[Senate Hearing 110-996]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-996
 
 THE HOMELAND SECURITY DEPARTMENT'S BUDGET SUBMISSION FOR FISCAL YEAR 
                                  2009 

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 14, 2008

                               __________

        Available via http://www.access.gpo.gov/congress/senate

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

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41-452 PDF                       WASHINGTON : 2010 

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Washington, DC 20402-0001 
















        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
                    Beth M. Grossman, Senior Counsel
                       Holly A. Idelson, Counsel
                     Christian J. Beckner, Counsel
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
   Robert L. Strayer, Minority Director for Homeland Security Affairs
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk













                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Levin................................................    15
    Senator Akaka................................................    29
    Senator Pryor................................................    23
    Senator Landrieu.............................................    25
    Senator McCaskill............................................    20
    Senator Collins..............................................     4
    Senator Stevens..............................................    15
    Senator Voinovich............................................    16
    Senator Coleman..............................................    18

                                WITNESS
                      Thursday, February 14, 2008

Hon. Michael Chertoff, Secretary, U.S. Department of Homeland 
  Security:
    Testimony....................................................     5
    Prepared statement...........................................    41
    Charts submitted for the Record..............................    57
    Post-Hearing Questions and Responses for the Record..........    64


 THE HOMELAND SECURITY DEPARTMENT'S BUDGET SUBMISSION FOR FISCAL YEAR 
                                  2009

                              ----------                              


                      THURSDAY, FEBRUARY 14, 2008

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 1:35 p.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Levin, Akaka, Pryor, Landrieu, 
Tester, McCaskill, Collins, Stevens, Voinovich, Coleman, and 
Domenici.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. The hearing will come to order.
    Good afternoon, Mr. Secretary. I am pleased to welcome you 
this afternoon for what has become your annual appearance, or 
the Secretary's annual appearance, before our Committee to 
discuss the Department of Homeland Security's budget request--
in this case for fiscal year 2009.
    The Department will have reached an important milestone at 
the end of this month. As you know, on March 1, the Department 
of Homeland Security will have completed its fifth year in 
existence. And as we examine your budget request for the coming 
fiscal year, naturally it is appropriate to take a moment to 
assess how the Department has fared over the 5 years since it 
was established and what more we have to do to get it to where 
we want it to be.
    I would say that the record has a lot of encouraging 
developments in it. Important measures have been taken to 
improve aviation and maritime security, to address 
vulnerabilities at our borders, to train and equip law 
enforcement officers, firefighters, and emergency medical 
workers--the first responders and, as we on this Committee like 
to call them, the first preventers--across our country. These 
are the people we depend on, as we have seen time and again, at 
the outset of every disaster.
    I also want to note with appreciation that every day you 
and the more than 200,000 other employees of the Department of 
Homeland Security (DHS) across the Nation, and indeed in some 
cases outside the Nation, single-mindedly work to keep the 
American people safe in the post-September 11, 2001, world, and 
for that you do have our thanks and appreciation.
    The fact that we have not had another terrorist attack on 
our homeland since September 11, 2001, is not an accident. 
There is obviously in life good fortune and grace, but the 
Department of Homeland Security and all that you at the 
Department have done has surely helped make that so. We grow 
safer every day, but the war of Islamist extremists and 
terrorists against us, and us with them, goes on. I know we 
would all echo the words of the 9/11 Commission Report that we 
have come a long way since then, that we are safe. In fact, I 
would say we are safer today than we were when the 9/11 
Commission Report came out--but we are in a war against an 
enemy that has no humanitarian and civilizational norms that it 
follows and therefore we are not yet safe enough.
    The Department obviously, in my opinion and others, still 
has a way to go before it gets to the point we want it to be, 
which is to be a well-integrated operation, the kind we 
envisioned when we created the Department back in 2002, even 
acknowledging that we knew that it would be difficult to bring 
the many agencies and many subcultures together quickly.
    We are in some ways not yet as prepared, as I have said, as 
we should be to meet a variety of threats, which if 
successfully carried out could inflict damage on our country. I 
am thinking of the security of our vast computer systems and 
databases, which the Department is just beginning to address 
seriously. I am also concerned that we lack adequate plans to 
prevent and respond to an attack using weapons of mass 
destruction, especially nuclear weapons, which is why Senator 
Collins and I have launched an investigation into that subject. 
Significant work remains also to be done to secure our critical 
infrastructure and, of course, our borders.
    An array of management challenges also continues to impede 
the success of the Department. We have commented before in this 
Committee about the morale of the DHS workforce, which, 
according to surveys that have been done, is much lower than we 
would like it to be. More active supervision is needed of 
several large costly procurement projects, such as SBInet, 
Deepwater, and the Advanced Spectroscopic Portal Program, to 
prevent wasteful and inefficient spending and to ensure, 
therefore, that taxpayer dollars are spent wisely.
    The security of many of the Department's own IT systems is, 
in my opinion, not yet what we want it to be, and the lack of 
consolidated headquarters makes many of these challenges that 
much more difficult to overcome.
    Two and a half years after Hurricanes Katrina and Rita, we 
are reminded that the Department is still rebuilding its 
preparedness, response, and recovery capabilities. Improvements 
required by the Post-Katrina Emergency Management Reform Act, I 
am pleased to note, are beginning to take hold. FEMA is making 
progress, but it, too, has a way to go before it is where we 
want it to be.
    Obviously, leadership is a key to getting this work done, 
and I thank you for your leadership and that of those on your 
team, Mr. Secretary, but adequate funding is also an essential 
element of making this Department what we want it to be.
    I am, therefore, disappointed about some of the areas in 
which the proposed budget, in my opinion, shortchanges 
potential success in key areas. I would say the most 
significant deficiency comes in the area of grants for State 
and local governments. For the fifth consecutive year, the 
Administration proposes to cut funding for those grants that 
communities across the country depend on most to pay for their 
homeland security needs. Without these grants, the Nation's 
first responders cannot capably partner with the Federal 
Government to prevent attacks or respond effectively when 
disaster strikes.
    The Administration's 2009 budget proposal calls for an 
overall 48 percent cut to State and local homeland security 
grant programs, including a 60 percent cut to firefighters, a 
56 percent cut to transit security grants, and a 48 percent 
reduction to port security grants. Those are not just budget 
trimmings, they put us in danger of being out of the business 
of supporting State and local homeland security efforts, and 
this obviously in the context of a continuing threat. I know 
that Members of this Committee on a bipartisan basis will do 
what we have done before, which is to oppose these proposed 
cuts and to work to restore funding to full levels authorized 
by last year's 9/11 Commission legislation.
    This will be a critical year for the Department of Homeland 
Security. In November, we will elect a new President, and no 
matter who is elected, the Department will undergo a transition 
in leadership. That is, I assume that you have retained enough 
sanity not to want to continue in this position, Mr. Secretary. 
We know from experience that al-Qaeda launches attacks at 
precisely the moment of greatest vulnerability, and one of 
those times can be, in their perception, during transitions of 
leadership. That is why the transition next year from one 
Administration to the next must be well-planned and executed.
    I note with appreciation that serious efforts are already 
underway under your leadership to achieve that result and the 
plans you are now setting in place, I hope will be fully and 
effectively implemented.
    Mr. Secretary, you know as well as anybody that the 
terrorist threat is as serious today as it has been at any time 
since September 11, 2001. I have heard you talk about what 
keeps you up at night, and that is the threat of a WMD attack. 
The fact is that there is no shortage of possibilities of the 
ways in which this might happen in our open society. The 
challenge of confronting and overcoming these threats can seem 
overwhelming, but you and your employees cannot afford to let 
down your guard and we cannot afford to let down our guard, 
which is why I believe we must invest in you, the people who 
work at the Department, to provide better training and better 
workplace conditions so that the Department can attract and 
retain the best and brightest employees.
    We, on this Committee, understand the responsibility you 
have taken on and again appreciate your leadership and hard 
work. We will continue to work with you as we work to fulfill 
our oversight responsibilities in ways that strengthen the 
Department, more important, strengthen the security of every 
single American. I look forward to your testimony today and a 
discussion about the work ahead for all of us to secure our 
homeland.
    I thank you, Mr. Secretary. I now call on Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman. Mr. Chairman, as 
you mentioned, the Department of Homeland Security is now 
approaching its fifth anniversary and I think it is appropriate 
today that in addition to encouraging the Department and 
criticizing the Department, that we also thank the Department 
and recognize that there has been considerable progress in the 
past few years after a rocky beginning.
    But we also know from this Committee's oversight work, from 
GAO and IG reports, and from the Secretary's own prior 
testimony that much more remains to be done to fully integrate, 
improve, and strengthen the Department's ability to confront 
the threats facing us and to deliver services and implement 
programs more effectively.
    The Administration's budget proposal for DHS contemplates a 
4.6 percent increase in outlays compared to last year's levels 
and funds some very worthwhile initiatives. The budget proposal 
must recognize that the risks of catastrophic natural disasters 
and terrorist attacks will not go away, that our borders and 
coastlines must be made more secure, and that our Nation's 
infrastructure, including seaports and chemical plants, must be 
protected.
    Yet the President's budget actually reduces funding for 
nearly every program that supports preparedness and prevention 
programs at State and local levels. A bedrock assumption of the 
National Response Framework is that first responders and State 
and local emergency managers will typically be the first to 
arrive on the scene of any disaster, even though massive 
Federal aid and support may soon follow. These first responders 
also serve, as the Chairman noted, as a critical line of 
defense against terrorist attacks, whether they may be a county 
sheriff patrolling an area of Northern Maine near the border, 
or a New York City police officer investigating a pipe bomb 
threat.
    The unpredictability of disasters and terrorist activity 
underscores the practical necessity for partnership and 
coordination at all levels of government. States rely heavily 
on the homeland security grants for emergency planning, risk 
assessments, mutual aid agreements, equipment, training, and 
exercises for first responders. That is why I share the 
concerns expressed by the Chairman today about the nearly $700 
million gap between this year's funding for the State Homeland 
Security Grants, or rather what the budget is proposing, and 
what Congress enacted just this past year.
    The proposed funding of only $210 million instead of $400 
million for port security grants is also cause for concern. We 
passed a landmark port security bill. It is already beginning 
to make a real difference, but if it is not funded, its promise 
will not be realized.
    I am also concerned about the absence of funding for 
important grant programs like the Staffing for Adequate Fire 
and Emergency Response (SAFER) grants for firefighters, 
interoperable communications grants, which have been a priority 
for this Committee, and the program that provides assistance to 
purchase commercial equipment for emergency response providers. 
The cuts in these programs--these are the front-line programs--
could have disastrous consequences for emergency preparedness, 
prevention, and deterrence.
    Federal funding has helped to enhance our Nation's ability 
to protect transportation systems, ports, chemical facilities, 
and other critical infrastructure, but it is clear that the job 
is not finished, and indeed, we have not brought every State up 
to a certain baseline level of preparedness to meet the 
preparedness goals.
    Now, I do want to recognize that there are some positive 
elements in this budget. I applaud the DHS proposal to upgrade 
vehicle lane technology at the busiest 39 land ports of entry 
and to increase Customs officers' presence, including at ports 
of entry in my State, in the Maine towns of Calais, Houlton, 
and Madawaska. The funding increases for FEMA, Customs and 
Border Protection, and the Coast Guard are all welcome, as is 
the increased funding to place a Protective Security Advisor in 
every State.
    The Department commendably is also taking initial steps to 
fund updates to a severely outdated computer system now 
deployed at the ports of entry. Our Committee has been 
investigating the weaknesses in this system that allowed a 
Mexican national with drug-resistant tuberculosis to enter the 
United States undetected some 21 times. We have found that the 
current system cannot perform many basic search functions that 
ordinary citizens could use on an ordinary web-based search 
engine every day.
    On the critical and growing need to counter the threat of 
terrorist bombs, improvised explosive devices (IEDs), right 
here in the United States, I am also disturbed to see that the 
proposed budget would cut the current $10 million in funding 
for the Office of Bombing Prevention by more than $800,000. 
This makes no sense to me at all given what the experts have 
warned us about. The funding also falls far short of the $25 
million funding level sought in the bombing prevention bill 
that the Chairman and I have introduced. That number was not 
plucked out of the air. It is based on expert testimony and 
calculations, so I hope we can reverse that cut, as well.
    Again, Mr. Chairman, thank you very much for calling this 
hearing today. Mr. Secretary, it is a pleasure to have you 
back.
    Chairman Lieberman. Thanks, Senator Collins, for your 
excellent opening statement.
    Mr. Secretary, it is all yours.

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

    Secretary Chertoff. Thank you, Mr. Chairman, and thank you, 
Senator Collins. It is a pleasure to appear again before this 
Committee. We have had a terrific relationship over the 3 years 
that I have been Secretary. I have to observe that in addition 
to our fifth anniversary, which is coming up in a matter of a 
few weeks as a Department, my third anniversary as Secretary is 
tomorrow, and this is the fourth time I have appeared before 
this Committee in connection with a budget request. So I look 
forward to our dialogue today, but also to an ongoing dialogue 
as we work further to institutionalize the Department and 
prepare for a transition into the next President's term.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Chertoff appears in the Appendix 
on page 41.
---------------------------------------------------------------------------
    This is a fiscally responsible budget that advances the 
Department's most critical priorities. We focus our resources 
on the greatest risks and we give our 208,000 employees the 
tools and support they need to continue to protect the American 
people.
    Now, Mr. Chairman, I could not agree more that this threat 
is very real, and the thing that we need to continue to remind 
ourselves is that complacency is the greatest enemy that we 
have and the greatest challenge that we have. In the last year 
since I spoke with you in connection with the prior budget, we 
have seen an attack take place in the United Kingdom that 
failed simply because of the incompetence of the attackers. We 
have seen a serious plot disrupted in Germany. We saw arrests 
in Spain in the last few weeks. There were arrests in the last 
couple of days in Denmark of a militant or a couple of 
militants who were planning to kill a cartoonist.
    These are all stark reminders that the reason we have not 
been successfully attacked here is not a lack of intent by the 
enemy, but the fact that we have managed to disrupt, frustrate, 
or deter them from carrying out their attacks. But as you have 
observed, Mr. Chairman, this is a dynamic process. They 
continue to retool themselves, and if we do not continue to 
adapt and improve, we will put ourselves in a position where we 
fall behind.
    Now, this year, for fiscal year 2009, we are requesting 
$50.5 billion in the Department's budget as compared with the 
previous baseline budget of 2008. That is excluding emergency 
funding. That is an increase of $3.2 billion, which I think 
comes to about 6.8 percent over last year's baseline, and 62 
percent over where we were nearly 5 years ago.
    Let me talk a little bit about the five major elements of 
our strategy and how the budget promotes that. Let me also 
observe that, as with any other budget--I know every governor 
knows this as well as everybody who has served in the Executive 
Branch--there are difficult trade-offs. There are things that 
are not funded as fully as some might like, and not because 
they are not important, but because the pie is only so big, and 
although the pie has grown this year, it is still finite, and 
if we put a larger slice in one area, we are going to have to 
cut the slice in another. So I hope as we continue with today's 
hearing to be able to explain our reasoning in this regard.
    I basically divide our strategy into five objectives: 
Protecting the Nation from dangerous people; protecting the 
Nation from dangerous things; hardening and protecting our 
critical infrastructure; boosting our emergency preparedness 
and response; and strengthening our management and operations.
    So let me begin with some of the highlights of what we have 
done and what we are doing to protect our Nation from dangerous 
people. At the border, as of earlier this month, we have built 
over 294 miles of pedestrian-vehicle fencing at the border. We 
had over 15,000 Border Patrol agents sworn in by the end of 
2007, and we are on track to hit over 18,000 by the end of this 
calendar year, which is more than twice what the President had 
when he came into office.
    A little less than a year and a half ago, I announced that 
we had ended the pernicious practice of catch and release of 
non-Mexican illegal aliens apprehended at the border. We have 
sustained keeping catch-and-release off the books and have 
catch-and-return operating. That has been a major deterrent for 
people coming into the country illegally, and we have seen some 
net positive results. Apprehensions are down over 20 percent 
over the prior fiscal year. In addition, remittances are down.
    Evidence of activity south of the border indicates to us 
that staging areas are beginning to shrink. The cost of coyotes 
and smugglers has increased, and that is again a sign of 
success. An unhappy sign of success is increased violence 
against Border Patrol agents, which is typically a metric that 
we see going up when criminal organizations feel that their 
businesses are in peril and they are fighting harder to 
preserve their ill-gotten gains. We are committed to continuing 
to support our Border Patrol agents in every way that we can in 
making sure that they do not become victims of these organized 
criminal gangs.
    We want to continue building on this progress in fiscal 
year 2009. We are requesting $3.5 billion for the Border 
Patrol, which is an increase of almost half-a-billion dollars, 
so that we can add 2,200 new Border Patrol agents by the end of 
September 2009. That would bring us up to over 20,000 agents.
    We are requesting $775 million on top of about $1.25 
billion that we received in 2008 to continue our efforts to 
develop and deploy technology and tactical infrastructure, 
including fencing at the border, to prevent incursions and to 
improve the Border Patrol's capability to intercept and 
apprehend illegal aliens, recognizing that, of course, the 
economic magnet that pulls illegal aliens in has to be tackled. 
If we are really going to have a solution to illegal migration, 
we want to continue to build on our success in worksite 
enforcement. In the last fiscal year, Immigration and Customs 
Enforcement (ICE) made 863 criminal arrests, issued 750 
indictments, and yielded 561 convictions as a result of 
worksite enforcement operations, 92 of the people charged were 
in the employer's supervisory chain, including some senior 
executives, and 771 were employees.
    Therefore, to continue moving forward, we are requesting 
$1.8 billion in fiscal year 2009, an increase of about a 
quarter-of-a-billion dollars, to help ICE expand its custody 
operations, getting us up to a total of about 33,000 beds. I 
might observe this is a 78 percent increase from where we were 
just 4 years ago, in fiscal year 2005. In all, we are 
requesting $3 billion--that is an uptick of $311 million--for 
ICE interior enforcement-related activities, including fugitive 
operations, the Criminal Alien Program, which looks to remove 
convicted illegal aliens from State and Federal prisons, 
supporting State and local programs to help us enforce the 
immigration laws, anti-gang initiatives, and worksite 
enforcement.
    Finally, we are requesting $100 million, an increase of $40 
million, for our E-Verify electronic automated employment 
authorization verification system so that employers can use 
this system to run their new employees' names and Social 
Security numbers against DHS and Social Security databases. 
This program has become increasingly popular. We now have over 
52,000 employers who have signed up to use it. It is important, 
however, that in addition to the money, Congress reauthorize 
the program, which is due to expire this year. So we are going 
to request your help in that.
    Turning to the issue of protecting us from dangerous goods, 
let me observe what we accomplished last year. At the end of 
the calendar year last year, we were scanning virtually 100 
percent of all containers entering our Southern border or 
coming into our seaports. That is a dramatic increase from 
where we were several years ago, where the number was around 
zero percent. We are at around 91 percent at our Northern 
border. We have expanded our Container Security Initiative to 
58 foreign ports. Consistent with the Security and 
Accountability for Every (SAFE) Port Act, we have begun 100 
percent radiation scanning at three pilot ports--Pakistan, 
Honduras, and Southampton in Great Britain--and we have 
agreements with four other ports that we hope to implement this 
year, and that is part of our Secure Freight Initiative.
    For fiscal year 2009, we are requesting $157 million, an 
uptick of $67 million, to support continued deployment of 
radiation portal monitors so that we get close to 100 percent 
scanning at our Northern border, which will give us essentially 
full scanning of all containers that come into the United 
States.
    At the same time, we are going to be continuing to 
implement the project to screen and scan general aviation that 
comes into this country from overseas to close that potential 
vulnerability with respect to a weapon of mass destruction, and 
we are working on rolling out a small boat strategy to enable 
us to deal with the possibility of small boats being used to 
smuggle in a weapon of mass destruction or dangerous 
terrorists.
    Turning to the issue of our critical infrastructure--thanks 
to the work of this Congress in passing a Chemical Security 
Authorization Act--we have completed our National 
Infrastructure Protection Plan, all the 17 sector-specific 
plans, and the chemical security final rule, which we are 
currently in the process of implementing with those chemical 
sites that have been identified as the most potentially risky 
across the country. We did establish an Office of Bombing 
Prevention and we have added additional layers of security in 
aviation and mass transit.
    Let me highlight some of our initiatives as captured in 
this year's proposed budget. We are requesting $1.3 billion, an 
uptick of almost $360 million, for Department-wide efforts to 
counter IED threats. This includes more than $1.1 billion for 
TSA explosive detection technology, $30 million to train 
Transportation Security Officers (TSOs), and $9 million for our 
Office for Bombing Prevention. We are also requesting $45 
million, which is an increase of $15 million, for behavior 
detection officers who work at our airports to identify people 
whose behavior is suspicious and warrants a closer look. This 
is the kind of technique that is used in Europe and in Israel 
as an effective layer of defense against people getting on 
airplanes and carrying out threats.
    We are requesting $30 million, which is an increase, to 
continue our 10 Visible Intermodal Protection and Response 
Teams. These are teams of integrated law enforcement and TSOs 
plus dogs that surge into mass transit and airports in order to 
provide enhanced security, either when there is a specific 
threat or merely in order to have the random level of security 
raised to provide an extra measure of protection for mass 
transit.
    And finally and importantly, as the Chairman and the 
Ranking Member mentioned, we are tackling in a very significant 
way at long last the issue of cyber security as part of an 
integrated Cyber Security Initiative which the President has 
authorized us to pursue beginning this fiscal year. That means 
we are requesting almost $300 million, an increase of $83 
million, to further deploy our anti-intrusion detection 
capabilities and to increase U.S. search ability to analyze and 
reduce cyber threats. I look forward to working with the 
Committee on this particular issue, which probably needs to be 
discussed further in a classified setting.
    The fourth goal is effective emergency response. We have 
worked very hard to, I wouldn't say rebuild, but to build FEMA 
to a level it has never been before with respect to emergency 
preparedness and response. This year, we are continuing on that 
path by seeking a $64.5 million increase for FEMA's vision 
initiatives, which include, among other things, converting 
thousands of temporary workers into permanent core employees at 
FEMA, so that is a cadre of experienced people that we can put 
into the field and around which we can build a surge capability 
when we do have an emergency.
    We are also working very hard to increase its information 
technology (IT) functions, and I think FEMA has proven over the 
last year an increased capability to move swiftly and 
efficiently in partnership with the Department of Defense, 
which has been a great partner, to respond effectively to 
emergencies and disasters across the country.
    I know the question of formaldehyde in trailers will come 
up and I look forward to talking with you about that effort in 
the course of this hearing. I will just simply reiterate what 
we said last summer. We continue to encourage people who have 
any anxiety about their trailers to come forward so that we can 
move them out of trailers. We have been very successful in the 
last 3 months at removing people from trailers at a rate of 
about 800 trailers a month, and we want to continue to do that. 
We have driven down the numbers very dramatically, but we want 
to continue to encourage those who are resistant to get into 
more permanent housing.
    Finally, with respect to grants, although I know the levels 
that we are requesting are below what Congress enacted and that 
has pretty much been the pattern over the last several years, 
we have done some things of which I think you will approve. We 
have continued this year, as we did last year, to have separate 
Port Security Grants and Rail Transportation Security Grants as 
opposed to lumping them in a single Infrastructure Protection 
Program, which was not warmly received on Capitol Hill. Our 
requested amounts for this year are, in fact, what we requested 
last year, which reflects our overall assessment of what is a 
disciplined program for building capabilities over a long 
period of time.
    I recognize there is always more need, and again, I come 
back to my pie analogy. We had hard choices to make with an 
admittedly generous but nevertheless finite budget and we had 
to balance the needs of localities and States, which are 
continuing to build capabilities, with the need to make sure we 
are funding those responsibilities which are exclusively 
Federal.
    Finally, let me talk about the importance of strengthening 
management and operations and plug in particular the need for 
$120 million that we are requesting to consolidate DHS 
headquarters at St. Elizabeths. My one disappointment in the 
omnibus appropriation this last year is we did not get the 
money for St. Elizabeths. A big chunk of this money, about $400 
million or so, is in GSA, and that was not funded, either. It 
is easy to shortchange bricks and mortar when there are other 
perhaps more appealing immediate needs to be dealt with, but I 
can tell you, to build morale, to build institutional 
capability, to improve security of our operations, and to make 
our management function better across the board, investing in a 
permanent headquarters makes a lot of sense and I am going to 
urge Congress to work with us to do that.
    So with that, I look forward to continuing to work with 
this Committee over the course of this next year and to answer 
your questions.
    Chairman Lieberman. Thanks, Mr. Secretary.
    I would suggest we do a 6-minute round of questions, 
because we have a lot of members here. We would like to get 
people involved.
    Let me just say first that I totally support the request 
for the DHS headquarters to be consolidated at St. Elizabeths. 
I regret that wasn't included in the omnibus budget. As you 
know better than we, DHS is now spread throughout 70 buildings 
across the National Capital Region and that makes 
communication, coordination, and leadership very difficult. So 
I hope we can do that this year.
    Let me ask you about the formaldehyde, since it is in the 
news today. This is a Center for Disease Control (CDC) report 
that says fumes from 519 trailer mobile homes in Louisiana and 
Mississippi which they tested were an average of about five 
times what people are exposed to in most modern homes. In some 
trailers--I am reading from the report--the levels were more 
than 50 times the customary exposure levels, raising fears that 
residents could contract respiratory problems. A gentleman 
named Mike McGann, director of the CDC division that focuses on 
environmental hazards, recommends that FEMA move people out 
quickly with priorities to families with children, elderly 
people, or anyone with asthma or other chronic conditions.
    So I wanted to get your more detailed response, and though 
the report just came out today, whether you have anything new 
to say about what FEMA intends to do to get people, including 
along this priority list, out of these trailers.
    Secretary Chertoff. Let me say that last summer, FEMA 
announced, and I personally announced when I was down in New 
Orleans, a program, not only an invitation, but frankly 
encouragement to anybody in a trailer who not only suffered 
physical symptoms, but had anxiety of any kind about physical 
effects of formaldehyde or simply wanted to get out of 
trailers, to raise their hands so we could move them out and a 
number of people did. Frankly, fewer did than I expected would. 
And it has, in fact, been our policy and our intent over the 
last 3 months to move as many people out of trailers as we 
possibly can. That is particularly true with respect to people 
who are in these group shelters or group trailer parks.
    I actually earlier said we move 800 out a month. I am 
sorry. We have been moving 800 out a week over the last 3 
months, and we are at the point now that there are about 38,000 
households on private sites and about 7,400 in group commercial 
or industrial sites.
    I would urge people to get out of the trailers.
    Chairman Lieberman. Right.
    Secretary Chertoff. Now, I recognize the reality that there 
is not a lot of housing in the area and that may mean for some 
people they will have to move some distance away. That has 
been, frankly, one of the reasons why I think some people have 
been reluctant to move out of the trailers. But from any number 
of standpoints, whether it be formaldehyde or just the fact 
that these trailers are not designed as permanent residences, I 
think that people would be much better served if they bit the 
bullet and moved out, and we will do everything that we can 
certainly to facilitate that. I guess a question you will have 
to wrestle with is whether we will compel people to move out.
    Chairman Lieberman. Yes, I was just going to ask that 
question. I mean, as I looked in a little more detail at the 
report which just came out from CDC, they said average levels 
of 77 parts formaldehyde per billion parts of air was what they 
found, significantly higher than the 10 to 17 parts per billion 
concentration seen in newer homes. Levels in some homes were as 
high as 590 parts per billion. So I know this has just happened 
today, but I think you raise an important question which I hope 
you and FEMA will consider--whether the risk to public health 
is, based on the CDC report, so real that you will want to 
compel people to leave the trailers, particularly if they have 
kids and elderly people or anybody with asthma or a chronic 
pulmonary condition.
    Secretary Chertoff. I think that is a very serious 
question, so let me just lay a couple of other items on the 
table on this.
    Chairman Lieberman. Go ahead.
    Secretary Chertoff. One way we could do this, of course, 
would be to charge rent for the trailers. One of the reasons 
people stay is because they are rent-free. But I want to put on 
the table the fact that when we have tried in the past to 
remove people, even if it is for their own good, there is a 
great deal of complaining, and in fact, we wind up getting sued 
over this. So this decision is not going to be an easy 
decision.
    Let me make two other quick observations. FEMA is in the 
position of the consumer, in a sense, in having acquired these 
trailers. It has been an enormous source of dismay and 
disappointment that housing products that for years have been 
bought by FEMA turn out to have high formaldehyde levels. We 
are like everybody else who buys on the open market, and we are 
a little bit at sea because there is no standard for trailers 
that is safe or not safe.
    Moreover, I was somewhat surprised to see in the report 
that came out that mobile homes, which are designed to be more 
or less permanent housing, which again we buy on the open 
market like everybody else, also had higher levels of 
formaldehyde than expected. There is a lot we don't know and we 
are, frankly, not in a position to answer as an agency. We 
don't know what is the baseline for mobile homes across the 
country. Is this a problem that is unique to the trailers that 
we purchased for some reason, or is it something that is 
prevalent in general? What is safe for individual populations?
    So while we are going to work very diligently to move 
people out of the trailers, I want to be clear that we are in a 
position, like any other consumer, of being uncertain about 
what is a safe level, if any, with respect to these residences.
    Chairman Lieberman. Looking at this summary of the CDC 
report today, it has a real sense of urgency to it. I mean, 
they say these conclusions support the need to move people 
quickly or relocate trailer residents before the warmer weather 
of summer, again following the priority list. They suggest that 
FEMA consider necessary assistance to Louisiana and Mississippi 
Health Departments to ensure adequate follow-up, including 
medical needs, for trailer residents and that FEMA should 
consider establishing a registry of long-term health monitoring 
of children and others who resided in FEMA-supplied trailers.
    This report puts a direct responsibility on FEMA and on the 
Department, and I think there is a concern implicit here about 
future liability.
    Secretary Chertoff. Well, I certainly hope that CDC will 
work with us on any medical follow-up because I want to 
emphasize we are not medical personnel.
    Chairman Lieberman. Sure.
    Secretary Chertoff. We have to rely on others just as we 
have to rely on other agencies to set standards for what we buy 
in the marketplace.
    Let me make this clear, and I have directed FEMA about 
this. We are out of the trailer business. We are no longer 
going to provide trailers for people in disasters. I say that 
up front because I guarantee you that in the next disaster, I 
will be besieged by requests for trailers.
    Chairman Lieberman. Yes.
    Secretary Chertoff. So in light of the uncertainty, I think 
the only safe course is to stop trailers.
    Chairman Lieberman. My time is up. Thank you very much. 
Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Let me follow up on the subject that the Chairman just 
raised. It is my understanding that just in the past couple of 
weeks, FEMA has agreed to send some of those infamous travel 
trailers and mobile homes that were stored in Arkansas and that 
Senator Pryor and I held a hearing in 2006. Some of those are 
going to be sent to house the victims of tornadoes in Arkansas 
and Tennessee. Have you put that plan on hold? Have those been 
tested also for formaldehyde?
    Secretary Chertoff. Yes. Let me explain. I don't think the 
results that we got on the trailers were terribly surprising, 
but the mobile home results were surprising because for mobile 
homes apparently up to now, there have been standards for the 
ingredients in mobile homes that have been set by law, and so 
our assumption was that mobile homes were basically vetted and 
we could use them, as distinct from trailers, and you don't 
want to confuse the two.
    I was surprised to learn today, and I haven't studied all 
the data, that mobile homes apparently also have higher-than-
expected levels of formaldehyde. So that, of course, throws a 
question on the whole issue of mobile homes and their safety.
    What we will do in the short run is we will test the mobile 
homes before we send them out. However, I will warn you, that 
will mean there will be a delay in the process because we have 
to test them. It also means that we may have to get out of the 
business of providing mobile homes.
    So I put all this on the table because the implications of 
this are far beyond simply the question of FEMA. We are, like 
everybody else who buys things on the marketplace, relying upon 
confidence that these are fit for human use. We have these in 
inventory. We are going to test them. But I think we are going 
to be very hesitant going forward even with respect to mobile 
homes until we get some clear direction from the health 
authorities about what is a safe level for this kind of 
residence.
    Senator Collins. Thank you. Mr. Secretary, I want to turn 
to the issue of State and local grants, and the State Homeland 
Security Grant Program. You had a chart up very briefly and 
said in your statement that part of the Department's rationale 
for slashing these programs so dramatically is that there is 
still billions of dollars in the pipeline. And, in fact, you go 
on to say that with Congressional approval of the fiscal year 
2009 request, a total of $13 billion would be in the pipeline 
for State and local homeland security needs.
    I have to tell you that I think your chart and that 
statement are very misleading. It is my understanding that 
State and local governments have already obligated virtually 
all of the money that has been awarded by the Department from 
fiscal year 2002 to 2007. So even though technically the money 
hasn't been spent, it has been committed. This implies there is 
plenty of money in the pipeline to handle future needs. In 
fact, the money in the pipeline has been committed to specific 
projects and it simply hasn't been completely drawn down yet.
    Secretary Chertoff. Well, I thought we were very clear in 
the chart to distinguish between money that was not drawn down 
but obligated and that which wasn't obligated. First of all, my 
point was not to criticize States and localities because it is 
appropriate not to draw down until you have actually acquired 
the material you are seeking.
    My point was that these are not entitlements. They are not 
like something that is a recurring expense. They are designed 
to build capabilities, so that there is an enormous amount of 
actual capabilities that are due to come online--and the delay 
is not through anybody's fault, it is the normal process--but 
the capabilities of State and local governments are really 
going to be significantly increasing over the next year so that 
we are literally meeting needs in the pipeline every day.
    Obviously, we want to continue to keep the money flowing, 
but we look at the fact that there has been, particularly in 
the last year, a significant increase. I think the rate at 
which we are funding, which is consistent with what we proposed 
last year, is a good rate. I can understand people would want 
more, but again, I have that pie I have to slice up and this 
seems to be a fair way to slice it.
    Senator Collins. I just wanted my colleagues to be clear on 
this point, that money is committed, it is going to be spent 
according to the States' homeland security plans, and it is not 
available for future projects and it does not mitigate, in my 
judgment, the need for an appropriate level of funding.
    Let me just quickly go to one other issue. Yesterday, we 
heard from the Commission on the National Guard and Reserves, 
and the Commission was very critical of DHS for not yet 
implementing or promulgating the requirements for the 15 
national planning scenarios, despite the fact that the National 
Guard is clearly a key responder in virtually all of those 
scenarios. What is the cause of the delay in fleshing out the 
requirements so that all those who are involved in responding 
under the 15 scenarios, and I commend you for developing the 
scenarios, know what their duties will be?
    Secretary Chertoff. Well, let me make a couple of 
observations. I was a little surprised to read their comments 
because I don't think that the Commission ever spoke to me. I 
believe that then-Under Secretary Foresman testified before the 
Commission, but I think that was well over a year ago. And I 
think since his testimony, we have made a lot of progress on 
the 15 scenarios.
    Now, we want to continue to move those and we have been 
working very closely with the Northern Command (NORTHCOM) in 
doing that. Part of the disconnect may be that the National 
Guard and NORTHCOM themselves are two separate entities and 
that we typically work with NORTHCOM directly in terms of 
planning. We have integrated planning at the Department now 
with the Department of Defense and we rely upon them to have 
the plans then integrated with what the National Guard is 
doing. So it is a little bit of a complicated process.
    But one of the things we do mean to get done this year is 
to, if not complete, substantially complete most of these 15 
scenarios and to do it joined at the hip with DOD, and I 
encourage you to ask General Renuart and Assistant Secretary 
McHale for their views on this, as well.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks, Senator Collins.
    As is our tradition, we will go in order of arrival. The 
next three Senators are Senators Voinovich, Coleman, and 
McCaskill.
    Senator Levin, I know because I am a member of the Senate 
Armed Services Committee, that you have a hearing that you are 
convening soon. Do you want to seek the mercy of one of your 
colleagues to let you go ahead of them?
    Senator Levin. If I knew which colleague would be the most 
merciful, I would. [Laughter.]
    Chairman Lieberman. Well, Senator Voinovich----
    Senator McCaskill. He is my Chairman, too. I am definitely 
merciful.
    Senator Voinovich. My neighbor from Michigan, I would be 
more than happy to---- [Laughter.]
    Senator Levin. I really appreciate that. I will just ask 
two questions.
    Chairman Lieberman. Go right ahead.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. I really appreciate the generosity of the 
Chairman and everybody else here.
    Going back to Senator Collins's question, it was because of 
the amount of money in the pipeline that you reduced your 
request for this year's appropriation. Is that accurate?
    Secretary Chertoff. No. The reason----
    Senator Levin. Why did you reduce this year's request?
    Secretary Chertoff. We didn't--the request we made this 
year was exactly the same request we made last year. That was 
based on the level we thought was appropriate.
    Senator Levin. It was below the appropriated amount?
    Secretary Chertoff. Correct.
    Senator Levin. All right. How much was in the pipeline last 
year at this time?
    Secretary Chertoff. I don't remember that. It is probably a 
little less than now because I think the appropriations for 
2008 came later in the year and also are a little larger.
    Senator Levin. Did you use that amount last year that was 
in the pipeline to reduce last year's request?
    Secretary Chertoff. Actually, I think we have been pretty 
consistent with our request, at least during my period of time 
here. What we have done, we have actually increased in some 
areas. We have tried to put a little bit more in the Urban Area 
Security Initiative Grants, but we have typically come in at a 
level that we think is adequate over a period of time.
    Senator Levin. I am sure of that. My question was, though, 
did you reduce your request last year based on the amount of 
money in the pipeline?
    Secretary Chertoff. No.
    Senator Levin. That is the same logic. Why not?
    Secretary Chertoff. Because my point on the pipeline is not 
to suggest that is why we reduce or add money. We don't do it 
based on the pipeline. It was to make the point that in terms 
of the visible output--the money is input and what matters is 
output--you are going to continue to see output based upon all 
the investment that has been made up until now. That was my 
point. It is not a rationale for adjusting the inputs.
    Senator Levin. Thank you. I am going to try to get back for 
the balance of my time, but thank you and I will ask that the 
record be kept open for the submission of questions for the 
record.
    Senator Stevens. May I steal 30 seconds now?
    Senator Levin. I thank my colleagues.
    Chairman Lieberman. I am sure that Senator Voinovich would 
give you at least 30 seconds, Mr. Appropriator. [Laughter.]

              OPENING STATEMENT OF SENATOR STEVENS

    Senator Stevens. Mr. Chairman, I would ask unanimous 
consent to put my statement and questions in the record.
    [The prepared statement of Senator Stevens follows:]
                  PREPARED STATEMENT OF SENTOR STEVENS
    Good afternoon Secretary Chertoff. Thank you for testifying before 
us today about the Department of Homeland Security's FY09 budget.
    Before I ask a few questions, I would like to comment on two 
important programs.
    First, the enhanced Loran, or eLoran system. I am pleased that DHS 
will begin implementing this important back up system to the GPS.
    As you know, Alaska has many environmental factors that GPS cannot 
always support. eLoran provides first responders and others with the 
necessary back up system in these environments. It's an important 
safety measure, especially for Alaska, and I commend you for its 
implementation.
    Second, I would like to commend FEMA for creating a new program 
that I believe will be an important tool in aiding many of Alaska's 
native villages suffering from severe erosion.
    In October, I held a field hearing on erosion in Alaska. Senator 
Landrieu was kind enough to attend, and Susan Reinertson, the FEMA 
Regional Administrator for Alaska, testified at the hearing. She also 
had an opportunity to join Senator Landrieu and me on a visit to the 
village of Shishmaref to see first-hand the destruction they, and other 
Alaska villages are facing due to this erosion.
    FEMA continuously pointed out that they did not have the authority 
to help communities prepare for future disasters, only to react when a 
disaster is ``imminent'' or after a disaster has occurred.
    I am pleased to see that the budget includes $200 million for the 
Disaster Readiness and Support Activities Program to assist FEMA in 
working with State and local partners in preparing for future 
disasters. Hopefully this can help villages in Alaska prepare before a 
storm hits, rather than spending more money reacting after the storm 
has already caused serious damage.

    Senator Stevens. Alaska is different from any other State. 
We have a Canadian system. We appear before our State 
legislature in joint session once a year. My day in the box is 
next Tuesday. I have sent you a series of questions and I would 
hope that you might be able to get me some of the answers 
before I have to make that appearance----
    Secretary Chertoff. Absolutely. We will.
    Senator Stevens. Thank you very much.
    Chairman Lieberman. Thanks, Senator Stevens.
    Senator Voinovich, thanks for allowing your colleagues to 
go before you.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you, Mr. Chairman.
    Secretary Chertoff, I want to take a moment to compliment 
you on the Department's work and strategic plan to assure a 
seamless transition. This is going to be a critical time for 
the Department as you pass the baton on to the next 
Administration and we are all concerned about that because of 
how important your Department is to our national security.
    I commend you for working with the Homeland Security 
Advisory Council on what I would consider a workable succession 
plan. I think your plan is a model that other cabinet agencies 
should look to as they prepare for the upcoming transition. 
This Committee is very interested in this matter, my 
Subcommittee particularly. If there is anything that we can do, 
legislatively or otherwise, to support you, I want you to know 
I will do everything I can to help you and I know the other 
Members of this Committee will do the same.
    As you know, I have been very interested in the Visa Waiver 
Program. I worked with the Department and the Committee to get 
legislation passed to modernize the program, which will enhance 
our ability to identify potential terrorists while improving 
our public diplomacy. We have a limited window of opportunity 
for this reform to become a reality so the question I have is 
whether or not the Department be able to meet the deadlines 
required by the legislation. When will US-VISIT and the 
Electronic Travel Authorization system be fully operational? Do 
you believe that the five-person staff dedicated to this 
program is sufficient to get the job done?
    Secretary Chertoff. It will, and this is actually a very 
high priority for the President, as well as for me. There are a 
couple of rules that need to get out in order to get this 
implemented and those rules are in the final stage of being 
issued. One element of the rule is getting US-VISIT exit for 
airports up and running. We can get that done this summer. 
There is adequate money in the 2008 budget to do the air exit 
piece and the Electronic Travel Authorization piece, and again, 
we are finalizing what is required for that, as well. So from a 
financial standpoint and a resources standpoint, there is no 
obstacle to our getting it done this year.
    Senator Voinovich. The President's 2009 Emergency 
Management Performance Grants (EMPG) request is $200 million. 
That is $100 million less than the fiscal year 2008 enacted 
level. It seems to me inadequate, given the fact this program 
is the backbone of our Nation's emergency management system and 
fills an important need. In the last 6 months I have met with 
first responders in four cities in Ohio--Cleveland, Cincinnati, 
Columbus and Toledo--and they have indicated how important 
these grants are. Why is it that you have cut the budget by 
$100 million?
    Secretary Chertoff. I am going to sound like I am being 
repetitious, but we have kept on all these major programs the 
same funding request level we made last year. I know Congress 
enacted more, and when we put this budget together, we engaged 
in the very difficult process of making trade-offs with a 
limited amount of resources, albeit a more generous amount than 
we had last year.
    Others might decide to put more money in another grant 
program or this one or might decide that we shouldn't perform a 
Coast Guard function or something else. We tried to pick a 
level of funding that we have historically thought was 
reasonable and appropriate, maybe not joyful for everybody, and 
to keep that going over the long run.
    Senator Voinovich. Well, I can tell you that without 
adequate EMPG funding, first responders at the local level are 
not going to be able to get the job done that we are asking 
them to do. You can't have people double-hatted to do the kind 
of work that we want in our communities throughout the country.
    Finally, I want to raise with you the issue of reconciling 
the differences between your Department and Government 
Accountability Office (GAO) on the metrics to judge the 
Department's performance on its your strategic plan. That is 
extremely important that agreement be reached about how we 
judge whether or not performance is continuing with the 
Department. Where are we on that and how important a priority 
is that for you?
    Secretary Chertoff. Well, it is important. Paul Schneider, 
who is our Acting Deputy Secretary, is working with GAO and 
with people on the management side to make sure that we are 
capable of being as rigorous as possible in identifying what 
our benchmarks are so we have a way of measuring our progress. 
We are generally, I would say in the Department, putting GAO to 
one side--if I look back over the last 3 years, our capability 
and our use of metrics is probably 10 times what it was when I 
first came in. We are really, across a range of functions, much 
quicker and much more accurate now in measuring what we do.
    Senator Voinovich. Well, it is really important that your 
work continues. It is one of the reasons why I support the 
concept of a Chief Management Officer with a term, to make sure 
that transformation really takes place. If we don't do this, 
God only knows when we will get the Department to desired 
operational static.
    Secretary Chertoff. I agree.
    Chairman Lieberman. Thanks, Senator Voinovich. Senator 
Coleman.

              OPENING STATEMENT OF SENATOR COLEMAN

    Senator Coleman. Thank you, Mr. Chairman.
    Mr. Secretary, this is the last time you will come before 
us to do a budget. Well, first of all, I want to start by 
wishing you a happy anniversary. As you noted, it is your 
anniversary. I will defer to your wife, Meryl, to wish you a 
happy Valentine's Day, but we will focus on anniversary.
    Secretary Chertoff. And happy birthday, too. [Laughter.]
    Senator Coleman. And I want to say thanks for two things. 
One, the focus on the border and the 19 percent funding 
increase, everything from fencing, vehicle barriers, additional 
personnel, I think it is important. We were unable to resolve 
and move forward on the issue of immigration. I think that is 
unfortunate. But first and foremost, the American public needs 
to understand that we understand that we have to control our 
borders.
    I also want to express my thanks for the recent Western 
Hemisphere Travel Initiative (WHTI) implementation about which 
we have had a lot of discussion. I visited International Falls 
just a couple of weeks ago and there is a grace period now. The 
new law requires birth certificates, passports, and I found it 
operated very smoothly and personnel were very accommodating in 
working with folks who were not yet aware of the change in 
policy--the dual-identity requirement. So I thank you for 
moving forward with understanding in that case and hope we 
continue along that path.
    And then the last thanks before I get to my concern has to 
do with the response to the flooding in Southeast Minnesota 
last year. I contrast that with what I think was one of the 
dark moments in government and that was the failures of 
Hurricane Katrina. I can still vividly remember sitting with my 
wife and her talking to me, kind of yelling at me, the Senator, 
there are folks standing there with the CNN or FOX reporter by 
the Superdome or on the highway and where is the government? I 
think you made a lot of changes there that reflected, then, 
what I saw in Southeast Minnesota. You were on the scene very 
early. FEMA Director Paulison was on the scene very early. I 
think the President dispatched FEMA even before there was the 
official declaration in the works and that was appreciated.
    Obviously, some changes are personal. It is leadership that 
has been provided. My question goes to the structural changes 
then because I would hope that what I saw in Southeast 
Minnesota reflects a structural change, specifically in the 
area of transition for which you have been commended in other 
times, but I do have some concerns. I have reviewed some of the 
correspondence you have had with Chairman Bennie Thompson of 
the House Homeland Security Committee in which there was a 
request to share documents and materials about the transition 
and you indicated that you were unable to do so at this time. I 
reflect upon what the Chairman spoke about in his opening 
comments, reflecting on al-Qaeda being targeted and focused on 
points of sensitivity. The Administration Transition Task Force 
specifically cites the transition period as one of those 
points, one of those moments.
    And so from an oversight perspective, I would really like 
to know what we are doing. I would like to have a real clear 
sense of what we are doing and certainly would like to then 
have the information that at this point apparently cannot be 
shared.
    Secretary Chertoff. Sure.
    Senator Coleman. Could this discussion take place--is it 
classified? Is that what we are looking at----
    Secretary Chertoff. I don't think it is classified. I think 
that we have gone up to brief and will continue to brief 
interested members on the transition. I can tell you generally, 
we had a number of objectives we wanted to achieve. For 
example, we wanted to make sure that we had in place a career 
person in the No. 2 or No. 3 position to manage the components 
and the major operating elements of the Department and who 
would continue on even after the presidential and political 
appointees had left. We have accomplished that. I think we have 
almost all those positions filled and cemented.
    We wanted to issue our National Response Framework. We did 
that. We wanted to reduce to writing and memorialize a lot of 
the doctrine that we developed over the last few years and we 
are in the process of doing that.
    I don't know that there is a single document to be 
furnished, but I would be more than happy to send the Deputy 
Secretary up with documents to brief you and any interested 
Member of the Committee about what we are doing because we are 
taking it as a point of pride to do a seamless handoff of the 
Department to the next Administration.
    Senator Coleman. I would also be interested in the plans 
for transition communications between folks at the State and 
local level. They are, as my colleagues have indicated, an 
essential part of the fabric of homeland security, and I 
remember sitting there as a mayor at times and wondering, are 
we going to find out? Do you have a specific strategy regarding 
transition information at State, local, and tribal level?
    Secretary Chertoff. We have been discussing this with our 
State and local counterparts, our Homeland Security Advisors. 
We will continue to keep them involved and give them visibility 
to what we are doing. I also hope that if the next President is 
able to identify who the senior leadership is going to be in 
Homeland Security at an early enough stage, that we can 
actually bring them in and get them in an exercise, introduce 
them to all of the Homeland Security advisors and get them as 
much up to speed because I think you are quite right. I mean, I 
came in in June 2001, and when September 11, 2001 came, there 
were only a very few of us at the Department of Justice and we 
were really--of course, it was brand new for everybody, but we 
didn't have fully populated agencies and at least we had the 
advantage of a very mature department. So we are going to work 
very hard to make sure we give visibility on this as we 
continue to implement this plan this year.
    Senator Coleman. I appreciate it. You really do deserve 
recognition for the fact that there hasn't been a successful 
attack on American soil. It is not just by the grace of 
providence, but by a lot of hard work and sometimes I think we 
don't reflect on that enough, so I do thank you for that.
    Secretary Chertoff. Thank you. This Committee has really 
been a major contributor in strengthening this country's 
capability to keep us safe, so thank you for that.
    Senator Coleman. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman.
    Chairman Lieberman. Thanks very much, Senator Coleman. 
Excellent questions. Senator McCaskill, you are next.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Secretary Chertoff, thank you for your 
service. I don't know how many more times you will be before 
this Committee before the end of the year, but I think you have 
worked very hard on behalf of the American people and we all 
thank you for that service. Public service, I think, is harder 
than it looks from the outside and I think your job is 
particularly challenging.
    I was a little taken aback by your comment earlier in your 
testimony about trailers and mobile homes that maybe you would 
get out of the business of trailers and mobile homes, which is 
a little frightening to me considering that you are emergency 
relief and that is a pretty integral part of emergency relief. 
It is a little bit like saying if you buy a car and it is a 
lemon that you are going to swear off buying any more cars the 
rest of your life. It seems to me that the more prudent course 
would be that you look to the manufacturer of those trailers 
and hold them accountable for providing a defective product to 
the citizens of the United States of America.
    Secretary Chertoff. Well, I am quite sure that once we 
fully understand the dimensions of what we have got, that we 
will certainly use all of our legal remedies. But let me take a 
moment to just follow up with you.
    You are right, it is a pretty striking statement. Here is 
what the problem is. There is no national standard on 
formaldehyde that I am aware of for people who are living in 
trailers or mobile homes. I don't think, by the way, the 
trailers are meant to be long-term housing. They are not 
designed to be that. No one has been able to inform me what is 
safe for the average person, what is safe for people with 
specific kinds of conditions. If there is an agency in the 
government or if it is Congress that is capable of making a 
scientific determination about what is the level that is 
acceptable and what is the level that is not acceptable so that 
that standard can be imposed on the industry, then, like any 
other consumer, we could go back into the marketplace.
    But right now, if we had an emergency tomorrow and you said 
to me, we need to have trailers, I would not be able to look 
you in the eye and say these trailers are safe. I am not saying 
they are unsafe. I just don't know the answer. And I haven't 
been able to find anybody who has told me what is the safe 
level of parts per million or parts per billion that allow us 
to have someone reside in a trailer.
    Now, we could go on a ``buyer beware'' theory, where we 
tell people--and this, I would be prepared to do, to say to 
people, we are going to give you money as part of your Stafford 
Act money. If you want to buy a trailer, knowing the risks, 
that is your choice. But for us to put trailers out there and 
say to somebody, now given what has emerged today, we are 
encouraging you to come into a trailer, I don't know how I 
could do that in good conscience.
    Senator McCaskill. Well, I think the CDC did say that 
certain levels were safe and unsafe and they said it in their 
report today and I think that is something that you could 
embrace. I know there was a lawyer in June 2006 at FEMA who 
actually said in writing, don't test these things because once 
we test them, we are going to be responsible. It seems to me 
the whole timeline of these toxic trailers is very troubling in 
terms of FEMA taking primary responsibility, and I will tell 
you that we know these are unsafe trailers now. We know that 
many of them are not healthy for the people who are living in 
them. And we know who manufactured them and who sold them to 
the government.
    Secretary Chertoff. But I have to tell you, Senator, some 
of the trailers were purchased off lots. I mean, we authorized 
governors to purchase trailers off lots. Moreover, I was 
surprised to learn that mobile homes are showing similar 
levels.
    So here is my problem. I don't know the answer. Now, maybe 
when I sit with CDC, they will give me more enlightenment. But 
I would be very hesitant to say that I could tell you what a 
safe level is for a trailer or for a mobile home. In the 
absence of some authoritative statement, I guess, my more 
cautious position is to say that while we will certainly allow 
people to buy homes themselves, I would be reluctant to furnish 
them.
    Senator McCaskill. Well, I will pose a lot of specific 
questions about the accountability on these trailer purchases 
and this timeline of how it was dealt with to you in writing.
    I also want to pose some questions to you in writing about 
the fact that the IG budget has gone down in this year's 
budget. I am always concerned when the Inspector General's 
budget goes down in any agency since I think that is a lifeline 
for taxpayers and for the legislature in terms of looking at 
that accountability piece.
    Secretary Chertoff. If I can just interject there, actually 
in 2008, our base budget was $93 million and this year we are 
actually asking for $101 million. The difference is last year, 
under the Disaster Relief Fund (DRF), an additional $16 million 
were provided on an emergency basis. If in 2009 that same kind 
of emergency money were required, it would come under the DRF.
    Senator McCaskill. Well, I know we still have problems with 
the way the emergency money has been spent. Trailers are a good 
example. So I think the IG needs to stay healthy.
    Since I don't have a lot of time left, I would just like to 
express my disappointment in looking at the 12 budget points 
that you asked for in enforcement. There is none of those under 
Immigration and Customs Enforcement (ICE) that deals 
specifically with employer enforcement. And I know you cited 93 
cases of employers being arrested in this entire country, in 
light of the thousands and thousands and thousands of employers 
that are knowingly hiring illegal immigrants. Every minute of 
this hearing, someone is hiring an illegal immigrant knowingly.
    These are not complicated cases, Secretary. They really 
aren't. Bar owners get cited all the time for letting kids in 
the door with a fake I.D. These are false documents. Many of 
them are false on their face and it is obvious to the employer 
they are false. I do not think there has been a concerted 
effort to prioritize the enforcement against the employer as 
opposed to the enforcement against the illegal immigrant, and 
that is, in fact, the root of this whole problem.
    Secretary Chertoff. Well, I agree with you that we need to 
crack down on employers. Of course, one of the things we have 
tried to do is get our ``no match'' rule out, and the whole no 
match rule, which the employers sued to block and we are 
fighting in court now, was designed to say to employers that 
when they got, for example, a no match letter, they were on 
notice and they had to take action because one of the defenses 
that we hit is under the current rule, there is actually an 
ambiguous signal to employers about whether they can pursue 
discrepancies.
    So I know that the head of ICE is committed to this. I do 
have to say this. I mean, I have personal experience in doing 
these cases as a prosecutor. They are actually tough because 
the regulations up until recently have been so complicated and 
there is so much room for a clever lawyer to hide his client 
that they actually are time consuming and difficult. If we can 
get this no match rule out of the courts and we can get it 
applied to the employers, I will guarantee you it will make it 
a lot easier to make these cases.
    Senator McCaskill. Well, I hope you are right, but I will 
tell you, knowing the U.S. Attorneys as I do, and I was just a 
local prosecutor, but if you give me 10 cases and 10 juries, I 
think you would be surprised how often they would convict. I 
just don't think very many of these cases are being put in 
front of juries. I think there is maneuvering and finagling 
among lawyers and U.S. Attorneys and plea bargains. But if you 
take these cases in front of 12 Americans with false documents 
on their face, I think you would be surprised how often you 
would get 12 people to believe the employers are guilty beyond 
a reasonable doubt.
    Secretary Chertoff. I am happy to take as many to a jury as 
we can. As I said, we had the experience some years back of 
doing a case which I thought was actually pretty much of a 
slam-dunk against a major employer where we had actually gotten 
pleas, and to my intense surprise, the prosecutor was not able 
to get a conviction in front of the jury. I actually was of a 
mind to think it was pretty easy. Sometimes--and I have fought 
a lot of jury cases--sometimes juries surprise you----
    Senator McCaskill. Well, they do----
    Secretary Chertoff [continuing]. So we are going to keep 
trying.
    Senator McCaskill. They do. Thank you, Mr. Secretary. Thank 
you, Mr. Chairman.
    Chairman Lieberman. Thank you very much, Senator McCaskill.
    Speaking of prosecutions, we turn now to the former great 
Attorney General of Arkansas, Senator Pryor.

               OPENING STATEMENT OF SENATOR PRYOR

    Senator Pryor. Thank you, Mr. Chairman.
    Secretary Chertoff, let me start on a note of good news, 
and that is I have been very pleased with FEMA's response to 
our tornadoes last week in Arkansas. On Friday, I had the honor 
of flying around with the governor, Senator Lincoln, and the 
lieutenant governor and we actually went down that entire 120-
mile swatch of land where that tornado just ripped through our 
State and saw the destruction and it was very powerful. 
Director Paulison came and joined us on that trip and FEMA has 
been very good, and the Arkansas Department of Emergency 
Management has been very pleased. There has been a lot of 
communication back and forth. So that is good news and it 
appears that is working the way it should, so I want to thank 
you for him and his focus and his attention there.
    I do want to ask about the trailers in a different way. 
With a previous question, you basically pronounced today that 
there will be no more trailers provided by FEMA. I can 
understand your hesitancy about trailers because you just don't 
know some of the medical risks associated with them, but one of 
the things that concerns me about a blanket pronouncement like 
that is in the Post-Katrina Act, we asked FEMA and DHS to get 
us a disaster housing strategy, and that was due in July 2007. 
We have never received that from your Department. Is there any 
explanation for why we don't have the disaster housing 
strategy, and also why you think today you can say trailers 
should not be an option when you don't even have a strategy?
    Secretary Chertoff. I can't answer for you exactly where 
the strategy is. I can get back to you on that.
    I can tell you the issue with the trailers, and I am going 
to separate trailers from mobile homes, although they are often 
confused----
    Senator Pryor. Yes.
    Secretary Chertoff. I am suspending judgment on mobile 
homes. The problem with trailers is this. In theory--let us put 
formaldehyde out of it. If you get a trailer and you put it in 
your driveway while you are rebuilding your house and the 
thought is you are going to be using it for a few months while 
you rebuild, it may be, even putting to one side the health 
issues, a reasonable short-term solution.
    But everything I have heard and observed about trailers put 
in parks is that it is merely a way of kicking the can down the 
road until the inevitable day when you need to move people out, 
and it becomes more painful as you wait. Now, I was told that 
soon after I came on board, that there was a real concern about 
trailers. People were still living in trailers from Hurricane 
Andrew over 10 years ago.
    Now add on top of this the issue of formaldehyde. If you 
said to me, you have got to give people trailers, I would say 
to you, I can only do what everybody else in the country does. 
I buy them in the open marketplace. There is no standard or 
agency that has set a safe level. I accept that there are 
people who have different sensitivities. I can't tell you 
whether they are safe or not. So my default position has to be, 
if I have a serious doubt about the safety of something for 
long-term living, I can't provide it. Now, you are free to buy 
it. It is a free country. But I don't see how I could, in good 
conscience, in light of what I have seen over the last 6 to 9 
months, give people trailers and say, go live in this.
    Senator Pryor. Well, I understand your discomfort with 
trailers right now, and again, I can't speak for the Committee, 
but I would feel more comfortable if you made that decision as 
part of a disaster housing strategy, which again is required by 
statute and is already 7 or 8 months late, and those decisions 
would be made in a comprehensive fashion, not in a piecemeal 
fashion. So I would encourage you to get back with your people 
on where that disaster housing strategy is.
    Another thing I want to follow up on is Senator Voinovich's 
question of where you are on the Emergency Management 
Performance Grants. You are recommending a reduction in the 
money, and I just want to be clear on that. Are you 
recommending to us that we spend less on EMPG grants this year 
than we did last year?
    Secretary Chertoff. We are recommending the same amount 
that we recommended last year. Now, last year, Congress 
appropriated more money, but the level that we thought was 
appropriate last year in terms of capability building is the 
same level we are recommending this year.
    Senator Pryor. Right. So in other words--I am not trying to 
put words in your mouth--but you are recommending we spend less 
on EMPG grants this year as compared to last year?
    Secretary Chertoff. I am giving you the same recommendation 
in both years. I recognize Congress disregarded the 
recommendation last year. There is perhaps a disagreement about 
the appropriate level. In the end, the appropriators have to 
decide if they are going to raise the level of these grants, 
what are they going to cut? We have come up with our view of 
the proper balance of what are admittedly a lot of deserving 
places to spend money. If the appropriators disagree and want 
to allocate it differently, then we will have to dialogue on 
that.
    Senator Pryor. Well, I guess that begs the question--are 
you forecasting fewer storms, fewer floods, fewer tornadoes? Is 
our terrorism preparedness----
    Secretary Chertoff. No, I am saying that preparedness is 
covered in a lot of ways, some of it covered in grants, some of 
it covered in kind, that these are capability-building grants, 
meaning that if we give you money for planning and you build 
the plan, then the plan is built. You don't have to redo it the 
next year, although you probably need to tune it up a little 
bit.
    So as with any capability grant, let us say where you buy 
equipment, you should only be buying the equipment once. You 
shouldn't be buying the same equipment every year unless you 
are getting defective equipment. So it doesn't surprise me that 
you would expect to see, as our investments in homeland 
security grow, and I think we have spent up to $23 billion over 
the past several years, I would expect to see a lot of 
capability out there.
    Senator Pryor. Mr. Chairman, I am out of time, but I must 
conclude by saying that I do share Senator McCaskill's concern 
about cuts to the Inspector General's Office because those IG 
offices give the internal accountability that every department 
needs, every agency needs. So I heard your explanation on that, 
but I think we need to look at that closer and make sure that 
the IG has sufficient resources to do what it needs to do.
    Chairman Lieberman. Thanks, Senator Pryor. I agree with you 
totally, and Senator McCaskill, about the IG Office.
    Senator Landrieu, you are next. Thank you for being here.

             OPENING STATEMENT OF SENATOR LANDRIEU

    Senator Landrieu. Thank you, Mr. Chairman. I am going to 
start by asking for a little bit of a grace period. I know we 
are in a round of 6 minutes, but I actually have several very 
important questions for the Secretary that are very troubling.
    First of all, I know that you are aware that I am holding 
the confirmation of Admiral Johnson, the second in command at 
FEMA. I am assuming that you know this gentleman and have met 
with him.
    Secretary Chertoff. I have worked closely with him for a 
considerable period of time.
    Senator Landrieu. OK. And I understand from Mr. Paulison 
that he comes highly recommended from within the Department.
    Secretary Chertoff. He was a superb Coast Guard officer. I 
have read his fitness ratings, not going back to when he was a 
junior officer, but in flag rank, and he consistently was rated 
outstanding by his superiors, and my observation of him in the 
time I have worked with him completely supports that 
assessment.
    Senator Landrieu. OK, and this is my dilemma. I am aware of 
his credentials. I am also aware that Director Paulison is a 
very able and very genuinely nice man and a fairly able leader. 
The problem is, they seem to be attached to an agency which is 
under your jurisdiction that is virtually dysfunctional when it 
comes to disaster-related issues. I can't speak to the 
credibility of your work regarding border security or 
transportation, but I most certainly can speak to the level of 
incompetence relative to disasters.
    So I have put his nomination on hold, and I have sent a 
letter and I want to just review the five reasons why, because 
we have several billion dollars still in the pipeline that the 
Administration that you represent claims has been sent to the 
people of the Gulf Coast, and technically, that is correct. It 
is impossible for them to receive the money. It has been sent, 
but it is impossible for them to receive the money unless you, 
Director Paulison, or Admiral Johnson make some changes, and 
there are five that I have recommended in my letter. So I want 
to ask you on the record if you will support one or all of 
these.
    Do you support an independent appeals process for public 
assistance projects? You must be aware by now that this is the 
No. 1 barrier to the people of the Gulf Coast receiving their 
money that they believe they are entitled to to rebuild fire 
stations, police stations, schools, libraries, etc., because 
your employees are the ones that recommend a reimbursement 
number. But the local officials dispute that number, and there 
is no one, no third party, no independent arbitrator to make 
that decision. So we have just gone round for round. Will you 
support an independent review or an independent arbitrator, and 
if not, not only why not, but how are you going to untangle it 
without such a person?
    Please be as specific as you can be.
    Secretary Chertoff. I will be specific. I discussed this 
with Don Powell, Federal Coordinator for Gulf Coast Rebuilding, 
last year, and I said to him, why don't you tell the individual 
parishes to put together a list of the 6 to 10 most significant 
projects where they feel there is an obstacle, that they are 
not getting what they are entitled to, and there are a couple 
possibilities.
    One is that there is a legal issue about whether they have 
met the legal standard, and as to that, that is not a question 
of arbitration, that is a question of we have got to make a 
decision about what the law is. But there is also the 
possibility that there is a genuine dispute, and in that case I 
said I would be prepared to have us agree on selecting an 
independent third party to make an evaluation factually about 
whether the number that they were coming in with was too high.
    Senator Landrieu. So you will support such a process?
    Secretary Chertoff. I have already supported such a 
process.
    Senator Landrieu. OK. That helps in that way.
    The second is, it took this Committee, over the objections, 
I might add, of this Department, to pass and the President has 
signed, over the objections of your Department, a procedure to 
allow us to aggregate, if you will, the money that you owe us, 
or the Federal Government owes us, to reconstruct schools, and 
it was met when that law was signed by the President with a 
great hurrah because there were over hundreds of thousands of 
children who are still, because of the incompetence of this 
Administration, without adequate school buildings. So that was 
a significant victory.
    Would you consider allowing this process to be used for 
other public buildings? In other words, instead of building one 
fire station at a time, if we need to build 14, would you 
consider using the model that we have used for schools to push 
that forward?
    Secretary Chertoff. Anything that is lawful that will 
expedite this process, I will consider.
    Senator Landrieu. Would you support a change to a law if 
you don't think the law is written correctly or if the law is 
not providing relief?
    Secretary Chertoff. Yes. Let me go further than that, 
Senator. I think that, and I have said this publicly before, 
the dimension of the challenge in what is being requested in 
connection with the Gulf Coast is of an order of magnitude that 
is vastly different from the normal disaster mechanism for 
which the Stafford Act applies, and what you describe as 
incompetence, which I disagree with, is an agency that is 
struggling between two mandates, a desire to comply with the 
law so that they later don't get crucified by GAO and the IG 
for violating the law, and a set of circumstances that don't 
fit within the law.
    So rather than attack it piecemeal, and this goes back to 
some of the ``lessons learned'' that the White House issued a 
couple of years ago, I think we should take a more general look 
at whether the way we approach a reconstruction effort of the 
magnitude you are talking about should be taken out of the 
normal model rather than trying to take the normal model and 
force it to fit something that it wasn't designed to fit.
    Senator Landrieu. That could be a subject for another 
discussion, and I would be inclined to accept that except for 
this. Except for when I or other Members of this Committee have 
pointed out to you and to your Department where the law doesn't 
fit and where it could, if it were changed, work better, you 
have consistently objected.
    Secretary Chertoff. I think----
    Senator Landrieu. So if the answer is that we can't fix 
anything until we can fix it all, the people of the Gulf Coast 
are going to be very disappointed in that. Let me just finish--
--
    Secretary Chertoff. No, I----
    Senator Landrieu. We cannot wait to fix the entire program 
when there are pieces that so obviously are crying out to be 
fixed. So while I don't disagree with you, let me say that 
ultimately the whole law needs to be rewritten, but the people 
I represent can't wait until that happens.
    Now let me move on to the next point. The next point is 
this. I just received a letter signed by you. You wrote it on 
January 30. This is again another thing that your Department 
has stood in the way of. This Congress appropriated 2 years ago 
$1.2 billion for hazard mitigation, which is 7 percent of the 
total that went to Louisiana, and because we were shortchanged 
by the Administration and by Congress under Republican control 
on our Community Development Block Grant, we thought, OK, it 
wasn't right to shortchange Louisiana, but we could maybe use 
this $1.2 billion that Congress has already given us, stop 
whining, stop complaining, let us just move on and make 
lemonade out of lemons, lift ourselves up by our bootstraps 
kind of attitude that is preached to us all the time.
    So we thought, OK, we have $1.2 billion. Let us just ask 
the Homeland Security Department if they would let us use it to 
elevate people's homes because that is clearly in the law that 
hazard mitigation can be used to elevate people's homes. Do you 
know what your letter says? I am sure you didn't write it, but 
you signed it. It says, ``The HMGP Program, Hazard Mitigation 
Program, is to remove at-risk property and people from harm's 
way.''
    Can I read to you what the FEMA website says, because I 
disagree with that. That is not true. That is written in your 
letter. That is not the truth. The truth is this. It is found 
on the FEMA website. ``The purpose of the HMGP is to reduce the 
loss of life and property due to natural disasters and to 
enable mitigation measures to be implemented during the 
immediate recovery from a disaster.''
    So Mr. Chairman and Senator Collins, I have 55,000 people 
who are asking Secretary Chertoff to allow them to raise their 
houses a foot or two or three so if the levees ever break 
again--the Corps of Engineers levees that broke, and put 20 
feet of water in their houses--or if the pumps don't work and 
the water rises, they would be out of the water. Now, we know 
if the levees break nothing is going to help them because it is 
20 feet, but in a rainstorm it would help. The Secretary says 
it is against the rules to use the money like this, so I have 
suggested we change the rules, but then he is against changing 
them. So please take one minute to clarify.
    Secretary Chertoff. Well, I----
    Senator Landrieu. Do you not think people should raise 
their houses?
    Secretary Chertoff. No. Not only are we prepared to support 
people raising their houses, when an issue was raised a few 
months ago about people who went ahead and did it without 
getting advance authorization, I directed that we use that 
money to allow them to be reimbursed for the hazard mitigation 
measures that they took.
    Now, I think the letter you are referring to responds to a 
request to use the money generally to support the Road Home 
Program, and that is a different issue----
    Senator Landrieu. No, it is to reimburse people to raise 
their homes as technically part of Road Home, but it is 
complementary to Road Home.
    Secretary Chertoff. Well, but this is where we get into 
issues where I have to say respectfully that giving a blanket 
``yes'' answer will with absolute certainty result in a GAO 
report or an IG report in about a year that will say that we 
violated the rules. We are prepared to be flexible in letting 
people use money for mitigation, but that doesn't mean we can 
just fork the money over based on someone saying it is going to 
be used for this.
    So I am more than happy to work with you within the limit 
of the law to satisfy what you want to satisfy in terms of 
mitigation, but with that standard----
    Senator Landrieu. Mr. Chairman----
    Chairman Lieberman. Senator Landrieu, can I ask you a 
favor? I don't know how many more questions you have. A vote 
just went off. Senator Akaka hasn't had his first round. If you 
have more questions, I am prepared to come back after the vote.
    Senator Landrieu. Thank you. For the final thing I will say 
on this, I will come back.
    Chairman Lieberman. OK.
    Senator Landrieu. You don't like the law the way it is. You 
think that this is against the law, yet you won't let us change 
it until we can rewrite the whole statute.
    Secretary Chertoff. No, I am----
    Senator Landrieu. I rest my case. Thank you.
    Secretary Chertoff. If I could just answer that, I don't 
think I have quite said that. What I have said is you can't 
look at a single piece of this in isolation. Now, I am willing 
to sit down and talk about how we might more generally deal 
with the problem so we don't bump into this problem each time. 
I am also prepared to look at individual suggestions.
    But, the bottom line is this. The poor people who work in 
this agency are put in a terrible position. Over the last 2 
years, they are asked to bend the rules, and they often do bend 
the rules, and then invariably they get crucified by auditors 
because they bent the rules.
    So what I am suggesting is this. Let us try to change the 
rules, but do it in a way that (A) is transparent and addresses 
all of the dimensions of the problem, not just fiddling at the 
edges, and (B) lays forth for the American public, if we are 
going to spend money on reconstructing the Gulf Coast, we ought 
to be clear about how we are going to do it. And I am the first 
person to agree that the normal model of a disaster probably 
doesn't fit here. But instead of putting us in a position of 
tweaking one thing at a time with a whole lot of unintended 
consequences, let us sit down and figure out what we can do to 
move this process forward.
    Chairman Lieberman. Thank you. Senator Akaka.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I ask 
that my full statement be made a part of the record.
    [The prepared statement of Senator Akaka follows:]
                   OPENING STATEMENT OF SENATOR AKAKA
    Mr. Secretary, I want to welcome you back to the Committee this 
morning as we discuss the President's FY 09 Budget for the Department 
of Homeland Security.
    I want to commend you on your effort since your last appearance 
before this Committee to discuss the budget. The Department is making 
progress to put in place strong leadership that can mold together more 
effectively the various agencies and components that comprise DHS. 
Although I continue to have differences both with the Department and 
the Administration's priorities as reflected in the FY 09 budget 
proposal, I think we both recognize that the Department of Homeland 
Security is a work in progress. I want you to know that I appreciate 
your efforts at improvement.
    For example, we all recognize that transition planning will be a 
critical function of the Department this year as you prepare for a new 
Administration. The Office of the Chief Human Capital Officer has taken 
some important steps to making that transition as smooth as possible. I 
will continue to monitor that progress through the Subcommittee on 
Oversight of Government Management which I chair. Senator Voinovich and 
I have a keen interest in making certain that you have the support you 
need to make that effort work.
    I also want to single out another important aspect of the 
President's budget. I am pleased to see a significant increase over FY 
08 levels in the budget request for the Under Secretary for Management 
and a commitment to improving human capital management and training. 
The Department is wise to focus on morale and other issues raised by 
employees in the 2006 Federal Human Capital Survey, which ranked DHS 
near the bottom in employee attitudes and views compared to other 
federal agencies. Prioritizing training, improving diversity, and using 
veterans preference to attract new talent are good areas to start 
addressing the shortfalls of the Department.
    I am very interested to see the Department's plans to improve the 
diversity of DHS across all components and throughout all levels and to 
attract the talented pool of veterans returning home from the war in 
Iraq. The Department will function best if it draws upon the experience 
of our troops and reflects our Nation's diversity
    However, I am concerned that the budget does not provide an 
adequate reflection of the real dollars to be spent on management and 
workforce training. Furthermore, the Department continues to move 
forward with a pay-for-performance component to the Human Capital 
Operational Plan, a revision of the MaxHR system, with which I continue 
to have many concerns.
    I would also like to underscore my support for the internship 
program being developed by the Office of the Chief Procurement Officer. 
This is an innovative program that I encourage other departments in the 
federal government to adopt. In addition, I hope consideration will be 
given to expanding it to a summer program for undergraduates. The 
earlier we can attract the next generation of workers into the federal 
government the better. I can think of no better way than to appeal to 
them while they are still in their formative educational development in 
college. In addition, we must continue to ensure that the existing 
contract specialists, including program managers, are trained 
adequately and that they utilize best practices to ensure better 
acquisition outcomes.
    Indeed we should not limit such innovative programs to just the 
acquisition workforce. There is a need across the Department to attract 
and retain its workforce. For example, while it is admirable that the 
Department is seeking to provide opportunities for TSA employees in 
Customs and Border Protection (CBP), it means that gaps in TSA need to 
be constantly filled. The Department must do a better job of resolving 
workforce problems without creating new issues.
    Last year, a Government Accountability Office (GAO) report revealed 
that CBP was understaffed by thousands of officers. Many locations were 
losing staff faster than they could be hired. As a result, officers 
were being forced to work extensive overtime, which contributed to 
fatigue and high turnover. During a hearing I chaired last year on the 
GAO report, all of the witnesses agreed that CBP's recruitment and 
retention efforts were harmed by the agency's inability to provide CBP 
officers with law enforcement officer benefits. Fortunately, Congress 
granted those benefits in the FY 08 Omnibus Appropriations Act and 
provided initial funding for implementation.
    Less than two months ago, President Bush signed those benefits into 
law. Now the Administration wants to repeal them. CBP officers receive 
law enforcement training, they carry firearms, and they regularly make 
arrests. The Administration's proposal to strip officers of law 
enforcement officer benefits is an example of how the Department needs 
to change its policies to attract and retain employees. It is my strong 
opinion that CBP officers deserve the same benefits as other law 
enforcement officers, and I intend to work to ensure that they receive 
them.
    Until the Department addresses its human capital problems, it will 
continue to rely too much on outside contractors to conduct functions 
that I believe are essential government services. I think you are 
making progress in moving to increase the number of full time employees 
and in reducing the overall contractor workforce, but much more needs 
to be done. Currently the Department does not track the number of 
contract workers that are in place making it difficult to develop a 
realistic plan to reduce its reliance on contractors. Contractors cost 
the taxpayer more than federal employees and carry a hidden cost of 
reducing the institutional memory and loyalty to the Department which 
are essential ingredients to DHS's long-term success.
    Also critical to DHS's success is the consolidation of activities 
in a central facility. I am pleased to see that the Department is 
committing $120 million to an overall pool of funds in conjunction with 
General Services Administration (GSA) to consolidate DHS headquarters 
at the St. Elizabeths facility in southeast Washington. This will go a 
long way to bringing the Department together as a cohesive unit and 
will provide a boost to the overall economic development of the 
District's Ward 8. I look forward to seeing more plans for how the 
money will be spent in the coming year and what goals the Department 
has laid out for its completion.
    In regards to other areas of the Department, I would like to 
underscore the innovative approach to guiding investments in the 
Science and Technology Directorate (S & T). Admiral Cohen's approach to 
developing an investment portfolio for the Department will benefit the 
country. My only concern is that I believe that the functions of the 
Domestic Nuclear Detection Office (DNDO) should be brought under S & T 
to ensure that same rigorous technology assessment is being brought to 
DNDO's operations. I support placing a priority on nuclear weapon 
detection, but I also believe that the most effective way for 
developing counter-technologies is through the same strict business 
model that is being applied in S & T.
    It is said that you can tell an individual's priorities by looking 
at their checkbook. Well, the President's budget for FY 09 gives a 
clear sense of the Administration's priorities.
    It is clear that the Administration does not believe REAL ID is a 
priority, despite claims to the contrary. The FY 09 budget request 
continues the tradition of not properly funding this project. While I 
have my own concerns about funding a project that risks the privacy of 
millions of Americans, I believe that if DHS wants REAL ID, then it 
must not only address serious privacy problems with the program but 
also provide states with the funding to implement it. Asking states to 
use part of their homeland security grants, which are already dedicated 
to other projects, or setting up a grant program that does not have any 
REAL ID designated funds is not the way to encourage state 
participation. In light of this proposal, a more appropriate use of 
funds would be to increase the number of TSA screeners at airports to 
avoid travel delays when states are unable to comply with REAL ID.
    I share the concern of my colleagues with the Administration's 
proposed budget cuts for key homeland security grant programs. The 
President proposes cutting State Homeland Security Grants by $750 
million, Port Security grants by $225 million, and Rail and Public 
Transport Security grants by $190 million. In addition, the budget 
again makes huge cuts to the Assistance to Firefighters Grant (FIRE) 
program which provides federal grants directly to local fire 
departments and Emergency Medical Services (EMS) organizations to help 
address equipment, training, and other firefighter-related and EMS 
needs. Specifically, the President's budget cuts funding for the FIRE 
program by nearly 50 percent from FY 08 levels, down to $300 million, 
and proposes eliminating the firefighter staffing program.
    Similarly, the budget proposes a $7.5 million decrease in funding 
for Urban Search and Rescue task forces, despite the critical need for 
them in the aftermath of an attack or natural disaster. These task 
forces have been designated by DHS to provide specialized assistance 
after buildings or other structures collapse. The task forces work to 
stabilize damaged structures, locate and free victims, identify risks 
of additional collapses, and meet other needs at disaster sites.
    Last year, this Committee worked hard to ensure a strong 
authorization for the all-hazards Emergency Management Performance 
Grant Program (EMPG). Disasters occur every day in this country as 
evidenced in last week's tornadoes. EMPG represents the only all-
hazards preparedness funding in the Department. There is an annual 
shortfall of $278 million to this program and states are over matching 
the federal government by at least $100 million each year. The current 
authorization is for $535 million and $300 million was provided last 
year; yet the Administration is proposing a $100 million cut to these 
grants. I strongly believe that these programs produce the most bang 
for the buck.
    I am also concerned that the value of mitigation programs is 
ignored. The Multi- Hazard Mitigation Council found that every federal 
dollar in invested in disaster mitigation reaps $4 in cost savings. 
Despite this, the President's budget proposes to cut pre-disaster 
mitigation by more than half, from an enacted amount of $114 million in 
FY 08 down to $75 million for FY 09, which is less than the enacted FY 
07 amount. I urge my colleagues to oppose cuts to this program and 
support its reauthorization this year.
    These are just a few of the vital programs being proposed for cuts 
this year. For example, the President proposes $387 million for flood 
control projects specifically authorized by Congress, a cut of more 
than one-third from the FY 08 funding level, and the budget again seeks 
to eliminate funding for the Metropolitan Medical Response System in FY 
09. The Administration proposed that this program be eliminated last 
year, but Congress turned back this effort, instead funding it at $41 
million for FY 08.
    If this is a message budget, I am not certain what message the 
Administration was trying to convey with its recommended program cuts. 
If the message was one of frugality, I suggest that some of the cuts 
could have come from some of the program areas whose deployment is 
entirely dependent on the successful development of questionable and 
unproven technologies. SBInet is a case in point. CBP awarded Boeing a 
$20 million contract to build eight integrated camera and radar towers 
for border protection in Arizona. The project has been plagued by 
delays, as well as technological and operational problems. Yet, the 
Department appears poised to accept the final project. Despite the 
shortcomings of the first part of the program, the Department has begun 
awarding Boeing a series of follow-on contracts without any new 
competition. I fear that the Department is moving forward with an 
unproven system without adequately defining its contract requirements 
and without providing enough oversight to improve future performance.
    Again, my welcome to the Secretary and I look forward to his 
presentation and response to our questions. Thank you Mr. Chairman.

    Senator Akaka. Mr. Secretary, I want to add my welcome to 
you to this Committee. I also want to commend you for progress 
you have made in putting in place strong leadership that can 
bring together more effectively the various agencies and 
components of DHS. I think we both recognize that more needs to 
be done. However, I want you to know I appreciate your efforts 
at improving the Department, and I am very interested in these 
five goals that you have.
    I do have some concerns. Along with many of my colleagues, 
I am strongly opposed to cuts to the grant programs at DHS, and 
I believe we need to focus, and you have it in here, on 
building State and local capabilities, and let me give you an 
example of why that is really necessary.
    For example, several days ago, a child exposed to measles 
in a San Diego clinic traveled to Hawaii, spreading the disease 
even further. By the way, the outbreak had originated in 
Switzerland. This incident underscores in no uncertain terms 
the need for adequate funding for pandemic disease preparedness 
and responses. Yet the fiscal year 2009 budget request 
recommended cutting funding for upgrading State and local 
capacity to respond to bioterrorism and other public health 
emergencies by $136.6 million.
    I am concerned that the budget does not reflect the need 
for more to be spent on management and workforce training, and 
I believe prioritizing training, improving diversity, and using 
veterans preference to attract new talent are good areas for 
addressing human capital problems in the Department.
    Mr. Secretary, DHS's budget submission includes a small 
increase for the Under Secretary for Management ``to provide 
for continuity throughout the transition process.'' I have been 
very concerned about DHS's readiness for the upcoming 
transition, which will be its first. Will this small increase 
be enough to ensure a smooth transition, despite the challenges 
the Department already faces from a management perspective?
    Secretary Chertoff. Well, thank you for the question. As I 
have said to Senator Voinovich and Senator Coleman, our 
transition planning is much broader than just this reflected in 
this small increase because it runs across what we are doing 
throughout the entire Department to put in place in the No. 2 
or No. 3 positions career people who will be the continuity 
after the presidential and political appointees have gone, plus 
what we are doing throughout all of the agencies to reduce to 
written form the planning, the doctrine, and everything that 
has developed over the 5 years.
    So I think that this is a piece of the puzzle, but it is 
not the entire puzzle, and I am more than happy as we progress 
this year to keep this Committee informed about what we are 
doing with transition planning because I agree with you, it is 
very important that we have a seamless handoff as we move into 
next year.
    Senator Akaka. Two months ago, President Bush signed into 
law provisions that granted law enforcement officers' benefits 
to Customs and Border Protection officers. CBP is starting the 
implementation process for those benefits, and these benefits 
will help CBP address its serious shortfalls in CBP officer 
recruitment and retention. Yet the Administration is proposing 
to rescind those benefits in the next fiscal year. How do you 
justify proposing to take away benefits that CBP officers have 
just been promised?
    Secretary Chertoff. Well, first let me say that I think the 
CBP officers in question perform an outstanding and very 
necessary service of helping us to secure our border. These 
are, of course, the inspectors, not the Border Patrol, and they 
deserve all of our support.
    I think in this particular case, the Administration 
consistently opposed extending these benefits, frankly, on 
budget grounds. To come back to my initial mantra, there are 
many things for which one could make quite a good argument, but 
there is a limited amount of funds, and particularly when they 
are personnel funds, they carry on indefinitely so there are 
tough budget decisions that are made.
    Senator Akaka. Well, Mr. Chairman, my time has expired. I 
will wait for the second round.
    Chairman Lieberman. Thanks, Senator Akaka----
    Senator Akaka. Thank you.
    Chairman Lieberman [continuing]. And thank you, Mr. 
Secretary. We are going to go and vote. We will be back 
probably within 15 minutes and have one more quick round of 
questions. Thank you.
    The hearing will stand in recess.
    [Recess.]
    Chairman Lieberman. The hearing will come to order.
    Thanks, Mr. Secretary, for your patience. I wanted to ask 
you a few questions about border security, which obviously is 
much on the minds of the American people, and I want to invite 
you to speak a little more about this chart,\1\ which reports 
that the apprehensions are down 20 percent nationwide from 
fiscal year 2006 to 2007, down from 1,089,000 to 876,000. It 
looks like the numbers for the first quarter of fiscal year 
2008 suggest an even lower number in the full year 2008.
---------------------------------------------------------------------------
    \1\ The chart referred to appears in the Appendix on page 61.
---------------------------------------------------------------------------
    Obviously, we don't know how many are coming over 
illegally, but we do know how many apprehensions there are. So 
explain why the reduction in the number of apprehensions 
suggests that there are also fewer people coming over 
illegally, and though I know we can't know the number of 
illegals, what are the latest estimates about how those trend 
lines are going?
    Secretary Chertoff. As you observe, first of all, we 
estimate, and these are really estimates, that roughly 40 
percent of the illegal workers or illegal people in this 
country come in through overstays. That is to say they have 
visas and they never leave. So this figure does not address 
that issue. This figure addresses the people who are coming in 
between the ports of entry, illegally sneaking across the 
border.
    Chairman Lieberman. Right.
    Secretary Chertoff. We have talked about this. The reason 
we think apprehensions are a pretty good approximation is once 
we put a lot of people at the border, we have a pretty high 
percentage chance of capturing people that we see and we 
typically put them in the areas where the highest traffic has 
been, and then we try to validate this concept of apprehensions 
by looking at the number of times we catch people who are 
recidivists.
    Chairman Lieberman. Right.
    Secretary Chertoff. They do to some degree literally count 
footprints to get a sense of what the traffic flow is. They 
look at what is going on in the staging areas south of the 
border. And they even look at things like the price it costs to 
pay a smuggler.
    The figures coupled with the anecdotes support the notion 
that this reflects--but I say reflects as opposed to precisely 
measures--a downturn in the number of people coming across the 
border.
    Now, what I can't tell you is whether the people that we 
don't get, whether it is an exact correlation or just a rough 
approximation.
    Chairman Lieberman. Sure.
    Secretary Chertoff. So it tells us what direction we are 
moving in, but until we get all of this technology along the 
border, it is not going to tell us with certainty.
    Chairman Lieberman. Are there estimates that the Department 
makes of the number of illegal entries there are?
    Secretary Chertoff. The last time we asked, it was the 
general view that for every two we catch, one gets through. But 
I have been told that it may be now somewhat better than that.
    Chairman Lieberman. A higher multiplier? I mean, in other 
words, a lower----
    Secretary Chertoff. That there is even a lower ratio now.
    Chairman Lieberman. Yes.
    Secretary Chertoff. But that is only, again, people coming 
between the ports of entry.
    Chairman Lieberman. Right.
    Secretary Chertoff. It is not people coming through the 
ports of entry.
    Chairman Lieberman. Right. So we can assume from these 
numbers, though in a sense they are counterintuitive, but you 
have made the argument that there are fewer people coming 
over----
    Secretary Chertoff. That is right.
    Chairman Lieberman [continuing]. Illegally between the 
ports of entry, and that is the key.
    Let me ask you about some of the programs. I appreciate 
that the budget requests $775 million for traditional fencing, 
infrastructure, and technology to protect the border, including 
creating so-called virtual fence areas of sensors and 
surveillance. As you know, we have been concerned about how so-
called Project 28 (P28) and SBInet are doing. Senator Collins 
and I sent you a letter in January expressing our concerns 
about SBInet and asking for detailed information from the 
Department to help us better understand the technological 
component of this initiative, frankly, before we commit another 
large chunk of money in the fiscal year 2009, although we are 
inherently inclined to do that. What is the status of P28 and 
have the problems that you have had been resolved?
    Secretary Chertoff. I will ask your indulgence to take a 
little bit of time to explain it.
    Chairman Lieberman. Go ahead.
    Secretary Chertoff. SBInet is broader than P28. It is 
really all the technology we use at the border----
    Chairman Lieberman. Right.
    Secretary Chertoff [continuing]. So it includes, for 
example, our unmanned aerial systems. We have three and I think 
the fourth one is about to come online. We anticipate with the 
budget this year in 2008 that we are going to go from, I think, 
a half-a-dozen ground-based vehicle radars, which we call 
Mobile Surveillance Sensors, to 40, and that is technology 
although it covers--I think they generally cover about six 
miles each way, depending on the terrain, whereas P28 is 
designed to give you 28 miles.
    Chairman Lieberman. So these are moving along?
    Secretary Chertoff. Correct.
    Chairman Lieberman. They are constantly in movement.
    Secretary Chertoff. Well, no, they are not constantly in 
movement. They can be repositioned.
    Chairman Lieberman. Yes.
    Secretary Chertoff. So they are stable in one place. The 
downside is to cover--that if you do the math, to cover 28 
miles with that, you need four agents as opposed to one, so it 
is more manpower-intensive.
    P28 is a solution that allows us in certain areas to 
actually have a broader situational awareness by connecting up 
the radar and the cameras so that when the radar hits something 
coming across the border, we can slew the camera and allow us 
to determine what we are looking at. When it was originally 
let, it was let to see whether we could get a basically 
operating system. That was P28. And there were some problems 
with the equipment.
    We were disappointed over the summer, and I had a frank 
conversation with the CEO of Boeing and he replaced the team 
that was on it. I think at this point, although we haven't 
finally signed off on it, all of the equipment-related issues 
that are material have been cured. There are four issues that I 
would characterize as not material for which we will get a 
credit. It is basically not worth trying to cure them. We will 
just get a reduction in price.
    But there is a second issue, which is how does this work 
operationally in terms of the kind of day-to-day activities of 
the Border Patrol, and to understand this, the Border Patrol 
needed to be able to work with the equipment itself over a 
period of some months, because there are two things that flow 
from that. One is that we come to see there are certain 
features of this that either are sub-optimal, the way we 
actually work with it in the real world, or in some cases there 
may be some things that we don't need that we would just as 
soon get rid of and not waste time with. And at the same time, 
the Border Patrol may want to adjust its operating procedures 
because it is not working in a way that fully exploits the full 
promise of the system.
    So let me give you a concrete example because I was there a 
week ago. The system, and I saw them do this, does identify a 
radar hit, the camera goes and fixes on the location, and we 
are able to characterize the people coming across so that we 
can intercept. One of the challenges was taking what we call 
the Common Operating Picture (COP), which is the map and the 
video feed, and getting an exact duplicate of that in the cars 
and the trucks that were actually out in the field. It is a 
problem partly because you have to stabilize it when you are 
driving along and there are some issues involving the wireless 
and the satellite.
    But when I was down there last week, we were talking about 
it and one of the agents said to me, ``You know, we are not 
sure that we really need to have all of this data on our screen 
in the car. We clearly want to have the map, but in terms of 
getting the video feed, it may actually turn out to be more of 
a distraction than a help and we may rather just have somebody 
tell us there are six people coming with backpacks or guns or 
whatever it is.'' So then they would make a determination that 
operationally, it is a waste of time to fully develop the COP 
in each car. At the same time, they may determine that back at 
headquarters, they want a better capability than the COP is 
able to provide, and this is what they call spiral development.
    This is now the next stage of development. The next thing 
we want to do is take the operators' inputs, adjust the 
software and the hardware to the next level, and then make a 
judgment about how to make this work and in what areas it 
works, and some terrain may not be suited for it.
    Chairman Lieberman. OK, I appreciate that answer, and in a 
way, it anticipates what I was going to followup on asking, 
which is I have heard that one of the concerns was that the P28 
was initiated without previous operational requirements from 
Customs and Border Protection and that as a result, there was 
some dissatisfaction with it and some ideas about how it could 
be used better, and therefore that P28 itself would not be the 
model for the future.
    Secretary Chertoff. I would say it is a partial model for 
the future.
    Chairman Lieberman. Right.
    Secretary Chertoff. I think that it was a concept. We 
wanted to make sure, (A) does the basic concept functionality 
work, and (B) the thought was to give the contractor an 
opportunity to present something that essentially thought out 
of the box, that wasn't just a follow-on to the traditional way 
of doing business. But I think we all agree at this point, 
certainly, and we have done this over the last few months--we 
now need to integrate that with the operators and----
    Chairman Lieberman. Right.
    Secretary Chertoff [continuing]. Real world functionality 
and all the development from now will be guided by what the 
operators want to do now that they have gotten to see the 
system.
    Chairman Lieberman. OK. So obviously, it is really 
important to keep us and the appropriators informed so that we 
have a feeling of confidence as we go to the next stage of 
appropriations for the virtual fence. Thank you.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Mr. Secretary, I want to bring up two issues that are a 
particular concern to my constituents. One is an issue that you 
and I have talked about many times. It is the Western 
Hemisphere Travel Initiative. As I have explained and as you 
have seen from your visits to Maine, Maine's border communities 
are very integrated with their Canadian counterparts. People 
cross the border all the time to visit relatives, to shop, and 
to work. It is really a way of life. So the idea of having to 
have a passport or a passcard eventually to do that is 
something that is very foreign to people who have lived on the 
border their whole lives.
    Nevertheless, it seems to me that when you boil down the 
objections, they come down to two. One is the cost of complying 
with the Western Hemisphere Travel Initiative, and the second 
is one of access. When the Department put into effect the 
requirement for a passport for air travel, it caused enormous 
backlogs at the Department of State. All of us were inundated 
by constituents who had to wait for months to get their 
passports and so it was a real problem.
    Now, when I look at those two problems, it occurs to me 
that there are some solutions. What we have done in Congress is 
to delay the implementation date until June 2009. I know you 
don't much like that delay, but let us look at what could be 
done.
    The first is to cut the cost. Now, I know the Department is 
looking at coming up with passcards that would be different 
from a passport and would cost about half as much, about $45. 
When I look at that $45 cost, $20 is the fee to the State 
Department and $25 is an execution fee that would be paid to 
the Post Office or the county clerk, in most cases.
    Now, one option to get that cost down further is to waive 
the $20 fee to the Federal Government, and the State 
Department's estimate based on how many people are likely to 
apply is that would cost $400 million. I have to say, if that 
creates a more secure border crossing, considering all the 
other programs that we spend lots of money on, I am not sure 
but that seems to be a bargain.
    But another idea would be to have DHS or the State 
Department have mobile enrollment centers that go to border 
States and that set up shop in border communities where the 
demand is going to be high for these passcards. And from what 
we can calculate, that would reduce the cost substantially 
without incurring the $400 million. It would be cheaper.
    And secondarily, it solves the access issue. It solves the 
problem of people having to go to the passport office in Boston 
when they need a passport very quickly, which is what they have 
to do now. Why not put mobile offices in border States? You 
could share them among border States. But publicize that they 
are going to be there. Cut the cost. I think that would solve 
both the cost and access problem, and you could do it this year 
when you have this grace period before the law goes into 
effect.
    Secretary Chertoff. Well, let me say, first of all, I mean, 
I agree with you that we are concerned about the cost. You are 
right that the passcard is meant to be cheaper than the 
passport. It is about half as expensive. I think it is about 
$45.
    We also have signed up with a number of States for enhanced 
drivers' licenses. Those should be cheaper, still. Now, 
obviously there is your basic license fee, but I think the 
marginal cost if you want an enhanced driver's license is 
pretty small. It may be less than $10. And that, of course, 
would be available through your motor vehicle process. So the 
State of Washington has already, if I understand correctly, 
issuing these. So that is another option.
    Now, the idea of doing mobile--I can't bargain away the 
State Department's fee because that is their----
    Senator Collins. Oh, go ahead. [Laughter.]
    Secretary Chertoff. Sure, I would be happy to look at some 
way to get closer to the point of sale, so to speak. We have to 
look at the budget implications of that. But if there is a way 
to maybe work with the States to find--maybe we could set up in 
a couple of Post Offices to do intake and handle something 
there. I would be certainly happy to look at that if we can 
manage it from a cost standpoint.
    Our objective here is to make this as easy as possible. I 
think the end state, we all agree, is what the 9/11 Commission 
said we have to have, and I think it has been pretty painless 
the way we have done the implementation this year on tightening 
up on the border requirements. So I will be happy to look at 
that and see whether we can do something along that line.
    Senator Collins. I am certain that in border States across 
this country, that town hall offices would be happy to 
cooperate. I still like the idea of a mobile van going through 
these border States, but I know that when my staff goes out to 
do citizens' hours, they always go to the town office and they 
are always welcome. They are given space. I am sure something 
like that could be worked out and I think it would make a real 
difference, so I look forward to working further with you on 
that.
    The second issue I want to bring up, if I may take the 
time----
    Chairman Lieberman. Go ahead.
    Senator Collins. Thank you--is the new Transportation 
Worker Identification Credential (TWIC) enrollment centers. 
Now, first, I want to congratulate the Department that the 
enrollment centers are starting to open up around the country 
and I am told that more than 78,000 maritime workers have been 
enrolled and that approximately half of the planned 147 TWIC 
enrollment centers are now open. But looking ahead, you are 
going to see an influx of people who need these cards and I 
want to describe the scenario.
    My home State of Maine and several other States, including 
New York, California, and Massachusetts, operate maritime 
academies. We have Maine Maritime Academy in Castine. Each 
year, they graduate thousands of men and women who are ready to 
go to work in the maritime industry, including on U.S. vessels. 
With the September 2008 TWIC deadline for merchant mariners 
fast approaching, I am concerned that a lot of these students 
are going to be graduating just before the deadline goes into 
effect and that the local TWIC enrollment capacity won't be 
adequate to ensure that they are able to get their TWIC cards 
in time to go to work.
    In Castine, Maine, for example, where the Maine Maritime 
Academy is located, the graduating class is approximately 800, 
and school officials have contacted me about this problem 
because they have been told that a mobile enrollment center 
will be available but that it can only handle 25 enrollments 
per day. So that is really troubling to me. I don't know why it 
can't accommodate more. That doesn't seem like very many to me, 
but that is what I am told.
    So I am worried about how TSA will accommodate the spike in 
applicants due to the influx of these new graduates that will 
occur just months before the September 2008 deadline, and I 
don't want these individuals to not be able to go to work.
    Secretary Chertoff. What you say makes a lot of sense. I 
will find out why we can't, first of all, do this on a rolling 
basis. I mean, I don't think we have to wait for people to 
graduate to give them their TWIC cards. Presumably, if they 
have been admitted to the academy, there is a lot of 
information available about them. I also don't know why they 
can only do 25 a day.
    I am sensing a desire for more mobile operations. Maybe we 
can use the trailers for these---- [Laughter.]
    But seriously, I will ask TSA because I think particularly 
with a school, we should be able to do a lot of this enrolling, 
frankly, during the course of the year and get it out of the 
way. So I am going to take that back. It is a good suggestion.
    Senator Collins. Thank you. That would be very helpful. 
What we are told, and I will provide you with the information 
we have from Maine Maritime Academy, is that the mobile station 
is going to come from Bangor. That is about an hour and 15 
minutes away. That is OK, but it is coming after the graduation 
date and it has the slow enrollment. It would be much better if 
it were prior to the graduate date and if we could somehow 
speed up this process. But this is something I wanted to put on 
your radar screen. It is going to affect the maritime graduates 
in those other States, as well. There aren't that many of the 
academies, but that certainly ought to be a priority for the 
Department.
    Thank you very much, and thank you, Mr. Chairman. I am 
going to submit the rest of my questions for the record.
    Chairman Lieberman. Thanks, Senator Collins.
    I want to ask you one question just before we close, Mr. 
Secretary. As I mentioned in my opening statement, I am very 
pleased to see that you are focusing on cyber security. It is 
one of your top four priorities. Obviously, this is an area of 
potential vulnerability to enemy terrorist attack. Not really 
comparable, but just a couple of days ago, the RIM Blackberry 
network went down for several hours and it was quite 
interesting to see how many people were disabled. That wasn't 
final because they actually could pick up the phone and call 
people or go to their computers. And you are requesting an 
additional $83 million for this year, including the $115 
million that was awarded in fiscal year 2008 omnibus 
appropriations. That would mean tripling the amount of money 
spent for cyber security and I am very glad to see that.
    I know a lot of this is classified and I hope that I can 
get a classified briefing on it soon. I want to ask you in an 
open setting generally what you can tell us about what the 
Department is trying to do to defend our cyber systems. Also, I 
know the Cyber Security Initiative deals with the government 
systems. Since most of the cyber networks in our country are in 
the hands of the private sector, what is the Department doing 
beyond the Cyber Initiative to work with the private sector?
    Secretary Chertoff. Well, what we currently do with the 
private sector is we deal with individual sectors of the 
economy through our Sector Coordinator Councils--financial, 
telecommunications. We have worked with various councils in the 
past when we have identified cyber vulnerabilities. We have US-
CERT, Computer Emergency Response Team, which I think 
identified something like 37,000 intrusions last year, and we 
work with the private sector in helping them to identify 
intrusions and disseminate warning information and information 
to cure it.
    Because so much of the discussion is classified, where we 
want to go at the next level is in two places. We want to find 
a way to better protect Federal assets. There, we have greater 
authority, frankly. That may mean reconfiguring the Federal 
system so that we can use some of these tools in a more 
effective way to detect and respond to intrusions more quickly 
and also to make sure that all the agencies are operating 24/7 
watch operations centers. It is no good detecting something and 
making a call at two in the morning and nobody is home. So we 
have to get that up to speed.
    And then the second piece is with the private sector, which 
is more delicate because we don't want to be seen as in any way 
trying to regulate the Internet. We are trying to be very 
careful about that and we don't want to create any alarm that 
we are trying to do here what is done, let us say, in China, 
where people are sitting there and censoring----
    Chairman Lieberman. Yes.
    Secretary Chertoff. We want to see if there are things we 
can do with our partners in the government to help enable the 
private sector to protect itself better, and I think that is 
probably the limit of what I can say in an open session.
    Chairman Lieberman. Yes.
    Secretary Chertoff. But we do look forward to briefing you 
very soon on this.
    Chairman Lieberman. Yes. I think it would be good if 
Senator Collins and I could do that. I urge you to be as 
aggressive as you can be, obviously within the normal 
constitutional protections.
    I thank you very much. It has been a good exchange of 
ideas. We look forward to working with you, as always.
    We are going to keep the record of the hearing open for 15 
days if you want to add anything or any of the Members want to 
subject you to further interrogatories.
    Secretary Chertoff. Thank you, Mr. Chairman. Always a 
pleasure, and I look forward to working with you on these 
issues during this coming year.
    Chairman Lieberman. Thank you. The hearing is adjourned.
    [Whereupon, at 4:06 p.m., the Committee was adjourned.]
















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