any more time. But I am glad we were 
able to get that study in for the Nation, because then you are 
given an opportunity to present to the Congress the real needs, 
and then it is up to Congress to decide and this 
administration, are we just going to not fulfill our 
responsibilities, pretend like it is not a real risk, hope we 
do not get any more hurricanes, pray no river goes over its 
boundaries?
    I mean, this truly is a Nation at risk right here at home. 
And I know we have risk around the world and I am cognizant of 
what we are doing in Iraq, but I hope that the study--and you 
should be finished with that when? I think it was June?
    General Strock. There is a preliminary----
    Senator Landrieu. A preliminary in June.
    General Strock. August.
    Senator Landrieu. In August. Preliminary in June and then a 
final in August. That will help us. That will be very helpful 
to the country.
    Our situation is more urgent, as you know, because 
hurricane season starts in 2 months. But we will continue to 
work on it.
    General Strock. Where the New Orleans levees are concerned, 
we are doing a study now for those areas that were not 
obviously impacted to make sure that they are still 
structurally intact, and that will be done certainly in June.
    The preliminary report on the levee inventory will be in 
August, not the final report.
    Senator Landrieu. Anything else, Mr. Secretary?
    Mr. Woodley. Thank you, Senator. It has been a real 
privilege to work with you and the rest of the Louisiana 
delegation on these important response issues and we appreciate 
your continued support for the agency and assure you that we 
take your views very, very seriously.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Landrieu. Well, I appreciate that. You have worked 
very closely with our delegation. But this is just not--this 
current system does not work. It does not work, did not work 
for us, does not work for anyone. We have got to have some 
serious change.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted by Senator Pete V. Domenici

                    REGULATORY ISSUES IN NEW MEXICO

    Question. General Strock, I have had Colonel Wang in my office a 
couple of times this year concerning a couple of permitting issues with 
the city of Albuquerque. One of these concerned the Montano Bridge, 
which has since been resolved, the other was the Paseo Del Norte road 
extension.
    The Paseo project involves crossing an arroyo and the issue had to 
do with the permitting required. I am simplifying the chain of events 
here for brevity. The city originally planned to cross the arroyo with 
a culvert. The permitting requirements became so onerous for the 
culvert, particularly with Corps' discretionary decisions concerning 
historic preservation consultation, that the city has committed to me 
that they will build a bridge instead. A bridge will be considerably 
more expensive. I have not heard any status on this project lately.
    General Strock, do you know the current status of this project?
    General Strock. The Albuquerque district is processing the Paseo 
Del Norte as a Nationwide Permit 14 and 43 for a culvert crossing of 
Piedras Marcadas arroyo. The district made a finding of no adverse 
effect to historic properties. The Advisory Council on Historic 
Preservation (ACHP) objected to the district's determination. As 
required by the National Historic Preservation Act, the district is 
reevaluation their initial finding of no adverse effect and will 
provide their decision to the Advisory Council on Historic Preservation 
in accordance with the requirements of regulations 800.5(c)(3)(ii) and 
800.5(c)(3)(B) in the Code of Federal Regulations, Title 33, Appendix 
C. This completes the Corps responsibilities under section 106 of the 
Historic Preservation Act.
    Question. Can you comment on the Corps discretionary roles in the 
permitting process, particularly in the area of historic preservation?
    General Strock. Compliance with Section 106 is required for all 
Federal undertakings which include issuance of Federal Permits in 
jurisdictional waters of the United States. The Corps of Engineers uses 
nationwide general permits and individual permits to authorize 
activities in compliance with the applicable laws and regulations. The 
Corps of Engineers must ensure activities comply with the National 
Historic Preservation Act regardless of the type of undertaking. The 
Corps has responsibility for determining the appropriate scope of 
analysis and the effect of the undertaking, in this case the activity 
in waters of the United States, on historic properties, including the 
direct and indirect effects of these activities. The Corps must also 
afford the State Historic Preservation Office (SHPO) and the ACHP an 
opportunity to comment on its determination of effect. The Corps must 
document how it considered the opinion of the ACHP and SHPO in its 
administrative record for the permit decision. Once this is 
accomplished the Section 106 process is complete.
    Question. Also in New Mexico, there is a railroad project called 
Abo Canyon. This canyon, which is about 4.5 miles long, has only a 
single track through it and, as a result, is a major railway 
constriction from the west coast to the Midwest and beyond.
    To maintain efficient transit of goods, it's essential that a 
second track be constructed through the canyon. I'm told that, before 
the railroad can construct a second track parallel to the existing one, 
they have to have a permit from the Corps because a grand total of 0.1 
acre of wetlands might be impacted.
    Now, General, these so-called wetlands are normally very dry--this 
being New Mexico--but I do understand why the Corps would have to be 
involved, given its Clean Water Act responsibilities. However, I don't 
understand why the Corps is requiring an archaeological investigation 
of the entire canyon, rim-to-rim, just because of this one-tenth of an 
acre of dry wetlands.
    Can you explain why the Corps has required this, and why it isn't 
over-reaching on the part of the Corps in defining its jurisdiction?
    General Strock. The Corps of Engineers is evaluating the second 
rail track for the Burlington Northern Santa Fe (BNSF) Railroad project 
in accordance with its regulations under the individual permit 
procedures because the project will impact a total of more than 0.5 
acre of waters of the United States at 24 separate locations along the 
proposed 4.5 mile alignment. The permit process has been delayed by 
historic property issues.
    Most of the landowners affected by the proposed track have 
cooperated with and sold their land to BNSF. The property owners of 
Dripping Springs Ranch have not sold their land and oppose the project. 
BNSF initiated the condemnation process for this parcel; however, the 
process is currently in abeyance pending a final decision on the 404 
permit. Thus far, Dripping Springs Ranch has not allowed BNSF to 
complete a required survey for cultural properties on their property. 
This is not an insignificant survey as BNSF has already identified over 
100 historic sites along the proposed alignment. The Corps and BNSF are 
meeting with the property owners to resolve this issue.
    Due to potential impacts to at least 17 of the 125 sites already 
identified, the Corps has determined that the proposed activity will 
have an adverse effect on historic properties and has sent a letter to 
the New Mexico State Historic Preservation Officer (NM SHPO) in 
accordance with the National Historic Preservation Act. The Corps will 
work with the consulting parties (BNSF, NM SHPO, Bureau of Land 
Management (BLM), the owners of Dripping Springs Ranch) to develop an 
MOA to mitigate for the adverse effects to historic properties in 
accordance with the regulations and law. BLM is involved in this 
process as BNSF must acquire a small piece of land from BLM to complete 
the project.
    The district expects to conclude permit evaluation, including the 
MOA to address adverse effects on historic properties, in August 2006.

                                DROUGHT

    Question. As you may be aware, we are facing significant drought 
issues in the Southwest and particularly New Mexico this year. I wanted 
to let you know that I am seeking $5 million in the current 
Supplemental for the Corps to provide drought assistance.
    Obviously this still has to be conferenced with the House before it 
becomes law, but can you describe some of the drought assistance 
measures that the Corps can provide under the Stafford Act?
    General Strock. The Corps is the Department of Defense Agent for 
Emergency Function 3 (public works and engineering) under the National 
Response Plan which is implemented pursuant to the Stafford Act. During 
a disaster, the Corps will do what is asked by Federal Emergency 
Management Agency under the Stafford Act pursuant to the National 
Response Plan.
    Question. Are there any other programs within the Corps that would 
allow you to respond to drought?
    General Strock. There are several ways the Corps can help during 
droughts independent of the Stafford Act. These authorities are 
summarized below.
  --Emergency Provisions of Clean Water.--Public Law 84-99, as amended. 
        Water can be provided to a community that is confronted with a 
        source of contaminated water.
  --Emergency Well Construction.--Public Law 84-99, as amended. 
        Authorizes the construction of wells or the transport of water.
  --Planning Assistance to States.--Public Law 93-251, as amended. 
        States may obtain Corps water resources planning expertise on 
        50/50 cost shared studies to develop plans related to the 
        overall State water plan. This plan must be developed prior to 
        any water shortage in order to be effective.
  --Drought Contingency Plans for Corps Reservoirs.--Provides for 
        release of water from Corps reservoirs during drought. Not in 
        law, but is part of the operation of Corps reservoirs.
  --Drought Contingency Water.--Section 6 of the 1944 FCA. When 
        available, the Corps can sell surplus water to a State or 
        political subdivision, which agrees to act as a wholesaler.
  --Reallocation of Storage.--Public Law 85-500. This permits the 
        reallocation of storage from an existing purpose to M&I water 
        supply. This plan must also be developed prior to any water 
        shortage in order to be effective.
  --Interim Use of M&I for Irrigation.--Section 931, Public Law 99-662. 
        This program is limited in that it is only applicable to 
        certain projects.

                                KATRINA

    Question. Hurricane Katrina was a terrible blow to this Nation. The 
costs in terms of human suffering are incalculable, and the costs of 
response and recovery have been staggering to the Nation's treasury.
    General Strock, can you give us a quick status update of the 
current rebuilding efforts?
    General Strock. Task Force Guardian has awarded all of the 59 
separate construction contracts identified as being needed to restore 
hurricane protection to southeast Louisiana. As of April 5, 2006, a 
total of 20 of the 59 construction contracts have been completed. 
Repairs to the Mississippi River levees (105 miles) have been completed 
and all vessels (155) have been removed from the levees and floodwalls. 
Of the 59 contracts, 54 (91 percent) were awarded to local businesses, 
36 were awarded to small businesses, 15 were awarded to 8(a) firms, and 
7 were awarded to HubZone firms. The total estimated cost of the 
repairs is $800 million.
    Question. General Strock, I have been told that the United States 
Geological Survey says that the storm surge from Hurricane Katrina, is 
the greatest recorded storm surge to ever hit the United States. Can 
you confirm this? This was, in fact a large hurricane that struck, 
contrary to what may have been said. Is that true?
    General Strock. To our knowledge, the statement made by the USGS is 
correct. The highest ``storm-tide'' (surge plus astronomical tide 
component) other than Katrina of which we are aware of was generated by 
Hurricane Camille, 1969. Camille's ``storm-tide'' is given by the 
National Oceanic and Atmospheric Administration's National Hurricane 
Center as 24.6 feet at Pass Christian, Mississippi. Dr. Andrew Garcia, 
of the Corps' Coastal and Hydraulics Laboratory, recalls others reports 
of around 27 to 28 feet attributed to Camille, but Katrina's ``storm-
tide'' at Waveland, Mississippi was right at or exceeded even these 
undocumented Camille values.
    Question. Along with everyone else, I have read numerous articles, 
from various ``experts'' about the levee failures in New Orleans. Most 
of these ``experts'' have indicated that the Corps was aware of 
potential problems with the levees as designed and constructed. Further 
there has been considerable comment that these levees should have 
withstood the effects of Katrina. General Strock, I need to know from 
you what is the Corps' response? Is there any fire to go with all of 
this smoke? Or is this speculation from self-described experts without 
access to all relevant data?
    General Strock. The Federal storm damage reduction system is 
composed of multiple Federal projects, authorized and constructed over 
many years. Some features had not yet been completed at the time of the 
storm. Others were built by the local sponsors and incorporated into 
the system under specific authorization language enacted by the 
Congress for this purpose. The Corps was aware that some areas of the 
levees were no longer at design grade due to subsidence or settling. We 
now suspect that design deficiencies may also have played a role in the 
failure of some I-walls. On a larger scale, the design of the built 
system was significantly different from the design that the Corps 
initially identified for the Lake Pontchartrain waterfront. To what 
degree the Corps was aware of these or other problems, or of the 
potential for such problems, prior to Katrina is a matter currently 
being assessed. I can assure you, however, that the way in which the 
Corps recommends projects and deals with any known, suspected, or 
anticipated problems is a matter that I consider critical to our 
future.
    Question. General Strock, can you give us a brief overview of the 
findings from the Interagency Performance Evaluation Team to date?
    General Strock. The Interagency Performance Evaluation Team, or 
IPET, is an outstanding group of experts from government, industry, and 
academia that are literally working around the clock to complete an in-
depth analysis of the performance of the Hurricane Protection System. 
IPET is looking at how the system was designed and constructed, the 
forces it experienced during Katrina, how the system performed, and 
what mechanisms caused the catastrophic breaching. IPET has done 
everything from putting boots on the ground to collect data and 
eyewitness accounts to pushing the modeling envelope with supercomputer 
model runs of Katrina's storm surge.
    The IPET draft final report is scheduled for release on June 1. I 
expect both the consequence and risk analyses in that report will be 
invaluable tools to evaluate additional hurricane protection measures 
in the near term and for future higher levels of protection.
    But IPET has already made great contributions from its findings to 
date.
    IPET determined the failure mechanisms for structures that breached 
prior to reaching their design levels, such as the 17th Street and 
London Avenue Canals. This knowledge of ``how and why'' is being used 
to assess the integrity of all other similar sections of floodwalls in 
the system. These results also helped in the development of specific 
strategies to strengthen I-wall sections that are outside the outfall 
canals, including stability berms, relief wells, deeper sheet piles and 
limiting wall cutoff heights to significantly increase the stability of 
these structures.
    IPET determined why levee sections failed because of overtopping 
and scour, such as those along the Inner Harbor Navigation Canal. This 
information has fueled repairs that include substituting T-walls for I-
walls to increase resistance to scour from overtopping and resistance 
to failure from lateral forces, such as surge and waves.
    IPET found levee sections that were overwhelmed by surge and waves 
with damages that related to the levee elevations and the strength of 
the levee materials. IPET lessons learned are being used to select the 
types of materials used in the levee reconstruction and the height of 
their construction in areas such as St. Bernard Parish.
    IPET also found sections of floodwalls and levees that performed 
very well during Katrina, such as the Orleans Outfall Canal. IPET is 
providing these equally important lessons learned to the repair and 
reconstruction efforts.
    Every lesson learned that IPET has provided has received immediate 
attention in the repair efforts. In some cases, repair design 
activities were halted and changed to take advantage of IPET knowledge. 
IPET work also helped validate significant temporary measures, such as 
the temporary gates and pumping capabilities at the Lake Pontchartrain 
end of the outfall canals.
    IPET input is also being used in design guidance for enhanced 
protection projects to ensure the New Orleans area protection system is 
better and stronger than before. We feel strongly that the IPET 
contributions will help us achieve this goal.
    Question. As I understand the current situation concerning levee 
rebuilding situation, funding provided through enacted supplemental 
appropriations will complete the levee system as currently authorized. 
This includes rebuilding levees to the authorized levels of protection 
as well as repairing non-Federal levees and pump stations. This system 
was not completed before Katrina. Is that correct?
    General Strock. That is correct, although cost increases are 
possible. Funding was provided in the enacted supplemental 
appropriations to repair the system to pre-Katrina conditions, to 
accelerate completion of the system and to rebuild those parts of the 
system that were below design height due to subsidence. Funding was 
also provided to repair non-Federal levees and pump stations. The money 
provided was based on the best information available at the time and it 
is possible that the cost for some of this work may increase. For 
example, at the time of the third supplemental, the IPET findings 
concerning floodwall stability were not known. Further, long-term 
subsidence will require that additional levee lifts be constructed for 
some of the levees in the protection system. These lifts must be 
constructed on average every 4-5 years until the subsurface soils 
stabilize. Funds provided through the supplemental appropriations do 
not cover these costs.
    The system was not completed before Hurricane Katrina.
    Question. Further, the President's latest supplemental takes the 
first steps to improve this system beyond the project originally 
authorized by authorizing and appropriating funding to remove many of 
the now obvious weaknesses in the system. This includes closing off the 
interior drainage canals and providing navigable closures on the 
Industrial Canal and the Gulf Intracoastal Waterway, raising and 
hardening interior pumping stations and armoring levees where 
appropriate. These seem to be a reasonably measured approach to 
improving the system, based on current information. Are you aware of 
additional work that we should be considering as a part of this 
supplemental?
    General Strock. The President's supplemental provided appropriate 
funding for these measures to improve the New Orleans hurricane 
systems. Additional work has been considered but we are not prepared to 
recommend these projects for funding at this time. Three of these 
include a more costly plan ($190 million) to deal with the interior 
canals that, if proven to be technically feasible, may be a more 
reliable method of providing interior drainage; a plan to incorporate 
into the system non-Federal levees on the East Bank in Plaquemines 
Parish ($94 million); and a plan to repair some non-Federal levees in 
western areas.
    Question. Director Powell has recently indicated to the Congress 
that it could cost as much as $6 billion just to restore the levees in 
the New Orleans metro area to provide 100-year level of protection. Why 
has the 100-year level of protection changed so drastically? What is 
your confidence level in the cost estimates that compose this $6 
billion figure?
    General Strock. Restoring 100-year certification is now a much 
different task than simply restoring the current levees, primarily 
because of the new storm data and new abilities to better predict storm 
impacts. Quite simply, the 100-year storm is now calculated to be a 
much larger storm than envisioned in the past. Also, we now realize 
that in some areas the generated storm surge, even from a smaller 
storm, can be significantly larger than was indicated by models in the 
past. Because of this new data, our task is not a matter of simply 
restoring or rebuilding the current levees. Based on analysis of an 
extended historical period of storm data including the Katrina and Rita 
events and utilization of more refined modeling technology now 
available, which considers such factors as losses in wetlands and 
natural lines of defense that may limit attack during major storms, 
land subsidence and other coastal area changes, the currently 
authorized grade of levees would not be high enough to prevent 
overtopping during occurrence of the revised 100-year frequency storm 
surge. In many places the levees will have to be significantly higher 
and stronger than they were before Katrina in order to provide 
protection from the newly calculated 100-year hurricane.
    The $6 billion figure for the cost to complete the system to 
provide 100-year level of protection was a preliminary rough order of 
magnitude estimate at a point of time, and further analysis is needed.
    Question. We have requested the Corps to undertake studies for 
improving protection to the New Orleans area to ``Category 5''. The 
interim report for this study is due in June 2006. Where would 100-year 
level of protection fall in improving levees to this new ``Category 5'' 
level? Is it possible that work undertaken to get to this 100-year 
standard would be incompatible with the ``Category 5'' level?
    General Strock. The revised 100-year level of levee protection for 
the New Orleans area would be at a lower grade than the grade required 
to protect the area from a major Category 5 storm using a single line 
of levee protection along the existing alignment. However, the 100-year 
levees along the basic ``footprint'' of the existing levee system 
currently being repaired would function as a ``useable increment'' in a 
system of hurricane protection that utilizes multiple or redundant 
lines of protection.
    Question. How does coastal restoration rank as a means of providing 
immediate hurricane protection? Long range hurricane protection?
    General Strock. The lessons of Hurricane Katrina show the dangers 
of depending upon a single line of levee defenses. The presence of 
coastal features, such as wetlands, cheniers, swamp forests, and 
barrier islands, prevent inland hurricane protection structures from 
being directly exposed to open gulf conditions during storms. Hurricane 
protection systems having direct exposure to the Gulf have greater 
potential for performance problems during storms, and will also likely 
have higher construction, operations, and maintenance life cycle costs. 
Protecting existing coastal features that provide this buffering 
function to current hurricane protection systems has short-term 
benefit, insuring against decreased system performance reliability and 
increased systems operations and maintenance costs over the project 
life cycle. Restoring coastal features is a long-term measure that 
should increase reliability of the existing and future hurricane 
protection systems that may be installed, as well as likely minimize 
their construction, operations, and maintenance costs over a life 
cycle.
    Question. What do you see as the next steps in rebuilding the New 
Orleans levees?
    Mr. Woodley. By June 1, we will be restoring the level of 
protection to pre-Katrina conditions. We have already begun the work to 
accelerate construction on some of the uncompleted features of the 
system and to rebuild subsided levees to design height and repair non-
Federal levees and pump stations. The next steps are providing a better 
and stronger system, ensuring that floodwalls are reliable, building 
the system high enough to provide 100-year protection, and evaluating 
even higher levels of protection.
    Question. As a result of Katrina, what have you learned about how 
flood control and hurricane protection projects should be evaluated? 
That is, how should we go about considering the possibility of serious 
risks to human life as opposed to evaluating projects strictly on the 
basis of economic losses prevented?
    Mr. Woodley. Based on the lessons learned from Katrina, we need to 
take a hard look at our policies for establishing levels of protection. 
When risk to life is possible during events exceeding given levels of 
protection, this loss of life risk must be addressed as a part of the 
decision process on level of protection, along with the economics, that 
is, net benefits of each level of protection. Formulation 
considerations include minimizing catastrophic potential in areas where 
large populations are at risk or evacuations are not easily 
accomplished when emergencies occur. These technical considerations are 
currently imposed only for design of high hazard dams, and similar 
considerations need to be evaluated for high hazard levee and flood 
protection systems. For instance, we are using risk and reliability 
analysis concepts in the evaluation of alternatives for the South 
Louisiana Hurricane Protection report. It should be noted that 
selection of a plan that includes life safety considerations is 
permitted under the Principles and Guidelines for water resources 
planning, in that the agency head may recommend a plan that does not 
maximize net national economic development benefits.
    As an interim measure, the fiscal year 2007 budget proposes funding 
for already authorized projects that provide significant reductions in 
life risks. I expect that future budgets also will address life risk 
considerations.

                 CONTINUING CONTRACTS AND REPROGRAMMING

    Question. In the fiscal year 2006 E&WD appropriations act, the 
Congress made significant changes in how funds are to be spent, which 
will result in similarly significant changes in how the Corps manages 
its program.
    General Strock, has the Corps assessed the impact of these changes 
on program execution and, if so, what are they?
    General Strock. The guidelines for reprogramming and the use of 
continuing contracts as set forth in the fiscal year 2006 E&WD 
appropriations act and accompanying conference report have brought 
about many significant changes in how we manage our Civil Works 
Program. We no longer emphasize expenditures as a measure of success. 
The volume of reprogrammings is significantly reduced. Reprogrammings 
that exceed the dollar and percentage thresholds established in the 
fiscal year 2006 act now require more coordination. We anticipate an 
increase of carry-over funds in the short-term as we realign our 
budgeting, planning, and execution practices.
    Question. For many years, the Corps carried a fairly significant 
amount of its available construction funds unobligated from one year 
into the next. This unobligated carryover afforded the Corps 
flexibility in meeting unforecasted needs and was a practice generally 
supported by this committee.
    Several years ago however, it became apparent to us that this 
practice must be changed and, at the urging of this committee, the 
Corps increased its execution performance and eliminated the carryover.
    With the new program management practices required by the fiscal 
year 2006 E&WD act, will this carryover reappear? If so, how much will 
it be, approximately, by the end of the year? After next year, assuming 
a constant appropriation level?
    General Strock. As stated earlier, execution performance will no 
longer be measured simply by the percentage of funds obligated or 
expended and an increase in carried-over funds is expected. Our 
estimate of unobligated funds to be carried over at the end of fiscal 
year 2006, according to the execution schedules developed after the 
appropriation of fiscal year 2006 Energy and Water funds, is as 
follows. Dollars in are in thousands. Funds provided in supplemental 
appropriations as of April 5, 2006 are included and account for the 
majority of the total unobligated carryover.

------------------------------------------------------------------------
                                           Unobligated Carryover $1,000
              Appropriation              -------------------------------
                                                E&W        Supplemental
------------------------------------------------------------------------
Investigations..........................         $49,495          $2,311
Construction............................         345,702           7,406
O&M.....................................         164,345          10,384
MR&T....................................          92,618          46,889
FCCE....................................  ..............         800,000
Expenses................................  ..............  ..............
Regulatory..............................              16  ..............
FUSRAP..................................             974  ..............
------------------------------------------------------------------------

    Since the fiscal year 2006 appropriations were not enacted until 
last November, adjustments had to be made in the scheduling of funds 
during the Continuing Resolution. In addition, in fiscal year 2006 we 
received substantial hurricane-related supplemental appropriations. 
Therefore, the amount carried over from fiscal year 2006 may not be a 
good indicator of what to expect at the end of the following year.
    Question. What changes to the requirements contained in the fiscal 
year 2006 act would you recommend to assist you in better use of the 
funds appropriated to the program?
    Mr. Woodley. The fiscal year 2006 Energy and Water Appropriations 
Act includes language that has enabled the Corps to limit the use of 
continuing contracts and thereby increase the use of other kinds of 
contracts (such as fully-funded contracts and base bid-plus-options 
contracts) for projects authorized for construction. The fiscal year 
2007 budget proposed to amend this language for fiscal year 2007 to 
enable the Corps to limit the use of continuing contracts and thereby 
expand the use of other kinds of contracting instruments for operation 
and maintenance activities as well.
    Question. If these changes remain unchanged for several years, will 
you be able to award and carry out as many construction contracts as 
you have under the previous rules? Can you estimate or characterize the 
differences for us?
    General Strock. The fiscal year 2006 Energy and Water 
Appropriations Act has enabled the Corps to expand the use of 
contracting instruments other than continuing contracts in its 
construction program. The Corps recently issued guidance to ensure that 
the construction program is using continuing contracts only where they 
are the most appropriate contracting instrument. The fiscal year 2006 
act did not, however, include a further reform proposed in the fiscal 
year 2006 budget, which would have provided the Corps with the kind of 
multi-year contracting authority used by other Federal agencies. In the 
absence of such authority, efforts to reduce reliance on continuing 
contracts could affect the number of awarded contracts during a 
transition period of up to a few years.
    Question. The Corps has been awarding so-called continuing 
contracts for many years . . . since 1922, I'm told. This is where you 
award a contract that will take more than a year to execute and where 
you depend on appropriations in future years to fund the contract 
earnings expected in those future years.
    General Strock, what is the Corps' experience with that type of 
contract? That is, have they presented great challenges or otherwise 
not served the Nation well in the years you've been using them?
    General Strock. Continuing contracts, like the multi-year contracts 
used by other Federal agencies, enable the Corps to incrementally fund 
work on any water resources project (studies, design, construction, or 
operation and maintenance) that the Congress has not fully funded up 
front. However, unlike the multi-year contracting authority of other 
Federal agencies, the continuing contract authority of the Corps has 
few constraints and allows the Corps to legally bind the Federal 
Government to pay future costs in advance of appropriations. The use of 
our continuing contract authority has resulted over the years in a 
large number of long-term contracts with high out-year funding 
commitments to one provider, and limited the ability of the Executive 
Branch and the Congress to set priorities in the civil works program. 
Obviously, there are other challenges as well, particularly when the 
contractor's earning rate is greater than anticipated and significant 
reprogramming from other projects is required.
    Question. How do you plan to manage your contracting in light of 
the guidance on continuing contracts contained in the fiscal year 2006 
act? That is, will you award fewer contracts? If so, how many fewer 
contracts in the current fiscal year would you expect to award than if 
you didn't have this guidance?
    General Strock. Generally, the Corps is issuing a continuing 
contract in the construction program only when other contracting 
options such as fully-funded contracts, incremental contracts, or other 
contracts are not appropriate, and only with reasonable assurance that 
the continuing contract will be funded in the out years. In the short-
term, fewer contracts are being awarded. However, I cannot make a 
numerical projection of the difference. In the long-term, we would 
expect the number of contracts to be as much or more than in previous 
years, assuming the same overall funding level.
    Question. What is the long-term impact on the number of projects 
you will have underway at any given point in time? That is, will you 
then be able to have fewer projects underway at any given time?
    General Strock. Because we are waiting for sufficient funds to 
fully fund some contracts, there will be a deferral of these contracts 
in the short-term. In the long-term, at any given out-year funding 
level, the number of projects underway at a given time would be the 
same.

                          CONTINUING CONTRACTS

    Question. How many continuing contracts has the Corps awarded in 
fiscal year 2006 since fiscal year 2006 Energy and Water Development 
Appropriations Act was passed?
    General Strock. There have been a total of 12 continuing contracts 
awarded as of the end of the second quarter of fiscal year 2006.
    Question. How many continuing contracts have you disapproved and 
why?
    Mr. Woodley. There are three continuing contracts that have been 
disapproved and/or sent back for reevaluation, because either the 
proposal did not satisfy the criteria laid out in the Corps fiscal year 
2006 program execution guidance, or the analysis of whether another 
contracting mechanism would be efficient and effective in the 
circumstances was inconclusive.
    Question. What are your criteria for determining to award a 
continuing contract?
    Mr. Woodley. The Corps uses several criteria. In accordance with 
the fiscal year 2006 Program Management EC, several questions must be 
answered during evaluation. These questions include whether the amounts 
available and that have been identified for reprogramming in fiscal 
year 2006 are sufficient to fully fund the contract, and, if the amount 
available in fiscal year 2006 is not sufficient to fully fund the 
contract, whether the scope and schedule of the contract are 
appropriate for the features of the project to be constructed. If the 
amount available is insufficient and the scope and schedule are 
appropriate, then different contracting vehicles are explored and 
analyzed. If other relevant contracting options are not appropriate, 
and delay of the contract to fiscal year 2007 or later would result in 
significant consequences, a continuing contract may be recommended. My 
office also assesses whether future appropriations to support the 
contract are likely, based on recent funding history, the fiscal year 
2007 President's budget, and the House, Senate, and Conference Reports 
when available.
    Question. Have the directions in the fiscal year 2006 Energy and 
Water Development Appropriations Act caused any difficulties for the 
Corps?
    General Strock. The new guidelines have encouraged improved 
discipline in the system, but they also have introduced some delays in 
part by requiring elevation to the Washington level of day-to-day 
operational decisions that previously were made in the district 
offices.
    With respect to reprogramming, we face the challenge of 
transitioning our budgeting and execution practices to an environment 
with limited reprogramming, including the challenge of funding 
previously incurred payback commitments and the challenge of addressing 
pressing or emergency situations and situations with strong business 
cases.
    With respect to contracting, the limited use of continuing 
contracts will result in the delay of some contracts during a 
transition period until funding and contracting decisions are aligned.
    All told, these changes have not caused significant difficulties. 
Carryover will increase in the short-term. These changes have also 
provided an opportunity to look for ways to improve the overall 
performance of the civil works program.

                             REPROGRAMMING

    Question. How many reprogrammings have been approved within the 
Corps authority?
    General Strock. Such reprogrammings are an ongoing process 
throughout the fiscal year and tend to become more frequent as the year 
goes on. However, the following snapshot at the end of the second 
quarter should give a reasonable estimate as to the rate of 
reprogrammings within the appropriation accounts:
  --Investigations--6 gainers, 2 sources;
  --Construction--13 gainers, 14 sources;
  --O&M--7 gainers, 5 sources;
  --MR&T--7 gainers, 5 sources.
    Question. How many reprogrammings that require prior notification 
to Congress have been proposed and how many have been approved?
    General Strock. As of the date of the hearing, the Army recently 
has submitted ten requests for reprogramming to OMB. OMB has cleared 
two of them already and is reviewing the others.
    Question. To what do you attribute the failure to approve proposed 
reprogrammings in a timely manner?
    General Strock. Few reprogrammings are proposed due to the 
difficulty in finding suitable sources. One type of suitable source 
would be one for which the funds are excess to the total needs of the 
source project due to savings, such as from a low bid or changed site 
conditions; however, such situations are relatively rare. In the past, 
another fairly reliable source was slipped earnings due to delayed 
awards; but the expectation was that the revoked funds would be 
restored when needed. The guidance in the fiscal year 2006 conference 
report that there be no expectation of such payback commitments has 
nearly eliminated sources with slippages.
    Question. Have the directions regarding reprogramming in the fiscal 
year 2006 Energy and Water Development Appropriations Act caused any 
difficulties for the Corps and do you have any recommendations as to 
how the directions in the fiscal year 2006 Appropriations bill might be 
improved?
    General Strock. The new guidelines have encouraged improved 
discipline in the program. We face the challenge of transitioning our 
budgeting and execution practices to an environment with limited 
reprogramming, including the challenge of funding previously incurred 
payback commitments and the challenge of addressing pressing or 
emergency situations and situations with strong business cases.
    The administration's proposals for fiscal year 2007 are reflected 
in proposed bill language in the Budget Appendix. We would like to move 
toward a system that retains the benefits of this discipline, but that 
returns day-to-day operational decisions to the district level, perhaps 
in combination with periodic reporting to the Appropriations Committees 
on actions taken the prior quarter, to give them the opportunity to 
assess whether the committee's guidance and the Corps' own policies 
have been followed.
                                 ______
                                 
              Questions Submitted by Senator Arlen Specter

                        HOPPER DREDGE MCFARLAND

    Question. Significant and timely maintenance, repair and 
replacement of systems and equipment in the amount of $25 million have 
been accomplished onboard the McFarland in the past 10 years. These 
include:
  --Complete replacement of riveted seams (both port and starboard 
        sides) resulting in all welded steel hull with estimated hull 
        life extension of an additional 25 years;
  --Phased renewal of all 12 hopper door frames;
  --Phased overhaul of all 12 hopper door operating gear;
  --Replacement of Steering Gear Control System;
  --New propeller shafts;
  --Complete replacement of propulsion control system from pneumatic 
        system control to electronic controls; and
  --Phased overhaul of all engines and generator.
    In its November 2005 report to Congress regarding the future 
operation and configuration of the Federal hopper dredge fleet, the 
Corps states that an additional $20 million in major overhaul and 
repair activities must be expended to keep the Hopper Dredge McFarland 
operational.
    It is my understanding that a one-time expenditure of this 
magnitude would be required only if the decision were made to 
transition the McFarland to ready reserve status, and that the 
McFarland can continue to work without this $20 million overhaul.
    On what grounds was the assertion made that the McFarland requires 
$20 million in overhaul and repair work?
    General Strock. The $20 million overhaul and repair would be needed 
in either case, whether the McFarland were to be placed in ready 
reserve or if it were to work a full schedule.
    Question. What specific repairs in the amount of $20 million are 
needed to keep the McFarland operational?
    General Strock. The current engine room, with 11 engines, is not 
the optimal configuration, nor the safest means of powering the 
McFarland. The majority of the repair costs would be used to repower 
the dredge with modern low emission engines, reduce the number of 
engines, and substantially improve the efficiency of operating the 
McFarland. The current manner of controlling the drag arms on the 
dredge is also not the optimal manner in which to perform this 
operational activity on the McFarland. Costs were included in the 
estimate to reconfigure the dual drag tender stations into a modern 
central drag tender station, thus reducing the crew requirements and 
improving the operational efficiency of the dredge. Additional items 
include removal of all asbestos on the dredge for the safety of the 
crew and other improvements.
    Question. Port stakeholders were not invited to be members of the 
Industry/Corps Hopper Dredge Management Group (ICHDMG), formed by the 
Corps and Dredging Contractors of America. The port and waterway 
stakeholders, and the customers they serve, are the ultimate end users 
of the any federally contracted dredging contracts.
    Failure to adequately respond to emergency dredging requirements, 
and the increasing cost of dredging, ultimately affects the 
competitiveness of the Nation's ports and waterways transportation 
system.
    General Strock. The ICHDMG was formed in response to Section 237 of 
WRDA 96. The purpose of the ICHDMG is to maximize the effectiveness and 
efficiency of our Nation's hopper dredging resources, to enhance the 
viability and competitiveness of our ports and waterways by maintaining 
communication between the Corps and the hopper dredging industry and to 
ensure procedures are in place and sufficient hopper dredges are 
available to respond to urgent and emergency dredging while meeting 
needed routine dredging requirements. The ICHDMG is a working group 
that is focused on identifying hopper dredging problems and crafting 
solutions, sharing information, diffusing potential problems, and 
coordinating schedules on a national basis. In the past some of the 
shipping stakeholders and ports have participated in ICHDMG meetings. 
In addition, the Corps district offices work directly with the many 
ports throughout the Nation to ensure that these important stakeholders 
are fully engaged in all aspects of the Corps dredging program that 
affects their interests.
    Question. Should port stakeholders be included in the ICHDMG to 
ensure their participation in the decision-making process regarding 
Federal hopper dredging?
    General Strock. Any interested port stakeholders would be most 
welcome to participate in ICHDMG.
                                 ______
                                 
               Question Submitted by Senator Mark Dayton

                  POWDER RIVER BASIN EXPANSION PROJECT

    Question. What steps is the Army Corps of Engineers taking to 
ensure that a complete and thorough review is conducted prior to 
issuing permits under Sec. 404 of the Clean Water Act and Sec. 10 of 
the Rivers and Harbors Act for the proposed construction of the Powder 
River Basin Expansion Project, also known as the Dakota, Minnesota & 
Eastern (DM&E) Railroad project?
    General Strock. The Omaha District began coordination (pre-
application meeting) with the Dakota, Minnesota and Eastern (DM&E) 
Railroad relative to the Powder River Basin Expansion Project in 
November 6, 1997. The Omaha District participated as a cooperating 
agency under the National Environmental Policy Act (NEPA) with the 
Surface Transportation Board (STB) in the formulation of an 
Environmental Impact Statement to ensure that requirements of Section 
404 of the Clean Water Act were addressed concurrently with the STB's 
review process.
    The Omaha District received two Section 404 permit applications for 
the Wyoming and South Dakota portions September 15, 2000. A Section 10 
permit application was submitted to the U.S. Coast Guard for a bridge 
replacement on the Missouri River at approximately the same time since 
that agency is responsible for that action.
    The STB rendered a decision to authorize the project under its 
program responsibilities January 28, 2002 which was the subject of 
litigation (Mid States Coalition for Progress v. STB). The 8th Circuit 
Court of Appeals remanded the decision and required that additional 
study and analysis be completed in four specific areas of the EIS. A 
supplemental EIS was formulated, which the Omaha District participated 
in as a cooperating agency. The supplemental EIS was released January 
6, 2006. The STB issued a new decision authorizing the project and is 
the subject of current litigation (Mayo Foundation v. United States of 
America and STB) in the 8th Circuit Court of Appeals.
    The Omaha District has ensured that the information formulated in 
the EIS addresses our information and data needs. Omaha has also 
continued coordination with DM&E on the permit applications in an 
attempt to address outstanding information needs that were identified 
since December 4, 2001. Action on these applications since 2002 was 
minimal due to DM&E's focus on litigation and addressing direction from 
the court. A meeting with Omaha District staff in Cheyenne, Wyoming, is 
scheduled to address outstanding information needs and administrative 
processes to allow final permit decisions to be rendered.

                          SUBCOMMITTEE RECESS

    Senator Landrieu. Thank you so much and the hearing is 
recessed.
    [Whereupon, at 3:53 p.m., Wednesday, April 5, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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