[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
        DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2011 

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
                    SUBCOMMITTEE ON HOMELAND SECURITY
                DAVID E. PRICE, North Carolina, Chairman
 CIRO RODRIGUEZ, Texas                      HAROLD ROGERS, Kentucky
 C.A. ``DUTCH'' RUPPERSBERGER,              JOHN R. CARTER, Texas
   Maryland                                 JOHN ABNEY CULBERSON, Texas
 ALAN B. MOLLOHAN, West Virginia            MARK STEVEN KIRK, Illinois
 NITA M. LOWEY, New York                    KEN CALVERT, California
 LUCILLE ROYBAL-ALLARD, California
 SAM FARR, California
 STEVEN R. ROTHMAN, New Jersey
 MARION BERRY, Arkansas           

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
                Stephanie Gupta, Jeff Ashford, Jim Holm,
              Karyn Kendall, Will Painter, and Mike Birsic,
                            Staff Assistants
                                ________
                                 PART 4
                     DEPARTMENT OF HOMELAND SECURITY
                                                                   Page
 Transportation Security Administration: Are We Making Smart 
Investments for Real Transportation Security?.....................    1
 Biosurveillance: Smart Investments for Early Warning.............  115
 United States Secret Service FY 2011 Budget......................  273
 Coast Guard FY 2011 Budget.......................................  351
 FEMA--Preparing for Disasters and Minimizing Losses..............  453
 DHS Cyber Security Programs--What Progress Has Been Made and What 
Still Needs to be Improved?.......................................  755
                                ________

         Printed for the use of the Committee on Appropriations


















    PART 4--DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2011















                                  TSA
                                  OHA
                                  USSS
                                  USCG
                                  FEMA
                                  NPPD
                                                                      















        DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
                    SUBCOMMITTEE ON HOMELAND SECURITY
                DAVID E. PRICE, North Carolina, Chairman
 CIRO RODRIGUEZ, Texas                      HAROLD ROGERS, Kentucky
 C.A. ``DUTCH'' RUPPERSBERGER,              JOHN R. CARTER, Texas
   Maryland                                 JOHN ABNEY CULBERSON, Texas
 ALAN B. MOLLOHAN, West Virginia            MARK STEVEN KIRK, Illinois
 NITA M. LOWEY, New York                    KEN CALVERT, California
 LUCILLE ROYBAL-ALLARD, California
 SAM FARR, California
 STEVEN R. ROTHMAN, New Jersey
 MARION BERRY, Arkansas           


 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
                Stephanie Gupta, Jeff Ashford, Jim Holm,
              Karyn Kendall, Will Painter, and Mike Birsic,
                            Staff Assistants
                                ________
                                 PART 4
                     DEPARTMENT OF HOMELAND SECURITY
                                                                   Page
 Transportation Security Administration: Are We Making Smart 
Investments for Real Transportation Security?.....................    1
 Biosurveillance: Smart Investments for Early Warning.............  115
 United States Secret Service FY 2011 Budget......................  273
 Coast Guard FY 2011 Budget.......................................  351
 FEMA--Preparing for Disasters and Minimizing Losses..............  453
 DHS Cyber Security Programs--What Progress Has Been Made and What 
Still Needs to be Improved?.......................................  755
                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                         U.S. GOVERNMENT PRINTING OFFICE 

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                        COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 NORMAN D. DICKS, Washington               JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia           C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                        HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana               FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York                   JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York                 RODNEY P. FRELINGHUYSEN, New   
 ROSA L. DeLAURO, Connecticut                Jersey
 JAMES P. MORAN, Virginia                  TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts              ZACH WAMP, Tennessee
 ED PASTOR, Arizona                        TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina            ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                       JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island          KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York              MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California         JOHN ABNEY CULBERSON, Texas
 SAM FARR, California                      MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois           ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan           DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                       JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania                RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey             KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia           JO BONNER, Alabama
 MARION BERRY, Arkansas                    STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California                   TOM COLE, Oklahoma
 ADAM SCHIFF, California
 MICHAEL HONDA, California
 BETTY McCOLLUM, Minnesota
 STEVE ISRAEL, New York
 TIM RYAN, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER, 
   Maryland
 BEN CHANDLER, Kentucky
 DEBBIE WASSERMAN SCHULTZ, Florida
 CIRO RODRIGUEZ, Texas
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado
 PATRICK J. MURPHY, Pennsylvania    

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)

       DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2011

                              ----------                                                                         Thursday, March 4, 2010.

TRANSPORTATION SECURITY ADMINISTRATION: ARE WE MAKING SMART INVESTMENTS 
                   FOR REAL TRANSPORTATION SECURITY?

                                WITNESS

GALE D. ROSSIDES, ACTING ASSISTANT SECRETARY, TRANSPORTATION SECURITY 
    ADMINISTRATION, DEPARTMENT OF HOMELAND SECURITY

               Opening Statement of Chairman David Price

    Mr. Price. The Committee will come to order. This afternoon 
we are pleased to welcome Acting Assistant Secretary Gale 
Rossides to her second hearing on transportation security 
issues before this Subcommittee. You have been the 
Transportation Security Administration's Acting Assistant 
Secretary for much longer than any of us anticipated. We all 
look forward to having some certainty about the long-term 
leadership of the agency, but in the meantime you have stepped 
up admirably to the demands of your role and we appreciate your 
strong and diligent leadership, which I am confident has made 
air travel in our country more secure. Thank you for serving 
your country with distinction in what is sometimes a thankless 
job.
    Created in the wake of the attacks of September 11th, the 
initial focus of the TSA was securing the aviation sector in 
this country. But soon thereafter, attacks in London, Madrid 
and Mumbai pointed to other transportation vulnerabilities, 
especially in transit systems. Based upon the threat 
environment, this Subcommittee has worked diligently over the 
years to fill security gaps in all of our transportation 
networks.
    Since 2003, we have appropriated over $8 billion to give 
TSA screeners better tools to detect weapons and explosives in 
luggage and on people. We have appropriated over $400 million 
for TSA to vet passengers for links to terrorism in order to 
prevent certain individuals from boarding an aircraft. 
Additionally, Congress has set an August 2010 deadline for 
screening all cargo on passenger aircraft, appropriating $468 
million to date to accomplish this task.
    To address threats outside the aviation environment, 
Congress has provided $1.8 billion in grants to help local 
transit agencies and Amtrak secure rail and transit networks. 
We worked with the new Administration last year to place 
additional emphasis on surface transportation security with new 
special response teams, or VIPRs, and funding to better 
coordinate security efforts in nonaviation modes, such as 
pipelines, highways, motor carriers, mass transit, rail and 
shipping.
    This Subcommittee has also encouraged research and 
development of technologies to thwart threats that have yet to 
materialize. Well before the Christmas Day bomb plot, TSA had 
been working to field a solution to the nonmetallic explosives 
threat by testing and evaluating advanced imaging technology 
which this Subcommittee supported.
    On December 25th, when Umar Farouk Abdulmutallab attempted 
to detonate an explosive device on board a Northwest Airlines 
flight from Amsterdam to Detroit, our fears about this threat 
were materialized. As a result, TSA ramped up its procurement 
and deployment plan for the new screening capacity. For that, 
you should be commended.
    However, the failure of Dutch screeners to detect the 
explosive on Christmas Day was just one piece of the breakdown 
in our intelligence and aviation security systems that 
permitted the would be bomber to get as far as he did. After 
ordering a top-down review of all the aviation security 
procedures, President Obama initiated a number of reforms, 
including enhanced screening for passengers flying into the 
United States from, or flying through, nations on our list of 
state sponsors of terrorism and other countries of interest; 
the deployment of additional law enforcement at airports, air 
marshals on flights, and explosives detection canine teams to 
keep our air traffic safe; ramped-up deployment of passenger 
screening technologies that can better detect hidden 
explosives; and importantly, improvements to the terrorist 
watch list system, including placing more individuals on the 
no-fly list. We will want to discuss your efforts since the 
announcement of these reforms and of course how your 2011 
budget builds on these measures to create lasting security 
solutions for the American people.
    The high threat environment that we face makes plain the 
need to close critical gaps in the aviation sector. The 2011 
request, which totals $7.87 billion overall, includes an 
additional $946 million above the 2010 level for increased 
measures to secure the Nation's airports and flights on the 
heels of the Christmas Day botched attack. We will need to 
closely scrutinize your request today, bearing in mind that the 
enemy is constantly watching and evolving and no single tool is 
a foolproof solution.
    We will be watching TSA to ensure that the agency itself is 
evolving to thwart potential attackers. One thing we rely on to 
give us perspective on the agency's strategic vision is your 
annual expenditure plan for checkpoint systems, checked 
baggage, and air cargo. This plan is our guidebook indicating 
how funds will be allocated within various programs. It is 
routinely updated to address changes in the threat environment 
or to revise estimates for technology development. Without 
knowing what you plan to procure in 2010 for airport 
checkpoints, we cannot make complete sense of your 2011 budget 
request for such items as advanced imaging technologies and 
portable explosive trace machines. We need to know if what you 
are requesting for 2011 is the best use of resources, and not 
just a response to the latest incident.
    Today, I look forward to learning more about this cohesive 
strategy. As part of this discussion, we expect you to be able 
to answer not only why a 9 percent increase in aviation 
security is a smart investment in 2011, but also whether we are 
devoting the correct amount of resources to domestic versus 
international activities. After all, aviation security does not 
start at our borders. We need to work across the globe to make 
sure that the threats are identified at their originating 
point, not when a terrorist boards an aircraft headed to the 
United States. So we will also want to hear about how TSA and 
the Department are cooperating with foreign authorities to 
secure air travel worldwide as well as discuss the optimal mix 
of manpower and screening technology for the 2011 fiscal year.
    I want to thank you again for your service to the country. 
I look forward to continuing to work with you to ensure our 
transportation security professionals are equipped with the 
resources they need to keep the American people safe.
    We will ask you, Ms. Rossides, to take 5 minutes to 
summarize your written statement and we will be happy to 
include your full statement in the record.
    Now before you begin, I recognize our distinguished Ranking 
Member, Mr. Rogers, for his comments.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
           Opening Statement of Ranking Member Harold Rogers

    Mr. Rogers. Thank you, Mr. Chairman.
    And welcome to Ms. Rossides for what is perhaps your final 
appearance before the Subcommittee, regrettably.
    When TSA was established in 2002, I voiced strong concerns 
about the agency's inclination to become overly reliant on 
manpower as opposed to the smart use of effective technology 
and its effort to bolster aviation security.
    Today, some 8 years later, in the wake of another terrorist 
attack, it feels like deja vu all over again as I review TSA's 
proposed response to the vulnerabilities exposed by the 
Christmas Day plot.
    Back in 2002, just as today, Congress was presented a 
request for funds to support thousands of thousands of 
screeners rather than a clearly articulated strategy for 
achieving meaningful aviation security. My concern back then, 
as it is today, is that we are not thinking through the 
proposed security enhancements in terms of portability, 
effectiveness, and adaptability for the next threat 
encountered.
    So as I look at the fiscal 2011 budget request for more 
than 500 additional whole body imagers and more than 5,300 
additional screeners I am apprehensive because it is unclear 
whether such a costly and manpower intensive approach is the 
absolute best course of action, especially when the initial 
deployment of these whole body imagers appears to be an interim 
step against the use of even more advanced technology.
    My position on enhancing aviation security is one of 
cautious urgency. Far too often government overreacts in the 
wake of a crisis and a reactionary posture is one that 
habitually leads us into overspending on solutions that don't 
pan out.
    Let me be clear, I am not saying there isn't some merit in 
what TSA is proposing for fiscal 2011. Rather, my concern is 
that this costly proposal appears to be a short-term fix, not a 
long-term sustainable solution that effectively balances 
legitimate travel, needed security, and limited resources.
    Unfortunately, these questions cannot be fully answered 
until we have a better understanding of the direction that TSA 
is heading in the current fiscal year, which is difficult to do 
until we receive TSA's fiscal 2010 spending plans, as required 
by law, even though we are well into fiscal 2010. But don't get 
me off on that subject.
    As this Subcommittee continues its oversight 
responsibilities, I intend to press DHS on the prioritization 
of its budget. I have made it very clear in previous hearings 
that I believe that the fiscal 2011 budget emphasizes aviation 
security and administration costs at the expense of virtually 
every other operational security program across the Department.
    While I do not dispute the need to enhance aviation 
security and to improve program management, it is important to 
recall that two very distinct al Qaeda plots were revealed this 
past year--the Christmas Day attack and the Zazi plot to 
reportedly detonate explosives in New York City. So what this 
means to me is that we cannot exclusively focus upon the 
aviation sector at the expense of other areas. We must remain 
vigilant on the entire spectrum of threats facing the country.
    Now having said all of that, I would be remiss if I did not 
take a moment to recognize the notable efforts of all the TSA 
personnel that have worked tirelessly to identify solutions to 
very difficult challenges since the Christmas Day attack.
    And finally, Mr. Chairman, I think we need to highlight, as 
you have, Ms. Rossides' noteworthy service since the 
establishment of TSA. She is one of the six original employees 
at TSA, as young as she is, and she has endured the full range 
of challenges facing aviation security in the post-9/11 era. 
She will be taking up further pursuits, but we want to thank 
you for your service to your country for many years in this 
chore. To put it mildly, this Subcommittee and this Nation owes 
you a debt of gratitude for your dedicated service.
    Thank you.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Price. Thank you very much. Ms. Rossides, please 
proceed.

                       Statement of Gale Rossides

    Ms. Rossides. Good afternoon, Chairman Price and Ranking 
Member Rogers. It is my great privilege to appear before you 
today to ask on behalf of the Transportation Security 
Administration, to ask for your support of the President's 
fiscal year 2011 total budget request of $8.2 billion for TSA, 
an increase of $512 million over fiscal year 2010.
    I also thank you both personally for your very kind words. 
Having been with TSA since its first days, I have witnessed and 
appreciate our enduring partnership with this Subcommittee as 
we have achieved and continue to strive to meet important 
objectives towards securing our Nation's vital transportation 
systems.
    I also greatly appreciate the work we have done with 
partners at all levels of government, industry representatives, 
our international partners, the privacy sector, and especially 
the traveling public we serve.
    This year, we expect to fully implement our Secure Flight 
program, a key security vetting measure effected before airline 
passengers ever arrive at the airport. GAO has now certified 
that we have generally met all 10 program certification 
requirements set by this committee.
    We will also screen 100 percent of air cargo on domestic 
flights by August and make substantial progress on screening 
air cargo on inbound international passenger flights.
    We will obligate all $1 billion provided under the Recovery 
Act, accelerating important passenger and baggage screening 
enhancements.
    We will further initiate over $1.3 billion in checkpoint 
and explosives detection systems with funds provided in fiscal 
year 2010.
    We will stand up 15 new VIPR teams dedicated to surface 
transportation security and serve as the executive agent for 
decisions on $300 million in FEMA public transportation and 
railroad security grants.
    TSA operates in a high threat environment day in and day 
out. This drives us to be ever vigilant. The attack on 
Northwest Flight 253 on Christmas Day was a stark reminder that 
there are still those who wish to do us harm. They are studying 
our security measures and will exploit our social norms to 
their advantage. The men and women of TSA live with that 
reality every day.
    I truly appreciate the time that you, Mr. Chairman, and 
Ranking Member Rogers took to visit our Transportation Security 
Integration Facility, the TSIF, last week to discuss many of 
the advancements we are seeking in fiscal year 2011, most 
notably our advanced imaging technology. For years, TSA has 
recognized the threat of improvised explosive devices and 
focused our efforts there. We began testing advanced imaging 
technology in 2007 to detect metallic and nonmetallic threats 
hidden on the body. Because of the 3 years we have put into 
this we currently have 40 machines already in place at 19 
airports. We will field approximately 500 units systemwide by 
the end of this year and our fiscal year 2011 request of $215 
million doubles that equipment capability.
    The almost 1,000 units will allow us to screen over 60 
percent of all airline passages with AIT. This requires also 
5,000 TSOs, which are also requested in our budget along with 
supporting costs.
    I want to emphasize that TSA is the world leader in the 
marketplace for this advanced imaging technology, and the work 
we have done to date has paved the way for other countries to 
follow suit in the wake of the December 25th incident.
    TSA does not screen passengers in other countries, but we 
are committed to helping our foreign partners enhance the 
security of flights coming into the United States. We have 
built strong relationships with our international partners, 
proven by the high level of cooperation we received in 
December. Within 5 hours of TSA issuing new security 
directives, 95 percent of foreign partners were in compliance. 
TSA seeks an additional $40 million for our international 
programs.
    Our request also seeks to better equip our TSOs to better 
identify threats through operational intelligence by expanding 
our field intelligence officer program. We are also requesting 
$60 million for 800 additional portable explosive trace 
detection machines which have been proven to be very successful 
at detecting a wide array of explosives. We propose to add 350 
behavior detection officers, and with an additional $71 
million, TSA is requesting to add 275 proprietary canine teams.
    The President's budget also requests an additional $85 
million for FAMS to sustain domestic and international flight 
coverage on our highest risk flights.
    In closing, I would like to state that TSA's core mission 
is one of counterterrorism. We continue the work we began 8 
years ago to close vulnerabilities with new technology and with 
new processes in a very complex security regime.
    As this will likely be my final appearance before the 
subcommittee as Acting Assistant Secretary, I am extremely 
grateful for your support of TSA, for our programs, and for the 
everyday heroes I have been honored to serve alongside with. I 
appreciate your support in achieving our shared security goals, 
and I am happy to respond to your questions.
    [The statement of Ms. Rossides follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                      ADVANCED IMAGING TECHNOLOGY

    Mr. Price. Thank you very much. The first question I will 
ask is having to do with the advanced imaging technology. Over 
the past 2 years, the TSA has worked to develop and test 
advanced imaging technology for use in airport screening 
checkpoints with an eye toward replacing metal detectors at 
primary screening checkpoints. This replacement effort has been 
well under way, actually well over a year before the Christmas 
Day bombing.
    Because of your efforts, TSA was quickly able to develop 
plans to screen 100 percent of passengers both with AITs in 
primary or to use an equivalent method to detect nonmetallic 
threats after the Christmas Day incident. Unlike pat-downs or 
traditional metal detectors, DHS believes that AITs, which see 
beyond a passenger's clothes and identifies threat objects on a 
body, could have detected the explosive powders that 
Abdulmutallab smuggled inside his underwear when he went 
through security in Amsterdam.
    The budget request notes that if funded, the 1,000 AITs 
purchased in 2010 and 2011 would allow this technology to be in 
place at 75 percent of the country's largest airports. It 
remains unclear as to how you deploy these systems since they 
have a much larger footprint than metal detectors and a slower 
processing time. For example, AITs take longer to scan a single 
passenger than a metal detector, 1.3 versus 22 seconds. In a 
briefing with staff, TSA stated they do not expect increased 
processing times with AITs because current passengers have to 
wait on the X-ray to scan their carry-on bags and shoes. 
Accordingly to TSA, this 22-second X-ray is about the same time 
that it takes an AIT to scan a passenger. I really wonder if 
the AITs will increase wait times. Could you help us figure 
this out?
    And if wait times begin growing, how are you going to 
alleviate the lines of passengers backing up and the potential 
security threat as they wait to be screened by an AIT?
    What is your deployment plan for the AITs? Is it your 
intention to deploy AIT equipment within the existing screening 
checkpoint footprint in all airports? Do you plan on doing a 
one-for-one replacement of metal detectors? How is this going 
to move forward?
    And then finally, let me just recall the situation we faced 
when we wanted quickly to be able to screen checked baggage 
after 9/11. You will recall TSA placed explosive detection 
machines in less than ideal locations in a number of airports 
on a temporary basis, which created a series of problems and 
ultimately made permanent solutions more costly and more time 
consuming. I am sure that experience is on your mind as you 
look forward to how we are going to do the AIT project. How are 
you going to avoid repeating these same mistakes as you begin 
to deploy the AIT equipment at existing screening checkpoints?
    Ms. Rossides. Yes, sir. Let me start by talking about the 
work that has been done to date. We gained a tremendous amount 
of knowledge from the pilots that we ran over the last couple 
of years in terms of how to process the passengers through, how 
to measure the wait times. And, from the time passengers enter 
the queue to the time they actually leave the checkpoint, there 
are multiple processes going on, one of which is walking 
through the advanced imaging technology. But the other is the 
screening of their carry-on bags. And it is the combination of 
those processes working in parallel for the passengers that go 
through that tells us that we do not believe that deploying 
this AIT is going to significantly increase the wait times for 
the passengers.
    We also believe that deploying the TSOs in the right 
positions in the checkpoint to inform the passengers how to 
properly divest to go into the AIT is going to contribute to 
keeping those wait times down.
    The integration of the AIT equipment into the checkpoint 
has been something that we have looked at as part of our 
piloting, and as we are looking at this deployment. We have 
airports around the country now that have raised their hands 
and said they are ready to take this technology and put it in 
their existing checkpoints. We are confident that those that we 
are rolling out this year can be done and put in the existing 
checkpoints and not have to go through major construction 
issues, not have the kinds of things we had where we had the 
checked baggage technologies in lobby areas, et cetera.
    We are also very much focused on how do we educate the 
traveling public so that when they show up at the checkpoint 
they understand exactly what they can expect as they go through 
the AIT machines. So, it is the combination of looking at the 
entire process within the checkpoint, looking at the public 
education element, making sure that we have the TSOs properly 
stationed in front of the equipment so that they can make sure 
that the passengers are properly divested. This technology 
gives us such an improvement in the detection capability that 
we are looking to make sure that the processes, the technology 
and the people are all well integrated so that it is both a 
very effective screening process as well as very efficient.
    Mr. Price. The footprint of these AIT machines though is 
greater than the metal detectors?
    Ms. Rossides. Yes, it is, sir. But what we have found is 
that in a lot of these airports as the checkpoints were built, 
they actually had more room in them, you know, more room within 
the checkpoint footprint itself. So the initial deployment is 
to look at those checkpoints that are ready right now to handle 
this equipment.
    Mr. Price. And the idea is that the carry-on baggage will 
still go down the line and be screened but the time the 
individual spends in the AIT machine will parallel or be 
concurrent with that time used for carry-on baggage screening?
    Ms. Rossides. Correct; right.
    Mr. Price. That is how you come up with very little net 
increase in time spent?
    Ms. Rossides. Correct. Correct. And it is something that we 
will be very focused on. Frankly, as passenger loads increase 
over the next couple of years, we will look to make sure that 
we are properly managing both queues. As we are setting these 
machines up, we will also have the ability to direct the 
passengers either through the advanced imaging technology or 
through the walk-through metal detector and receive alternate 
screening so we can manage the process that way as well.

                   AIT PASSENGER RESPONSE AND PRIVACY

    Mr. Price. These pilot efforts that you have undergone in 
the last couple of years to check out this technology, has that 
also included extensive work on what we are talking about right 
now? The deploying of the machines? The way the passenger flow 
works?
    Ms. Rossides. Yes.
    Mr. Price. And for that matter, passenger acceptance of the 
new technology in general?
    Ms. Rossides. Yes, and I am very, very pleased to be able 
to report to you that the passenger response to this technology 
has been overwhelmingly positive and that was part of our 
pilot. I believe that we had an over-90-percent acceptance rate 
by the traveling public when they opted to go through the 
equipment. This has been a great piece of technology for 
persons with disabilities going through checkpoints. During our 
pilots, we looked at the configuration, officer training 
requirements, passenger throughput and we looked at passenger 
acceptance.
    Mr. Price. And by passenger acceptance, you are also 
referring to the measures taken to protect privacy?
    Ms. Rossides. Yes, sir. And we have signage up in the 
checkpoint area that informs the passengers that first of all 
this is optional. They do not have to go through the advanced 
imaging technology if they choose not to. It also informs them 
that the officer that is guiding them through this technology 
will never see the image that the officer in the remote 
location is using for detection purposes. And we have made sure 
that those privacy concerns have been addressed with the 
public.
    We have had a privacy impact statement out during this 
deployment of the technology in pilot phase and again we have 
worked very hard with privacy groups, as well as the traveling 
public, to ensure that they accept and understand the privacy 
measures that are in place.
    Mr. Price. Thank you.
    Mr. Rogers.
    Mr. Rogers. So continuing on the privacy aspect, the 
machine makes an image which is telecast, if you will, to a 
room where just one person is located; correct? And that is the 
only place where this image is shown?
    Ms. Rossides. Correct.
    Mr. Rogers. To the one person in the closed room, an 
employee?
    Ms. Rossides. That is right.
    Mr. Rogers. And the face is blurred?
    Ms. Rossides. Correct.
    Mr. Rogers. Now you say this is optional to the passenger. 
Suppose they say no, I don't want to do that. What do you do 
then?
    Ms. Rossides. Then they are directed through the walk-
through metal detector. They could be subjected to hand wanding 
and a full-body pat-down, so we are ensuring that an 
alternative and comparable form of screening applies to 
passengers if they choose not to go through the technology.
    Mr. Rogers. So every person that refuses the whole body 
imager scan would be patted down?
    Ms. Rossides. Possibly; they could either be patted down, 
they could have a review of their carry-on luggage. There is a 
variety of alternative measures that we would have that could 
be applied depending on, again, the particular technology that 
is available in the checkpoint.

                         EFFECTIVENESS OF AITS

    Mr. Rogers. Now, is this new machine, is it as effective as 
a pat-down?
    Ms. Rossides. From an effectiveness standpoint and an 
efficiency standpoint, it is better. Because it allows us to 
view the images quickly. It identifies anomalies on the body. 
It identifies anomalies that may be in sensitive parts of the 
body and it is much faster than doing a full-body pat-down on 
somebody.
    Mr. Rogers. Well, considering the Christmas Day bomber, 
would this machine have detected the bomb on that person?
    Ms. Rossides. Without going into the specifics of that, 
because of the ongoing criminal investigation, I will tell you 
that the experience we have had, both in the labs and in our 
pilots, our officers are identifying objects on the body that 
are comparable to what that threat was.
    Mr. Rogers. Every time?
    Ms. Rossides. Our officers are doing a very good job.
    Mr. Rogers. Every time?
    Ms. Rossides. I would have to get back to you, but you 
know, we have very, very good measures in place for evaluating 
our officers.
    [The information follows:]

    No single security technology or procedure is 100% effective. 
Consequently, TSA has instituted multilayer and dynamic threat 
mitigations, some of which are visible to the traveling public and some 
of which are not. However, the capability of screening technology and 
the ability of screeners to detect threat items are classified and 
cannot be disclosed in a public forum. TSA would be pleased to provide 
that information to the Committee in an appropriate environment.

    Mr. Rogers. Well, contrariwise, if you had patted this man 
down, would we have found the bomb?
    Ms. Rossides. Today we do not do a full-body pat-down that 
goes into the sensitive parts of the body where that bomb was 
secreted.
    Mr. Rogers. Now, this machine is not foolproof; correct? I 
mean it is not 100 percent?
    Ms. Rossides. It requires the experience of the operator as 
well, yes.
    Mr. Rogers. And we may be getting into some confidential 
matters here, but what I need to do as well as you can state it 
in these circumstances, is this machine the end all?
    Ms. Rossides. This machine gives us an increased detection 
capability that is significantly greater than what we have at 
the checkpoint today. And what we, in working with industry and 
these manufacturers, we are driving these manufacturers to 
continue to improve this technology because of the demands that 
we have for aviation security.
    Mr. Rogers. And if a bomb were secreted in an article of 
the body, the machine would not detect that of course, would 
it?
    Ms. Rossides. Inside the body?
    Mr. Rogers. Yes.
    Ms. Rossides. Correct.

                        AIT AND METAL DETECTORS

    Mr. Rogers. On the footprint, the machine would not replace 
the magnetometers; correct?
    Ms. Rossides. Right now we do not have plans to fully 
replace all the walk-through metal detectors; that is correct.
    Mr. Rogers. So you would have the metal detectors as well 
as the full body imager?
    Ms. Rossides. Correct, right now.
    Mr. Rogers. Why would you need both?
    Ms. Rossides. Part of it is to manage the flow of the 
passengers so that we would be able to have an alternative 
first. If passengers say they don't want to go through the 
advanced imaging technology, we would have the walk-through 
metal detector and couple that with other security measures.
    But also what we are looking at right now is, as we are 
deploying these, maximize the use of the advanced imaging 
technology but also direct passengers through the walk-through 
metal detector in checkpoints. So that when a passenger shows 
up, the security advantage we have is that as the passenger 
shows up in the queue line they will be directed by the officer 
to either the advanced imaging technology or the walk-through 
metal detector and they won't know which. And so the advantage 
to us is somebody couldn't predict he would get in this line 
and go through the advanced imaging technology or get in this 
line and go through the walk-through metal detector. Long term, 
we hope to drive the industry to provide us with the technology 
where the walk-through metal detector capabilities would be a 
part of the advanced imaging technology equipment.
    Mr. Rogers. You would have a combined machine?
    Ms. Rossides. That would be a great setup for us down the 
road.
    Mr. Rogers. Why haven't we done that?
    Ms. Rossides. We are pushing the industry to do that. The 
industry has not gotten to that point yet.
    Mr. Rogers. I bet if you put out a spec and asked for bids 
you would get some bids.
    Ms. Rossides. I believe we are asking for that in the labs, 
and we are working with the DHS science and technology lab to 
help us push the industry towards that.
    Mr. Rogers. Would that save money in the acquisition and 
deployment, wouldn't it?
    Ms. Rossides. I am not sure that it would, sir. I would 
have to get back to you.
    Mr. Rogers. Let me know.
    Ms. Rossides. I will.
    [The information follows:]

    TSA is working with vendors on adding new capability to AIT 
machines, including metal detection. Costs cannot be determined until 
systems have been developed and qualified for use at checkpoint. We 
will inform the Committee as soon as additional information becomes 
available.

    Mr. Rogers. There is the machine and then there is the 
separate room where the image is viewed by an operator, which 
has to be fairly close to the machine, but not terribly close; 
right?
    Ms. Rossides. Uh-huh.
    Mr. Rogers. Nevertheless it requires some space that is not 
now required with magnetometers or the check-in procedure; 
right?
    Ms. Rossides. Right.

                     AIT INSTALLATIONS AT AIRPORTS

    Mr. Rogers. Now, does your budget request cover the costs 
of installing the machines and acquiring space for the room and 
all of that?
    Ms. Rossides. What the budget request includes, money for 
constructing a viewing room, you know within the checkpoint 
area. What we are doing, for example, in a lot of places, we 
are taking a supervisor's office. We are using other pieces of 
the real estate there close by to the checkpoint to create that 
alternative viewing room. But the budget does have some money 
in it to cover some of those infrastructure costs to build out 
the viewing room.
    Mr. Rogers. What about the airports? What will be their 
financial involvement with this change?
    Ms. Rossides. The airports' financial involvement? Some of 
them are providing us the room. And in some cases we are 
providing them nominal amounts of money to pay for this 
infrastructure cost. But I think for the most part the 
investment is TSA's that we are making in the checkpoint area.
    Mr. Rogers. So, will you pay the airports for taking more 
of their space?
    Ms. Rossides. I don't believe we are. I will get back to 
you on that though. I have not seen that cost factor as we are 
looking at these deployments. But I will get back to you and 
double check.
    [The information follows:]

    In order to carry out the statutory mandate of the Aviation 
Transportation Security Act (ATSA), it is necessary for TSA to use 
certain airport space and facilities defined under federal law as 
``necessary security checkpoints.'' Pursuant to Section 511 of the DHS 
Appropriations Act, 2005, Pub. L. 108-334, 118 Stat. 1317 (October 18, 
2004) airports must provide such space rent free to TSA. The space 
required for the AIT machines is the direct result of TSA's mandate to 
screen airline passengers. In accordance with Section 511 referenced 
above, TSA will continue to pay for necessary services and utilities 
associated with such checkpoint space.

    Mr. Price. Thank you.
    Mr. Rodriguez.

                      PRIVATE AIRCRAFT REGULATION

    Mr. Rodriguez. Thank you. Thank you very much. Madam 
Secretary, thank you very much for your service to our country 
and thank you for the work that you have been doing. We had a 
recent incident that occurred in Texas in Austin, the IRS 
facility there, and it could have taken a lot more lives. It 
did take the life of a wonderful individual veteran who served 
our country well.
    In 2008, TSA had proposed a plan to propose new rules for 
some 15,000 planes, including requirements for jet operators to 
check the passengers on a watch list and those kind of things, 
and this proposal was met with a great deal of opposition in 
the private pilot industry groups and others.
    When will the TSA's new proposal for regulating private 
aircraft be made available?
    And number two, what changes, if any, will be taken into 
consideration as a result of the incident that occurred in 
Austin at the IRS facility?
    Ms. Rossides. Yes, Mr. Congressman, in answer to your 
question first, we are going to go out with a supplemental or a 
second notice of proposed rulemaking on the general aircraft, 
large aircraft security program. And we are hoping to have that 
through the Administration and posted by the end of the year. 
And we did receive a lot of comments on the first round and we 
had a terrific collaboration with the industry and with GA 
pilots on comments. And we are really looking at that.

       AUSTIN, TEXAS, INTERNAL REVENUE SERVICE SECURITY INCIDENT

    In the aftermath of the Austin, Texas, crash and that 
incident, we actually went back to the Homeland Security 
institute that had done the engineering studies for us and 
asked them to take a look at the specifics of that crash and if 
it should formulate any changes in that proposed rulemaking. 
And so we are waiting for the results of that study. And that 
may help us and it definitely will inform us as to any changes 
that we may need to make in the rule.
    Mr. Rodriguez. What kind of security do we have, if any, in 
some of the small airports that we have in terms of any kind of 
assessments that we might make at the present time?
    Ms. Rossides. Right now in most very small GA airports we 
don't really have any.
    Mr. Rodriguez. We don't have any at all?
    Ms. Rossides. No, sir.
    Mr. Rodriguez. Do we have any kind of establishment, I 
guess we do have the number of flights that go out of there but 
we don't have any way of checking to see who flies out of 
there, who doesn't and those kind of things?
    Ms. Rossides. Right now--well, mostly the FAA knows who is 
flying. They would know the registration of the small plane and 
they would know generally who the pilots are. The pilots have 
to be certified by the FAA. So most of the regulation to date 
has been via the FAA's programs.
    Mr. Rodriguez. So not even once a year or twice a year do 
we do any spot check on any of those?
    Ms. Rossides. We have done so on occasion, for national 
security events. For example, with the inauguration last year 
of President Obama we actually went and visited every general 
aviation airport on the route for the train that he took from 
Philadelphia to D.C. During the Olympics, the plan for the 
Olympics that just ended, we did work looking at the general 
aviation airports and we did that with state and local law 
enforcement in concert with our inspectors. Depending on 
national events, significant activities in an area, we will go 
and look at the general aviation airports. And if intel 
suggests something, we definitely then work in looking at them.
    Mr. Rodriguez. If I can just follow up on that one again. 
When you referred to intel, are you in direct contact on the 
border with Border Patrol and others?
    Ms. Rossides. Yes, we have a very close working 
relationship with the Border Patrol.
    Mr. Rodriguez. The number of flights coming over? The 
Canadian border also?
    Ms. Rossides. Yes, sir.
    Mr. Price. Mrs. Lowey.

                 ADVANCED IMAGING TECHNOLOGY DEPLOYMENT

    Mrs. Lowey. Thank you. In the American Recovery and 
Reinvestment Act the Committee provided TSA with $25 million 
for airport screening machines that have been discussed rather 
thoroughly to be deployed at airports over the country. 
However, last Tuesday it was reported that not one of these 
devices has yet to be deployed. I was really shocked to read 
that because we know the importance of quickly deploying this 
technology to our most traveled airports, including Kennedy and 
LaGuardia in New York.
    Why did it take 7 months just to purchase 150 advanced 
imaging technology machines? You mentioned the time frame for 
deploying this technology in Boston and Chicago. What about New 
York? And if you struggled to spend the $25 million, what 
assurances can you give this Committee that you can quickly and 
effectively spend the more than $214 million being proposed by 
the President to deploy nearly 1,000 machines across the 
country?
    Ms. Rossides. Thank you. Yes, Congresswoman, we bought 150 
of the machines last September and we are in the process now of 
receiving those and they will be this first group to go out to 
the airports. The reason that it took some time is we put in 
the order in September and the manufacturer has been delivering 
those, we have made sure that they are ready and equipped in 
the way that we need them to be for the delivery to the 
airport. We are also in the process of awarding a contract, an 
integration contract, and that will be a contractor that will 
be--their expertise is in deploying this kind of technology and 
rolling this out and supporting us to do that.
    So we have two qualified vendors with this technology 
today, and as we make these purchases we will be able to use 
that vendor's list. And in the meantime our lab is continuing 
to certify additional vendors. And that is why the industry is 
responding very quickly to this demand and with our integration 
contract we believe we will be able to deploy these. And it is 
going to take all of our energy and our commitment, but we are 
very, very committed to doing this.
    Mrs. Lowey. You mentioned Boston and Chicago; how about New 
York?
    Ms. Rossides. I don't have the schedule in front of me but 
I will be happy to provide it. Secretary Napolitano tomorrow 
will be announcing the deployment to 11 airports and our team 
is working on the deployment all 150 machines, plus those that 
we will be receiving this year and hopefully next.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Lowey. I hope the decisions are made according to 
threat.
    Ms. Rossides. They are.

                                 UNIONS

    Mrs. Lowey. I just wanted to check that out.
    Another issue, Secretary Napolitano testified last week 
before the authorizing committee that DHS did in fact have the 
authority to grant TSO's bargaining rights administratively.
    Can you tell me what is holding up the Department from 
taking this action which President Obama stated many times over 
during the campaign that he supported it? I mean it seems to me 
that the threat to the traveling public is the terrorists, not 
the labor unions. And the fact that we cannot even get someone 
to head up the agency because of this issue doesn't make any 
sense. Could you respond?
    Ms. Rossides. Yes, ma'am, Congresswoman. The Secretary has 
indicated that she wants to get a permanent TSA Administrator 
in place before the final decision is made on collective 
bargaining.
    Mrs. Lowey. That is a good excuse, but what does she--
well--
    Ms. Rossides. I will tell you what I have done in my tenure 
as the Acting Assistant Secretary. I have held meetings with 
both NTEU and AFGE in the last year where the leadership of the 
unions have brought in officers from around the country that 
are members of their respective unions and we have sat down and 
had great dialogue with those frontline officers and the 
leadership of both unions on issues of mutual concern. And I 
will tell you that if you put me in a room with a bunch of TSOs 
it is a great, great exchange. And we have had, I consider the 
leadership of TSA today to have a very good working 
relationship with both unions. And we will await the 
Secretary's----
    Ms. Lowey. I thank you for that response, and I see the 
Chairman is about to crack the whip. I want to remind you that 
Customs and Border Protection, Immigration, Customs 
Enforcement, Capitol Police and the Pentagon Force Protection 
Agency have collective bargaining rights.
    Ms. Rossides. Yes, I know.
    Ms. Lowey. You are aware of that?
    Ms. Rossides. Yes, I am.
    Mr. Price. Thank you.
    Mr. Farr.

                              AIR MARSHALS

    Mr. Farr. Thank you, Mr. Chairman. I probably fly more than 
anyone on this Committee because of the distance from here and 
I go home every weekend. So I have a lot of experience with 
TSA. And frankly I have been very critical of the air marshals, 
wondering what the cost-effectiveness of them are. It would be 
like us having to have a marshal to take us from this room to 
the floor. After you are in the building, the building is 
secure, and after you get through the airports, it should be 
secure. We have locked down cabins and cabins that are armed. 
And with the Christmas bomber I don't think it would have made 
a difference whether an air marshal was on that plane because 
the air marshals sit in first class and that incident happened 
in the back.
    So the Committee last year asked for a report on the cost 
effectiveness of the air marshal program and we have not 
received anything yet. And in your request you want $85 million 
more for air marshals. I don't think our Committee ought to 
give it to you until we get that report.
    I just wondered if you want to comment on what we are 
getting out of that program. I mean, this is a priority issue. 
Although I am a big fan of law enforcement, I don't think this 
is the best. From what I understand talking to air marshals, 
they have nothing to do when they are not flying. They are not 
reviewing rosters. They are not helping with the no-fly list 
and things like that. They have no access to the information of 
who is on the plane. They are also shocked to find out that I 
am a Congress member. They only find that out because they sit 
next to me and they can read my material. And they are asking 
me afterwards after we get off, why didn't anybody tell me? 
There were five other Members of Congress on this plane and 
they didn't know who they were either. I guess that is what has 
led to this issue of wondering why we ought to keep beefing up 
this program.
    Ms. Rossides. So Congressman, I would be happy to come 
myself and bring the leadership of the Federal Air Marshal 
Service to give you a briefing, including some of the issues 
that you questioned there that I don't want to talk about in an 
open setting.
    I can tell you that the Air Marshal Service is a group of 
extremely well-trained law enforcement professionals.
    Mr. Farr. I don't doubt that.
    Ms. Rossides. When they are not in mission status they are 
doing other things, including training. They are supporting our 
operations in airports, and they work closely with the FBI. 
They are assigned to the JTTF in the interest of aviation 
security. So we do have a number of deployments when they are 
not in the air.
    But they are----
    Mr. Farr. Why don't you submit the report that we asked for 
and then we can have a meeting after that?
    Ms. Rossides. We will do that and I will follow up on where 
that report is.
    [The information follows:]

    The draft Federal Air Marshal Service Assessment report to Congress 
is currently undergoing Executive Level review within the 
Transportation Security Administration (TSA). After the draft report 
clears TSA, it will undergo review at the Department of Homeland 
Security and the Office of Management and Budget. Once all these 
entities clear the report it will be delivered to the House and Senate 
Appropriations Committees.

                           LANGUAGE TRAINING

    Mr. Farr. The other, I wondered how the TSA is addressing 
the language barriers in their national field personnel in the 
Middle East and Africa; this is; what are you doing to train 
people in the native languages or hire host country nationals 
to work for you with field personnel in sort of the risky areas 
of the world?
    Ms. Rossides. So one of the things that we do look for as 
we deploy our TSA representatives around the globe is whether 
or not they are fluent in the language to which they are being 
deployed. And if they are not, then they go through the 
Department of State language schools so that they at least have 
some basic capability in the language.
    Mr. Farr. And who pays for the screening equipment in 
foreign countries?
    Ms. Rossides. In the foreign countries, the foreign country 
pays for that equipment.
    Mr. Farr. What lessons did TSA learn from its involvement 
and cooperation with so many other agencies in other countries 
during the Vancouver Olympics?
    Ms. Rossides. We are in the process of doing a lessons 
learned now. And we had great cooperation both from the general 
aviation and the commercial airports back and forth to 
Vancouver. We had a greater intergovernmental interagency 
cooperative effort. And the lessons learned are being reviewed 
now immediately in the aftermath of the Olympics.
    Mr. Farr. Can you report those to the Committee?
    Ms. Rossides. Happy to.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Farr. And lastly, what you are doing with private 
aviation.
    Mr. Price. Very quickly. We have a vote coming up.
    Ms. Rossides. As I mentioned to Congressman Rodriguez, we 
are in the process of preparing the supplemental notice of 
proposed rulemaking for general aviation, which will go out 
later this year.
    Mr. Price. Mr. Culberson.

                          TERRORIST WATCH LIST

    Mr. Culberson. Thank you, Mr. Chairman. We really 
appreciate your service. Thank you for the job you have been 
doing. There is a lot of concern that the Christmas Day bomber 
was on a terror watch list and was able to get on an airplane. 
How and why did that happen and what can we do in the future to 
make sure that if they are on the watch list they are not able 
to get on the plane?
    Ms. Rossides. Sir, he was not on any terrorist watch list. 
He was neither a no-fly nor a selectee. So we did not have any 
visibility into him.
    Mr. Culberson. Of course he had apparently a valid visa, 
but it was my understanding he was on a terror watch list. That 
is not correct?
    Ms. Rossides. He was not.
    Mr. Culberson. Oh, he was on a British terror watch list, 
my colleague Mr. Kirk tells me. Are we looking at watch lists 
from other countries?
    Ms. Rossides. I probably shouldn't answer that in an open 
session. But I will tell you that right now President Obama did 
direct that the U.S. Government, both the Homeland Security and 
the Intelligence Community, look at the watch list process, and 
that review right now is ongoing to see how we can improve 
that.
    Mr. Culberson. I am glad you are doing that. But common 
sense, if they are on a watch list just automatic pilot you 
shouldn't let them on the airplane with my wife and kids, 
anybody's wife and kids.
    Ms. Rossides. One of the things that the TSA will have 
implemented by the end of this year is the Secure Flight 
Program which will ensure that no-flies and selectees are 
properly screened and no-flies are not permitted to fly.

                               PROFILING

    Mr. Culberson. One of the things that I know frustrates all 
Americans--I hear a lot about it and I know my colleagues do 
from their constituents--is common sense. It is very 
frustrating to see the TSA apply these restrictions to all of 
us. Frisking and searching 70, 80-year-old women. I remember a 
horrible case, a medal of honor winner, an 80-year-old 
gentleman who had served his country and was pulled aside, yet 
young Muslim men--this guy had been traveling to Pakistan--are 
not treated any differently. What statute, what Federal 
regulation prevents you from singling out young Muslim men and 
giving them a little more attention than an 80-year-old medal 
of honor winner?
    Ms. Rossides. Well, sir, when I hear of circumstances like 
that as you just described, it troubles us too. We want to make 
sure that our officers are respectful of all passengers. But in 
reality, the law requires us to screen all passengers. And TSA 
does not profile and therefore we do not single out different 
categories of individual passengers.
    Mr. Culberson. That is why I was asking. Is there a Federal 
statute that prohibits you from singling out a group of people 
or particular characteristics? Or is there an internal 
regulation? Is it a Federal regulation or a Federal statute 
that prohibits you from profiling?
    Ms. Rossides. I would have to get back to you, but I know 
as a matter of policy we do not profile.
    [The information follows:]

    The Transportation Security Administration adheres to ``Guidance 
Regarding the Use of Race by Federal Law Enforcement Agencies'' 
developed by the U.S. Department of Justice (DOJ) in June 2003 that is 
premised upon the constitutional prohibition against selected 
enforcement of law based on considerations such as race. Under the DOJ 
Guidance, federal law enforcement officers may not use race or 
ethnicity to any degree in making routine or spontaneous law 
enforcement decisions. Applying that standard to TSA, Transportation 
Security Officers (TSOs) do not factor race or ethnicity in conducting 
routine screening operations at an airport security checkpoint. The DOJ 
Guidance also states that, in preventing threats to national security 
or in enforcement laws protecting the integrity of U.S. borders, 
federal law enforcement officers may not consider race or ethnicity 
except to the extent permitted by the U.S. Constitution and laws of the 
United States. As an example, the DOJ Guidance indicates that, if U.S. 
intelligence sources were to report that a particular ethnic group was 
planning to use commercial jetliners in connection with a terrorist 
attack at a specific airport within a specified timeframe, then it 
would be permissible for TSA personnel to subject individuals of that 
ethic group to heightened scrutiny in that location during that period 
of time.

                             ISRAELI MODEL

    Mr. Culberson. It is disturbing. It is something that needs 
to change. It defies common sense. I got here in 2001 and was 
on the transportation authorizing committee before I joined 
this wonderful Committee. And right after 9/11 we brought in 
the head--I think you were on there with me, Mark--we brought 
in the head of the Israeli, of El Al security. He was terrific. 
And we heard terrific input from the head of Israeli security. 
They just don't have this problem. If you are an 80-year-old 
grandmother they don't bother. And they obviously are going to 
screen you and check you. But they have a security professional 
that will talk to them. And if you fit certain characteristics 
you are going to have a conversation with Officer Lewis here 
and you will have a special visit.
    It just defies common sense. What do we need to do to make 
that happen? Because we do not have a problem with Baptists or 
Hindus or Buddhists blowing up airplanes it is just common 
sense. What needs to happen so you can let your officers use 
their own common sense and good judgment and zero in on the 
population that is the problem?
    Ms. Rossides. So let me answer that in a couple of ways. 
First of all, we have consulted with the Israelis frequently on 
the security measures that they have there and what we can do 
here. We have also a behavior detection officer program that 
has officers looking for behaviors that would warrant us to 
give somebody additional screening.
    In terms of what legislative remedy would we possibly need 
for this, I would have to get back to you.
    Mr. Culberson. Please do. Specifically, where is the 
problem? And if I could, let me let Mr. Kirk, he is very 
knowledgeable as a naval intelligence officer.
    Mr. Price. Mr. Kirk, we will try to get your question in 
before we go to vote.

                                 O'HARE

    Mr. Kirk. Thank you, Mr. Chairman. I just have to ask 
because the second busiest airport in the world is in my State. 
We just had the head of security at O'Hare, Jim Maurer, say 
that it was the least secured airport in America. This is in 
the front page of the Chicago Sun Times today. Can you comment 
on his charges? He has got some pretty specific complaints 
against O'Hare.
    Ms. Rossides. Yes, Congressman, I am familiar with the 
statements that he made, but I will tell you that O'Hare has an 
airport security plan. TSA inspects that plan. They are in 
compliance with that plan. And any time that we have something 
reported to us or we notice in our inspections that they are 
not in compliance we will take it up with any airport 
authority.
    Mr. Kirk. Just one specific thing that he has here that I 
want to raise. He said, quote: O'Hare is the only airport in 
the country that allows private vehicles to park on the secure 
side of the airport.
    Ms. Rossides. I saw that and I am aware of the parking 
setup there, but basically right now they have a security plan 
that they are in compliance with.

                 WORKING WITH EUROPEANS ON WATCH LISTS

    Mr. Kirk. Right. Do you have regular liaison with your 
European counterparts?
    Ms. Rossides. Yes, sir, we do.
    Mr. Kirk. One of the things that I would hope that you do, 
and maybe at the initiative of this Committee, if you are on a 
British no-fly list at a minimum you would be on the selectee 
list for the United States.
    Ms. Rossides. And I believe that that is part of what we 
are looking at in terms of how we share information across 
governments and how we make sure that information gets to the 
United States so that we can properly act on it.
    Mr. Kirk. This may take some money, some foreign liaison, 
and some work, but I think especially the no-fly list of NATO 
allies should immediately trigger membership on the selectee 
list for the United States.
    Ms. Rossides. Thank you. I will take it back and I will add 
that----
    Mr. Kirk. It would be expensive in liaison, but I believe 
the public would----
    Mr. Price. The recommendation that the gentleman is making 
does not depend on this, but I am told that as a matter of fact 
Abdulmutallab was not on the British no-fly list.
    Mr. Kirk. It was actually worse, he was denied a visa.
    Mr. Price. He was denied a visa because of a related 
problem.
    Mr. Kirk. That even means that the Foreign Office even had 
its act together.
    Mr. Price. He was on our TIDE list but that does not 
automatically translate into being placed on the terrorist 
watch or no-fly list. For the record we will straighten that 
out.
    Mr. Kirk. Basic point, you ought to have the resources to 
when they update their list they immediately go on the selectee 
list for us.
    Ms. Rossides. And Congressman, I would just say TSA 
actually does not nominate and maintain that list. But it is 
something that I will take back to the committee that is 
looking at this issue exactly.
    Mr. Kirk. Thank you.
    Mr. Price. I apologize for having to take a break. We will 
make it as brief as possible. We will come back for one final 
round after 2 votes.
    [Recess.]
    Mr. Price. The Committee will come to order. Once again we 
have had a little more delay than we anticipated but we will 
have one more round of questions. We appreciate your patience, 
Ms. Rossides.
    I will have some questions for the record, following up on 
my first line of questioning having to do with where these AIT 
machines are going to be deployed, particularly with the 
manpower aspect of that request. I will not get into detail on 
that now, but we do have this request for five screeners for 
each machine. We will want to explore with you just how hard 
and fast that estimate is and what the possibilities might be 
for a less manpower intensive operation.

                            CARGO SCREENING

    I also want to ask you some questions about the plans for 
portable explosive trace machines. But I think in this exchange 
here to end this hearing, I want to ask you about the goal that 
we all share and that we trust will be achieved, although there 
are some significant challenges. That is the goal of 100 
percent screening of cargo transported on passenger aircraft.
    The 9/11 Act requires that you establish a system to screen 
50 percent of cargo by February of 2009, and 100 percent of 
cargo by August of 2010. You met the 50 percent by last 
February yet it is going to be more difficult to achieve 100 
percent screening and, as we understand it, the difficulty lies 
in two areas, that is international cargo and also cargo in 
large pallets.
    Let me ask you about the nature of both challenges and what 
you are doing to overcome them. You estimated last year, Ms. 
Rossides, that TSA may reach 75 percent for international cargo 
by August of this year. You have been working on the problem 
for over a year now in addition to the years before that. So I 
wonder if you would still stand by that estimate. What is the 
screening estimate for international air cargo now? Any 
possibility we can do better than that 75 percent? If not, when 
are we going to achieve this?
    Now, the other problem is the pallets. There are no 
machines qualified to screen air cargo delivered as pallets or 
in oversized containers. TSA and S+T have been working on this 
problem for multiple years. But it appears we do not have a 
solution at least in the near term to this dilemma, well after 
the mandate has expired.
    So the lack of technology means that screening air cargo 
will be more person dependent and more canine dependent in the 
near term. Here, too, can you help us understand the technical 
challenge that we are facing and the likely timeline for 
achieving our goals?
    Ms. Rossides. Yes, Mr. Chairman. So with respect to air 
cargo domestically, let's talk about that first, which is part 
of the requirement by August. We are confident that we will 
meet the domestic requirement to screen 100 percent, which 
means that all passenger airplanes leaving the United States, 
lifting off from domestic airports, that that cargo on those 
passenger flights will be screened. The challenge and the 
really significant challenge is the international inbound. 
There are 98 countries that we need to gain compliance to that 
requirement. And right now we are working with those countries, 
for example, the U.K., that their procedures, their screening 
methods will meet the standards that we have set. But in 
looking at those countries we have literally got to look at 
their methods, how are they screening, are they using a similar 
supply chain approach, and are we comfortable with those 
methods?
    I do not believe that we will get to that 100 percent by 
August. The 75 percent that I testified to last year might even 
be optimistic. What the staff is telling me is that it may be 
65 percent by August. We are aggressively looking at every 
country and working with ICAO and looking at our global 
strategies office; our people that do work around the globe are 
working with these host governments and the air carriers to 
begin to address this, but it is going to be quite a challenge.
    We have about 20 countries that account for about 84 
percent of the volume coming in and so those are obviously 
where we are focusing our attention the most so that we can get 
the biggest bang for our buck, so to speak, with those 
countries. We have been asked before what is our timeline, how 
much longer would it take, and our estimate is it could be a 
couple more years beyond August 2010 that we would have 100 
percent compliance in some of those foreign countries.
    Mr. Price. Will you turn to the pallet question? What is 
the nature of the issue with the most difficult cases? Is it 
simply or mainly the technological capability that these 
countries possess? The resources with which to do this? Are 
there more intractable problems of a diplomatic nature? And it 
does lead one to wonder, if the latter is the case, what is 
going to be taken to overcome this?
    Ms. Rossides. So, most of the challenges are either their 
basic capability to do it. We have actually gotten great 
cooperation every place where we have visited and talked to the 
host governments and the foreign carriers. So it is more that 
they just simply lack the resources to make the investment in 
the technology or to build the capability.
    We are going to have to look at alternative measures if it 
comes down to that in terms of how we enable these foreign 
governments to meet this challenge. But right now we are 
working with ICAO, which has supported our supply chain 
approach. We are hoping that they too can assist at some of 
these locations.
    The issue with the pallets is that these very large 
pallets, there basically is just not a very good technology to 
screen the huge configuration that some of these pallets are. 
We are looking at what kind of technology and our labs can look 
at that and how we first try to break down the commodity into 
smaller packages that we can use to address the compliance 
requirement. So we go and look at smaller packages versus the 
huge large, palletized size configuration of these shipments.

                        TRANSIT SECURITY GRANTS

    Mr. Price. Let me quickly and finally refer to an item that 
will not surprise you, given the content of last year's 
hearings. In fact we had two hearings last year with TSA and 
FEMA on what solutions could be implemented to improve the 
timeliness of transit grant drawdowns for fiscal years 2006 
through 2008. At that time 93 percent of the 2006 transit 
grants remained unspent and 99 percent was unspent from 2007. 
For the 2006 grants, it took about 285 days after DHS announced 
the awards for the actual projects to be approved. And slightly 
less in 2007, 207 days.
    Last spring TSA and FEMA announced that all Tier 1 projects 
would be approved at the time the awards were announced. This 
was to be a significant change allowing transit entities to the 
access these funds faster. Yet 1 year later, despite this 
change in the process for approving this funding, it appears 
the disbursement of these funds has really not improved 
dramatically. Certainly for grants awarded in 2006 there have 
been improvements, with 67 percent of the grants remaining 
unspent, compared to 93 percent a year ago. But there have been 
marginal improvements at best for 2007, with 93 percent of the 
grants unspent compared to 99 percent a year earlier.
    So why have these changes, which certainly on paper appear 
to be major changes to expedite the disbursement of these 
grants, not produced the results we all anticipated?
    We had intense interest in this, as you know. We had a 
second hearing. We asked you to report on your progress by 
August of 2009. We know you worked hard trying to solve this 
problem. We saw some improvement, but we still haven't seen the 
report. It is over 6 months late.
    So the main concern here is the underlying problem. But at 
the same time it is hard for us to get a handle on the problem 
when we don't have the kind of information that we deemed 
necessary.
    Ms. Rossides. Yes, Mr. Chairman, and first let me apologize 
that the report is not to the Committee yet, and we are working 
to get that through and to you.
    What we have done, though, is look at the recipients of 
these grant funds because what we know is regardless of the 
process between TSA and FEMA, we wanted to focus locally on the 
recipients of these funds, how were they spending those. So TSA 
has actually met with the recipients of 80 percent of these 
funds. And what we are seeing is that at the local level these 
funds are being managed well. The challenge is they do not 
necessarily invoice, and so the drawdown rates do not actually 
reflect the progress that is being made with each of the 
individual projects. So we are attempting to work with them so 
that they do actually invoice us in a way that would show 
higher percentages of drawdown rates.
    What most of these local recipients and agencies do is they 
wait for the project to be completely over, and then they 
submit their invoices for payment. And so it looks like 
projects are not moving along in due course when in fact our 
visits with them and our work with them locally are showing 
that they are actually making some progress.
    But we will get you that report, and I again apologize it 
is not to the Committee.
    Mr. Price. What you have said really underscores, I think, 
the need for an accounting of this. We have no way of assessing 
what you just said of this being an artifact of an accounting 
method. I suppose on the face of it I would wonder how much of 
the problem that really explains. But to the extent some other 
way of accounting for this would help us understand what the 
real rate looks like, we of course would like to see that. But 
we do need an accounting and we are still very concerned about 
the underlying problem. These are funds that are not getting 
out to our communities for vitally needed protections. So we 
will look for that report in very short order.
    Mr. Rogers.

                      ADVANCED IMAGING TECHNOLOGY

    Mr. Rogers. Let me get back to the whole body imaging, or 
AIT, machines with you. Tell me, I read your statement about 
the schedule of deployment. Summarize that for us.
    Ms. Rossides. So you asked before about our ability to 
deploy the technology and install them in the checkpoints. And 
TSA has the designs for all the checkpoints across our U.S. 
airports. And what we are looking at right now is we know what 
the two current manufacturers' technology requirements in terms 
of the size of these units are. And we are looking at the 
airport configurations that we know and where we can deploy 
this technology so that it has minimal impact on the 
configuration of these checkpoints. And that process is ongoing 
between the TSA technology staff and the airports.
    And we are very confident that these first 500 we can 
deploy very effectively and in a fairly accelerated manner and 
time frame because we know what those checkpoints look like 
today. We have had airports volunteer because they know as well 
that they can take this technology in the checkpoint as 
configured.
    As we look ahead and as we continue to press the industry, 
we are not going to just stop with this technology and the 
advancement and the capabilities that this technology promises. 
We want to see the industry get us to a kind of technology that 
has both the walk-through metal detector capability as well as 
the imaging technology capability. But we are very confident 
right now, based on our planning, based on what we know about 
these checkpoints, and based upon the cooperation from the 
airport industry across the system that we can deploy these in 
a very, very effective fashion.
    Mr. Rogers. On the schedule you say in your statement on 
page 5 that 40 machines have been deployed at 19 airports 
already.
    Ms. Rossides. That is correct.
    Mr. Rogers. Last September you bought 150 additional units 
and this year you expect to deploy those and at least 300 
additional units across the country, which would be 450 
additional units.
    Ms. Rossides. Yes.
    Mr. Rogers. And that the first units set to arrive at 
Boston Logan and Chicago O'Hare next week.
    Ms. Rossides. Right.
    Mr. Rogers. And then as you point out, the budget requests 
$214-plus million to buy and install an additional 500 units at 
checkpoints to bring the total number of units to about 1,000.

                        AIT MANPOWER REQUIREMENTS

    And so you are asking then on top of the money to acquire 
the machines, you are asking an additional $314-plus million 
for 5,355 new positions to run these machines at their 
accelerated deployment pace. Now assumedly, if these machines 
work out well, assumedly you will increase the number even 
further; correct?
    Ms. Rossides. That is part of this ongoing assessment we 
are doing right now, is what would be the optimum full 
operational capability across all airports in the country 
beyond the thousand. But we have not come to a final number on 
that.
    Mr. Rogers. So your initial guesstimate on the manpower to 
operate the 1,000 machines is 5,355 people. Five FTEs per 
machine. Is there any hope that we could get that down?
    Ms. Rossides. What we are looking at is that requirement 
for this initial 1,000 machines. I believe that as we continue 
to deploy additional machines across the whole system you will 
have different requirements for the Cat X airports versus the 
smaller. And it is our commitment as we are going forward to 
get the maximum efficiencies and effectiveness out of both the 
resources of our people and that technology. That 5,000 FTE per 
machine basically really represents a little over 1\1/4\, 1\1/
2\ FTEs but you are adding in 3 shifts 24/7 operation, so that 
is how we get the five per machine.
    Mr. Rogers. But some airports won't be open 24/7.
    Ms. Rossides. That is right. That is the average across the 
whole system that that represents. So as we continue to move 
into more and more airports we will be looking at what that 
right combination and what that FTE would be once we are at a 
full capability.
    Mr. Rogers. Well, you are asking for a 12 percent increase 
in the money for the FTEs in 1 year. Now as you recollect, when 
we first started this organization before this Department ever 
existed, when it was under the old Transportation Department, 
TSA, we capped the number of employee FTEs at 45,000. What is 
it now?
    Ms. Rossides. Today in the checked baggage and passenger 
screening we have 38,000 FTEs working in those areas.
    Mr. Rogers. But for total screeners?
    Ms. Rossides. Total, it is just under 45,000.
    Mr. Rogers. Which you would bump up with these new ones to 
plus-50,000?
    Now, I notice that there is some comment that there is some 
auto detect function which might be possible on these body 
scanner machines. What do you mean by that?
    Ms. Rossides. The auto detection capability is where the 
machine actually identifies on the image the anomaly so that 
the operator does not have to study the image, the machine 
basically tells the operator that there is an anomaly here that 
requires further examination.
    Mr. Rogers. Well, does that exist now?
    Ms. Rossides. No, it is in our labs being evaluated right 
now, that kind of technology.
    Mr. Rogers. If that works out, would that help us reduce 
the FTEs per machine?
    Ms. Rossides. No, sir, it really does not because the 
configuration for the staffing right now, that staffing is to 
actually be in the checkpoint assisting with the divesting 
process and the anomaly resolution process. So it would not 
necessarily save on the auto detection capabilities.
    Mr. Rogers. You have the magnetometer at the checkpoint 
plus the whole body imager. Would the FTEs for the body imager, 
the 5 FTEs, would that also cover the magnetometer work?
    Ms. Rossides. Well, we look at it in terms of the whole 
checkpoint being a cell that requires staffing, and so the 
additional resources that we are asking for would accommodate 
the checkpoint with the advanced imaging technology as well as 
if we had the walk-through metal detector. So we don't really 
save FTEs if we get rid of the walk-through metal detector. It 
is still the number of people required in that checkpoint unit.
    Mr. Rogers. Without the whole body imaging machine, what is 
the manpower requirement per checkpoint?
    Ms. Rossides. I believe that the checkpoint configuration 
with the AIT in this design is 9.5 FTEs. And then you normalize 
it across the whole system. And so the request that you are 
seeing is for the increase, which is 1\1/4\ to 1\1/2\ FTEs per 
machine, and then you multiply that by the shifts and by the 
24/7 operations in the major airports.
    Mr. Rogers. Well, your estimate of 5 FTEs per machine per 
day looks to me like it is going to be conservative.
    Ms. Rossides. Well, sir, we have looked at what we can do 
with our existing resources and with this technology, and that 
is a good faith estimate on our part of what our modeling 
shows.
    Mr. Rogers. Well, I hope, Mr. Chairman, at some point in 
time we can talk about on the Subcommittee withholding some 
money in the later part of the year until we see a practical 
application that we actually need 5 FTEs per machine per day, 
because it very well may work out as they deploy these machines 
they we will find some efficiencies that we are not now 
thinking. But if we go ahead and hire these people then we are 
stuck. So I would hope that we could talk about staging the 
manpower as time goes on.
    Ms. Rossides. And we will be happy to keep the committee 
informed as we are deploying these in terms of what we are 
seeing operationally.
    Mr. Rogers. Thank you.
    Mr. Price. All right. Mr. Ruppersberger, you can wrap up 
today's Subcommittee hearing.

                         TRAINING FOR SCREENERS

    Mr. Ruppersberger. Excuse me. We have a lot of hearings at 
the same time. This is very important and relevant. One of the 
issues that I want to discuss, and if I am repeating let me 
know, is your personnel, the training of your personnel, and 
looking at how there are techniques used in other parts of the 
world that might work. And Israel is a perfect example. We are 
not talking about profiling, but I think Israel talks about 
behavior. And that is what we would really like to talk about.
    But let me ask you this. From a training point of view what 
standards do you have for your average TSA person? Do they have 
to have former law enforcement experience? Any education 
experience? Any experience at all? What are your standards as 
far as hiring?
    Ms. Rossides. Sir, the standards for the transportation 
security officer are spelled out in law, and those require a 
high school degree or its equivalency. There are requirements 
once they are hired for extensive training. They must have a 
minimum of 80 hours of training, and that training runs the 
gamut from how to operate the technology that is in the 
checkpoint, how to deal with passengers properly, how to 
resolve alarms, how to conduct physical body pat-downs. So it 
is a variety of training.
    The officers are also required annually to be certified, 
meaning that they have to demonstrate their proficiency to 
conduct those duties and, if they are not, they are subject to 
dismissal.
    We have another group of officers called behavior detection 
officers, and they are trained and get to what you are talking 
about in terms of the Israelis with looking for anomalous 
behaviors of passengers as they are coming through the 
checkpoint. And then based on the behaviors that they observe, 
they may refer the passenger for secondary or additional 
screening.
    Mr. Ruppersberger. This is what I want to get into. I think 
a lot of times we do repetition because we have always done it 
and yet are we really wasting our personnel's time when they 
could be focusing in other areas that might create a better way 
of detecting.
    I will give you an example. I am going to use myself 
personally. I have two artificial shoulders, my back is fused, 
and I have five screws in each foot. And so I set off 
everything when I go through. So automatically I stand in line 
and elected officials know you don't complain. You get in the 
back of the line. And then every time you go in you wait for 
somebody to come, and you have maybe one or two people that are 
there.
    Now, you know eventually there has got to be some judgment 
on whether it is me or somebody on a regular basis that does 
this type of thing. Because I wonder if the people that are 
working on me, because of my artificial body parts--I am 
bionic, by the way--but if they would be looking at not only 
behavioral but also there is the issue of the manifest. In port 
security we look at manifests. We look at the port of 
embarkation. If we are going to have airlines involved in this 
process, we have to be more open and get them more information 
and more intelligence.
    And I think that if you look at the Israel system it works. 
They are probably more exposed than any other country in the 
world from the terrorist's point of view. And whether you would 
consider evaluating first thing, the standards of the people 
that you hire, do we need more law enforcement? And if you do 
hire--I am not complaining about the people that are being 
hired. I am not judging them. I don't know their performance 
records. They need to be trained and are we really doing the 
same thing over and over, wasting time with certain individuals 
even though we know that al Qaeda might try to find more 
Caucasians or whatever? Are we putting ourselves in a better 
position by that reevaluation and doing what really might work 
better?
    Ms. Rossides. Sir, you have actually described part of the 
reasons why we are moving in this direction, we are moving with 
the advanced imaging technology. One of the advantages that the 
advanced imaging technology is going to give us is that persons 
like yourself having metal implants will now go through the 
machine and avoid a total pat-down and the time that that 
takes. We have actually had tremendous positive response from 
veterans and persons with disabilities going through that 
technology in the pilot phase.
    Mr. Ruppersberger. I am not talking about me or that 
person. I am talking about the system and whether the personnel 
that spend their time with someone like a veteran or people 
that have these, that they could be doing something that would 
be making the system more safer and not just doing something 
that makes us feel good but what do we really get?
    Ms. Rossides. And in fact what we do do is, in addition to 
our behavior detection officers, we actually utilize our TSOs 
in other parts of the airport to look for and do random 
unpredictable screening procedures. And that is exactly some of 
the lessons we have learned from the Israeli models, is to have 
multiple layers of security. We have actually worked closely 
with the Israelis on the number of our programs besides 
behavior detection, but also our covert testing program and we 
did actually consult with them after the Christmas Day attack 
to talk about what might that have done in their system versus 
how it was carried out across the globe through the Amsterdam 
process that the suspect went through.
    So our approach to multiple layers of security and 
utilizing our officers in those multiple layers is exactly what 
we are trying to do similar to the Israelis, where it is not 
just focusing on the passenger that is coming through that is 
perfectly compliant.
    Mr. Ruppersberger. I represent the BWI airport and I have 
seen, I think, a lot of advancement in your personnel, the 
quality of the personnel, the way they treat the public. But 
again I think some of the system seems that it is repetitive 
and redundant and you wonder where they are going to work and a 
lot of it, which I believe you agree with is the technology.
    Mr. Price. Thank you, Ms. Rossides. Let me again thank you 
for a very useful afternoon of testimony, good exchanges that 
are helpful to us, and beyond that for the outstanding quality 
of your service.
    Ms. Rossides. Thank you so much, Mr. Chairman. And I 
appreciate tremendously the engagement with this Committee. We 
enjoy and are appreciative of the support that you give to the 
TSA.
    Mr. Rogers. We sort of started out together this business 
when TSA was created before the Department was created in the 
old Department of Transportation. So we have been laboring over 
these things for a good while, and we are going to miss your 
expertise. You have been a very competent manager. You have 
demonstrated today again your knowledge of these subjects. And 
we are going to miss you. And we want to say thank you again 
for your long service.
    Ms. Rossides. Thank you.
    Mr. Ruppersberger. Where are you going?
    Ms. Rossides. Well, right now I am waiting for the 
Administration to appoint a permanent Administrator, sir.
    Mr. Ruppersberger. Are you holding your breath?
    Mr. Price. I think we best adjourn this hearing. Thank you 
very much.

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                                       Thursday, February 25, 2010.

          BIOSURVEILLANCE: SMART INVESTMENTS FOR EARLY WARNING

                               WITNESSES

DR. ALEXANDER GARZA, DEPARTMENT OF HOMELAND SECURITY
DR. TARA O'TOOLE, DEPARTMENT OF HOMELAND SECURITY
DR. BERNARD GOLDSTEIN, NATIONAL ACADEMY OF SCIENCES
DR. DANIEL SOSIN, CENTERS FOR DISEASE CONTROL AND PREVENTION

               Opening Statement of Chairman David Price

    Mr. Price. The subcommittee will come to order. Good 
afternoon. We are pleased to be welcoming this afternoon a 
number of witnesses to discuss the investments being made by 
the Department of Homeland Security in early warning and 
response for a bioterror event.
    In 2003, the newly formed Department of Homeland Security 
placed a priority on the quick implementation of programs 
designed to inform the Federal Government, as well as its state 
and local partners, about the potential of an attack with 
biological weapons. The two most prominent DHS programs are 
BioWatch and the National Biosurveillance Integration Center, 
the NBIC.
    BioWatch is a system of detectors which currently exist in 
more than 30 cities nationwide designed to trigger a public 
health response from the earliest time after the release of a 
biological pathogen. NBIC was envisioned to be a hub of federal 
information collection to identify biological events of 
national significance.
    Both of these programs have met significant challenges 
during the past few years, ranging from technological issues to 
implementation difficulties. It is my hope that we will have a 
robust discussion today of those challenges, as well as the 
possible paths forward.
    We are joined today by four very qualified experts in this 
subject matter. Testifying first will be Dr. Alex Garza, the 
Chief Medical Officer and Assistant Secretary for Health 
Affairs at the Department of Homeland Security. Dr. Garza 
manages the Office Of Health Affairs, which oversees both 
BioWatch and the NBIC.
    Next we will hear from Dr. Tara O'Toole, the Undersecretary 
of Science and Technology. S&T will evaluate technological and 
testing decisions for the BioWatch program. Also, Dr. O'Toole 
is a subject matter expert on biosurveillance and other 
biodefense issues who has previously testified before this 
Subcommittee.
    Our third witness is Dr. Bernard Goldstein representing the 
National Academy of Sciences. At this Subcommittee's request, 
the National Academy has just completed a comprehensive 
assessment of the BioWatch system and the country's early 
warning capabilities. I believe this report will greatly inform 
decisionmaking in this area going forward. Today, we will be 
discussing some of the conclusions of that report and asking 
what the implications are for the 2011 budget request.
    We are pleased to have as our fourth witness Dr. Daniel 
Sosin from the Centers for Disease Control and Prevention, who 
will help us understand the work going on in the public health 
community to support the biosurveillance and response system.
    Biosurveillance involves many different environments, 
pathways, government agencies. BioWatch addresses one discrete 
area of biosurveillance, the introduction of an aerosolized 
virulent agent in a major city. One thing that all these 
different scenarios have in common is that they rely on our 
public health system for the characterization of the threat and 
the subsequent response.
    The BioWatch program has been plagued by difficulties which 
culminated in the removal of some detectors from a location 
last spring. Unfortunately, these problems seem to lead state 
and local partners to lose some of their faith in the validity 
and usefulness of the BioWatch program. Dr. Garza, we want to 
hear from you about how to restore and bolster confidence in 
the system among local public health officials who, after all, 
are the recipients of BioWatch warnings and who are then in 
charge of the response.
    The fiscal year 2011 budget request nearly doubles funding 
for the BioWatch program from $89 million in 2010 to $173 
million in 2011. Most of that is to support the purchase and 
initial testing of the third generation of detectors. It is 
anticipated that these detectors will provide more rapid 
results and be more sensitive than the detectors currently 
employed.
    However, before this Subcommittee can feel comfortable 
recommending full funding of this program we must be sure that 
it is a well-developed proposal, both technologically, as well 
as from a risk management perspective. The National Academy of 
Sciences report makes a number of recommendations to address 
these concerns which we look forward to exploring in detail 
today and throughout this budget season.
    Next, the National Biosurveillance Integration Center, 
which takes a $1 million cut in the budget request from $8 
million to $7 million, has yet to fully realize its potential. 
Originally designed to be a hub for information collection and 
sharing of biological threat data to be used by all levels of 
government, this budget proposes a new strategy for the NBIC, 
one that seeks to integrate work going on in the states on 
biosurveillance.
    I look forward to understanding how this will provide a 
more complete surveillance picture and how it will add value to 
the current reporting that states already do through other 
Federal agencies such as the CDC, FDA and other parts of DHS. 
Additionally, we want to learn more about the Department's 
longer term vision for NBIC.
    It is extremely important that this nation identify a 
biological event as early as possible, but we need to make sure 
we are making smart investments which are supported by sound 
planning, evaluation and decision making. The real goal of 
these programs is to save lives, which depends on reliable 
early detection, to inform an evaluation of the situation and 
ultimately successful response activity. Any effort to complete 
the detection piece without addressing the others will fail to 
provide meaningful protection to the American people against 
biological threats.
    Again we look forward to hearing from the witnesses today. 
Each of you will have a written statement which we will be 
happy to include in full in the record, so we ask you to limit 
your oral remarks to five minutes. We will begin with Dr. 
Garza, then Dr. O'Toole, then Dr. Goldstein and conclude with 
Dr. Sosin.
    Before we begin let me recognize the distinguished Ranking 
Member, Mr. Rogers, for any comments he wishes to make.
    [The information follows:]

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           Opening Statement of Ranking Member Harold Rogers

    Mr. Rogers. Thank you, Mr. Chairman. Welcome to our 
distinguished panel. The bioterror threat is undeniably real. 
The 2000 anthrax attacks brought home the chilling reality that 
bioterrorism can take lives and does instill genuine fear and 
panic in the American public. Moreover, al-Qaeda's known 
aspirations to acquire WMD and pronouncements to carry out 
something much bigger and better than a chemical attack on the 
New York City subway suggests that we cannot dismiss the 
possibility that they will someday attempt to launch a 
bioterror attack in the U.S.
    But some nine years after the anthrax attacks and in spite 
of the known threat, the state of our bio-preparedness is still 
a work in progress. Sadly, it appears that we have only been 
nibbling around the edges of this daunting challenge for many 
years. Look no further than the H1N1 flu outbreak of the past 
year; an event that revealed stark deficiencies in our ability 
to respond to a major pandemic or the release of a deadly 
pathogen. Then just last month the WMD Commission gave the 
government an F in terms of the ability to both detect and 
respond to a biological attack.
    On a somewhat promising note, the Administration has 
produced a strategy for countering biological threats, but the 
actual response plan for coordinating the federal, state and 
local government response following a bioterror attack is still 
under review by DHS and the White House National Security 
Council.
    Moreover, having some high level plan is only a starting 
point. We need to be prepared in real terms to respond swiftly 
to an outbreak or release with vaccine and robust isolation and 
remediation measures, actions that will demand coordination 
among every level of government and perhaps most especially the 
actual health care providers and drug manufacturers in the 
private sector.
    These are serious, disturbing gaps, gaps that the federal 
government has been aware of for some time and gaps we must 
address. And that brings us to the fiscal 2011 budget, which is 
proposing to basically double down on BioWatch and investment 
in technology that is far from proven. It is only one piece of 
the biosurveillance puzzle, so today I hope to learn what steps 
we are taking to get our biosurveillance and detection systems 
right.
    More to the point, I hope to learn how the sprawling 
bureaucracy involved in bio-preparedness are addressing our 
known vulnerabilities, applying the lessons learned from the 
H1N1 flu outbreak and putting an effective bio-preparedness 
plan into action. Given the seriousness of the bioterror 
threat, far too much is at stake for us to fail.
    We want to thank the witnesses for appearing today. We look 
forward to hearing your comments.
    Mr. Price. All right. Thank you. Well, let us begin with 
Dr. Garza.
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                      Statement of Dr. Alex Garza

    Dr. Garza. Good afternoon. I want to thank you, Chairman 
Price and Ranking Member Rogers and the rest of the 
Subcommittee, for the opportunity to testify before you today. 
I am honored to testify here with my colleagues, Dr. O'Toole, 
our Under Secretary for Science and Technology at Homeland 
Security; Dr. Goldstein from the National Academy of Sciences; 
and Dr. Sosin from the CDC.
    I believe it is apparent from this collection of experts 
that are on this panel today that biosurveillance is a very 
complex issue, and it is not the sole property of a single 
agency and that OHA has a unique role that intersects many 
paths within this discipline.
    The Office of Health Affairs and Science and Technology 
Directorate have a very unique partnership in moving 
biosurveillance and detection forward from what is possible to 
what is operational. We also value the careful study and 
opinions of our partners at the National Academy of Sciences, 
and we strive to work well with our partners at the Centers for 
Disease Control and Prevention.
    As the Chief Medical Officer and Assistant Secretary for 
Health Affairs, I lead and coordinate the biodefense within the 
Department of Homeland Security, and I view biodefense and 
detection as one of our core missions. I would like to point 
out, however, that DHS does not collect health surveillance 
data, nor do we perform epidemiological analysis. We greatly 
defer to our partners at the CDC who have this professional 
expertise.
    The area within the mission space for DHS is to look across 
the surveillance data for a one health and whole spectrum view. 
Examples include the economic impacts of a pandemic influenza 
on critical infrastructure and looking at seemingly disparate 
data to see if there are any similarities.
    One thing that I want to relate is that biosurveillance and 
detection are just one part of the puzzle which I think you 
articulated. While there is value in each and every piece of 
this puzzle, the keys to the security are prevention and early 
detection. The combination of a covert nature and the lag time 
for casualties from a biological attack, among others, make 
these weapons much different than conventional nuclear and 
chemical weapons. Valid and reliable early detection of a 
biological release, whether through environmental sampling or 
through health surveillance, allow a window of opportunity for 
us to interdict, provide medical countermeasures and save 
lives.
    At the Department of Homeland Security's Office of Health 
Affairs we operate two national biosurveillance, programs which 
you have mentioned, to support this mission, the BioWatch 
program and the National Biodefense Integration Center, or the 
NBIC. BioWatch is the only federally coordinated and locally 
operated biodetection program in the world. Its goal is to 
provide communities timely detection of select biological 
agents using strategically placed environmental samplers.
    However, I would like to emphasize that BioWatch is more 
than just a machine. It is a detection and response support 
system. Early detection without a strong coordinated response 
to the biological agent would be akin to asking the DOD to 
identify threats on a radar and then not giving them the 
systems to interdict.
    While the collector is the entry point for the decision 
algorithm, the coordination with our state, local and federal 
partners, emergency management and pubic officials is a 
critical piece of the program that should not be 
underestimated, and it pays dividends well beyond BioWatch. 
Failure to plan and exercise the cascading events following a 
detection would be a waste of technology, science and resources 
and put the country at significant risk.
    The Administration has requested $173.5 million for Fiscal 
Year 2011 for BioWatch; approximately $89.5 million for 
operations to build a comprehensive quality assurance program, 
expand our current exercise program and population protection 
models. Eighty-four million dollars will allow DHS to procure, 
evaluate and potentially deploy Generation 3 detection units 
for operational field testing.
    While we are looking forward to the future of early 
detection, we deeply value the opportunity to improve on our 
current capabilities. The recent National Academy of Sciences 
report lays out various issues that BioWatch can address to 
make the system that much stronger.
    In furtherance of this view, in recent days we have 
determined that from protracted negotiations involving the 
necessary diligence and testing that would be required for a 
Generation 3 contract that we are going to adjust our program 
schedule. We are evaluating the impacts and are immediately 
going to update the Congress once we resolve this issue.
    While a delay is disappointing given the urgent operational 
needs, I believe that we are being consistent with the NAS's 
urgence to ensure a thorough and protective evaluation as an 
appropriate way to ensure that we are pursuing the acquisition 
with appropriate oversight, testing and diligence.
    Going on to the NBIC, since this was handed over to OHA two 
and a half years ago we have worked to enhance the Federal 
Government's ability to rapidly identify, characterize, 
localize and track biological events of national concern 
through the integration and analysis of data relating to human 
health, animal health, plant, food and environmental monitoring 
systems.
    NBIC received $8 million in Fiscal Year 2010 and is 
requesting $7 million in Fiscal Year 2011 to fund the Center. 
Last year's GAO report, ``Biosurveillance: Developing a 
Collaborative Strategy Is Essential To Fostering Interagency 
Data and Resource Sharing'', identified the unique mission of 
the NBIC. This report included recommendations for 
strengthening NBIC, and we have already begun to move forward 
on many of them.
    In addition to addressing the GAO's recommendations, I 
recently held a meeting of our interagency partners, which 
included representatives from HHS, ASPR, CDC, FBI, DOT and DOD, 
to talk about these challenges outlined in the report. I then 
directed the NBIC to become more focused on its core mission of 
biosurveillance and directed them to work on a new path going 
forward to meet our desired goals of whole spectrum situational 
awareness using a new approach.
    To this end we are developing a new strategy to reach 
outside the federal systems and collaborate with state and 
private sector partners. This will begin with a demonstration 
project with the North Carolina Collaboratory for Bio-
Preparedness supported by funds included in the Fiscal Year 
2010 appropriations bill.
    States such as North Carolina have capabilities and 
sophisticated practices that capture critical biosurveillance 
information. We are looking to learn from these systems and 
leverage their successes at the state and local level for the 
benefit of the Nation. I am hopeful that engaging in this new 
outreach approach we will improve the information sharing 
between public and private sources and provide new ways to 
identify and enhance biological surveillance data.
    In closing, I would like to thank this Committee for their 
invaluable work and leadership that they have provided on this 
important topic. I know that you share my passion for making 
sure the Nation is protected from biological incidents, whether 
man-made or natural.
    Under the leadership of President Obama and Secretary 
Napolitano, I will continue to stay focused on this issue, and 
I thank you again for the opportunity to testify. I look 
forward to answering your questions. Thank you.
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                     Statement of Dr. Tara O'Toole

    Mr. Price. Thank you very much. Dr. O'Toole.
    Dr. O'Toole. Thank you, Mr. Chairman, Members of the 
Subcommittee. It is an honor and a pleasure to appear before 
you again now in the role of Undersecretary of Science and 
Technology at the Department of Homeland Security. In this new 
role, one of my chief responsibilities is to serve as the 
Department's overseer of testing and evaluation for new 
technologies. This is a role I not only intend to take very 
seriously, but to emphasize and expand within DHS, and it has 
direct pertinence for BioWatch and for other technologies of 
which you are aware and which pertain to biosurveillance.
    S&T's role and ambitions in this regard are going to be 
greatly aided by the official adoption of the new acquisition 
directive in DHS which codifies a very disciplined process for 
acquiring and testing new technology in the Department, as I 
will discuss. Clearly neither DHS nor the government want to 
pay for or deploy technology that does not work, but in 
addition, particularly in the case of BioWatch, it is critical 
that the technologies that Homeland Security uses be reliable 
and accurate because highly consequential, I regret, decisions 
are going to depend upon how this technology performs and we 
have to be confident that the results of BioWatch are reliable 
and accurate.
    Science and Technology will oversee the testing and 
evaluation of Generation 3 BioWatch. We have been working very 
closely with the Office of Health Affairs in this regard. We 
have charted a working integrated product team that consists of 
members of my staff, of Dr. Garza's staff, BioWatch operators 
from states and localities that actually use the BioWatch 
technology, as well as representatives from the independent 
testing authority who will be conducting the operational tests 
in the field.
    This team has established a testing and evaluation master 
plan which is very comprehensive, very rigorous and very 
ambitious. I can describe these plans in more detail, but they 
do address many of the concerns raised by the National Academy 
of Sciences report. I want to emphasize that this report is 
milestone driven. We will not move forward on testing or on 
deploying BioWatch until we meet the milestones.
    I would like to also emphasize that Gen 3 BioWatch is an 
extraordinarily sophisticated and ambitious piece of 
technology. This really is cutting edge science, and though we 
recognize the need to balance the urgency of making this 
technology operational for the country, as I said, we also have 
to serve the imperative of ensuring the technology works as 
expected in the real world.
    We realize we have to satisfy the operational requirements 
that have been set down, and that could affect the testing and 
evaluation schedules. As the National Academy report points out 
and as Dr. Garza said and as you mentioned, Mr. Chairman, 
biodefense is necessarily a collaborative endeavor. The Academy 
report emphasizes the need for S&T and OHA to work together, 
and Dr. Garza and I can assure you that will happen and in fact 
is happening.
    We have also been in close contact with CDC. I have had 
several conversations with Dr. Frieden, the CDC Director, about 
biodefense and biosurveillance. Biosurveillance is actually his 
top priority. We had talked about how the Administration might 
collectively go forward and advance some of the nation's 
capacities to respond to bioattacks. We have also been in touch 
with Dr. Nicki Lurie at HHS, as well as with DARPA and IARPA on 
matters concerning biodefense and how our collective efforts 
might be amplified by working together more closely.
    It is also important that Science and Technology search out 
the best ideas, and one of the things that we know about 
innovative science and technology is it often emerges from 
small companies. BioWatch Gen 3 is actually a success story in 
this regard.
    One of the final two Generation 3 BioWatch candidates which 
we will be testing was developed by a small company, Micro 
Politic Systems, with funding from S&T. This small company then 
joined forces with a larger firm to create one of the final 
candidates in the selection process, and I think this is an 
example of how important it is that we form all kinds of 
collaborations not just across the federal government and 
between the feds and the state and local users of BioWatch, but 
between the government and the private sector in order to get 
the kind of biodefense that we are going to need.
    Science and Technology is also working very closely with 
CDC to validate the assays, that is the laboratory tests, which 
identify the biothreat agents that BioWatch is designed to 
detect. There are many other collaborative endeavors in the 
biodefense field that the S&T directorate is engaged in which I 
would be happy to tell you about, but in addition I think it is 
important to note that the S&T directorate also manages for the 
nation a number of important national biodefense assets and 
capabilities.
    I particularly note the National Biodefense Analysis and 
Countermeasures Center at Fort Detrick which is charged with 
responsibility of bioforensics in the case of a biological 
attack and has been running the biothreat risk assessment which 
forms one of the foundations for the decision about which 
bioagents to focus on in BioWatch and which medicines and 
vaccines to develop in response to the biothreat.
    I would also note that the biothreat is very dynamic, as is 
the progress in bioscience in the twenty-first century, and it 
requires constant attention and reassessment. The S&T 
directorate also manages Plum Island, a facility out on the tip 
of Long Island which is dedicated to research on medicines and 
vaccines against foreign animal diseases which are probably 
also an emerging biothreat that we need to be concerned with, 
and the directorate is intent on building a new twenty-first 
century facility for animal disease research. Manhattan, 
Kansas, has been selected as the site, and we are also working 
on doing the necessary risk assessments preparatory to 
beginning construction on that site. Happy to answer questions, 
Mr. Chairman.
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                   Statement of Dr. Bernard Goldstein

    Mr. Price. Thank you. Dr. Goldstein.
    Dr. Goldstein. Good afternoon, Chairman Price and Members 
of the Subcommittee. I am honored today to testify as the chair 
of the 25-member Committee on Effectiveness of National 
Biosurveillance Systems, BioWatch and the Public Health System 
which was convened by the Institute of Medicine and the 
National Research Council. We have submitted a written 
statement for your review and for the record. My testimony is 
drawn from the publicly available version of the summary of our 
Committee's report.
    The work that we did was done between mid 2008 and mid 2009 
in response to your Committee's direction to the Office of 
Health Affairs and the Department of Homeland Security. There 
were three essential elements to our task. The first was to 
evaluate the current and potential capabilities and costs of 
BioWatch in detecting biological threats. The second was to 
examine the capabilities and costs of current and enhanced 
disease surveillance to detect biological threats through 
hospital and public health agencies, and the third was to 
consider whether BioWatch and traditional infectious disease 
surveillance are redundant or are complementary.
    I want to note first that certain important elements were 
beyond our study's scope: First, examining the basis for 
estimates of the risk of bioterrorism; second, considering uses 
of BioWatch such as aiding forensic analysis that are separate 
from detection of biological agents; and, third, assessing the 
capacity in the public health and health care systems to 
deliver treatment and other services in response to the 
detection of a biological threat.
    So our report addresses matters concerning both BioWatch 
and the public health and health care at the federal, state and 
local levels. In my remarks today I am going to highlight 
certain findings and recommendations about BioWatch and DHS.
    Very importantly, DHS needs to conduct systematic, 
technical and operational testing and evaluation of both the 
current version of BioWatch, Generation 2, and future BioWatch 
technologies, Generation 3. The rapid initial deployment of 
BioWatch for obvious reasons did not allow for sufficient 
testing, validation and evaluation of the current system and 
its components. The decision not to deploy an interim 
technology known as Generation 2.5 and the delay in the 
acquisition and deployment of a Generation 3 system provide a 
needed opportunity to establish a more systematic, 
scientifically sound and stakeholder approved approach to all 
aspects of BioWatch.
    With the continued use of Generation 2, a clear 
understanding of it capabilities is critical. Therefore, we 
recommended that operational testing of Generation 2 be 
undertaken now. This testing would provide performance 
specifications that can be used to refine Generation 3 
requirements. Improvements are needed in the laboratory assays 
as well, and we endorse the DHS collaboration with CDC, with 
EPA and the FBI to develop validated and consistent assays and 
assay platforms for Generation 2.
    From our review of the DHS plans for testing and evaluation 
for Generation 3 which were presented to us in the spring of 
2009, we found that the technology goals for Generation 3 are 
appropriate, but will require significant advances to meet 
longstanding scientific and technical challenges. Furthermore, 
the plan, test and evaluation timeline may be too short. There 
is little allowance for delays to respond to problems that 
often emerge during testing and limited provision for 
operational testing under diverse environmental conditions.
    We also saw a need for measures of effectiveness developed 
in collaboration with the public health community which must 
use the information BioWatch generates. The results of BioWatch 
testing need to be thoroughly documented and made available to 
public health stakeholders.
    An analysis commissioned for our study suggests that the 
direct costs for the next 10 years for continuing the BioWatch 
program in its current form--in other words in Generation 2--
will average approximately $80 million per year, which appears 
comparable to the DHS budget request for this portion of the 
program.
    For the Generation 3 program, our commissioned analysis 
suggested an average direct cost of about $200 million per year 
over the same 10 year period for acquisition, deployment and 
operation of the next system, which included expanded coverage. 
However, examination of the fiscal year 2011 budget request 
suggests that it is based on a lower unit cost for Generation 3 
detectors than we had available for analysis. It is about a 20 
percent lower cost.
    We emphasized that DHS needs to make BioWatch planning 
risk-based and responsive to user needs. DHS should ensure that 
the BioWatch program reflects both a careful analysis of the 
risks of an airborne biological attack and the most effective 
ways to manage these specific tasks and specific risks. This 
analysis should include all the risk scenarios, each pathogen 
that BioWatch monitors and the differences between use in 
indoor and outdoor settings. DHS should work closely in all 
aspects of the program with key partners and stakeholders at 
the federal, state and local levels.
    We advise that the BioWatch program should not expand its 
coverage of biological agents or jurisdictions without a clear 
understanding of the contribution any such expansion would 
make, the possibility of reducing mortality or morbidity. We 
also recommended that DHS needs a stronger partnership with the 
state and local jurisdictions where BioWatch operates.
    Public health officials need greater assistance in 
developing the capabilities required to interpret and respond 
to BioWatch actional results. These BARs signal detection of 
genetic material from a target organism, but it does not 
automatically mean that an attack has occurred, that an 
infectious agent has been released or that people have been 
exposed.
    The apparent lack of systematic assessment of BARs that 
have occurred, none of which has been associated with 
bioterrorism or with human illness, is a missed opportunity to 
inform BioWatch program planning and development. DHS should 
continue it efforts to develop and improve decision support 
tools to help local jurisdictions in the synthesis and analysis 
of information for decision making after a BioWatch actionable 
result is declared.
    While mindful of various concerns, we concluded that in 
principle BioWatch and surveillance through the public health 
and health care systems are complementary. BioWatch has the 
potential to provide a more timely alert than the public health 
and health care systems under certain specific circumstances. 
These circumstances are if a large scale aerosol attack using 
certain pathogens were to occur in the localities where 
BioWatch is deployed and if BioWatch successfully detects the 
pathogen.
    Disease surveillance through the public health and health 
care system certainly needs improvement. It is broader and more 
flexible than BioWatch. It permits detection of a wider range 
of infectious diseases and diseases resulting from sources of 
exposure that BioWatch is not designed or deployed to detect. 
With or without BioWatch, the public health system needs to be 
capable of monitoring disease trends and accessing information 
from multiple sources to identify or characterize situations 
that may signal a public health emergency. At best, BioWatch is 
one source of this information.
    Infectious disease surveillance of all types, including the 
BioWatch system, should be better linked to a broader and more 
effective national biosurveillance framework. Better approaches 
to information sharing can be expected to contribute to faster 
and more effective outbreak detection, improved communication 
between public health officials and clinical providers and 
improved situational awareness and response capabilities.
    Ensuring that information from BioWatch is effectively 
integrated into such systems will help maximize its values. 
Thank you for the opportunity to testify. I would be pleased to 
answer any questions.
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                     Statement of Dr. Daniel Sosin

    Mr. Price. Thank you very much. Dr. Sosin.
    Dr. Sosin. Good afternoon, Chairman Price, Ranking Member 
Rogers and distinguished Members of the Subcommittee. I am Dan 
Sosin, Acting Director of CDC's Office of Public Health 
Preparedness and Response. Thank you for the opportunity to 
include a federal public health perspective in your hearing on 
biosurveillance.
    I want to recognize the critical role that collaborations 
among the U.S. Department of Health and Human Services and the 
Department of Homeland Security play in supporting strong 
biosurveillance capabilities across government. My testimony 
highlights the importance of a multi-layered approach to 
biosurveillance that builds on systems and relationships we use 
every day and the importance of creating an intergovernmental 
environment that values and supports the various layers and 
perspectives.
    As you are all aware, the United States is confronted by an 
array of health threats from natural, accidental and deliberate 
origins. HHS leads federal public health to respond to threats 
to human health. Within HHS, CDC provides scientific expertise 
and works with state, local and international departments of 
health in the core public health functions of surveillance, 
laboratory science, epidemiology and response operations that 
include incident management, risk communications and medical 
countermeasure delivery and guidance.
    For us, biosurveillance is the information supply chain 
that supports decision making to ensure our response is 
appropriately matched to the public health event or emergency. 
Biosurveillance for human health is an integral component of 
the DHS National Biosurveillance Interaction System or NBIS. In 
accordance with HSPD-21, CDC has worked closely with DHS and 
other governmental partners to assure that information from the 
human health component of biosurveillance is effectively shared 
with the broader response community to improve situation 
awareness and coordinated decision making.
    Investments in biosurveillance must be viewed with a wider 
lens than just early detection. Biosurveillance for human 
health includes three functional components whose goals are to 
one, detect unusual events; two, validate or rule them out as 
potential threats; and, three, guide the response if a threat 
is confirmed. Each of these three functions is vital to an 
informed and effective response and none alone is sufficient to 
achieve health security in the face of an emergency.
    The foundation of our biosurveillance capability is the 
national public health and medical system which supports 
disease surveillance via routine case reporting of notifiable 
diseases and unusual events. It helps with detection, 
investigation and response and takes into account when 
populations become sick from predictable or unanticipated 
health hazards.
    Clinical disease surveillance is supplemented by secondary 
surveillance layers, which may include environmental 
surveillance like the BioWatch program. Most secondary 
surveillance layers demonstrate their greatest value in 
validation of incidents and supporting response. Diagnostic-
based detection systems like BioWatch have the potential, when 
in the right place and monitoring for the right agent, to alert 
the public health system of a threat to human health, thereby 
triggering investigation and, when indicated, a swift response 
to mitigate illness and death.
    CDC partners with the BioWatch program as mentioned through 
verification of assays used in the analysis of biological 
agents and with technical assistance and guidance related to 
biological detections. Once an outbreak of a dangerous agent is 
confirmed, it is essential to track the event, to understand 
its impact, to determine whether countermeasures are needed and 
to provide public guidance on response to promote community 
resilience.
    Broad governmental and nongovernmental input has produced a 
national biosurveillance strategy for human health. The 
National Biosurveillance Advisory Subcommittee also provided 
its report titled Improving the Nation's Ability to Detect and 
Respond to Twenty-First Century Urgent Health Threats in 2009.
    Both these documents and the CDC's own Director's 
priorities draw attention to the need for promoting leadership 
and intergovernmental governance structure that allows the 
diverse partnerships needed for effective biosurveillance to 
work in concert, strengthening global disease surveillance to 
protect all nations, assuring adequate skill and capacity of 
the workforce and, lastly, leveraging new technologies and 
policies to support the workforce in a multi-layered approach 
that builds on systems and relationships that we use every day.
    We at CDC look forward to continued collaboration with DHS 
to accelerate action and build a strong and vigilant national 
biosurveillance system. Thank you for the opportunity to 
testify today.
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                      BIOWATCH GENERATIONS 2 AND 3

    Mr. Price. Thank you, and thanks to all of you for 
interesting and important statements. We will now proceed with 
questions.
    DHS has spent nearly $600 million directly on the Biowatch 
program in the last seven years. That does not account for 
resources devoted to the program at the state and local levels. 
Your fiscal year 2011 budget proposes $174 million for 
Biowatch; that is an increase of $84 million over the current 
fiscal year. Almost all of that increase is to support the 
operational testing and evaluation of Generation 3 detectors, 
as well as an initial procurement of detectors for a small 
number of cities.
    As I understand it, your budget request includes a steady 
state program for Generation 2 detectors. That is, no further 
testing and no additional deployment. We understand the 
Generation 3 procurement is already at least three months 
behind the Office of Health Affairs development schedule as 
outlined six months ago. We know that delay is not the fault of 
the Department, but it is still worrisome.
    The National Academy report cites challenges such as the 
lack of confidence in the system from state and local partners, 
insufficient support and guidance these partners, and 
inadequate coordination among agencies. I am sure you have 
taken note of those criticisms.
    The testing recommendations also seem slightly at variance, 
or considerably at variance. The National Academy makes a 
recommendation that further testing should be done on 
Generation 2, while the Generation 3 work is being done.
    So, Dr. Garza, let me just initially get a little more 
precise fix on your 2011 budget request and the kind of 
timetable it is assuming. What you think can be achieved in 
this timeframe, and what is the rationale for this money you 
have requested? Given the track record of the program and the 
factors I have just cited, can you assure the Subcommittee that 
your plans for the program are feasible within the timeframe 
and the significant increase in funding that you have 
requested?
    As a way of getting a longer term view, let me ask you to 
look ahead three years; what kind of mix of Generation 2 and 
Generation 3 detectors do you assume are deployed, how many 
cities are they deployed in, what is the annual cost? I think 
that would help us get a fix on your request and where we are 
headed.
    Dr. Garza. Right, thank you very much Mr. Chairman. As far 
as the current budget request, you are right that we have asked 
for substantially more money, and most of that, or at least 
half of it is to keep our current operations underway with the 
Generation 2, and that is to make sure that we do have a 
sustained ability for environmental detection through our Gen 2 
program.
    You are correct that we have had challenges in the past 
with integration at the state and local level, and this is an 
issue that we take very seriously and that we have aggressively 
pursued to correct in the last couple of years. I recently took 
a trip out to the west coast, last week to meet with the state 
and locals, and I feel confident in saying that we have 
improved those relationships, and I consider that to continue 
to be an important part, and we will keep working on that as 
time goes on. The second half you rightly said was for 
Generation 3, and there has been an adjustment in the schedule. 
But I want to emphasize as well that the adjustment, as you 
rightly said, was outside of DHS control, but in a larger view 
it fits into, I think, exactly what the point of the NAS was, 
which was making sure that there was a robust testing and 
evaluation period.
    So quite frankly, there are reasons why the schedule moved, 
but they were for good reasons, and the good reasons were that 
we were not going to change our posture in our ability to test 
and evaluate these machines. We want to make sure that we have 
gone through a thoroughly rigorous testing period before we go 
and deploy these, and operating with S&T I believe we have come 
up with that schedule. And so I believe that fits in well with 
Dr. Goldstein's opinion that we do need to have thorough 
testing and evaluation for these.
    Going forward, our plan is to increase the capacity to 
protect the country against biological threats using our 
BioWatch systems. I cannot tell you exactly how many cities 
will be involved, we can do that behind closed doors. But I 
believe in the years to come that we will increase our capacity 
to have detectors out in the communities, we will improve on 
the technology. One thing I also wanted to emphasize, and I 
believe Dr. O'Toole did a good job of this, is this is cutting 
edge technology, this has never been done before. And so we are 
essentially starting from a blank slate and trying to move that 
science forward.
    So the request, although it is doubling our money, we 
believe has been put into a robust system for testing and 
evaluation. And as Dr. O'Toole said as well, it is a milestone 
plan, we will not move into the next stage until we are 
confident that we have achieved everything that we need to 
achieve to make sure that this system is reliable and is valid 
before we move on to the next step.
    Mr. Price. Well, we will of course get whatever information 
we need in executive session. But I believe you can say a 
little more than you have about the Generation 2 and Generation 
3 replacement rate.
    Dr. Garza. Correct. During our evaluation period, part of 
that will be operational testing. So the Generation 2 will 
continue to work during that time period. If everything goes 
according to plan for Generation 3 through testing and 
evaluation, through field testing and operational testing, we 
will eventually switch out Generation 2 with Generation 3.
    Mr. Price. And what I am asking is, what does eventually 
mean?
    Dr. Garza. So, ``eventually'' means, after our testing and 
evaluation period, which we figure will be six months to a 
year, and then field deployment coming after that. So what we 
are saying is, because of that three-month shift we are not 
sure if we will be able to actively do our field testing at the 
end of Fiscal Year 2011. And so that is where that three-month 
delay comes in, from our contractual issues.
    Mr. Price. All right, but then you would anticipate a very 
quick replacement of Generation 2 with Generation 3 equipment 
or is there some time period where we are maintaining these 
Generation 2 machines in use?
    Dr. Garza. Correct, so it will take about three or four 
years to get all the machines out eventually. This is also not 
just the machines being complicated but the siting of where the 
machines go is also fairly complex as well. And so we have to 
study the individual environments, the individual cities, in 
order to assure that if the machines do what we ask them to do 
that they will be able to perform where we need them to 
perform. And it is a very complex process, depending on 
modeling, air flow and the different technical needs that we 
will need to make sure that these machines do what they are 
supposed to do. We anticipate full deployment by 2016, but we 
will be intending to replace all of them with Gen 3.
    Mr. Price. All right, thank you. We do want to move along 
here. I will turn to other witnesses to elaborate on the 
question, but let me turn now to Mr. Rogers.
    Mr. Rogers. Well, to follow up on that same line of 
questioning, since 2003 we have appropriated $598 million to 
the BioWatch program, and a recent Academy of Sciences report 
on BioWatch estimates that the annualized direct cost for 
Generation 3 acquisition and operation over ten years is $200 
million. And for Fiscal Year 2011, you are asking $10 million 
for the continued operation of the current system and $163 
million to support the test and evaluation and procurement of 
476 of the new Generation 3 detection systems. Am I accurate so 
far?
    Dr. Garza. Those are not the figures that I have, sir. We 
have $89 million for continuing Generation 2 deployment and 
continuing on of that service. And then I believe it is $83 
million for the testing, evaluation and potential procurement 
and field testing of the Generation 3. So I do want to address 
though the difference with the $200 million, and the reason 
that number is higher is because we will be expanding both the 
number of units and, as you said, Mr. Chairman, the number of 
locations for the biodetection machines. And so inherently the 
budget request would be higher to maintain those machines. 
There is a difference in the costing out of those because, if 
Generation 3 does what we expect it to do, which would be 
removing the laboratory piece of that and containing it all in 
a box, there would be a shifting of that cost.
    Mr. Rogers. Well, as I understand it, due to concerns about 
past mishandling of Generation 1 and 2, that S&T will be 
intimately involved in the test and evaluation of new 
Generation 3 systems, is that right, Doctor?
    Dr. Garza. Absolutely.
    Mr. Rogers. And I am told that if the Generation 3 test and 
evaluation proves accurate, that you will begin to deploy the 
system in multiple cities by the end of 2015?
    Dr. Garza. I am sorry, sir, by?
    Mr. Rogers. By the end of 2015?
    Dr. Garza. The plan will be to have completed the 
deployment by 2016.
    Mr. Rogers. But you will not begin to deploy until the end 
of 2015?
    Dr. Garza. The dates that I have, sir, are that we would 
begin deployment in Fiscal Year 2012. But I also want to 
emphasize though that it still has to go through the rigorous 
test and evaluation period. And so we have to make sure that 
this machine is going to do what we ask it to do.
    Mr. Rogers. But in the meantime, the process has been 
delayed several months due to challenges in the contract 
negotiation process?
    Dr. Garza. Correct.
    Mr. Rogers. So we do not know when you are going to start 
putting these machines out there, then replacing the Generation 
2 machines, which in my judgement are as useless as teats on a 
boar hog. Why? Because they have to be manually interrogated, 
and you have got to send a lab technician out there to find out 
whether or not the machine is wrongfully, mistakenly saying 
there is a poison in the air. Well, the lab technician will 
never get there if there is a problem, right?
    Dr. Garza. If the agent was still in the air and they were 
collecting the agent, yes, sir. Well, let me rephrase that. So, 
as I said in my opening statements, there is a delay between 
release and clinical symptoms. And so I think the scenario you 
were describing is more in line with a chemical attack where 
there is a release, you inhale vapor and, you know, it is 
mustard gas World War I. The difference between the Generation 
2 and the Generation 3 is of course, you are correct, there is 
somebody that goes out there and collects the filters, brings 
them back to the lab, it is analyzed in the lab.
    Which, I believe, brings us to the point of the tremendous 
jump in the technology that we are trying to make, moving to 
Generation 3. And the benefit of that is bringing that time to 
detection from 36 hours down from anywhere to four to six 
hours. That is the goal, is to bring that detection time down 
in order to do interdiction, in order to account----
    Mr. Rogers. I know, but the present system, and we are 
stuck with the present Generation 1, 2 for a while.
    Dr. Garza. Yes, sir.
    Mr. Rogers. How long, we do not know. But the present 
system, the lab technician has to go out and take the 
measurements out of the machine. Well, either the agent is 
still on the scene, in which case the lab technicians do not 
make it back, or the agents have disbursed but the population 
has been killed off already. So why have the results of the 
machine anyway?
    Dr. Garza. Well, again, sir, there is a time delay between 
exposure and clinical disease. And so that timing is what is 
the important thing to focus on. And so it would not be the 
scenario, and I do not want to get too much into clinical 
medicine, but it is not designed to do a detection of a rapid 
killer, it is designed for a biological agent which does take 
time for incubation. So what Generation 2 does is, it collects 
the bacteria or the agent from the air and brings it back to 
the lab. In order to cut down that lag time between release and 
clinical symptom, that is the time frame that we are talking 
about, and that can be anywhere from 48 hours to extended, you 
know.
    Mr. Rogers. What would it take to automate that Generation 
3 so that it works electronically real time?
    Dr. Garza. Right, and that is exactly what we are trying to 
do, we are trying to take that person that goes out into the 
field and collects the filter, has to drive it back to the lab, 
the lab technicians have to do their various things and run it 
through the PCR analysis, and they only collect this once every 
24 hours. And so if the release was at that 24 hours, we are 
doing pretty good. If it was at hour 1, we are behind the 
curve.
    Mr. Rogers. Answer my question, why cannot we develop a 
real time, automatic reporting machine out there?
    Dr. Garza. That is what we are attempting to do with 
Generation 3, sir.
    Mr. Rogers. Well, where are you with it? Dr. O'Toole.
    Dr. O'Toole. Generation 3 is quite revolutionary, if it 
works. What it is going to do is it is going to collect the 
air----
    Mr. Rogers. I ask a question, why cannot we have an 
automatic, real time reporting machine without a person having 
to attend to it? That seems like a fairly simple thing.
    Dr. O'Toole. We will, it is not a simple thing.
    Mr. Rogers. Why not?
    Dr. O'Toole. It is extremely complicated.
    Mr. Rogers. Why?
    Dr. O'Toole. It is absolutely at the far edge of available 
science.
    Mr. Rogers. Why?
    Dr. O'Toole. Because you have to collect the air and then 
you have to analyze it--understand that Generation 3 will 
analyze, will try and detect multiple different biothreat 
agents--it needs to say with near 100 percent accuracy, bug A 
is here, bug B is there, and the different tests that you have 
to do for these different bugs are very different. That box is 
going to perform multiple assays, okay, more than a dozen 
laboratory tests are going to be in that box, and then 
reported--which takes some time, it is not instantaneous, it 
takes some time to do that inside the box or anywhere else--and 
then they are going to report out digitally as soon as they get 
that result to the public health authority in that vicinity. So 
it is not instantaneous, but it is pretty darn close.
    Mr. Rogers. But does the military not already have similar 
type sensors?
    Dr. O'Toole. No, the military has nothing close to this.
    Mr. Rogers. Do they not have machines that detect poison 
gas, all sorts of poisons?
    Dr. O'Toole. Yes, it takes hours. They have to actually do 
the lab assays. Now, the military, when they are deploying 
troops, has the advantage of having a pretty good idea where 
the enemy is, and what they usually do is put these machines, 
the sniffers, out ahead of the troops in a kind of perimeter 
deployment so that they are always looking out ahead of the 
troops, and they can test for very specific things fairly 
quickly, you know, not a whole lot of things, but they are 
always manned by people right there where the sniffers are. So 
they basically have mobile labs when they are deployed in the 
field.
    Mr. Rogers. Dr. Goldstein, do you have a thought on this?
    Dr. Goldstein. Congressman Rogers, I certainly feel your 
frustration with this, but I will tell you that the technical 
experts on the NAS Committee felt that the original plans were 
unrealistic in that they thought that it would not occur as 
quickly as originally stated. I think I can speak for the 
committee to say that we are much more comfortable with the 
milestone approach that has been laid out where this very 
difficult technical approach gets a thorough, step by step 
process.
    We see the issue, as you put it so well, as being 
undeniably real, but we see it real in a short term time frame, 
which is where the frustration is, but also on a long term time 
frame, and we as a committee, I think, do not want to see the 
mistakes that inevitably occurred with Generations 1 and 2 
where there was a need for an immediate response and the 
systems were not as thoroughly evaluated as needed to be for 
the long term protection of the public.
    Mr. Price. Thank you. Mr. Rodriguez.

                               STANDARDS

    Mr. Rodriguez. Thank you, Mr. Chairman. Dr. Garza, let me 
ask you a little more basic question regarding some of the labs 
out there. I know in San Antonio for example we have Southwest 
Research and we have Brooks, you know, Air Force Base and 
others. Do we have, and for some of these agents and these 
toxics, do we have some kind of standard that we follow 
throughout the country, and how do we check when these people 
are using these agents?
    Because I know we have had difficulties, I know, you know, 
we kind of laugh because I know we have, you know, I guess snow 
monkeys that took off some time back and they are in the brush 
country there in Texas and once in a while they show up. And 
so, do we have a way of, number one, are there standardize the 
process utilizing these agents and these toxics?
    Dr. Garza. Yes.
    Mr. Rodriguez. And number two, is there a way of checking 
that in terms of what is actually occurring?
    Dr. Garza. Yes, so in answer to your first question, sir, 
we do have standards for the entire BioWatch system that all 
our laboratories use. So there is a standard platform, standard 
assays, standard way of performing the tests. So that is taken 
care of.
    Mr. Rodriguez. And then how do we make sure that that is 
occurring?
    Dr. Garza. We do have jurisdictional coordinators, and the 
labs are fairly well regulated, to make sure that they are 
meeting quality control measures. Just like any medical or 
other lab has to go through a series of certifications. So they 
are fairly well, they do have fairly good oversight to make 
sure that they are doing the proper procedures for the lab 
work.

                 NATIONAL BIO AND AGRO-DEFENSE FACILITY

    Mr. Rodriguez. So you do have oversight, okay. Let me ask I 
guess a following question I guess to Ms. O'Toole regarding the 
national bio and agro defense facility that we have been 
looking at. And I know that, I think we have held the 
obligating funds until there were certain conditions and one of 
those conditions revolved around the serious concerns regarding 
the risk of such a facility and there was also serious concerns 
regarding the selection process, and I know that now it is 
under some degree of litigation in terms of how that went 
about. Can you let me know where it is at? And we were one of 
the finalists in San Antonio.
    Dr. O'Toole. Yes, sir.
    Mr. Rodriguez. And of course we felt that the Committee 
made the wrong decision, and so and we feel very strongly about 
that to this day.
    Dr. O'Toole. I understand, Congressman. As you pointed out, 
this Committee mandated that DHS ask the National Academy to do 
an evaluation of the risk assessment that is now being 
conducted by DHS in association with the Manhattan, Kansas 
site. And we are not to begin construction until the Congress 
has a chance to evaluate that risk assessment. DHS has been 
talking with NAS and NAS has established a committee, and we 
are going forward as we speak with that process. I am sorry, 
sir, I forgot your second question.
    Mr. Rodriguez. The second one is the most important, the 
process for selection, how political was that?
    Dr. O'Toole. It was not political at all.
    Mr. Rodriguez. Okay.
    Dr. O'Toole. It was before my time as Undersecretary, it 
was carried out by career officials in the Department.
    Mr. Rodriguez. So how do you know it was not political if 
you were not there during that process? I do not mean to get 
that, but can you please look into that process? Because it is 
serious.
    [The information follows:]

    S&T has reached out to Rep. Rodriguez's office to set up a briefing 
with Dr. O'Toole and the Congressman, to review the specific details of 
the site selection process for NBAF.

    Dr. O'Toole. I would be happy to give you a robust review 
of that process, it was really, I have looked into the process, 
anticipating this question. And it was merit based, the 
competition was quite stiff. Texas has a lot of assets in this 
regard. Texas was just awarded, for example, a Co-Lead and a 
Center of Excellence devoted to agriculture and food health. 
And basically the state of Kansas made a very generous offer to 
the Federal government, it is a great deal for the nation, not 
to say that Texas does not have great skills in this area.
    Mr. Rodriguez. So they made a bigger offer?
    Dr. O'Toole. They did.
    Mr. Rodriguez. Okay, that sounds politically terrible. 
Okay, thank you.
    Mr. Price. Mr. Culberson.

                             PRIVATE SECTOR

    Mr. Culberson. Thank you, Mr. Chairman. Dr. Goldstein, I 
was particularly struck with your comments on the importance of 
working more closely with the existing hospitals, health 
workers, the public health sector, and the private sector is 
certainly capable of helping immensely. And I represent the 
Texas Medical Center, St. Luke's Hospital I know on their own 
initiative and I think largely with their own funding, this was 
a couple years ago, has already prepared, already set up an 
emergency response center in the hospital and have trained 
their EMTs, nurses, doctors, to watch for certain symptoms, 
because the medical center, astonishing, but 155,000 people 
move in and out of the Texas Medical Center every 24 hours.
    And so there is a great deal of expertise there that is 
ready, willing, and able to help. Could you talk a little bit 
more about that, and what specifically did your committee, 
would you recommend that we need to be doing to make sure that 
we are involving the private sector? Because I know the Medical 
Center is ready, willing, and able to step up and participate 
and they would be a great partner, I mean St. Luke's did this 
on their own initiative.
    Dr. Goldstein. Congressman, you are absolutely right, there 
is an enormous capability certainly in our emergency medical 
response system. There is a NAS Committee recommendation that 
better training for EMT, I mean there is an enormous difference 
between the emergency medical response folks in different 
locations as to how well they know about these potential 
issues, how quickly they are going to be responsive, are they 
going to be able to be the first alert system so that the 
informed emergency room doc, for instance, is the one that 
immediately blows the whistle and we all come running and look 
at this from a situational point of view and do the early 
detection which is so needed. But we see this as being uneven 
capabilities around the country, and the need for further 
training to improve the capabilities.
    Mr. Culberson. Did you all explore it, and it seems to me, 
Mr. Chairman, to the extent we can do so, when it comes to 
Homeland Security, decentralize as much as possible and rely on 
local talent? You know, we are blessed in our urban areas, New 
York and North Carolina, with your great universities as we 
have in Texas, you are right, it is uneven, you have got rural 
areas that are not going to recognize these things and be 
prepared. But where we are able to decentralize and shift 
responsibility back to local authorities, local healthcare 
workers, not only would we save a great deal of money, I think, 
Mr. Chairman, you would also be strengthening our ability to 
respond and the speed with which we respond.

                 WORKING WITH THE DEPARTMENT OF DEFENSE

    That is America's great strength, is the initiative of 
individual Americans and the talent of our people, and I do not 
know why everything has to come out of Washington. I understand 
the difficulty, technical difficulties certainly of developing 
and deploying this machinery. I wanted to also ask, Dr. 
O'Toole, to what extent have you looked at and participated and 
worked with the military to see, the sniffers you described, it 
sounds to me like they have already done this, and to what 
extent are we reinventing the wheel and why cannot we use some 
of their technology? Why do we have to do something completely 
new and different with money that is so precious and scarce?
    Dr. O'Toole. Sure. We are not doing anything that DOD has 
already done. DOD created another version of what is 
essentially Gen 2 BioWatch, the currently deployed BioWatch, 
for its bases and its facilities. And we are very familiar with 
that technology, it is slightly different. We have worked hard 
in S&T to make sure that the assays that the DOD uses are 
comparable to those in the civilian system, but what the DOD is 
using now is actually quite comparable to the currently 
deployed BioWatch.
    The problem with that system is that--it is not useless by 
any means--it targets a limited number of biothreats, and one 
of the characteristics of the biothreat is that there are a lot 
of bugs out there that could be used as weapons. And as 
bioscience advances, the likelihood that one of these weapons 
will be engineered, i.e. something that we have not seen 
before, grows.
    Mr. Culberson. Did I hear you say it is a manned mobile lab 
is essentially what the Army is using, the military is using?
    Dr. O'Toole. That is what they use to protect troops who 
are out in the field. They also have BioWatch type sensors at 
facilities such as the Pentagon, which are in place.
    Mr. Culberson. They are not automated?
    Dr. O'Toole. Pardon me? No, they are not automated, sir.
    Mr. Culberson. Somebody still has to go out and pick it up.
    Dr. O'Toole. They have to go out and collect the filters 
and analyze the filters over a period of time. So Gen 3 is 
actually quite different from what DOD is using.
    Mr. Culberson. And I will follow up, Mr. Chairman, but it 
is something I think for us worth exploring to what extent this 
can be done in cooperation with DOD to develop something in 
partnership, try to save some money and pool some talent.
    Dr. Garza. Sir, if I could add on to that, I believe one of 
the true values as well in working with the DOD is to bring 
together an integrated system. So, forgetting about who owns 
what machines, as we can all testify here today, if there is a 
release of a biological agent near a military facility, it is 
not going to stop at the gate, it is going to flow to other 
regions as well. And so one of the beauties that we saw when we 
were out in Los Angeles was doing a multi-jurisdictional 
exercise, and as I am sure everybody knows, between L.A. and 
San Diego is the small military facility that is owned by the 
Marines.
    And they are very well ingrained with our local BioWatch 
people. We have agreements with DOD, they used to have to 
collect their samples and fly them all to Fort Bragg to get 
them all processed. We said, that is silly, bring them to our 
lab, we will do them, we are going to become integrated, this 
has to be a national defense, it cannot be civilian DOD 
installation, we have to work together on this.
    Mr. Culberson. Sounds like a good model. Thank you, Mr. 
Chairman.

                           LOCAL COORDINATION

    Mr. Price. Thank you. Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman. Somewhere along the 
lines of some of the comments that Mr. Culberson made, although 
I do not mind a strong central government, but as all of this 
is going on, what relationships, if any, are taking place with 
local governments and local institutions? I come from New York, 
New York continues to be a target if not the target in the 
nation, its subway system and its mass building lend themselves 
to easy access to a lot of people at the same time for one of 
these attacks. So what is the relationship and how much of it 
gets checked, if you will, with local authorities before 
everything gets developed and put in place?
    Dr. Garza. Thank you, that is an excellent question. One of 
the beauties, I believe, of the BioWatch program that probably 
is not trumpeted enough is that, although it is federally 
coordinated, it is run by the locals. And so we rely on them 
heavily to help with this system, help run this system. And 
they exercise this, and so if there ever was or is going to be 
an alert on the systems, it is a local response. So they have 
to figure out what their response is going to look like, which 
I also believe is underemphasized in the BioWatch program, 
which is it brings together the individuals that have to make 
that decision.
    So it brings together the lab officials, the public health 
officials, the emergency managers, the EMS people, everybody 
comes together, coalesces around the BioWatch unit. So in that 
instance we are heavily engaged with our state and local 
partners for that system. Going forward, and I believe this was 
in the NAS report, is that we have to bring our stakeholders 
into the process of moving forward, and we have done that. We 
have brought them to the table in developing our new 
technology, we have asked for their opinion, we have brought 
them to the table and said, what do you need from us, what can 
we do to better serve you to make this system better and help 
you out with our resources?
    Mr. Serrano. Now, I am sure that there are many communities 
that feel that they have a lot of knowledge in this area. I am 
sure in New York there are a lot of folks who probably think 
they know more than you guys about how to deal with it. So is 
there ever pushback or any problems in the relationship?
    Dr. Garza. I will not say that it is a completely smooth 
process, there are always differences of opinion at the table, 
especially when you are dealing with very smart people. But I 
also view that as one of the beauties of the system, is we 
bounce ideas off each other and they let us know when we need 
to improve something. And quite frankly, you know, me sitting 
in a room with my folks in my office, we do not realize or 
cannot understand some of the challenges that go on at the 
local level and we rely on the local people to tell us what 
those challenges are so we can make a better system. So, do we 
have instances where we talk back and forth? Absolutely, but I 
think that is better for the system.
    Dr. Sosin. Thank you, Congressman. To respond also to the 
decentralization, that is exactly what our health and public 
health and medical system is, it is decentralized. But around 
urgent events, catastrophic events, terrorism, and the like, 
those resources need support, and that is what we are talking 
about here. They are stretched to the limit every day with the 
everyday activities, whether they are food borne or whether 
they are taking care of patients who have respiratory illness 
or whatever it is in their communities.
    So, as it relates to that, I think there really are two 
pieces of this discussion, about BioWatch in particular, which 
we have had most of our conversation about. One is the threat 
piece and setting this as a high enough priority. That is 
really not a public health and medical sector decision. Once 
that decision is made, that this is such a critical threat that 
we need those extra hours of early notification before we see 
clinical illness and to expedite the process of investigation 
and response, then the question is, have we balanced our 
strategy in supporting those local jurisdictions to respond 
effectively and take the right actions in response?
    And that take money, and that today it takes money from the 
Federal Government, but it also speaks to making this program 
in the period of time when we do not have attacks to be of 
greatest dual use possible to those local entities. That 
includes, and I think we have great opportunities and 
collaborations to do this, addressing environmental 
microbiology, learning more about the nature of these organisms 
in the environment so we understand human disease and the risk 
of human disease, whether it is around terrorism threat agents 
or all microbiological agents.
    It includes advancing the technology of diagnostics, 
driving us to points of care diagnostics for a wide range, 
changing the way we look at platforms for diagnosis. There are 
tremendous benefits, much like people often put in front of us 
the space program, there are opportunities to leverage 
technology here. And then the opportunity, as Dr. Garza pointed 
out, to exercise across sectors, so it is not just public 
health exercising within public health or medical programs, 
hospitals and the like, doing their drills within hospitals, 
but bringing the law enforcement sector, the Homeland Security 
sector, and using these as opportunities to learn how we will 
do this and be more ready to do it because we have 
relationships and a trust understanding about these in advance. 
There is opportunities for great advantage in this once you all 
have made the decision that this is a significant enough 
priority that we should be investing these dollars here.
    Mr. Serrano. Thank you. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Ms. Roybal-Allard.

              NATIONAL BIOSURVEILLANCE INTEGRATION CENTER

    Ms. Roybal-Allard. Well, first of all, it is comforting to 
hear somewhat that there is this cooperation at the local and 
state level anyway. But the concern is that it does not appear 
to be happening at the Federal level among agencies. And 
according to a GAO report that was issued in December of last 
year, the National Biosurveillance Center does not collect the 
kind of information that would enable our government to respond 
to a biological disaster in its very earliest stages. 
Specifically, the GAO reports that the Center must rely on 
publicly available data because it receives limited input from 
its Federal and state partners.
    In fact, some of the words that were used, and this is 
directly from the report based on interviews with the partners, 
is that GAO encountered widespread, and I am not going to read 
everything, but confusion, uncertainty, skepticism, lack of 
clarity about roles, responsibilities, joint strategies, and so 
on and so forth. So the question that I have is, how are you 
working to improve cooperation and information sharing with the 
National Biosurveillance Center so that you can get the 
information that you need at the Federal level to quickly and 
effectively respond in the event of some kind of an attack?
    Dr. Garza. Thank you for that question, ma'am. The first 
thing is personal relationships. And so one thing that I 
committed to when I came into the office was to build those 
relationships with the various inter-agencies, both outside of 
the federal inter-agency and within DHS, and I think it speaks 
that Dr. O'Toole and I have a very strong relationship in 
building technology, Dr. Sosin and I have a very strong 
relationship from DHS CDC, and I have weekly telephone meetings 
with the Assistant Secretary for Preparedness and Response, Dr. 
Nicki Lurie.
    You are correct in that it is difficult to get data from 
the federal inter-agency, but quite frankly I believe the 
approach should be a more refined mission. And I have talked 
about this with our inter-agency partners at our regular 
meetings, and that includes USDA, HHS, Transportation, DOD. And 
that is, instead of trying to eat the horse in one bite is to 
take it a bite at a time, and to focus on what is the critical 
situational awareness things that Secretary Napolitano needs in 
order for her to have effective decision support?
    So a lot of that revolves around human health, animal 
health, agriculture health. And so what I have told our office, 
the NBIC, is to start focusing on our core missions but also 
realize that the federal agencies are not the sole owners of 
what works best. And I believe that plays in well with some 
other projects that we are interested in doing, and one of 
those is with the North Carolina group that does a superb job 
of fusing this at the state level. We should not assume that us 
at the federal level at all have ownership of how to fuse data 
to bring it all together.
    And so some of our goals going forward are to engage more 
at the state level, to engage more with the private sector, 
because some of those have absolutely fabulous ideas, and to 
engage more with our international partners, because as I 
explained before, disease does not know any boundaries and as 
H1N1 showed us it can come from anywhere around the world.
    Ms. Roybal-Allard. Okay, but I just want to make sure that 
I understand, but at the same time making sure that the Federal 
agencies still understand that they have a responsibility.
    Dr. Garza. Absolutely.
    Ms. Roybal-Allard. Okay.
    Dr. Garza. One thing that I do want to make clear is that I 
want people to come to the table because they realize the value 
that we give them. I am not a fan of making people come to the 
table because they have to, I want people to come to the table 
because they are willing to work with us, and in order to do 
that we also have to show them value, and so that is another 
thing that we are working on as well.

                          H1N1 LESSONS LEARNED

    Ms. Roybal-Allard. Okay. The Commission on the Prevention 
of Weapons of Mass Destruction and Terrorism was exceedingly 
critical of the Federal response to the H1N1 epidemic, and the 
Commission argued that the delay in procuring sufficient 
quantities of vaccine was evidence that our government is, and 
this is their words, woefully behind in preparing for future 
epidemics. It was also noted that in subsequent public health 
emergencies we might have only hours, not weeks or months, to 
organize an effective response. What were the key lessons that 
were learned from the H1N1 epidemic and how are you applying 
this knowledge to the challenge of preparing for a biological 
attack?
    Dr. Garza. Right, I will not answer the vaccine question 
since that is more of an HHS role, but I will answer the 
question what did H1N1, what did we learn from that episode. 
And I think what we really learned is that it takes a whole-of-
government approach to attack these problems. And so, within 
DHS, I can speak for a couple of efforts that we did, and one 
was standing up a crisis action team where we had 
representatives from the federal inter-agency feeding us data 
so that we could bring it all together into a common operating 
picture, so we could see on a more full spectrum globally what 
was going on out in the atmosphere.
    So that was one beauty of it. The other one, and Dr. Sosin 
can attest to this, is bringing together some of our modeling 
communities in order to look into the future and see what is 
going to happen down the road, and I believe that was the first 
time that we had ever worked together on issues such as that. 
And so it really was I think a solidifying of that 
relationship.
    Ms. Roybal-Allard. Okay, but again, inter-agency 
cooperation at the Federal level continues to be one of the 
keys in our ability to deal with these things effectively.
    Dr. Garza. And we are committed to building those 
relationships.
    Ms. Roybal-Allard. Thank you.

                       BIOWATCH DEPLOYMENT PLANS

    Mr. Price. Thank you very much. Let me turn to a question 
that I will address to both Dr. Garza and Dr. Goldstein and 
perhaps bring Dr. Sosin in as well, because I want to get a 
better fix on the approach that you are taking to the eventual 
scope and scale of this BioWatch program. We of course want to 
base this program on some kind of risk management strategy 
rather than just some kind of ``more is better'' attitude.
    I understand there are plans to deploy Generation 3 
technology to a much larger number of cities. I wonder, for 
example, about the advantages of that strategy as opposed to 
more concentrated work in a limited number of cities or other 
uses of funds that you might think of in terms of enhancing the 
local response capacity or complementary methods of 
surveillance.
    So, Dr. Garza, to the extent you can do this in a public 
forum, and I realize there is some limitations, please discuss 
how your decision making for deployment of this system is based 
on things like risk and threat and consequence. How are we 
going to decide how much is enough, both with respect to the 
capacity we need in a given city and the number of cities to 
which we eventually try to extend this technology?
    Dr. Garza. Thank you, sir, and I appreciate that question 
and I would like to echo Dr. Goldstein's comments in the NAS in 
that it does have to be based on a thorough evaluation how we 
are going to deploy these machines. And so, at Homeland 
Security we have done some extensive modeling to look at the 
percentage of the population that would be covered in the urban 
areas and what we view as the highest threat. Now, threat comes 
from Dr. O'Toole's job, but she bases that threat, not she but 
her office, bases that on real information, on what is the 
highest threat to the country, and then we defend defense 
against that. And so the threat is a combination of different 
things.
    As far as the coverage, we have done some extensive 
statistical work looking at, how can we cover a majority of the 
population, which goes into the siting of the machines as well, 
and then how much is enough around the country, as you stated. 
And we believe we have come to the right number that, again I 
can share with you afterwards, of the number of cities and 
where they are situated, and we would be happy to provide that 
information for you, sir.
    Mr. Price. Dr. Goldstein, you and your panel have 
specifically told us that you were not able to assess the 
overall risk environment in which this system is being 
deployed, and we understand that and respect that. Nonetheless, 
I expect you may have some views about how wise it is to invest 
what is likely to be hundreds of millions of dollars to develop 
and deploy Generation 3 detectors in all current BioWatch 
cities and then a number of additional cities.
    Putting this in budget terms, would you allocate some of 
that funding to some of the other problems you have identified, 
such as the development of local response capacities, 
capacities that go beyond mere detection? And then at what 
point would you see more profitable investments going in the 
direction of these complementary methods of surveillance? After 
all, no matter how far we take BioWatch, no matter how 
ambitious it becomes or how much money we put into it, it is 
always going to remain a partial system.
    Now, as you and Dr. Sosin both have said, this is a system 
that has certain advantages in terms of the speed of detection, 
the ability to act on a hostile act, but it has inherent 
limitations, and it is always going to have to be complemented 
by public health surveillance. We are never going to be able to 
dispose of one system or the other, there is always going to be 
this complementarity, and I would think about this point of 
where the balance tips, where the tradeoff occurs. So I am 
asking you to reflect on a very difficult question, I realize 
but nonetheless, your central charge was to think about this 
complementarity. So I hope you have some views that might give 
us some guidance.
    Dr. Goldstein. Well, let me start by saying that one can 
envision a public health response without BioWatch. One cannot 
envision BioWatch without a public health system.
    Mr. Price. Exactly.
    Dr. Goldstein. What the NAS Committee really was focusing 
on to a large extent was the importance of thinking of this 
holistically, of thinking of the system as a whole. Perhaps I 
can go back to something that Vice Chairman Serrano asked 
about, which was the pushback. There was clearly pushback 
originally from the public health system to the BioWatch. We 
were very encouraged as a committee to see that there was a 
transition in the thinking of the BioWatch folks to recognize 
that the users of the information were important, that it would 
not be just simply an automatic response, as soon as there was 
a BioWatch actionable report that there needed to be 
situational awareness, that there needed to be cooperation such 
that the public health authorities, who as Dr. Garza, Dr. 
O'Toole pointed out, are the local response elements, will have 
to be the people to pull the trigger on any response, that they 
are part of the system.
    So we are very encouraged in seeing what seems to be a 
change in the way DHS is approaching it. I would point out 
there is a legacy among the public health workforce that left 
over from this previous approach, there is some degree of 
skepticism as to whether or not there will be in fact the very 
many important things that Dr. Garza and Dr. O'Toole talked 
about in terms of cooperation. But assuming that there will be, 
then it is a holistic system and it is a system that 
incorporates both. And then I go back to what you point out, is 
that we as a committee were not cognizant of what the threat 
is.
    If we understood the threat, what we did say was that there 
is a previous NRC report that looked at risk assessment that we 
felt had the right recommendations. One of the points we made 
is a point that Dr. O'Toole made, that it is not an unthinking 
risk that we are dealing with, it is not the risk of a meteor 
hitting this room, it is a risk that is more akin to Game 
Theory than standard risk assessment, you do this, the other 
guys do that, you do this, et cetera. So there is a lot of 
analysis of the threat and the changing threat that needs to be 
done that again our committee was not cognizant of, but very 
strongly supportive of the fact that a previous NRC Committee 
had recommended that and it should be followed.
    Mr. Price. I do want to turn to Dr. O'Toole and Dr. Sosin, 
but I am aware of time sensitivities, so let me turn to my 
colleague Mr. Culberson. You are on.

              NATIONAL BIOSURVEILLANCE INTEGRATION CENTER

    Mr. Culberson. Thank you very much. I wanted to ask about 
the GAO report in particular and was disappointed and 
astonished to see the reaction of some of the other Federal 
agencies. They did a survey, and as you know, I know you are 
all familiar with the GAO analysis, and wanted to ask, what 
specific steps are you all taking to deal with this? I mean 
when you hear officials quoting from the GAO report, officials 
from, and this they said was typical of the response they got, 
officials from one component said that the tabletop exercise 
showcased Federal agencies' reluctance to share information 
underscored that there was no role for NBIC.
    While officials from other components said during 2009 
swine flu activities, NBIC was not able to demonstrate that it 
had any unique value to add. You know, frustrating and a source 
of concern, and it never ceases to amaze me how the Federal 
Government can generate more studies to go study more studies 
to go study more studies when it seems to me a lot of this is 
just common sense, we just decentralize as much as you can, 
rely on--all hospitals are not up obviously to the standards of 
the Texas Medical Center, but where you have got that 
capability is in New York, is in North Carolina, is in Houston.
    I had my staff double check, and the University of Texas 
Health Science Center, on its own initiative and using its own 
money, has developed a mobile response lab that is able to go 
out and actually, if someone has been exposed to a biological 
agent or to a weapon of mass destruction, some chemical, they 
can help decontaminate them. That has also been done by the 
Methodist Hospital, I know St. Luke's has developed this. The 
vast amount of money that has already been spent on this, with 
all the talent that is already out there at the local level, I 
guess a lot of frustration on my part, but two questions.
    One, what are you doing to try to make sure that you are 
able to demonstrate to these other agencies that you are adding 
value? And then number two, why are we not using the tremendous 
Centers of Excellence as I know there are in New York and North 
Carolina and California, all across the country, in Texas. 
Those are our best early detection, those are our best early 
warning systems, are those emergency rooms, it seems to me. And 
this is something we need to deal with now. I mean if we make a 
mistake and do not do this right people are going to lose their 
lives, it is not like any other Federal function or agency 
really.

                         PUBLIC HEALTH RESPONSE

    Dr. Garza. Thank you for that question, sir. I will take 
that second part first. So, as I said in my opening statement, 
DHS does not perform biosurveillance, we rely on the experts at 
CDC to do that. And you are correct, that there are a lot of 
very good programs out at the state and local level that are 
able to collect, and we cannot forget that it is the local and 
state people that have to respond to that data.
    Mr. Culberson. They will be the first ones to see it.
    Dr. Garza. Absolutely, and they are the ones responsible 
for responding.
    Mr. Culberson. To what extent though are you collecting 
that information? I mean have you got any kind of a system in 
place where you can monitor those emergency rooms where you are 
helping train the first responders and when they see something 
they report it, who do they report it to and then what is done 
with it?
    Dr. Garza. Right, I believe Dr. Sosin may be better 
equipped to answer that than I am.
    Dr. Sosin. So the local to state, state to Federal system 
is the way that we approach this. The challenge of NBIC, for 
example, managing data, nationwide volumes of data, is you 
cannot make sense of these unique local data at a national 
level. There are very severe limits to being able to interpret 
and respond to those data. First detection, the first few cases 
will never be found in a national system whether that is a CDC 
or whether that is at NBIC. So most of our resources do go out 
to state and local health departments in order to reinforce 
those very models and mechanisms that you speak of. In Texas, 
in North Carolina and New York, the relationships and the 
systems that they have in place are largely supported by 
Federal resources that have helped to do that.
    Mr. Culberson. As a practical matter, where would a doctor, 
for example, in North Carolina, who would he call, who would 
she call to report peculiar case?
    Dr. Sosin. There are laws, local and state laws, that lay 
out the mechanisms for a clinician or a hospital to report 
notifiable conditions and unusual conditions.
    Mr. Culberson. So who would they call?
    Dr. Sosin. And they would call their local health 
department or they would go online and they would put 
information to the local health department.
    Mr. Culberson. Who would then report it to who?
    Dr. Sosin. So, the health department would then engage to 
get more information to validate what is that and what is the 
basis of that information, do we need to gather more 
information to confirm a high threat type of event. But should 
there be sufficient concern about that or validation of those 
results, they would report that to CDC very quickly because 
they are looking for advice, hey we have never seen a case of 
this, what do we need to know, what do we need to do, how do we 
engage our system? They have response plans and protocols at 
the local level, the state level. But that sharing of 
information, which is very human based, it is not data moving, 
it is information moving, and that information can be enhanced 
by technology but it is extremely dependent on the individual 
relationships between health departments, state health 
departments, local.
    Mr. Culberson. Right, so really the network is already 
there, that was my point, Mr. Chairman.
    Mr. Sosin. Yeah.
    Mr. Culberson. I think a lot of the network is already 
there, CDC is the lead agency on it, you know, I am compelled 
to ask, it seems to me Congress creates a lot of agencies, I am 
compelled to wonder, driven to ask, what is a compelling reason 
for having this information center? I do not know why we do not 
just do this through the CDC and quit trying to reinvent the 
wheel? Thinking of the vast sum of money we have already spent, 
my time is also limited which is very frustrating. But it is 
maddening for us as Members of Congress and to our constituents 
the vast sums of money that are wasted in Washington, and I 
appreciate the noble good work that you all are doing to try to 
fulfill the mandate that Congress gave you. I have a notice in 
the GAO report, Congress forgot to even include any legal 
requirement that these agencies even cooperate with you. So 
there is no legal requirement, Mr. Chairman, that the other 
Federal agencies provide you anything, which has got to make it 
doubly frustrating.
    Dr. Garza. It makes it a little frustrating.
    Mr. Culberson. It is kind of, yes, sort of maddening. So, 
Mr. Chairman, I certainly want to help in any way that I can, 
but I do think a lot of the existing structure is already there 
to help us make sure that information gets up.
    Dr. Garza. Right. Sir, I did want to point out what DHS 
does. HHS is concerned with the public health side, with the 
human health side. DHS, although, and this is one of my pet 
peeves, is maybe we have the wrong name of biosurveillance 
integration center. It should be more of a fusion center of 
data or of information. So we do not merely just look at the 
human health side, we also want to look at the animal health, 
at plant, at transportation data, at all those other streams.
    Mr. Culberson. That research is also already being done 
everywhere. You are talking integrating the data.
    Dr. Garza. Right. It is being done mostly at the state 
level, which is why we are very excited about doing this 
project in North Carolina, to see how they integrate the data.
    Dr. Sosin. Sir, could I?
    Mr. Price. All right. Yes. Certainly.
    Dr. Sosin. One very brief response. I do not think I could 
go home if I left here with the impression that we have all the 
resources we need to do this. This whole enterprise is 
underfunded by orders of magnitude. That we have the local 
resources in the public health sector or in the security sector 
already in place and everything we need, I would just hate to 
go home leaving a sense that everything is taken care of.
    Mr. Culberson. The network is there is my point.
    Dr. Sosin. There are networks there but we are stretching 
the people beyond their capabilities, and we saw with H1N1 even 
in New York City in the spring that even in that context it 
took everybody and really good people in that city to be able 
to manage the health response and the public health actions 
that followed. So it is not a fixed problem, and I would hate 
to leave it with that thought.
    Dr. Goldstein. If I may just quickly follow-up. About a 
year ago I asked a radiologist in Staten Island, not your 
district but part of New York, a very good radiologist managing 
a practice, looking at chest x-rays, if he knew how to diagnose 
anthrax. He said yes, and he described it. I said if you did 
see a case, who would you report it to? He thought for a second 
and then he said, well, you know, I graduated Emory, it is in 
Atlanta, I would call the CDC. He said no, you know, I would 
probably get a clerk there. I do not know who to talk to there. 
No, I do not know who to report it to. Well, he should report 
it to New York City Health Department, and the law says he 
should. That is the reality of where we are at. It is a very 
uneven system depending upon clinical acumen and knowing how to 
interact with the health departments, and the health 
departments are simply too underfunded to go out and really 
grab this data in the way they should.
    Mr. Culberson. That is where it seems to me we ought to 
focus our energy. That is what I was driving at, Mr. Chairman. 
Thank you. That would be a good illustration. Thank you.
    Mr. Price. While it may be theoretically true that, as you 
said, the networks are there, the networks do not amount to 
much if they are not----
    Mr. Culberson. Educated.
    Mr. Price [continuing]. Educated and prepared to respond. I 
am very pleased to hear the things some of you said about North 
Carolina's public health effort, and also the effort that is 
headed by our state university. One thing we learned very 
quickly in examining this is how unique it is, or you certainly 
cannot say it is being replicated all over this country. I 
understand Mr. Serrano has no further questions, but Mr. 
Rodriguez might.

             NATIONAL BIO AND AGRO-DEFENSE FACILITY (NBAF)

    Mr. Rodriguez. I apologize. You know, we have scheduled all 
these hearings at the same time. I want to apologize for coming 
in and out. Let me I guess go back a little bit, Dr. O'Toole, 
on that bio national lab. Your last comment was basically that 
Kansas has sweetened up the pie a little bit better, is that 
correct?
    Dr. O'Toole. Well, I suppose that is one way of putting it, 
Congressman.
    Mr. Rodriguez. Okay. How would you put it?
    Dr. O'Toole. They were among the finalists on the basis of 
the criteria that DHS specified for the competition, they far 
and away had the most intense concentration of researchers in 
animal and food disease in one area that was already 
established, and that critical mass of intellectual fire power 
was one of the key criteria that were used for the decision. As 
I said, Texas was also competitive. Both states actually made 
generous offers but it was the entire package that was 
decisive. As I said, the decision was made by a bunch of career 
officials. It was not a politically motivated decision. I would 
be happy to come over and talk to you about the specific 
details of how it was determined.
    Mr. Rodriguez. Thank you.

                 INTEGRATION OF BIOSURVEILLANCE SYSTEMS

    Mr. Price. Dr. Sosin, let me turn to you and then Dr. 
O'Toole just to follow-up on the previous line of questioning. 
The National Academy of Sciences' report focuses a great deal 
of attention on measures the public health community, including 
HHS agencies specifically, can undertake to increase the 
nation's biosurveillance capabilities. Some of these 
recommendations include improvements to diagnostic and 
reporting tools, better cross-jurisdictional information 
sharing, as well as a general call, which you have echoed here 
today, to improve public health workforce strengths and 
competencies.
    Currently, the CDC has BioSense, the National Electronic 
Disease Surveillance System, global disease detection centers, 
disease specific outbreak response networks, such as Food Net, 
the Laboratory Response Network, the National Healthcare Safety 
Network, et cetera. Some states and some large cities have 
their own surveillance systems in place. Are you confident that 
these systems feed into a larger national surveillance system 
or that we are at least on the way to that kind of integration? 
What is the CDC doing to integrate these systems and to 
standardize public health disease data collection across 
jurisdictions? What specific gaps remain in public health 
surveillance? What steps are being taken to address these gaps? 
Then, finally, what about the question of speed?
    Dr. Goldstein and his NAS Committee have concluded, and of 
course this is accurate, that one of the advantages that 
BioWatch has is speed, assuming this Generation 3 capability 
can be developed. There is no way that a public health-based 
intake and reporting system could ever match that kind of 
instantaneous capability. On the other hand, we have not 
particularly had a definitive account of what kind of speed we 
could be talking about, whether there is any kind of 
convergence in terms of the turnaround time that we are talking 
about. It seems to me that is a fairly important capacity to 
assess when we are thinking about this complimentarily and 
where the BioWatch system will eventually stop and when we will 
rely on this broader system.
    Dr. Sosin. So a number of very challenging and important 
questions you raise, Mr. Chairman, and probably not enough time 
here to be eloquent about the range of them. I do believe that 
the evolution over 60 years of disease specific surveillance 
systems and the opportunities to leverage new tools and new 
approaches as new threats have been prioritized over many years 
that the evolution of technology on the efforts to bring 
standards to information technology, especially in the health 
sector, will on their own drive us towards stronger, more 
integrated systems. The question is how much can we spend to 
expedite that process and spend it in a productive and useful 
way.
    There are many efforts at the Department in the Office of 
National Coordinator to help expedite the uptake of electronic 
health records, and a lot of that work will lead to faster 
standardization and integration of these electronic health 
systems, but it is going to take many years for those systems 
to have wide uptake. So a lot of the question you ask has to do 
with what is the problem you are solving? If you are talking 
about healthcare hospital-related infections and what is the 
best surveillance system to monitor the everyday ones and stop 
bad practices or products that are contaminated, et cetera, you 
have a pretty good system in the tools working through the 
infection control practitioners, in the hospitals, to do that.
    Efforts underway that are focused on that are not 
necessarily efforts to address bio defense. So when we talk 
about a catastrophic exposure to anthrax spores, for example, 
we have not designed these other systems to be optimally 
configured to address this. We are now looking to what are the 
other ways that we can approach this. BioWatch is one of those 
ways that is very specific to a highly catastrophic type of 
event. In the health sector, though, if you have exposure to 
100,000 people, the nature of disease is such that you will see 
some people very early on.
    They will get high exposures or they will be highly 
susceptible and they will develop disease. I mean, you will see 
not just one and are we going to pick up the one case, you will 
see many cases in the health system 36, 48 hours after that 
exposure. We would expect that with multiples of those, we will 
pick them up, we will have somebody suspicious in the clinical 
setting. If you have the local health capacity and the state 
health capacity, you will begin that investigation at that 
point in time. We see that in Connecticut examples of the 
sporadic anthrax cases, but you are not going to see it 
everywhere if you have got a very thin health sector in the 
public health sector and the medical sector. It is very 
workforce dependent. So technology is evolving.
    That is going to improve. There are efforts, both at CDC, 
to integrate the set standards. The director, as you heard 
earlier, has set a priority for doing better information 
management. That is the core and foundation of what we do at 
CDC. He is creating a single center that is bringing all of 
these informatics programs, the epidemiologists and the 
laboratories together to develop methods and to accelerate the 
standard setting. Those will help. These other investments in 
technology will accelerate standardization, but at the end of 
the day you need people. You need those people who have 
relationships. In your own state, having public health people 
sitting in your hospitals has been a major advance of 
connecting where the clinicians know now I am going to talk to 
so and so. It is not like it is an unknown health department, 
it is so and so who is in my hospital who is doing this work 
and just check in to see whether this is something they need to 
know about. That is going to lead to multiple benefits, not 
just for bio defense.

                             PUBLIC HEALTH

    Mr. Price. Dr. Goldstein, do you have any further comments 
along these lines? You have already reflected on this briefly, 
but you stressed that you were not able to do a thorough 
assessment of the entire public health system. Nonetheless, you 
made the points you did about the complimentarily of the flu 
systems and you no doubt have some ideas about the eventual 
potential of a public health-based system.
    Dr. Goldstein. A few comments. One is that it is a highly 
stressed system right now. The public health system has been 
underfunded for quite some time and has been losing funding and 
losing good workforce over the past few years of the national 
crisis we are in. A second point is that there is, Congressman 
Obey has asked the National Association of Community and City 
Health Officers to look at this issue of the public health 
workforce. I think that is a very important study that NACCHO 
is undergoing and is one that I think would be very valuable to 
respond to some of the questions that we have heard.
    Mr. Price. Dr. O'Toole, finally, let me bring you in on the 
end of this because I know in your previous assignments you 
have thought a lot about the issue we are discussing at this 
moment, and in your current role, of course, you have some 
responsibility not just for the technical assessment of the 
capabilities of these various BioWatch machines, but also some 
responsibility for the risk assessment and for making some 
judgments about the extent of deployment for Generation 3, 
assuming it can be developed, and the point of intersection 
with other modes of surveillance that may be less instantaneous 
but more flexible.
    Dr. O'Toole. Well, thank you, Mr. Chairman. It is true I 
have spent the last 10 years thinking about bio defense and 
probably the topic I have thought about more than any other is 
biosurveillance because it is so troublesome and it is so 
complex. The first thing I would say is that, as all of my 
distinguished colleagues have said, if we cannot respond, it 
does not matter what we can detect. The foundation of response 
is the day-to-day public health and medical system in the 
country which, let us face it, is not just highly stressed, it 
is very fragmented and more or less in tatters. It can barely 
deal with Friday night in the emergency room. That is the first 
thing.
    The second thing is that when we talk about biosurveillance 
we need to talk about not just detection, but what Dr. Garza 
called situational awareness, which is really the point of 
NBIC. It is not to detect something, but to get all the 
information we need when there is events ongoing in order to 
make informed decisions at the very top of the government, 
which is very complicated as we saw in H1N1. The third thing I 
would say is that because response depends so critically on our 
routine day-to-day capabilities that are spread out over all 
our cities, and our small towns and so forth we constantly 
conflate normal healthcare and public health with these 
extraordinary events, the likes of which we have actually never 
seen, which are very hard to imagine.

                              BIO THREATS

    So when we are talking about an anthrax attack, what we are 
talking about, as far as we can judge based upon available 
intelligence on available scientific knowledge and on the 
modeling, which the S&T directorate does, is we are talking 
about attacks. A single attack could kill upwards of 10,000 
people, and it goes up from there, let me tell you. That is 
the, you know, smallest plausible event that we are talking 
about. So what we are contemplating here is not just an 
epidemic, it is a catastrophic event carried out by a thinking 
enemy who is looking at all of our defenses and trying to 
thwart them and basically trying to bring down the country.
    The question becomes what are we willing to spend to 
prevent that from happening or to at least mitigate the 
consequences so that fewer people die and it is not totally 
disruptive of our social and economic foundations? Okay? So 
that is the question. It is very difficult to answer on a fact 
basis, but here is what we have done in S&T. Three times now, 
every two years, we have done this thing called the bio threat 
risk assessment which takes what we know from intelligence 
data, which is not much in terms of hard intelligence because 
it is hard to find out about bio threats. We know, as you say, 
that Al-Qaeda had a lab in Afghanistan which we disrupted. We 
know they have an intent: fuse biological weapons. There is 
other intelligence out there that we can talk about in closed 
sessions.
    By the way, I would urge all of you to get a bio threat 
briefing on the top secret SCI level. So we take intelligence 
data, we take available scientific information about what we 
know about anthrax and dozens of other agents, we get experts 
to look at the availability of anthrax. Can you find it in the 
world? Could you steal it from a lab? Not just anthrax, but 
smallpox, and tularemia and all of these agents. We then look 
at how could you make it into a biological weapon? How hard is 
it to mill, or grind up, or disperse that bio threat into an 
aerosolized weapon? Then, if you do that, what happens in an 
urban area? These are all aerosolized attacks in high 
population areas. How many people could get infected?
    Based on the medicine that we know about that infectious 
agent, if infected, how many people would be likely to die, and 
we model it. So we take all of those assumptions and we see 
what comes out the other end. Then we do it again with a 
different agent. Then we do it with that agent again with 
different assumptions. We try to get a sense of what the 
boundaries are of how bad it could be under different 
conditions with different bugs. It is really, really 
terrifying. So that is the first thing we have to understand. 
We are not talking about an H1N1 epidemic, we are talking about 
a catastrophic attack on the United States.
    So the first thing that we have to do after all of this 
conversation about how our response, and indeed our survival, 
as you point out, Congressman, is going to depend upon our 
routine healthcare and public health delivery systems. Now we 
are in a space of an absolutely extraordinary unheard of event 
that is threatening to the survival of the nation. By the way, 
these are self-replicating organisms. So if a terrorist group 
has the capacity to do one attack, you have to assume they can 
do two, or three, or 10 attacks. It is not like getting a 
nuclear weapon. Hopefully it is highly unlikely a terrorist 
group will get hold of a single nuclear weapons, but it is 
really remotely a possibility that they get hold of two or 
three. We are in a totally different ballpark when we are 
talking about a biological attack.
    So the question for you all and for us is how much are we 
willing to spend to mitigate the consequences of these attacks 
which we probably cannot prevent because the bugs are 
everywhere, they are easy to get, it is not so hard to carry 
out these attacks and it is very hard to get the intel to 
discover and interdict such attacks. So how much are we willing 
to spend, and what is the best way to deploy our resources? You 
are asking all the right questions, Mr. Chairman, and all of 
you are, okay? We can tell you what we have to do, what the end 
goal is, but we cannot tell you what the bug is that we are 
going to have to detect, we cannot tell you the precise 
likelihood of an attack with anthrax, or tularemia or plague, 
and it is basically we are placing bets with very high 
consequence results if we are wrong.
    We have to have the capacity to respond, which means not 
only a medical system and a public health system, we have to 
have countermeasures available when we need them in the 
quantities we need, which is why the President announced a new 
strategy towards that end in the State of the Union address, we 
have to be able to tell in the midst of this catastrophic event 
what is going on. Obviously, everybody downwind of the first 
person who gets sick is going to worry that they are infected 
and want medicines. Where do we really have to get to those 
medicines, and who really needs to be treated?
    As Dr. Sosin said, it would be very valuable, as you 
mentioned, Mr. Chairman, to have point of service diagnostic 
tests so I could tell whether or not Dr. Goldstein was infected 
if he comes into my emergency room with a cough. We cannot do 
that right now. That would be a good investment, okay? It would 
be very helpful to have BioWatch systems in other cities who do 
not have sick people so that we can assure ourselves it does 
not look like there is an aerosol attack here, for example. A 
different kind of use of BioWatch for situational awareness.
    There is a lot of things we would like to have, and with 
more time and an infinite budget I could list them all for you 
and give you some priorities, but the problem is very serious 
and very complex. We are chipping away at it. I truly believe 
that biosurveillance is in better shape now than it was two 
years ago when last I testified before this Committee because 
of this constant incremental improvement that we are making at 
the local level within CDC, and indeed, with NBIC. We learned a 
lot from H1N1, as Dr. Garza said. There is no silver bullet. 
Goodness knows Gen 3 BioWatch is not a silver bullet. It is a 
better bullet, but we need an army.
    Mr. Price. All right. Thank you.
    Mr. Culberson. Mr. Chairman.
    Mr. Price. Mr. Culberson.
    Mr. Culberson. If I could, this is tremendously helpful. I 
want to thank the Chairman, for all of you, for putting this 
together. May I say, Mr. Chairman, I think that Dr. O'Toole's 
suggestion is an excellent one, for us to have the classified 
briefing. Could I ask that perhaps we could do that in a closed 
session?
    Mr. Price. I agree, and we will schedule that.
    Mr. Culberson. That would be very, very helpful and help us 
get our arms around this.
    Dr. O'Toole. Be happy to participate in that, Mr. Chairman.
    [The information follows:]

    Staff from the Department's Office of Chief Financial Officer have 
reached out to the Subcommittee to make arrangements for the bio-threat 
briefing for the Members of the Subcommittee.

    Mr. Price. Good. Mr. Rodriguez, do you have anything 
further?
    Mr. Rodriguez. Could I ask one more question?
    Mr. Price. Sure.

                              BIO THREATS

    Mr. Rodriguez. Let me ask you. I know that during 9/11 we 
had a great deal of difficulty coming to grips with the issue 
of a lot of people, and there was a lot of false, you know, 
about anthrax being here, being there, and we only had, you 
know, I guess the CDC and there was waiting periods of up to 
six months. We had from other countries, also, that so-called 
anthrax was in a classroom or something and had to, literally, 
if we were going to do it, it was going to take six months or 
so, and I guess the chaos and stuff. Are we anywhere close to 
in case we have something similar that--I know those poor 
little dogs that were well-trained, you know, and they do such 
a beautiful job. We only have so many of them. What happens if 
we have something similar or something happens to, does it all 
kind of basically--at one time we talked about diversifying the 
CDC and putting senders in separate areas, just like we talked 
about NSA and different areas where instead of just being one 
in case something happens there. Number one. So that said, and 
diversifying it and responding to such a situation again.
    Dr. O'Toole. In terms of where we are now versus then. 
First of all, I think it is fair to say that every state health 
department is better prepared to deal with white powder 
incidents and anthrax attacks than it was in 2001. We 
understand to a much greater degree what kinds of tests 
actually tell the truth about whether that white powder is 
anthrax or not. A lot of work has gone on at S&T to figure out 
exactly what kinds of tests are reliable and how you should 
sample a classroom or an area to figure out whether or not it 
is contaminated with anthrax.
    A lot of work has also gone on, some in S&T, some at EPA 
and at HHS to figure out how we would sample an area after an 
attack to figure out the extent of contamination, and then how 
to decontaminate it. Again, it is a combination of a lot more 
science, applying that to new technologies, making sure the 
word gets out so everybody understands the new technologies and 
the science, making sure the local folks have the capabilities 
to apply those technologies when they need to, and all of this 
requires continuous training, continuously advancing the edge 
of the science. So we are better off. Are we perfect? No. It 
will still be chaotic, but it will be less chaotic.

                   CONTINUITY OF OPERATIONS PLANNING

    Dr. Sosin. So I think what you are speaking to is what we 
refer to as continuity of operations planning. The whole 
infusion of incident, command incident, management, not just in 
the usual sectors, but into public health has also been a 
dramatic change over these years that we are talking about. 
Continuity of operations plans, having offsite and plans in 
place that you are exercising are requirements for federal 
agencies. They are happening also at the state and local level. 
I think we are much better prepared to be able to deal with the 
consequences. If your laboratory or your primary site goes down 
for whatever reason, explosion or a contamination, that we have 
ways to adapt. The plans are never perfect, and, in fact, they 
are never the exact scenario we get, but they help us have 
thought through the measures where we are going to go, who is 
going to be critical for going, how we can work from home, all 
those different pieces. A lot of work has gone into assuring 
that continuity.
    Mr. Culberson. Mr. Chairman, could I have one brief follow-
up?
    Mr. Price. Certainly.
    Mr. Culberson. Thank you. If I could, Dr. Garza, I wanted 
to ask you about the $89 million for this next generation. Now, 
what exactly would that amount support? Is that the minimum you 
need?
    Dr. Garza. Yes, sir. So that supports procuring the units 
for testing and evaluation. It is a step-wise process, however, 
so we have to make sure that the machines are going to do what 
we want them to do before we go out and purchase a whole bunch 
of machines. So step one is making sure that it is able to 
detect the organism that we want to detect. Although that 
sounds easy, it is a very complex process that involves a lot 
of time, effort and money. So part of the money will be spent 
on testing and evaluation. If it goes through that process, and 
we are confident that it will, then we test the subsystems to 
make sure the wheels turn and the widgets flip, and then we do 
field testing to make sure it is going to work in southern 
Florida, and in Chicago and out in arid climates. So it is a 
step-wise process, but that is what the money supports.
    Mr. Culberson. That is the absolute minimum level of 
funding you need in order to achieve this? There is a lot of 
debt in the deficit. I am always very conscious trying to find 
out where we can save money.
    Dr. Garza. I believe so, sir.
    Mr. Culberson. Thank you.
    Mr. Garza. Thank you.
    Mr. Price. We will bring this to a close. You have been 
very generous with your time, and we have had, I think, a good 
discussion that will be very helpful to us. Dr. Goldstein, if 
we were going any further, I would ask you, and I will ask you 
to do this for the record to the extent you have something you 
think we need to hear, I would ask you to reflect a little more 
explicitly on the implications of your report for the 2011 
budget submission. There are some apparent points of 
difference, such as the question of further Generation 2 
testing. There may be other less apparent points of difference 
that would lead you at least to suggest to us certain questions 
we should be raising, if not outright disagreements.
    So we really value the work of the Academy in putting this 
together, and we of course will make use of it far beyond just 
the current year budget consideration, but we would like to ask 
you to be as explicit as you can be about the questions your 
study brings to the budget submission as you have studied it 
from the Department. That would be very helpful. We thank all 
of you for your time, your service, your very useful testimony 
this afternoon. With that, the Subcommittee is adjourned.
    [The following information was submitted through the 
Questions for the Record:]

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                                          Thursday, March 18, 2010.

              UNITED STATES SECRET SERVICE: FY2011 BUDGET

                                WITNESS

MARK SULLIVAN, DIRECTOR OF UNITED STATES SECRET SERVICE

               Opening Statement of Chairman David Price

    Mr. Price. Subcommittee will come to order. Good morning 
everyone. Today we welcome Director Mark Sullivan of the U.S. 
Secret Service to the Subcommittee to discuss the 2011 budget 
proposal for the Secret Service which proposes $1.572 billion 
for the agency in 2011. This amount includes modest increases 
to fund inflationary salary growth and to continue the 
recapitalization of the Secret Service's outdated computer 
system.
    The request also includes $17 million for the start-up cost 
of the 2012 Presidential campaign. It is hard to believe, but 
indeed that marathon is already in its formative stages, and 
the Secret Service agents working on the campaign will 
certainly have an arduous few years ahead of them.
    The 2011 request also includes a significant and surprising 
reduction in Secret Service operations, a $9.6 million cut to 
the budget for protective operation support personnel. These 
personnel were initially funded through 2009 emergency 
appropriation which the Congress passed just after the 
inauguration to respond to an increased level of threats 
directed at President Obama.
    Since that time, the threat level has waned to a level 
consistent with past presidents, which is to say that the 
threats against President Obama are probably more than likely 
the result of the office he holds rather than personal animus 
against the man himself. Still, as we are all aware, it only 
takes one or two deranged or impassioned individuals to create 
a potentially dangerous situation for Secret Service's 
protectees. The recent party crashing incident, which 
fortunately did not result in violence against any of our 
country's leaders, shows how nothing, not even the assumption 
that uninvited guests will not show up for a White House 
function, can be taken for granted in this day and age.
    So Mr. Director, we are interested in understanding how an 
increase that the Secret Service said it needed less than two 
years ago is now no longer required for the protective mission. 
Are you confident that not only the absolute volume of threats 
but also the intensity of those threats make it reasonable to 
decrease the budget for protective support? Is it wise for the 
Secret Service to be going into the campaign season with a 
lower level of support personnel than you thought necessary at 
the end of the last election?
    The other issue of note addressed in the Secret Service 
budget is the poor state of the agency's information technology 
system. In a recent analysis by the National Security Agency, 
Secret Service IT systems were found to have a reliability rate 
of less than 65 percent. The study also uncovered security 
vulnerabilities and a mainframe architecture dating from the 
1980s.
    In last year's appropriations bill, we started the process 
of recapitalizing the Secret Service's hardware and software 
with an appropriation of $34 million. This year's budget seeks 
$48.6 million more including $15 million for interoperability 
of radio systems with the White House Communications Agency.
    Clearly this is a project that cannot wait if the Secret 
Service is to provide the highest levels of protection 
necessary for the 2012 campaign. However, it is astonishing to 
contemplate that this problem was seemingly ignored or deferred 
for so long. The budget for every agency at DHS includes a per-
employee cost module that is supposed to fund regular capital 
replacement such as scheduled upgrades in computer 
infrastructure. So, Mr. Director, we do need to understand more 
about how the Secret Service allowed these system deficiencies 
to fester for so long especially in light of other department-
wide efforts to improve Homeland Security technology.
    Mr. Director, these issues should not overshadow the 
excellent work done everyday by the agents and officers who 
work for the Secret Service. We know that these agents 
literally put their lives on the line to protect our nation's 
leaders, our financial institutions, and the integrity of our 
currency. We are grateful for the dedication of your men and 
women in your agency in serving our country. I also appreciate 
the good working relationship we have maintained during my 
tenure as Chairman of the Subcommittee and your agency's 
responsiveness to various Congressional concerns. It is this 
type of collaborative relationship that our Committee depends 
on to make the best investment decisions for our country.
    Now let me turn to my colleague and the ranking member of 
the Subcommittee, Mr. Rogers, for his opening remarks. After 
that, Mr. Director, we will ask you to summarize your written 
testimony in a five-minute oral statement and then answer the 
questions we have about your budget proposal.
    [The information follows:]

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           Opening Statement of Ranking Member Harold Rogers

    Mr. Rogers. Thank you, Mr. Chairman.
    Welcome, Mr. Director, for another session at this table. 
You have been doing this for a good while, and so have we. So 
we hope to gain good information from you today toward the 
budget for next year.
    Secret Service of course has a long proud history as the 
nation's oldest Federal law enforcement agency which is why I 
have found all the discussion about the events at last 
November's Indian State Dinner rather disturbing.
    This incident has been an unfortunate distraction from the 
Secret Service's distinguished record of safeguarding the 
nation's financial infrastructure and protecting our national 
leaders.
    With that being said, the incident did bring to light the 
manner in which people are cleared into the White House for 
official events. Mr. Director, I firmly believe that no other 
third party should have any role in determining access to the 
White House.
    Secretary Napolitano testified that she wholeheartedly 
agreed with me at our recent hearing with her. Today I would 
like to hear whether the revised access protocols that you have 
put in place will prevent further slip-ups and sufficiently 
empower the Secret Service to perform its duties.
    With respect to your protection mission, I note that it is 
already time for you all to begin preparing for the next 
election. Given the unprecedented crowds that the last election 
drew and the length of time that the Secret Service was 
protecting more than two candidates, I am interested in 
learning how you are integrating the lessons from the last 
election into your preparations for the upcoming one in 2010.
    As always, I want to understand how you plan to strike a 
reasonable balance between your investigative and your 
protection missions in the upcoming election.
    Mr. Director, we remain aware of the challenges facing 
Secret Service, and I believe you are well aware of our 
Subcommittee's expectations. But I want to reiterate to you 
again, as the chairman has, that you have our trust and our 
support, and we look forward to your testimony here today. 
Thank you.
    [The information follows:]

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    Mr. Price. Thank you. Director, please proceed.

                       STATEMENT OF MARK SULLIVAN

    Mr. Sullivan. Good morning Chairman Price, ranking Member 
Rogers and distinguished members of the Subcommittee. It is my 
privilege to appear before you today to discuss the President's 
Fiscal Year 2011 budget request for the U.S. Secret Service.
    The last year and a half has been an active period for the 
U.S. Secret Service especially in the areas of protective 
travel and securing major events. Today, I would note that from 
January 2009 through January 2010, the President has engaged in 
31 international travel stops, a significant increase when 
compared to the previous administration's first year in office.
    During the same period, the Vice-President engaged in 21 
international travel stops compared to one international travel 
stop during the previous Vice-President's first year in office.
    In addition to the increased international travel for the 
President and Vice-President, the U.S. Secret Service was 
responsible for eight national special security events in 
Fiscal Year 2009, the most ever designated in a single year.
    This included the G-20 held in Pittsburgh, Pennsylvania, 
which was attended by the President and a total of 37 heads of 
state and government, along with their spouses.
    Concurrent to the G-20 in Pittsburgh, the Secret Service 
also protected 189 heads of state and government and 60 spouses 
for the 64th U.N. General Assembly, a 40-percent increase over 
the previous year.
    In addition to these protective requirements, the Secret 
Service was also successful in dismantling a number of 
transnational criminal groups targeting our Nation's financial 
institutions. For example, the established partnerships 
developed throughout 29 electronic crime task forces led to the 
successful investigation into the network intrusion of the 
Heartland Payment Systems. This investigation revealed that 
data from more than 130 million credit card accounts were 
compromised and transferred to a command and control server 
operated by a transnational criminal group involved in other 
ongoing Secret Service investigations. This is the largest 
identity theft case in U.S. history. Also last year, the 
International Association of Chiefs of Police and the 
International Association of Financial Crimes Investigators 
recognized us for another significant investigation, TJX, which 
was the largest and most complex case of its type in U.S. 
history prior to the Heartland Payment Systems case.
    The President's Fiscal Year 2011 budget request for the 
U.S. Secret Service totals roughly $1.58 billion and focuses on 
four primary areas: funding to provide the necessary training 
and equipment that will be needed in advance of the 2012 
Presidential campaign; funding to enhance protection of the 
White House complex and other protected sites; funding to 
sustain critical and investigative operations in the areas of 
protected intelligence, cyber crimes directed at our Nation's 
banking and financial institutions and counterfeit suppression; 
and funding to address IT and communications deficiencies that 
directly support the protective and investigative mission. I 
will highlight a few of these initiatives this morning.
    Although the 2008 Presidential campaign and transition 
activities ended just last year, we are already beginning the 
necessary planning and advanced work for the 2012 campaign. 
This early preparation is critical because of the time that is 
required to provide advanced protective training to our 
employees and DHS partner agencies participating in the 
campaign's security activities. In addition, we require start-
up funds to procure equipment and pre-position protective 
vehicles throughout the country to transport protectees and to 
purchase technical security equipment to appropriately secure 
their homes and sites to be visited by the candidates.
    Critical to both campaign security and day-to-day 
operations in the White House complex and other protective 
sites, the men and women who serve in the uniform division are 
the first line of defense against outside threats. In recent 
years, the uniform division has faced ongoing recruiting and 
retention challenges. This in part is because of current pay 
structure and its inability to use certain hiring flexibilities 
such as offering higher starting salaries to applicants who 
have prior state or law enforcement experience. While 
legislation to address these issues is currently pending before 
Congress, the President's budget request provides the Secret 
Service with the resources needed to meet these ongoing 
recruitment and retention challenges.
    In support of the protective and investigative mission, the 
U.S. Secret Service must modernize our IT infrastructure and 
communications system. The Secret Service has been working with 
the Department for several years to address immediate 
infrastructure concerns while providing a long-term plan to 
replace our legacy mainframe IT system with a modern Web-based 
environment that can meet the demands of today's mission 
requirements. One example of the need for this modernization 
effort is the White House Communication Agency interoperability 
project. Between 2003 and 2008, WHCA made investments to their 
communication system that created an interoperability gap with 
the U.S. Secret Service. Thanks to the funding this Committee 
provided in Fiscal Year 2009 Omnibus Appropriations Act, the 
U.S. Secret Service is one step closer to achieving 
interoperability and full communications parity with WHCA.
    Despite the demands of our mission, the men and women of 
the U.S. Secret Service remain vigilant and prepared for the 
challenges that lie ahead. At this moment, we and our partners 
are engaged in security planning for the nuclear security 
summit in Washington, D.C. next month which was designated a 
National Special Security Event by Secretary Napolitano on 
February 6th, 2010.
    We expect domestic and international travel stops to 
continue at a heightened pace consistent with what we saw 
during the past year. Further, as the complexity of cyber and 
other crimes directed at our Nation's banking and financial 
institutions grows, the U.S. Secret Service will continue to 
foster relationships with our local, state, federal and 
international law enforcement partners through our network of 
electronic crimes task forces and financial crime task forces.
    Mr. Chairman, distinguished members of the Committee, this 
concludes my opening statement. I will be happy to answer any 
questions you may have.
    [The information follows:]

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                          2012 CAMPAIGN BUDGET

    Mr. Price. Thank you, Mr. Director. Let me move directly to 
your budget request for $14 million in new funding for the 
start-up cost of the 2012 Presidential campaign.
    This is significantly more than the $8.1 million in start-
up costs for the 2004 campaign which was the last time a 
sitting president ran for election. Even after adjusting for 
eight years of inflation, this represents a 41 percent increase 
in costs.
    Why has the first year planning cost to prepare for the 
2012 campaign grown so much more than the rate of inflation 
since we last had this circumstance? Is the Secret Service 
planning a more robust effort for the upcoming Presidential 
campaign than in the past, or are there other circumstances 
that account for this? We assume that the protection budget 
correlates roughly to the workload, so why would Secret Service 
request such a large increase for the Presidential campaign but 
at the same time be reducing its budget for the regular 
protective mission? How does this balance out?
    Mr. Sullivan. Thank you, Chairman. As you mentioned, the 
budget for the 2004 campaign was $8 million. I believe the 
budget for the 2008 campaign was about $19 million for the 
first year; and for this campaign, it is $14 million.
    When we look at the cost associated with the 2012 campaign 
compared to the 2004 campaign, there are a couple of areas 
where there has been a significant increase. Again, I am not 
sure how you would--you know, what we are using to compare the 
inflation with back to 2004, but the cost we see that has 
increased is the cost of vehicles.
    For the campaign, the vehicles that we get are a very 
important part of our protective methodology. We have to buy 
these vehicles this coming year.
    These vehicles need to be armored. They need to have 
ballistic glass installed. They need to be equipped with radios 
and other types of equipment for the campaign, and then they 
need to be pre-positioned around the country. But the cost of 
these vehicles compared to 2004 has increased, about twice the 
cost that they were back in 2004.
    Additionally, we have to buy radios and other types of 
technical equipment. Again, we look at the cost compared to 
2004. This cost has increased about twice as much as well.
    I will tell you that one area where we have found 
efficiencies is in-training. I believe we are about a $1.5 
million-and-a-half under where we were back in 2004 for 
training.
    Back during 2004, we used to do our training--we would have 
all of our people come to the Rowley Training Center to do 
training, and that would involve, you know, the travel cost. 
That would involve per diem. That would involve the lodging 
cost of all these people coming to DC, not to mention the fact 
of taking them out of their district for a longer period of 
time.
    What we found in the 2008 campaign, that it was more cost 
effective and, from a mission perspective, better to have our 
people trained in the field, so now we are having the trainers 
go to our people in the field. So we did realize a cost savings 
by conducting that type of training.
    But again, I would say that two areas where we really have 
seen an increase would be in the cost of our vehicles and the 
equipment for the vehicles, as well as the radios and the other 
types of technology.

                INTENSITY OF THREATS AGAINST PROTECTEES

    Mr. Price. Well, to turn to the manpower and womanpower 
question, the FTE question and the way this request dovetails 
with the reductions you are proposing for the regular 
protective mission, let me see if we cannot shed a little light 
on that.
    I mentioned in my opening statement, we understand that the 
number of threats made against the President have dropped, 
however, during the 2008 Presidential campaign, the intensity 
of threats against then candidate Obama lead to the assignment 
of a Secret Service security detail earlier than for any other 
candidate in history. Of course, we are all aware that it takes 
only one particularly obsessed individual to present a real 
threat.
    There has been a rise recently of lone-gunmen style attacks 
at Fort Hood, IRS offices in Austin, the Pentagon. So we do 
need to realize it is not only the number of threats but the 
fervor with which they are conveyed that indicate the level of 
risk that our leaders face.
    So to the extent you can express this in open session, can 
you tell us if the threats against the President or any of your 
other protectees include the hallmarks of any particular 
intensity that the Secret Service has not seen before? Have you 
seen any change in the intensity of threats against the 
President since the inauguration?
    Then if you could help us understand how changes in volume 
or intensity of threats translate into Secret Service manpower 
and personnel requirements?
    Do more threats require additional field investigations? 
Does Secret Service increase the protective forces directly 
when the Agency observes particularly aggressive threats?
    And then the underlying question, at the same time that you 
are asking for these increases anticipating the 2012 campaign, 
how does that dovetail with the decreases, the manpower 
decreases in particular, that you are looking at for the 
regular protective mission?
    Mr. Sullivan. Chairman, you have brought up some great 
points, and I will try to answer them, but if I leave any of 
them out, be sure to remind me which ones I left out. You know, 
as far as the threats go, it is something that we pay a lot of 
attention to.
    As you know, we have one program area that is just 
dedicated to protective intelligence, and I believe that we are 
very aggressive with it, working with all of our partners there 
that provide us the best information that they have. We are a 
big consumer of information, and that is a big part of our 
protective methodology based upon that information we receive.
    However, we also know that we cannot just rely on the known 
information. There is a lot of unknown information there. So 
for that reason, I do not believe that there is an employee on 
our job who does not wake up in the morning or go to bed at 
night not thinking that there is someone out there looking to 
harm any one of the individuals that we protect everyday.
    So the threat information is important to how we do our 
mission, but we still know that everyday there is somebody out 
there looking to harm those people that we protect. And you are 
right, it could be a lone gunman. It could be an organized 
group, and we have to look at every single one of those 
possibilities.
    As far as the threat level, as I have talked about before, 
during the Presidential campaign, the threat level we saw rose 
right about the time of the election. I would say that that was 
the highest it had been prior to that and since that.
    As we approached the inauguration, we saw those numbers 
begin to decline, and over the past year, little over a year, I 
would say that the number of threats we are seeing against this 
president are at the same level they were for the previous, the 
last two, administrations at this point in their 
administration.
    It pretty much goes back to, I believe what you said during 
your opening statement, that it is more about the office than 
anything, these threats that we are seeing.
    Now, going back to the hiring, you know, back two years ago 
we made a case because of heightened threats that we needed to 
bring more people into our organization, into the agent ranks, 
and into our administrative, professional, and technical ranks.
    Thanks to you, and you Mr. Rogers, we are able to get in 
the $100 million Omnibus bill. We got the opportunity to hire 
150 agents and I believe it was about 204 administrative 
professional and technical.
    These people were to go to permanent protection details. 
The priority was for them to go to permanent protection 
assignments and go out into the field to do some of the other 
protective duties that we need to be done in our network of 
field offices.
    Ultimately, the out-year funding for that was cut by about 
nine and a half million dollars, and we had to really take a 
hard look at our hiring goals here. And we had to make sure, 
one thing that all of us wanted to make sure, what I wanted to 
make sure of was that whatever people we did bring on that we 
would be able to bring them on and equip them and have the 
necessary funding in the out years to make sure that these were 
hires that we could maintain.
    With this loss of nine and a half million dollars, we had 
to modify our hiring goals, and we reduced it to 125 agents to 
be brought on, and I believe it was 146 or so administrative, 
professional and technical, probably about 138, somewhere 
around there.
    So far this year, we have hired all 125 of the agents. I 
will tell you that every one of those agents has started in a 
field office. Those people are backfilling more seasoned agents 
who have been now transferred to a permanent protective detail.
    So I can assure you that those priorities when it comes to 
our permanent protection have been addressed by the 125 that we 
have hired, and again, they were backfilled by these new hires.
    We have hired 75 of the administrative, professional and 
technical positions, those priority positions we needed to fill 
for fiscal year 2009 and now during fiscal year 2010, we are 
looking to hire about another 40 or so of the administrative, 
professional and technical.
    So did we get exactly what we are looking for in the 
original Omnibus? We did not; however, have we been able to 
prioritize and put those people to the best use where they need 
to be and does that make us whole and does it get it to where 
we are looking to be?
    I believe at this point in looking at the constrained 
budget environment that we are operating in, I believe that we 
have been able to make this work, and I believe that--and as I 
have told you before--protecting the President is our number 
one priority, and we are not going to compromise on that. I 
believe that we have the assets in place to do that.
    Mr. Price. Thank you. Mr. Rogers.

                      2008 CAMPAIGN COST OVERRUNS

    Mr. Rogers. Well, in the 2008 election, the Secret Service 
spent a little over 5 million beyond the amount they were 
appropriated for in 2009, and your present request for fiscal 
'11 for the protective mission of the Secret Service, you are 
requesting $792 million with $18 million of that specifically 
called out for preparations for the 2012 campaign.
    You missed the mark in 2008 by 5 million. What can you 
extrapolate from that about 2012, if anything?
    Mr. Sullivan. As we have talked about before, Congressman, 
you know, it is very difficult to predict these type of events, 
and I believe we talked about this four years ago as well.
    One of the challenges we had last year was the number of 
protection days we ended up having, you know, and that the 
campaign did start earlier than we had originally anticipated.
    Also, at the end of the campaign or at the inauguration, we 
had a total of I think four or five NSSEs right around the 
inauguration, and that did add to the cost of the campaign. We 
did have to go back and look for reprogramming.
    But what we did learn is that they are--well, what it did 
reaffirm to us is that these campaigns are very unpredictable. 
And the crowd sizes that we did see did drive how we had to 
conduct our protection.
    We put, I think, nearly 5 million people through metal 
detectors during that campaign which I think is at least two 
times the amount we had had put in during the 2004 campaign.
    So we do want to make sure with this campaign coming up 
that we do--I do not believe that there will be as many 
candidates, but again, that remains to be seen.
    This last campaign was the first time I believe in 50 years 
that we did not have an incumbent running for office, so we had 
candidates from both political parties.
    Mr. Rogers. Well, as you say, you are unlikely to have the 
number of candidates in 2012 as we had in 2008, and as we all 
know, that remains to be seen at this point. But you do 
anticipate fewer protectees in the campaign in 2012 than 2008?
    Mr. Sullivan. That is what we are expecting. Yes, sir.

                   WHITE HOUSE STATE DINNER INCIDENT

    Mr. Rogers. Let me quickly jump tracks now to the White 
House access that I mentioned in my opening remarks. It seems 
to me that we do not have clear lines of responsibility about 
clearing who gets into the White House. I hope I am mistaken on 
that, and you can correct me if I am.
    But the State Department has a hand in it. The White House 
social secretary's staff has a hand in it. Obviously the Secret 
Service, perhaps others, but these people who crashed the 
party, so to speak, a while back at the Indian state dinner 
raise this issue, and I think they did us a favor, frankly, 
because I think we need to clarify this. Perhaps it has been 
done or already has been in effect.
    What can you tell us? Should not the Secret Service be the 
person, agency, that clear people into the White House grounds?
    Mr. Sullivan. Congressman, I see it as a partnership, and 
it is a very critical partnership. Just to give you a little 
bit of background on the procedure, what will happen when there 
is an event at the White House, these people are invited by the 
White House to come to the White House. They will give us a 
list of the people who have been invited and who have accepted, 
and we will do name checks on these individuals. So again, it 
is a very important part of the partnership.
    From that, the invitation list is generated, and in the 
system that we have in place is that--we and the White House 
staff will work together as partners at each checkpoint to 
ensure that those individuals who have been invited do get in.
    If somebody is not on that list, again us working with the 
White House staff will determine if, in fact, they should be on 
the list. If they should be on the list and they have not been 
name checked, we will name check them and then those people 
will be allowed to enter the White House.
    As far as with the State Department, we have a very healthy 
and long-standing relationship with the State Department. We 
have a long-standing partnership with them.
    On this particular night, we did not have the list. We have 
since modified that so that we and the State Department are 
working off the same list, and we are checking that list 
together. And this was at an area that was a remote location 
from the White House.
    But again, it is my opinion that the best way for this to 
work is for us to do it as a partnership, both of us being 
there together, both of us with the list and checking the list 
off together.
    Mr. Rogers. Well, the State Department is not in charge of 
protecting the White House from unlawful intrusions, nor is the 
social secretary.
    They may be involved in making up the invitation list of 
who should be invited and see that they are invited, but when 
it comes to gaining entry into the White House grounds, I 
firmly believe it is the Secret Service, period. Am I wrong in 
that?
    Mr. Sullivan. No, as far as somebody getting into the White 
House who should not come into the White House, I mean, that is 
our priority. That is our job to do that.
    However, as far as the list, as far as checking that list 
and making sure the people that need to get in are getting in, 
I do believe that it does have to be a partnership, whether it 
be with the White House staff or with the State Department, 
just to ensure that those right people are getting in.
    Mr. Rogers. How did these people get in past the 
checkpoint? They were not on the list, right?
    Mr. Sullivan. They were not on the list. As I have said 
from the beginning, Congressman, you know, this was a mistake 
in judgment. This was an error. They should not have been 
allowed to go by the initial checkpoint.
    We had protocols and policies in place for that evening 
that if anybody showed up at that gate and their name was not 
on the list that we were to call for assistance to help us 
verify whether or not those individuals should be able to get 
in.
    Mr. Rogers. And what happened when they showed up and they 
were not on the list? What happened then?
    Mr. Sullivan. They were allowed to proceed through that 
gate.
    Mr. Rogers. By whom?
    Mr. Sullivan. By us.
    Mr. Rogers. How come?
    Mr. Sullivan. As I told you, sir, it was a mistake. They 
should not have been allowed to go through.
    Mr. Rogers. Has anybody been reprimanded for that?
    Mr. Sullivan. Currently, we have put those people on 
administrative leave to testify before--we are in the middle of 
a criminal investigation, so at this point, sir, I would rather 
not go into anything deeper than that as far as where we are 
with the administrative action.
    Mr. Rogers. Well, I know just from a personal reference, 
Mr. Chairman, members of Congress are invited to the White 
House for a Christmas party. Obviously a large number of 
members, 435 House members and 100 senators, staff, and cabinet 
members and the like, quite a crowd of people.
    But I noticed in going through the process of getting in, 
we were met on the street outside the White House by some young 
staffers from somebody with a list in their hand, and they 
would check you off and you would go four or five steps, and 
another young person would--who represented whom, I do not 
know.
    And they would have a list. They would check you off, and 
you got checked off four or five times by young staffers for 
whom I do not know. Finally, you get to the gate, and people--I 
assume Secret Service people--then check you off an official 
list.
    But who are these other people that check you off five or 
six times?
    Mr. Sullivan. Sir, I am not sure----
    Mr. Rogers. Are they assigned to social secretary or who?
    Mr. Sullivan [continuing]. Again, sir, I believe working 
with our partners at the White House, that would be White House 
staff and our people working together.
    You know, we do not want anyone to get into the White House 
who should not get into the White House, and we have looked 
at--you know, we put 100,000 people through the White House 
every month. 100,000 people go through the White House every 
month. Thousands of pass holders are at the White House that we 
expedite through there. You know, I believe our men and women 
do a terrific job.
    What happened back in November none of us want to see that 
happen again. That is why I go back to the partnership with the 
White House or with the State Department. We believe it is very 
important to us to work as a partnership and make sure that the 
people that are invited get in and those people that are not 
invited do not get in.
    And those people that you are referring to, and I am not 
sure of the number of times, but those are the White House 
staff people and our people working together to ensure that the 
right people are getting into the White House.
    Mr. Rogers. Well, I have to tell you, going to that 
Christmas party, it was a confusing process and helter skelter. 
It was not what it has been in the past, and it is probably 
beyond the Secret Service's capability to solve, but it is not 
a clean clear check with all of those other people there. I do 
not blame you for them, but the process needs to be cleaned up 
some.
    Mr. Sullivan. You know, sir, that process going back to 
November, we have taken a hard look at that, and we have worked 
very hard with that. Again with all due respect, I believe that 
that being so close to the incident back in November, I think 
everybody was trying to do the best job they can to make sure 
that we did get the right people in there and, again, to make 
sure that the wrong people did not get in there.
    Mr. Rogers. Let me just put it this way, I feel completely 
checked.
    Mr. Sullivan. That is good to know, sir.
    Mr. Price. I think we all felt completely checked at the 
Christmas party, and I also think we understood at some level 
that this was reaction to the earlier incident and perhaps did 
not assume that the multiple layers, as the ranking member 
says, is somewhat apparently redundant list checking that was 
going on did not assume that that was necessarily the permanent 
state of affairs.
    Mr. Rogers. Mr. Chairman, by the time I got through that 
check out--those checked lines, those tiered lines of 
checkouts--I was too tired to go to the party then.
    Mr. Price. Mr. Ruppersberger.

                      OVERTIME AND RETIREMENT PAY

    Mr. Ruppersberger. I want to say that I think your 
organization does a great job. You have well-trained men and 
women. You remind me of the offensive line of a football team. 
You only are noticed when something goes wrong, and when things 
do not go wrong, that is when you are doing your job.
    I want to get into the issue of the overtime pay. You 
mentioned that you have a lot more resources and more man hours 
especially in the last election with the type of campaign that 
it was. Also it just gives you a lot of overtime, and yet a lot 
of people because of certain Federal cap laws cannot be paid 
for some of their overtime.
    I know that in some areas there is some air traffic 
controllers there is a waiver on overtime. I think anybody in 
the Department of Defense in theater there is overtime.
    Have you looked into this? Where are you as it relates to 
that issue of a waiver for overtime in unusual circumstances 
for your men and women?
    Mr. Sullivan. Right. Yes. You know--to go over the overtime 
cap. I have the ability to go to the overtime and ask her for a 
waiver.
    Mr. Ruppersberger. Have you received those waivers?
    Mr. Sullivan. We have not had to do that. This is the first 
year I believe that we have the--the cap is going to be on 
starting, I think, in fiscal year 2010 if I have that correct, 
but we have not had to go looking for a wavier.
    Mr. Ruppersberger. Okay, even with all the overtime, the 
man hours that you used in this last election?
    Mr. Sullivan. We did not, as far as I know. No.
    Mr. Ruppersberger. Okay, well, my understanding was you had 
an issue there.
    Secondly, I know you are not a party of the Intelligence 
community, but I know that you are in Estonia now because of 
financial crimes and issues such as that. Do you work 
seamlessly with the Intelligence community, both military and 
straight Intelligence?
    Mr. Sullivan. Yes, Congressman. They are one of our best 
partners, as I mentioned earlier. We are a big consumer of 
intelligence and information, and I can tell you that all of 
our partners in the Intelligence community could not be more 
forthcoming, and we have a great relationship with them.
    Mr. Ruppersberger. Okay, well, that is good. I think 
Intelligence is probably one of the main issues that you deal 
with everyday to do your job.
    Mr. Sullivan. As a matter of fact, just to remind you, you 
know, we are very active in the JTTFs, in the FBI, JTTFs, and 
those are, again, very critical to our operations.
    Mr. Ruppersberger. Okay. The last thing, retirement issue. 
For no fault of their own, I think, you know, about 200 Secret 
Service agents were put into the wrong retirement system 20 
years ago, and they have lost thousands of dollars of 
retirement which they should be entitled to because everyone 
else in the agency has dealt with that.
    Senator Lieberman and I are trying to work on this issue to 
see if it can be resolved. Do you know anything about that at 
this point?
    Mr. Sullivan. I do. I am familiar with that.
    Mr. Ruppersberger. Okay. Can you discuss it, and do you 
have any recommendations or suggestions?
    Mr. Sullivan. Yes, sure. First of all, I am very grateful 
to you for your support. These are agents who came on the job 
in 1984, 1985 and 1986 who have since risen into many of the 
senior leadership positions of our organization.
    As it has been reported to me, many of these people were 
recruited back during 1982, 1983 when the old retirement system 
was in force, and they were told that they would be in that--it 
has been told to me they were told that they would be in that 
retirement plan.
    I am also told that when they came on the job, whether it 
was 1984, '85, and '86, they were lead to believe that they 
would be in that retirement plan. I believe with the 2012 
campaign coming on I do look at this as a retention issue.
    These are people that are highly marketable. They are 
people that could leave because of this current plan just does 
not lend itself to tracking them to stay.
    These are people who have told me they would like to remain 
on the job and that this bill would, I think, so a long way to 
maintaining these employees within the U.S. Secret Service. So 
any help you could provide with that, we would appreciate.
    Mr. Ruppersberger. Okay. Thank you.

                 SECRET SERVICE INFORMATION TECHNOLOGY

    Mr. Price. Thank you.
    Director, let me turn to the question of information 
technology, another major item in your budget. The budget 
requests $48.6 million for information technology investments.
    Recent reports have highlighted how some Secret Service 
systems such as the primary mainframe on which many critical 
applications run date from the 1980s.
    However, the Secret Service budget, like all budgets at 
DHS, includes certain per-employee cost allowances for various 
overhead and capital expenses. It does raise the question why 
the Secret Service has allowed its IT infrastructure to become 
so outdated particularly when we year after year--I think 
without exception--have granted the full budget request for 
Secret Service, and that request is supposed to cover the cost 
of regular system recapitalization. It is supposed to be built 
into the budget.
    Then, of course, the question that this proposal raises, 
what kind of program are you putting in place to ensure that 
the base Secret Service budgets are appropriately aligned with 
the information technology developments you simply must make 
now and in the future?
    Mr. Sullivan. Chairman, one of the priorities for me right 
after I became director was our IT infrastructure, and I had 
asked--this is going back to 2007 or late 2006, I had asked for 
a top-to-bottom, bottom-to-top review of our IT infrastructure 
and wanted a report on what the state of our IT infrastructure 
was.
    The report I got back--that if you were looking for a 1980s 
state-of-the-art IT infrastructure compatible with the U.S. 
Treasury Department, you know, we were your guys.
    The bottom line was that we were--we confirmed what you 
just said is that we had an IT infrastructure that was 
degrading and that was in need of repair.
    So I requested that we do an as-is--and again, let me--give 
me a full briefing on the as-is, and I also asked that we have 
an outside entity come in and do a review, and ultimately that 
was the NSA who came in and did a blue team.
    As you had mentioned earlier, we found that we had about a 
68 percent reliability and that our IT people were having to 
come up with, you know, work-arounds to get our IT 
infrastructure to just maintain.
    It was that point that we began working with you, and I 
would like to thank you, Chairman, and you Mr. Rogers, for all 
your help because both of you have been extremely helpful with 
this. And because of your help, I believe that we are well on 
our way to fixing our IT infrastructure.
    We have worked with the Department. We worked with the, you 
know, the DHS CIO. I think that we have come up with a very 
good plan. It is a five-year plan to get our IT infrastructure 
up to where it needs to be.
    Currently right now we are stabilizing our IT 
infrastructure, and we have addressed many of the deficiencies 
that were pointed out by the NSA report. Now we are analyzing 
and working with the Department, working with the CIO to make 
sure that this is the best and most effective investment that 
we can and to make sure that 10 or 15 years from now we do not 
find ourselves in the same position.
    You know, this is something that is going to require 
maintenance. It is something that is going to continue to 
maintain attention. I believe we have a good plan, and I think 
that the trick here is going to be for us to maintain that plan 
and continue to keep the Department and you advised of the 
direction we are going in.
    Mr. Price. I appreciate your commitment to the plan going 
forward, and I perhaps should underscore what you just said 
about sticking to the plan.
    The question I am raising has to do with whether you may 
need some help in doing that from the way your budget is framed 
because there has been a lag, a serious lag, in investment in 
IT infrastructure despite a budget process that is supposed to 
guarantee that there is money available for this kind of work 
right along without it being specifically designated in a 
single line item.
    As you know, your information technology budget is included 
within a broader account within the broader salaries and 
expenses account. That does allow you some flexibility to use 
these funds for other activities as competing priorities might 
emerge.
    So my assumption is that the past history demonstrates some 
taking advantage of this flexibility, perhaps for what seem to 
be good reasons at the time. But given the poor condition of 
the Agency's information technology infrastructure, it leads 
one to question whether maybe that flexibility over time has 
served us well.
    How can we make sure that the funds appropriated last year 
and requested for 2011 will not be redirected to other 
priorities?
    Mr. Sullivan. Yes, sir, there is not too many priorities 
for us that are any more important than this IT infrastructure. 
You know, and I can tell you that I am committed to it. Senior 
staff is committed to it. All of our employees are committed to 
it. The people that we have working on this project are 
committed to it. This is a really important initiative within 
our organization.
    You know, what happened going back 10 or 15 years ago, 
quite frankly, I cannot address. All I can address is moving 
forward here and make my commitment to you that we are going to 
make sure that we keep you informed of the direction we are 
going in, make sure we continue to work with the Department.
    I can tell you that we have got 100 percent support and 
backing from the Department. We have made a presentation to 
them. They have signed off on it. There is a report, I believe, 
that went from the CIO up to your Committee. I think it spells 
out what our plan is and what our commitment is.
    I would be more than happy to continue to come up here and 
provide you with progress of where we are or have our IT people 
come up here and talk to your staff about where we are with it.
    But I really do appreciate your support on it.

      REPLACEMENT CYCLE FOR SECRET SERVICE VEHICLES AND SMALL ARMS

    Mr. Price. Well, and we appreciate that commitment, and we 
will follow your progress closely.
    Finally, let me just ask if there is perhaps more problems 
where this one came from, so to speak, whether when you 
acknowledge that the Secret Service has been unable to keep its 
information technology up to date, are there other analogous 
problems, for example, with the vehicle fleet, with weapon 
systems?
    What is the replacement cycle for Secret Service vehicles 
and sidearms, and can we be assured that we are on top of the 
game here?
    Mr. Sullivan. Yes, sir, you know with vehicles it is 
something that is very important to our mission. We pay 
attention to that, both the vehicles that we put our protectees 
in and the vehicles that we put our employees in. I believe 
this committee has been very fair with us as far as the funding 
for these vehicles, and I can assure you that we are fine with 
vehicles.
    As far as weapons, we are continually looking at the type 
of weapons that our people carry. Right now we have two 
separate evaluations ongoing regarding shoulder weapons that 
our people use.
    I, just as a matter of fact, had a meeting last week with 
several of our people that I would refer to as experts in the 
field of weapons, and I can assure you that we want to make 
sure that our people have the best equipment.
    As I said, our people and our mission are our priorities, 
and I want to make sure that our people are able to carry out 
their mission. You know, when we look at efficiencies within 
our organization, when we look at ways to cut back on overtime, 
we look for those discretionary areas.
    However, when we look at making those efficiencies, we are 
adamant that it will not come at the expense of our mission. We 
do not look to compromise when it comes to buying equipment. We 
do not look to compromise when it comes to buying vehicles. We 
do not compromise when it comes to anything that is going to 
directly support our operational mission.
    Mr. Price. Thank you.
    Mr. Rogers.

             SECRET SERVICE FINANCIAL CRIMES INVESTIGATIONS

    Mr. Rogers. Well, of course protection is one of the big 
missions of the Secret Service, but there is another big aspect 
of what you do and that is financial crimes investigations.
    After all, this is the oldest law enforcement agency in the 
government, formed to--and the treasury department--to look out 
for counterfeiting and financial crimes.
    And I do not want us to forget that big heavy 
responsibility that you have in that respect, especially in 
these troubled economic times where the temptations for people 
to engage in huge financial crimes, the temptations are greater 
now than perhaps ever. Ever.
    I notice in the last year you uncovered a very large 
financial crime operation. Can you describe what I am talking 
about? Are you familiar with what I am talking about?
    Mr. Sullivan. Yes, sir. There is a couple of them. There 
was the--there were two identity theft cases that we worked, 
both of them at the time were the biggest identity theft case 
in the history of this country. These were data intrusions 
where individuals were able to get into financial systems and 
were able to extract identities and credit card account 
numbers.
    The one you are referring to is the Heartland Payment 
Systems where 130 million credit card account numbers were 
compromised with potential of billions of dollars in fraud. 
This was a transnational investigation. I believe it included 
two Russians and one American who were involved in this 
particular case.
    But it does go to show that these are borderless crimes. 
They are transnational. And that is why your support on our 
foreign office initiative is so important because these are not 
investigations that are just local. These are international in 
scope.
    But I will tell you that these cases--or because of the 
support all of you have shown for our electronic crime and 
financial crime task forces--you know, we have 29 electronic 
crime task forces, 28 domestically. We just opened up our first 
one in Rome last year, and we have 38 financial crime task 
forces.
    It is through this partnership we have with our--we have 
about 2,000 State, local, and other Federal law enforcement 
partners. We have about 300 partners from academia, and we have 
about 3,000 business and financial partners.
    We are able to take advantage of this partnership, and 
because of that partnership and because of our terrific men and 
women, we are able to work investigations like the one that we 
are talking about right now, the Heartland Payment Systems.
    Mr. Rogers. There was another one I think you----
    Mr. Sullivan. There was another one right before that, the 
TJX investigation. That involved nine defendants, again 
transnational. That one I believe involved about 40 million 
identities and credit card account numbers that were 
compromised.
    Again, this was a transnational investigation, many of 
these individuals over in Eastern Europe. Again, it is because 
of the support that we get from this Committee with our 
electronic crime task forces that this came to fruition. But 
this was a terrific investigation.
    As a matter of fact, one of the defendants--I believe we 
found $1 million buried in his back yard, and because of these 
type of investigations what we have seen is, you know, our risk 
numbers are up by about eight percent from last year, and our 
asset forfeiture is up by about 35 percent.
    So I do believe that--and also because of what our people 
are doing, we are able to prevent further fraud.
    Mr. Rogers. Well, that scheme I am told involved 11 
individuals from four different countries who hacked into the 
computer networks of nine major retailers and obtained more 
than 40 million credit card numbers and debit card numbers. Is 
that accurate?
    Mr. Sullivan. Yes, sir.
    Mr. Rogers. Can you tell us the dollar amount of the crime 
that was involved?
    Mr. Sullivan. You know, if you took those 40 thousand 
account numbers and you just put a minimum of $500 on each 
account----
    Mr. Rogers. Forty thousand or 40 million?
    Mr. Sullivan. Forty million. Thank you. If you took those 
40 million accounts that were compromised and you just put a 
minimum of $500 on every account, the potential fraud here we 
are talking is I believe about $20 billion.
    Mr. Rogers. Twenty billion?
    Mr. Sullivan. Twenty billion. Right now I would--I do not 
know what the actual fraud is on that. I do not think that we 
have been able to get a final number on that, but I will tell 
you that it is estimated that it is a couple hundred million 
dollars or several hundred million dollars. I do not have an 
exact figure on that. I can get you that.
    Mr. Rogers. Well, are you seeing a higher level of 
sophistication around the globe recently in the efforts to 
defraud banks and other financial institutions?
    Mr. Sullivan. I am. You know, in this particular case, what 
these defendants did--the way they were able to hack in it is 
called war driving where they drive around in their vehicle and 
using a lap top, you know, they hack into vulnerable systems 
that these companies had, and it is very, very advanced.
    That is again why our electronic crimes special agent 
program is so important. You know, we have about 1,200 agents 
who are trained up in electronic crimes, whether it has to do 
with basic, or intrusion, or forensic capabilities, but these 
are very smart people out there. They are very talented people 
out there, and our people have to be more talented and better 
equipped.
    Mr. Rogers. And are the economic times a contributing 
factor to the increase?
    Mr. Sullivan. I believe they are. Yes, sir.
    Mr. Rogers. Well, then why are you proposing to cut $4 
million, the domestic field operations component of the 
investigations mission?
    Mr. Sullivan. Again, sir, I go back to the constrained 
economic environment that we are in. But first of all, let me 
just tell you that that cut will not involve cutting any field 
office. It will not involve us cutting any program we have 
going on. It will not involve us roofing any of our people. To 
the people out in the field, they should not notice this at 
all.
    What we have done--and we have done this across the board 
with every program area--we have asked our people to take a 
hard look at all of our discretionary spending.
    So the areas that we are looking at here would be for 
contractual services. It would be for--took a hard look at the 
number of vehicles we are going to purchase. As I had mentioned 
earlier, we take a hard look at our vehicles. We felt we had a 
pretty healthy vehicle fleet.
    We are going to take a look at the supplies, and we are 
going to look at every discretionary pot of money that we have 
out there, but it is not going to impact our operational 
entities at all or equities.
    Mr. Rogers. Well, I think I differ with you on that. But 
more importantly, I have been told that leadership of the 
Department, not you, but above your head is reviewing the 
possibility of severely cutting back the investigative mission 
next year, next year, in 2012 with the aim of only allowing 
certain aspects to continue on.
    I am told that the counterfeit and identity theft work 
might, from your perspective, die on the vine. So I look at 
this $4 Million cut this year as a possible omen of bad things 
to come in the future. Can you straighten me out?
    Mr. Sullivan. Yes, sir. No, I can tell you from 
conversations I have had with the Secretary and with the Deputy 
Secretary, they fully support our investigative agenda and that 
I do not anticipate any cut like that, I believe, with our 
identity theft and with all our investigations. I fully 
anticipate them to move forward in the direction they are going 
right now.
    As a matter of fact, right now the Department is involved 
in a bottom-up review. We have had some very healthy 
conversation regarding our investigative mission, and from 
those conversations I have had with the Department regarding 
our investigative mission, I find them to be in full support of 
it.
    Mr. Rogers. Well, I for one will try to make sure that you 
are supported in that. I find it hard to believe that parsing 
off aspects of the investigation role that you have especially 
in these economic times that we are in and with the increase in 
financial crimes globally, and especially here, I do not want 
to see us degrade your agents' capabilities, and skills, and 
quantity to thwart those financial crimes even more complicated 
as we go along.
    So I would like for you to keep us abreast of any even 
thoughts about cutting the investigative operation.
    Mr. Sullivan. I appreciate that, sir. You know, one of the 
things you and I have talked about before is the ratio, and 
during the campaign, we were able to with our people in the 
field----
    Mr. Rogers. The ratio between investigations----
    Mr. Sullivan. Yes, sir.
    Mr. Rogers [continuing]. And protection?
    Mr. Sullivan. Yes, sir. And for the campaign, we are at 50/
50 during the campaign year. And for this past year, we are at 
about 57 percent investigations and about 43 percent protection 
which, as you know, is an increase.
    So please let me assure you that it is a really important 
component of what we do. I think the duality of our mission 
makes us the organization we are.
    I believe we are better at protection because of what we 
learn as investigators, and I believe when we go back to 
investigations we are better at that because of what we learn 
in protection.
    So I think we are the organization we are because of that 
duality of mission. It is something that we are committed to 
maintaining, and I will tell you that from my conversations, 
just to reinforce with the Department, it is my belief I have 
100-percent support from them on that as well.
    Mr. Rogers. Well, I am glad to hear that. Well, the 
protection aspect of what you do is the most visible, and the 
most glamorous, and attracts the most attention.
    But the investigations work that you are also charged with 
doing is terribly important to the economic well-being of the 
country and, indeed, the world. Thank you.
    Mr. Sullivan. Thank you, sir. I appreciate it.

          ANTI-COUNTERFEITING INVESTIGATIONS IN SOUTH AMERICA

    Mr. Price. And in that same vein, let me ask you a final 
question about another aspect of your investigations work, 
namely your anti-counterfeiting work.
    As the ranking member says, the protective work is far 
better known. Most Americans probably have no idea that your 
original function was focused on counterfeit currency from the 
very first days of the Agency.
    You have leveraged in recent years a relatively small 
development in overseas operations to significantly reduce 
production of counterfeit U.S. currency, particularly in 
Colombia, and I want to focus on the South American connection 
here for a minute.
    Previously, the criminals operating in that country made it 
the world's number one producer of counterfeit. Colombia now 
ranks third, still not great but certainly better.
    Unfortunately, a number of those counterfeiters have simply 
relocated itself to Peru which has the dubious distinction now 
of being the foremost source of phony U.S. currency production.
    So I would appreciate an update this morning on what the 
Secret Service is doing to address counterfeit currency that is 
being produced in Peru. Have you been able to leverage your 
good relationship with the Colombian government or replicate 
that kind of relationship in dealing with Peru?
    Have you considered establishing a permanent field office 
in Lima or elsewhere in Peru, and has DHS or the State 
Department offered any resistance to the notion of expanding 
Secret Service operations in Peru or elsewhere in South 
America?
    Mr. Sullivan. Thank you, Chairman.
    Well, Colombia I think is a great story. And again, it goes 
back to the support we have received from this committee, but I 
do think it shows that when we put our people--when you put 
boots on the ground working with our foreign partners how much 
we can achieve.
    And over the last several years, we have developed a 
terrific working relationship with the Colombians, and we have 
made some great strides. We have made some big seizures.
    You know, when you look at the types of counterfeiting, 
there is two different types, as you know. There is the offset 
of the more traditional type of printing, and then there is the 
inkjet or computerized generated--computer generated type of 
printing.
    We do not see too much domestically of the offset printing, 
but foreign wise, we see an awful lot of it, and the majority 
of that comes from Colombia. And because of the great work of 
our people down there, we really have been able to arrest a lot 
of people, and we have been able to make significant seizures 
down there.
    I did not know that they had gone from first to third, and 
now Peru is climbing. I guess we could get ourselves in trouble 
here because we are forcing people out of Colombia and moving 
them into another South American country.
    But I think we have another success story going here in 
Peru. We have Project Peru. Our people went down there, I 
believe, early last summer, and that so far has yielded about 
31 or 32 arrests and about $20 million in seizures. So again, 
it shows that when our people are there on the ground working 
with our foreign partners, it does work to everybody's 
advantage.
    As far as establishing a field office or an office down in 
Peru, you know, for any foreign office initiative, we want to 
be very strategic. We want to do all of our homework. We 
normally TDY people first to see, you know, exactly what the 
potential is and what benefit we are going to get out of that.
    I can tell you that we have not made a determination yet on 
Peru. I will tell you that if we do make one, your Committee 
will be one of the first ones we talk to.
    We will discuss this with the Department as well. You know, 
the Department currently is conducting a complete review of 
their foreign office allocation and their strategy. We are 
working with them, and I provided them with our foreign office 
strategy two weeks ago, as a matter of fact.
    But if we do believe that Peru or any other location is the 
best place for us to have an office, we will do the appropriate 
background information. We will present it to you in a written 
form along with the Department and to the State Department.
    Mr. Price. But you are saying this is still under review?
    Mr. Sullivan. It is still under review.
    Mr. Price. By you or by the Department, or by both?
    Mr. Sullivan. Right now by us. Right now, you know, we are 
taking a hard look at it. Right now it does appear to be a very 
successful initiative, and we will take a look at it and we 
will compare that to other locations that we are considering as 
well and we will make a determination, you know, what our 
priorities are and where we think we are best situated to 
perform our mission.
    Mr. Price. Thank you.
    Mr. Rogers.

                        DESIGN OF U.S. CURRENCY

    Mr. Rogers. Mr. Chairman, I will be brief because time is 
running out here, but I was just thinking the new money that 
is, I guess, fairly new, is it not?
    Mr. Sullivan. Yes, Sir.
    Mr. Rogers. How old is this new $20 bill?
    Mr. Sullivan. I would say the last two or three years.
    Mr. Rogers. Two or three years?
    Mr. Sullivan. Again, that continues to be updated. I am not 
exactly sure.
    Mr. Rogers. Yes. I am not trying to trick you.
    Mr. Sullivan. It does not take much.
    Mr. Rogers. But we----
    Mr. Sullivan. If you want to give it, we can take a closer 
look.
    Mr. Rogers. We have gone to great lengths, have we not, in 
redesigning most of our paper money in recent years?
    Mr. Sullivan. Yes, sir. As a matter of fact, I think we are 
going to be unveiling the new hundred next month or so.
    Mr. Rogers. Since we have the new money that has all sorts 
of new imprints, and paper, and secret things, and so on, have 
you noticed that counterfeiting is going down or up after that 
took place?
    Mr. Sullivan. You know, again, as I mentioned earlier, 
domestically I do see the offset counterfeiting significantly 
down. We continue to see, you know, with the quality of these 
inkjet printers now, we do continue--as with all of the 
investigations, we see this computerized equipment does make 
counterfeiting a lot easier for people.
    You know, counterfeiting goes up and down. It does ebb and 
flow. I do think the countermeasures are working. I just do 
not--I cannot give you a definitive percentage of, you know, 
where it has gone.
    Mr. Rogers. Well, is it worth redesigning the money? Does 
it pay to do that?
    Mr. Sullivan. You know, I think it is. You know, when you 
look at it, I think there is about $883 billion in genuine 
currency out there. The percentage of that money that is 
counterfeit is, you know, like a fraction of one percent, like, 
two hundredths of one percent.
    Again, I go back to prevention. I think anything that we 
can do to discourage or prevent people from counterfeiting or 
any measure we can take, I think is a benefit, so I do think 
the redesign of the counterfeit is a benefit.
    And again, I do think it does show with the offset 
printing, I think it does show that that really has decreased.
    Mr. Rogers. Mr. Chairman, I will conclude just by thanking 
the director and all of the folks under your command out there 
who risk their lives every minute of the day protecting our 
government officials, and routing out financial crime, and all 
of the things that the Secret Service does.
    So we owe you a debt and all of the folks that you 
represent. We thank you for your service.
    Mr. Sullivan. Thank you, Congressman. I appreciate it.
    Mr. Price. Mr. Director, we do thank you for your 
appearance here today and for the good work you and the men and 
women under your direction do.
    We are going to need to confer with you in the weeks ahead 
as we assemble our appropriations bill, and we look forward to 
that continued collaboration.
    Mr. Sullivan. Thank you, Chairman.
    Mr. Price. With that, the Subcommittee is adjourned.

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                                         Wednesday, March 17, 2010.

                       COAST GUARD: FY2011 BUDGET

                                WITNESS

ADMIRAL THAD W. ALLEN, COMMANDANT, U.S. COAST GUARD

               Opening Statement of Chairman David Price

    Mr. Price. The Subcommittee will come to order.
    Good morning, everyone.
    We are pleased to welcome Admiral Thad Allen, the 
Commandant of the U.S. Coast Guard, before the subcommittee for 
his final hearing on the Coast Guard's budget. As I am sure all 
of us know, the Commandant's term comes to a conclusion this 
May after four dedicated and distinguished years of service, 
for which we want to thank him and express our admiration.
    Admiral Allen, as the 23rd Commandant of the Coast Guard, 
you have led the Coast Guard through a transitional period. 
During your tenure, you have implemented major reforms to the 
Coast Guard's organizational structural. You have fought for 
additional personnel, for assets to close resource gaps, and 
for management reforms to help make the Coast Guard more 
transparent and accountable on several fronts.
    We observed with appreciation the critical lifesaving role 
of the men and women under your command played following the 
recent earthquake in Haiti. We also recognize the Coast Guard's 
more traditional contributions, such as its search and rescue 
efforts, its ongoing work of keeping our ports secure, our 
mariners safe, and smugglers of illegal immigrants and drugs at 
bay. We thank you for managing these critical efforts on behalf 
of the American people.
    Today, you are going to have to answer some tough questions 
from this Subcommittee about the Coast Guard's budget, about 
critical planning documents that are due, and about a leaked 
internal memo from your designated successor regarding the 
budget process. These are questions that must be answered if we 
are to make fully informed judgments on the Coast Guard's 
budget going forward. And so we welcome the chance to talk with 
you about these and other matters here today.
    The work of budgeting and appropriating taxpayer resources 
is a regular exercise in setting priorities and making often 
difficult tradeoffs among competing priorities, especially in a 
year in which the President is laudably seeking fiscal 
sustainability. Nowhere is the difficulty of making those 
tradeoffs more apparent than in your budget.
    Your fiscal 2011 budget proposes significant amount 
reductions in manpower, and it calls for accelerating the 
decommissioning of older ships and planes while slowing the 
acquisition of new ones to replace them. It does this without 
an adequate capital investment plan or a legislatively mandated 
comprehensive review of the Deepwater recapitalization effort. 
Now, this is information we are going to need to give us 
confidence in the Administration's choices for the Coast Guard 
in 2011 and beyond.
    You are clearly aware of the problem this presents since 
you alluded to it in your annual State of the Coast Guard 
address, saying, and I am quoting you here, ``Our acquisition 
baselines lack credibility when they are not supported by a 5-
year capital investment plan provided to the Congress in a 
timely manner or are overtaken and rendered ineffective by 
annual adjustments that change basic business plans.''
    Now, we know the blame for this does not fall entirely on 
your shoulders, but, as Commandant, we do want to ask you and 
we hope you can answer these questions today:
    Are the Coast Guard, the Department, and the administration 
in agreement on a coherent plan for recapitalizing and funding 
the Coast Guard?
    Why have the Coast Guard and DHS failed to include a 
revised Deepwater baseline in the budget review for the coming 
fiscal year, which has been mandated annually in law since 
fiscal year 2006?
    Was Admiral Papp's assertion accurate that the Coast Guard 
was forced to make asset reduction decisions without full 
appreciation of the impact of those reductions to operational 
performance in the fiscal year 2011 budget?
    And, taken as a whole, what does this budget proposal mean 
for the future of Coast Guard recapitalization and reform?
    Drawing on this Subcommittee's recent hearing on major 
acquisition projects in which we examined the past and present 
of Deepwater, I am also interested in your explanation of the 
Coast Guard's strategy to ensure good money will never again go 
after bad, that the Coast Guard is in the driver's seat when it 
comes to acquisition decisions, and that we have the requisite 
number of professional civil servants to manage major 
governmental contracts.
    Admiral, we hold the men and women of the Coast Guard in 
the highest regard on this Subcommittee. We understand the 
great value of the work they do day-in and day-out. That is why 
we have asked you to come before us today, to provide answers 
to these tough questions, to critically compare the 2011 budget 
to the Coast Guard's mission needs, and to give us your 
unvarnished views on how the Department and the Coast Guard can 
best make progress against the budgetary headwinds that are, in 
fact, likely to continue for some time to come.
    As is the Subcommittee's custom, your full written 
statement will be entered in the record. I ask you to limit 
your oral remarks to 5 minutes.
    Before we begin, I want to turn to our distinguished 
ranking member for his comments.
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           Opening Statement of Ranking Member Harold Rogers

    Mr. Rogers. Thank you, Mr. Chairman.
    And welcome, Admiral and your staff, again to this room.
    Admiral, there are some budgets you defend, and there are 
some budgets that are simply indefensible. And I think you know 
where I stand between those two. I think this one is 
indefensible.
    It cuts more than 1,100 active-duty billets; it 
decommissions or deactivates 19 operational components; it cuts 
acquisitions by more than $155 million, 10.1 percent; it fails 
to comply with congressional reporting mandates in the law; and 
includes no moneys to replace key assets recently lost in the 
line of duty. And that is notwithstanding the helicopter that 
sadly crashed just 2 weeks ago.
    The administration claims substantial cuts to Coast Guard 
operations are necessary to, quote, ``make room for investments 
in new acquisitions.'' However, the moneys that are cut from 
Coast Guard would be going, under this budget, to hire more 
bureaucrats in DHS headquarters, taking people from the front 
line and moving them to the safety of a headquarters office.
    But, as I just pointed out, the budget is proposing a 
sizable decrease in Coast Guard acquisitions while also pushing 
the funding and delivery of many critical investments to future 
years. What this means in real terms for fiscal 2011 and 
perhaps a few years following is that fewer drugs will be 
seized, fewer drug smugglers will be interdicted, fewer 
migrants will be saved, fewer ports and miles of coastline will 
be protected.
    In the wake of another terrorist attack, in the midst of a 
murderous drug war, and after our country once again called 
upon the Coast Guard to respond to an urgent humanitarian 
crisis in Haiti, this budget proposal for fiscal year 2011 
simply does not add up.
    And I find myself as confused as I am concerned. While I 
wholeheartedly support the need for increased fiscal discipline 
by DHS, I do not believe severely cutting operational 
capabilities at the expense of increases for DHS headquarters 
functions and wasteful funds for terror trials makes any real 
sense. To make matters worse, we have yet to receive the 
revised Deepwater plan, as required by law, L-A-W, law.
    So, while I am not sure we will ever be able to truly 
understand what the administration is thinking with this 
proposal, we can at least shed some light on the implications 
of this budget. After all, Deepwater was supposed to be a 
program that aligned the phaseout of antiquated assets with the 
deployment of modern tools in such a way that the Coast Guard 
would only grow stronger. And I was around at the inception of 
Deepwater, before there was a Department of Homeland Security, 
and I remain confused.
    But as we continue to ask the Coast Guard to do more and 
more, the sea of threats and challenges only seems to grow 
greater and greater. And that means it is high time to get the 
Coast Guard budget right. We have to find a way to provide our 
frontline personnel the tools they need to withstand the storm 
while going into harm's way, and do so in a way that doesn't 
break the bank or jeopardize our Nation's security.
    This need for perseverance in the face of mounting 
challenges is perhaps best summed up in the Breton Fisherman's 
Prayer, which President Kennedy prominently displayed on his 
desk. It humbly reminds us, quote, ``Oh, Lord, thy sea is so 
big, but my ship is so small,'' end quote. I would hope this 
administration would heed this perspective of Kennedy and 
really think hard about the ramifications of trading operations 
for bureaucracy and political righteousness.
    Admiral Allen, after almost 4 years at the helm of our 
Nation's oldest continuous sea-going service and a total of 38 
years of public service, I can't believe that the fiscal year 
2011 budget is the one you wanted to go out on, as you retire 
in just about 2 months' time. And we know that these words that 
we are speaking this morning are aimed not at you but over your 
head. And we have the utmost confidence in your leadership and 
capabilities.
    We are deeply grateful for your years of service, whether 
it is the countless lives you have saved or the numerous drug 
smugglers you have interdicted or the legacy of leadership from 
9/11 and Hurricane Katrina that you are leaving behind in the 
hallmark of your service. Your contributions to the safety and 
security of this great Nation are worthy of our highest 
recognition and appreciation.
    You have come a long way, and you reached the highest apex. 
And we appreciate your devoted service to your country, which 
you dearly love. And while I am still confused how a landlubber 
from the Arizona desert rose to become the Commandant of the 
Coast Guard, it is a tribute to the talent that you possess in 
a big way. And I, for one, am very sorry to see you sail off 
into the sunset, but I have a feeling we will see more of you.
    Thank you, Mr. Chairman.
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    Mr. Price. Thank you.
    Admiral, please proceed.

                   Statement of Admiral Thad W. Allen

    Admiral Allen. Thank you.
    Chairman Price, Mr. Rogers, distinguished members of the 
Subcommittee, thank you for the opportunity to testify this 
morning. And I do have a written statement that will be 
submitted for the record.
    I would like to thank the Committee and especially Chairman 
Price and Mr. Rogers for their support over the years--Mr. 
Rogers, when you were the chairman. You are right; we do go 
back many, many years. And I want to thank you both very much 
for the leadership, mentorship, guidance and friendship, and 
the other Committee members as well, Judge Carter and 
Representative Kirk.
    As you noted, Chairman, on the 12th of February, I 
delivered my fourth and final State of the Coast Guard address. 
I described our current state as ready and resilient. That 
doesn't mean it is perfect, but it is ready and resilient.
    This was clearly demonstrated following the devastating 
earthquake in Haiti. One hour after the earthquake struck, 
three Coast Guard cutters had orders to proceed. Arriving on 
the scene the following morning, our units controlled aircraft 
movements until the tower was operational. We conducted damage 
assessments, provided medical care and even delivered a baby on 
the flight deck of a cutter. Our aircraft began to evacuate 
American citizens and the most critically injured Haitians.
    As the recovery operations ramped up, we deployed a reserve 
port security unit to safeguard the harbor and partnered with 
the Federal Emergency Management Agency to provide an incident 
management team to support the U.S. Agency for International 
Development and the Ambassador. We continue to monitor 
departures from Haiti for any indication of mass migration.
    The Coast Guard was first on scene because our operational 
forces and command and control structure are agile and 
flexible. That is our operational model. We are multi-mission 
military, and we are a whole of government agency. It is 
unique, and it enables us to provide tremendous value to the 
American people and the global maritime community.
    Our multi-mission nature can be hard to explain, but 
consider these benefits. As we initially surged into Haiti, 
other Coast Guard assets were breaking ice in the Great Lakes 
and in New England, medically evacuating a heart attack victim 
270 miles off San Diego, conducting fishing vessel safety 
patrols in the Bering Sea and detaining 12 foreign vessels 
around the country for violating International Maritime 
Organization regulations.
    The genius of our organization is our operational model 
that emphasizes on-scene initiative and allows our field 
commanders to move resources where they are needed the most, 
and we manage risk every day. Management of risk is going to 
become a recurring theme in some of my answers here today, and 
I think it is important that we understand that.
    The operational model of the Coast Guard is based on 
allocating resources to the highest need. And whether we are in 
a growing budget environment, steady environment or declining 
environment; that risk management model is key to the way we 
conduct Coast Guard operations.
    To be able to sustain our performance, we must provide our 
people with the capability to safely and effectively execute 
the mission. And, as we discuss the Fiscal Year 2011 budget, it 
is important to acknowledge that we are operating in a fiscal 
environment that is constrained. In his State of the Union 
speech, the President said families across the country are 
tightening their belts. The Federal Government should do the 
same. Obviously, that sentiment is reflected in our 2011 
budget.
    In our discussions with the Secretary, we had to make 
difficult tradeoffs between balancing our current operational 
capacity with the need for new cutters, aircraft, boats and 
sensors. We made a conscious decision to invest in our future 
within the levels provided.
    This budget contains nearly $1.4 billion to acquire new 
assets, while removing aging cutters and aircraft from service 
that are too costly to maintain. It also includes $13.9 million 
for housing units. And we have appreciated the First Lady's 
support of our people and our families in the Coast Guard.
    To allow for recapitalization within a top fixed line, we 
are consolidating activities that will result in the reduction 
of 773 positions. This includes regionalizing our Marine Safety 
and Security Teams, which is the most efficient use of these 
vital resources. We will have less capacity in 2011 than we did 
in 2010. However, we will use our existing resources to 
prosecute all of our missions by allocating them to the 
highest-priority needs, just as we have always done. We will 
have to manage risk.
    Recapitalizing our fleet is my top priority. It has to be 
because our future readiness is at stake. Of the 12 cutters 
that initially responded to Haiti, 10 suffered severe mission-
affecting casualties. Each passing year erodes our operating 
capability, putting our people at risk and endangering our 
ability to execute our statutory responsibility.
    I would add, however, that the Haiti earthquake was the 
first real test of our modernized support system and some of 
the reforms that we have been putting in place over the last 3 
to 4 years, and it was highly successful. By providing product 
line support for the forward-deploying personnel and the assets 
throughout the chain of command, we were able to sustain our 
Haiti relief efforts while still executing other missions and 
dealing with the casualties that I just noted.
    To fully implement modernization--and this is more of an 
authorizing committee issue--I am asking the Congress to pass 
legislation that will give us an authorization bill in the 
House and the Senate this year, so I can have one during my 
tour.
    The real goal for modernization was to make the service a 
learning organization. The results are evident in our reformed 
acquisition procedures. A contract for the Fast Response Cutter 
was lauded by the U.S. Government Accountability Office for its 
thoroughness. And next month, we will hold a keel-laying 
ceremony for our first Fast Response Cutter.
    The lessons from the Bertholf were rolled into Waesche, 
which will be commissioned on the 7th of May. Waesche achieved 
the authority to operate classified systems 1 year earlier and 
had 50 percent fewer trial cards after acceptance than 
Bertholf. These are signs of progress, but obviously there is 
more work to be done.
    I understand the Subcommittee's frustration with the 
timeliness of acquisition-related reports. And while you said 
you are aiming over my head, sir, we are all accountable. I am 
accountable as the Commandant, as part of that system, and I 
understand that accountability.
    We are working at best speed to rectify the situation. We 
delivered the 2009 Deepwater expenditure report at the 
beginning of March. And our 2010 Deepwater Implementation Plan 
is under Coast Guard review, and I anticipate delivery in the 
near future. We will continue to work with your staffs to meet 
Committee reporting requirements. It is our responsibility to 
provide you this information so you can do your job.
    So, yes, the state of the Coast Guard is ready and 
resilient, but our fleet is fragile and approaching the limits 
of supportability due to its age. We must recapitalize our 
fleet to continue delivering superior service to the Nation. 
Our guardians deserve the best because that is what they 
provide us.
    After the first day of rescue operations in Haiti, a young 
petty officer e-mailed his mother: ``Today I have been truly 
more thankful to be an American. As a country, we will stand 
together and put aside different opinions on health care, war 
and the economy to help those in need.'' It was well said by a 
very young petty officer in the Coast Guard, and it is my duty 
to ensure our guardians remain strong, resilient and semper 
paratus.
    So I ask for your support. And, again, I am more than happy 
to have a discussion about providing the proper information and 
managing risk with the resources we have.
    And thank you for having me here, Chairman.
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                DEVELOPMENT OF FY2011 COAST GUARD BUDGET

    Mr. Price. Thank you, Admiral.
    Well, Admiral, let me get to some of the questions I raised 
in my opening statement, which I think we all want to address.
    Without focusing on the leaking or not leaking of a budget 
memo, I want to talk about what was said in that memo--a 
remarkable charge, really, that cuts in the proposed fiscal 
year 2011 budget for the Coast Guard were made without 
consideration of their long-term operational impact.
    Now, a statement of that sort sheds light, I think, on the 
dilemma we all face. Congress faces the same dilemma that you 
do in putting a budget together. We are being asked to make 
informed decisions on the fiscal 2011 request without 
information we need to understand how the budget squares with 
the Coast Guard's long-term plan. Namely, we are missing the 
comprehensive review of Deepwater and detailed capital 
investment plan for the next 5 years to make our assessments 
from.
    The requirement for the comprehensive review of Deepwater 
has been carried in every law every year since fiscal 2006 in 
bipartisan bills passed by Congresses controlled by both 
parties and signed by Presidents of both parties. The capital 
investment plan requirement has been around even longer.
    So, Admiral, was the Coast Guard budget request for 2011 
put together with cuts that were made without consideration of 
the long-term operational impacts? Is that your judgment, as 
well?
    If those long-term impacts were adequately considered, then 
the Coast Guard must have had forward-looking planning 
documents outlining where you plan to go on capital investment, 
like the new Deepwater baseline or capital investment plan.
    And then for this Committee, in the absence of these 
documents, how can we move forward on this budget request with 
any degree of confidence that we are doing the right thing? Why 
do we not have the basic information from the Department that 
we need?
    And let me stress, this isn't merely or even mainly a 
question about documents and deadlines. What I am interested in 
here is the substance of the issues we have to decide on, the 
substance of these budget recommendations, the obligation we 
all have to square up the budget with operational needs and 
operational requirements. And as I said in my opening 
statement, it does raise questions about the attentiveness to 
the Coast Guard's needs, the attentiveness to your and your 
team's recommendations at the upper levels of the budget 
process at DHS and OMB.
    So, yes, we want and need and must have these planning 
documents in order to make our decisions, but what is at stake 
here really is not just missed deadlines but the substance, the 
merits of the proposal before us and the information we are 
going to need to do an intelligent job of writing the budget.
    Admiral Allen. Thank you for the question, Mr. Chairman.
    I would like to talk about two things, if I could, in 
responding to your comments and your question. Number one, I 
would like to talk about the context of the 2011 budget and 
then the process by which information is provided to you. I 
think they are both very important, and I think that is where 
you are driving at.
    In developing the 2011 budget, if you start with the 
assumption that you are going to be fiscally constrained and 
you are starting with a top line that is fixed, that creates 
certain assumptions that you have to deal with because you are 
trying to find cost savings in that immediate year.
    If you were looking at a long-term fiscally constrained 
budget and you knew it was going to be there for 2 or 3 years, 
you would do very thoughtful analysis on tradeoffs, how you 
would assess risk. If you are trying to achieve reductions in a 
single year, you have to find money that is available where you 
can find the cost reductions, and that is what you have to deal 
with because you can't immediately generate a lot of cost 
savings in the first year.
    And if you going to get those kind of cost savings to meet 
a top line that is constrained, you have to go to force 
structure. That is people, operating money and operating units. 
That is the only way you can get those kind of cost savings in 
the short term. It is kind of like applying the brakes very 
quickly rather than slowly. You expend energy with what you 
have to meet that line.
    Given the top line that we were provided, I made very, very 
tough choices and tradeoffs within that context in 
conversations with the Department. And the basic assumption I 
had was, if that is the top line, I cannot stop recapitalizing 
the Coast Guard. Even though it is significantly lower than the 
prior-year enacted level, $1.4 billion keeps critical 
acquisition programs going.
    But to do that, we had to take a reduction in operating 
capability to sustain the $1.4 billion reduction within the top 
line provided. And, as the Commandant, in discussion with the 
Department, I thought it was better to take a near-term 
reduction in operational capability rather than mortgage our 
future and have a hollow force that would collapse on itself in 
several years if we did not recapitalize these cutters.
    So that was the context that I approached the budget. I 
don't want to attribute any motives to Admiral Papp. He can 
speak on his own on this. But if you are going for what savings 
are available to meet a top line in any particular year, you 
are basically identifying the costs that could be reduced in 
that particular year, and that does not allow the long-term 
analysis implications of those reductions. They are the ones 
that are available, so you take them to meet the top line.

                        CAPITAL INVESTMENT PLAN

    Now, regarding process, sir, I have been working capital 
investment plans since I was a Commander in the Coast Guard. 
The best way to allow you to do your job is to have all the 
information in the budget when it arrives with the 
congressional justifications for you to act on our 
appropriations. You should have every right to expect that. We 
should be able to produce it for you. And while I don't own the 
entire process, I have a part of it, and I am accountable with 
everyone else in government to give that to you. We are moving 
at best speed on that. You should not be put in a position to 
make decisions without having the proper information, and we 
are moving as fast as we can.
    One of the problems is having a 5-year plan fully fleshed 
out and developed every year that helps you develop the budget. 
And it is really problematic when, because of external 
pressures, that gets reinvented every year. It changes our 
acquisition baseline, it changes our acquisition strategies, it 
adds costs and it requires us to kind of rewicker all of our 
project plans every year.
    It should come up with a budget, it should be there, and 
you should have it, sir.
    Mr. Price. What can we expect, and when can we expect it?
    Particularly the 5-year capital investment plans provided 
by the Coast Guard in years past have been useful in 
illuminating the way forward on future investments until last 
year. The single page provided in this year's budget request 
clearly doesn't satisfy the legal or practical requirements.
    What has happened here? And what kind of fuller document 
can we expect in the near term?
    Admiral Allen. We are working right now--in fact, I have 
had discussions with both the Deputy Secretary and the 
Secretary to actually work in parallel with the other parts of 
the administration that have to review these reports so we can 
cut down on the cycle time.
    One of the problems is, until the one-page capital 
investment plan that you got was actually published, we had no 
baseline numbers from which to start to develop that report, 
and that is what is being done now. If you look at the number 
of line items and the amount of work that has to be done to 
flesh out those plans, even based on the simplistic one-pager 
that was submitted to you, it takes time to do that. What we 
are trying to do is remove time from that cycle by working in 
parallel with the Department right now, and that is exactly 
what we are doing, sir.

                EFFECT OF FY2011 COAST GUARD BUDGET CUTS

    Mr. Price. I am going to turn to my colleagues for 
questions, but we understand the thrust of your effort here in 
terms of the operations reductions and the kinds of immediate 
savings that gives you, in light of these overall constraints.
    We, of course, as a Committee, are going to want to look at 
the overall constraints, as well as the specific proposals you 
have made to meet those constraints. So we will have a chance 
later this morning to go through some of these, especially the 
personnel reductions, the FTE reductions, and sort out those 
that have widespread agreement and a solid rationale in your 
view and those that really should give us more heartburn.
    Let me turn, though, to Mr. Rogers first.
    Mr. Rogers. Well, I don't buy it. I just don't buy it. The 
people above you say that the reason for these cuts of 
personnel and equipment is to make room, they say, for 
acquisitions, but they then in the budget don't provide for the 
acquisitions, the NSC deliveries, the MPA.
    I understand your frustrations and difficulties that you 
have in trying--you are the middleman between the Budget Office 
at the White House and us. So I fully appreciate the delicate 
place where you are.
    But I don't appreciate the OMB and the White House trying 
to flimflam this Congress on your budget request, leaving you 
dangling in the wind. It is unfair to you, it is disrespectful 
of the Coast Guard, you and your staff and the men and women of 
the Guard, and equally disrespectful of the intelligence of 
this Subcommittee.
    Making room, they say, for acquisitions. Funds for many of 
your major assets in this budget are reduced, prolonged, or 
nonexistent. Long lead materials for the National Security 
Cutter number six are pushed to fiscal 2012. That will likely 
stretch out NSC deliveries. Funds for the MPA are reduced 
substantially, such that you are only buying one airplane, no 
funding for spare parts, no funding for unmanned aerial systems 
or asset replacements.
    So when they say they are making room for acquisitions and 
then don't make acquisitions, it tells me that they wanted the 
money to go to DHS headquarters to fund bureaucrats and taking 
people off the front lines of seizing drugs and saving people's 
lives and protecting our coastline, cutting your personnel by, 
what, 1,100 or so.
    Well, we appreciate the report that we got last week. We 
have been demanding these expenditure plans for Deepwater, the 
annual Deepwater plan. Well, we got one last week--for fiscal 
2009. We have no idea what you are planning for in 2010, much 
less the budget request that you are making for 2011.
    So I am mad, frustrated, disappointed, not at the Admiral 
and not at the Coast Guard, but at the people at DHS who are 
dictating the emasculation of the Coast Guard. Yes, I said 
that, and I mean it: the emasculation of the Coast Guard.
    You would be cut 1,112 active-duty billets. You would 
decommission and deactivate a total of 19 operational 
components--deactivate and decommission. Your acquisitions are 
cut by over 10 percent, $155 million. It takes away moneys for 
key investments like unmanned aerial systems, which we have 
been discussing with you for almost your whole career. No 
moneys to replace key assets like the C-130 that was recently 
lost in the line of duty and, of course, the helicopter that 
sadly crashed just 2 weeks ago.
    So, Admiral, there are not many questions that I have that 
you can answer, to be frank with you. We need to have the OMB 
here testifying, and the Secretary, about why she is slashing 
funding for Coast Guard.
    Deepwater was supposed to be a plan that would align the 
phaseout of antiquated assets with the acquisition of modern 
ships, aircraft, communications systems, and the like in such a 
way that the Coast Guard would only grow stronger as we go 
along. But this budget appears to be stretching out the time in 
between decommissionings and deactivations and the deployment 
of new assets. So it appears that for fiscal 2011 and maybe a 
few years beyond, the Coast Guard will be less capable.
    Admiral, is there any way that you can correct what I 
consider to be these gross misapplications of Federal funds, 
taxpayers' dollars, to put it back to work to defend the 
American people on our coasts?
    Admiral Allen. Sir, I would tell you this. Given the budget 
discussions and the levels that were provided to us, I will 
tell you this. I am accountable, as the Commandant of the Coast 
Guard, for the decisions made within our budget at the levels 
provided regarding units decommissioned and acquisitions to 
carry on.
    One of the obligations and duties I have as the Commandant 
is to make the tough choices with the resources that are 
provided to me. And while the budget is lower than it was in 
2010 and everybody would like more money, I am accountable for 
the decisions that were made within that level. And, therefore, 
I can explain the tradeoffs and the decisions made within the 
levels that were provided. And that is my responsibility as the 
Commandant, sir.
    Mr. Rogers. Well, the key phrase you just said was ``with 
the assets given to you.'' You will make do with what you get. 
I am arguing about what you get, not how you necessarily have 
allocated those funds. If you don't have the money, you can't 
spend it. You can't even recommend how we spend it. They have 
hogtied you, and I regret that and bemoan it.
    Well, 2 years ago, you told us that people are the most 
critical asset the Coast Guard has, and you made an impassioned 
pitch to increase active-duty positions. We responded, 
increasing funds for watch-standers and counter-drug personnel. 
In fact, through an increase in counter-drug funding last year 
that you pushed for, the Congress refuted the Administration's 
proposed cuts to Coast Guard billets for fiscal 2010. But these 
fiscal 2011 cuts are something much, much different. These are 
huge cuts.
    I understand the new assets like the National Security 
Cutter will need fewer people to operate, but since the budget 
is prolonging the funding and delivery of those newer assets, 
it appears as though you are being required to downsize the 
force as opposed to simply transferring personnel from aging 
assets to newer ones. Is that right?
    Admiral Allen. We are removing older cutters from service, 
yes, sir, before the replacements will be there.
    That is done for two reasons. Number one, they are old and 
getting more difficult to sustain. The maintenance costs are 
being driven up. And, again, it is a tradeoff between current 
capability and recapitalization, sir.
    Mr. Rogers. But you are still stuck with the older assets 
because the newer assets aren't available and the older assets 
require more personnel. Right or wrong?
    Admiral Allen. The ones that are in service, yes, sir.
    Mr. Rogers. Yes, sir. And yet you are still being required 
to reduce your personnel.
    Admiral Allen. Well, we are reducing the personnel 
associated with the cutters that are being decommissioned, as 
well as the Marine Safety and Security Teams, yes, sir.
    Mr. Rogers. Well, Mr. Chairman, I have a lot of other 
questions, but I will yield.
    Mr. Price. Thank you.
    Mr. Ruppersberger.
    Mr. Ruppersberger. Sure. Well, first thing, Admiral, I 
think you are retiring, what, in May?
    Admiral Allen. Yes, sir.
    Mr. Ruppersberger. And you have had a great service, been a 
great leader, and you have done a lot for the Coast Guard. So 
what some of us are saying about this has nothing to do with 
you. You are being a good leader. You are told by your 
commander, this is what you have, and you have to make the best 
of it.
    But, you know, the Homeland Security, we do their budget. I 
am getting really concerned that they have too much on their 
plate. They have 22 different agencies. They have missions all 
over the place, from what you do to cybersecurity. And 
sometimes when you have too much and you don't focus and 
prioritize, you can't do anything real well.
    I believe the Coast Guard is one of the best agencies that 
I have worked with since I have been a Member of Congress. And 
I really think the men and women who work there are 
outstanding. They do the best with what they have.
    I agree with everything Mr. Rogers said, except for the one 
word, ``emasculation,'' or whatever that is. But I agree with 
what he said. The Coast Guard, what you have on your plate--and 
I want to go over this so that we can get it on the record.

                           DRUG INTERDICTION

    The first thing, you have responsibility for drug 
interdiction. Drug interdiction is serious. There is a lot of 
cocaine, and there is a lot coming in, either through air and 
through water. And a lot of what you do is the interdiction and 
to really go after the smugglers, is that correct?
    Admiral Allen. Yes, sir.
    Mr. Ruppersberger. All right. Now, do you have certain 
goals?
    Admiral Allen. Yes, sir.
    Mr. Ruppersberger. Okay. What are those goals?
    Admiral Allen. Sir, over the next couple of years, we are 
moving to try to approach a 40 percent removal rate of cocaine 
flowing from the Southern Hemisphere into the United States.
    Mr. Ruppersberger. Okay. And what did you remove in the 
last couple of years or within the last year?
    Admiral Allen. Sir, in the last accounting year, we removed 
approximately 362,000 pounds of cocaine, or more than 150 tons. 
Our drug removal rate was 15 percent. The target was 15.7 
percent. That is going to be moving up to 40 percent over the 
next few years.
    Mr. Ruppersberger. All right. And let's talk about that.
    Admiral Allen. Yes, sir.
    Mr. Ruppersberger. Based on the cuts that are before us 
today, do you believe that you will be able to reach that 40 
percent?
    We talk a lot about terrorism, we talk about a lot about a 
lot of issues. But if you really look at the bottom line and 
some of the negative things that affect our citizens, it is 
drugs. And it is something that we have really taken our eye 
off the ball for a long time. We need to maybe put our eye back 
on it, and you are doing a great job.
    If you can answer the question, with these cuts, will you 
be able to make that 40 percent target?
    Admiral Allen. Well, what is going to happen, sir, I 
mentioned earlier. The way we allocate our resources in a 
particular year is based on projections on migrant threats, 
drug threats and everything else. And certainly a lot of these 
assets for counter-drugs are actually shifted to Joint 
Interagency Task Force South, which does the detection and 
monitoring.
    We will have to make decisions on how to allocate these 
resources with fewer cutter days in 2011. It will have to be a 
tradeoff between not only the drug mission but the fisheries 
mission, other things we do offshore with those cutters that 
have sustainability. If we have fewer cutter days down there, 
there will be a lower removal rate, and we may or may not meet 
those objectives. But we will have to manage the force with 
what we have.
    To give you a good example, during the recent operations in 
Haiti, we actually took a cutter from the West Coast, brought 
it through the Canal, to be able to provide command and control 
in and around Haiti, and basically lost a high-endurance cutter 
operating off Colombia for about a month. That is indicative of 
the type of choices we will have to make in 2011, sir.
    Mr. Ruppersberger. But getting back to my question, your 
goal for 2014 is 40 percent. Based on the cuts that are before 
us today, do you feel you will be able to reach that 40 
percent?
    Admiral Allen. It will be a challenge.
    Mr. Ruppersberger. It will be a challenge. Basically I 
would assume by that that it is going to be awfully difficult. 
You can't take away your manpower, but also your resources. 
Let's talk about that.
    I have been to your headquarters and seen some of the 
things that you do in drug interdiction. How about either your 
ships or airplanes or UAVs? That is a very significant part of 
dealing with drug interdiction, is that not correct?
    Admiral Allen. Yes, sir, it is not just cutters, as you 
know. It is maritime patrol aircraft and sensors, intelligence 
and coordination with other agencies.
    Mr. Ruppersberger. And what does this budget that is before 
us today, what does this do as far as those resources are 
concerned?
    Admiral Allen. Well, the budget just focuses on the Coast 
Guard contribution toward that. I would add, if you are looking 
at the drug interdiction overall operation, it also includes 
maritime control aircrafts from Customs and Border Protection 
and U.S. Navy assets. Our allies operate with us in foreign 
countries down there; our partner nations do, as well, in 
addition to the increasing value in----
    Mr. Ruppersberger. I only have another minute. But getting 
to the bottom line, what I am trying to get you to say--if you 
don't say it, I will try to say it--is if you don't have the 
resources, if you don't have the continued resources of your 
ships, of your airplanes or the technology that you use to find 
these smugglers of the drugs that are coming in, mostly from 
Colombia to Mexico, then it is very difficult for you to do the 
job, is that not correct?
    Admiral Allen. Yes, sir.
    Mr. Ruppersberger. Okay. So do you feel this budget today, 
by taking away those resources and those cuts, will have an 
impact on your ability to do the job that you have set a goal 
for, which is 40 percent in 2014?
    Admiral Allen. It will force us to make tradeoffs, and part 
of those tradeoffs could be drug interdiction, yes, sir.
    Mr. Ruppersberger. Okay. Well, I think that we----
    Admiral Allen. I don't want to presuppose the decisions 
made in the following year, but we will have to make tradeoffs.

                              INTELLIGENCE

    Mr. Ruppersberger. I think the Chairman understands this 
and I know the Ranking Member, and I think we really need to 
work as Americans on this issue to try to turn this around. 
Because it just doesn't make a lot of sense here because of 
what is at stake, our national security.
    The only other question--you are more involved now in 
intelligence. Can you tell me just a little bit--and I only 
have, like, about 30 seconds--about your cooperation and how 
you are working with the intelligence agencies? Because 
intelligence is one of the best defenses for what you are doing 
here.
    Admiral Allen. Yes, sir. Actually, we have been able to 
have higher seizure rates with fewer assets because we are 
using better intelligence.
    As you know, the Coast Guard is a member of the 
intelligence community now. We have a service cryptographic 
element. We are involved not only here in the Western 
Hemisphere in drug interdiction but in support of military 
operations in Iraq and Afghanistan, as well, sir.
    Mr. Ruppersberger. Right. I understand that. And you are 
putting in SCIFs in a lot of your operations?
    Admiral Allen. Yes, sir.
    Mr. Ruppersberger. Thank you. I have to go to another 
hearing. I am sorry. But we will be working hard, hopefully, 
with the Chairman and Ranking Member, to make sure that we 
hopefully can relook at this whole issue about where we are 
going with the Coast Guard. You do a great job, and so do all 
of your men and women that work there.
    Admiral Allen. Thank you, sir.
    Mr. Price. Thank you.
    Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman.
    First, Admiral, it has been my honor to work with you since 
I have been on this Subcommittee, and I am going to miss your 
guidance in the Coast Guard. I think you have been a great 
shining light for the Coast Guard. But I will see you in Texas, 
okay? And that will be good.
    This is just amazing, what is going on here today. I mean, 
within the last 10 days, we have had a major firefight on the 
Texas border within a hundred yards of where American citizens 
live where two State Department people were killed. And this is 
because the cartels have decided that they would all settle 
along our border and fight over who is going to run the show.
    Meanwhile, their supply is coming up from Colombia with 
those submersibles and the other things that I have seen in 
your operations when I visited your headquarters--all of which, 
in my opinion, are at risk. Our ability to interdict and stop 
that supply chain is going to be severely set back by the 
proposed cuts of the Obama administration. I am just shocked by 
this.
    If you go back to Katrina and you say, ``What good things 
came out of Katrina in the Homeland Security Department?'' 
there is only one place you can look. It is the United States 
Coast Guard. Everything else Homeland Security did failed. And 
that is pretty much the story you have heard in Homeland 
Security. The one agency that has always been above and beyond 
the call of duty and always exceeded at their mission has been 
the Coast Guard.
    Last summer, we got the opportunity to go up to see your 
operations in Alaska. And we now have ships that are sailing 
through what we used to call the Northwest Passage, cruise 
ships. And we realize the lack of resources means if one of 
those cruise ships on the other side, the northeast side I 
think it is, of Alaska were to have a horrible accident, your 
response, because of the lack of clippers available to get 
there, it is scary what could happen in the Northwest Passage 
from lack of resources from the Coast Guard.
    This is what I heard last summer. And now I am hearing we 
are cutting back a thousand personnel and a one-third reduction 
of the Coast Guard's assets. This is crazy. This is insane.
    And I am kind of going back to what the former questioner, 
Mr. Ruppersberger, said about this drug war. But part of 
stopping this fight on the Texas border is stopping the supply 
coming in. And I believe it is your statement that we are going 
to be lacking in being able to fight that war down there.
    Admiral Allen. Well, sir, I was directing it at Coast Guard 
assets and the tradeoffs we will have to make. As you know, it 
is a multi-agency, multinational effort down there. And, 
frankly, regarding the southwest border, the border I worry 
about is the southern border of Mexico.
    If we can take down multi-ton loads before they get to the 
southern border of Mexico, before they disaggregate into 
smaller loads and become almost impossible to stop at the 
border, the best place to stop that and interdict that flow is 
before it gets to Mexico. That is the reason there is such a 
concentrated effort between not only the Coast Guard, Customs 
and Border Protection and Immigration and Customs Enforcement, 
our Department of Defense counterparts and our multinational 
partners down there.
    And, again, we will allocate resources in the future on the 
basis of what is appropriated and on the basis of risk. But we 
do understand in the Coast Guard that the biggest bang for the 
buck for this country is stopping those drugs before they get 
to Mexico, sir.

                              ICE BREAKERS

    Mr. Carter. And, just shifting from far south to far north, 
up in the Alaska region, we understand that the Russian 
trawlers are more and more infringing upon what we would at 
least call American waters north of Alaska. And we have very 
limited resources to keep a ship within that area. And, under 
international law, there is a potential for claiming portions 
of the North Pole region under a theory of international law 
that says whoever has the most presence has the most claim. We 
learned some of that when we were in Alaska.
    Now, cutting out, when we are already lacking the resources 
to keep a ship consistently in that region--and the Coast Guard 
is really our only, as I understand it, our only presence that 
we have up there, and the Canadians are not helping as much as 
we are--there is a potential for a loss of some resources up 
there that could be major.
    Would you like to comment on that, the lack of these 
resources?
    Admiral Allen. Yes, sir. I would discriminate the operating 
platforms we need to effectively operate up there and what is 
actually in the budget in terms of reductions. If you are going 
to operate north of the Bering Straits, you need an ice-
strengthened vessel. And----
    Mr. Carter. And we have two old ice-cutters, right?
    Admiral Allen. We have three total ice-breakers in the 
inventory right now. The Polar Sea and the Healy are 
operational. The Polar Star, which I announced in Seattle, WA, 
last week, we are going to move into Todd Shipyard, and it will 
be reactivated. It will be available in 2013.
    Those three vessels are the only vessels the United States 
has that are capable of operating in ice-diminished or fast ice 
for the purpose of response, regardless of what the issue is, 
whether it is an oil spill or response to a cruise ship issue. 
Those are the only three vessels in the U.S. Inventory that are 
capable of doing that.
    My intent as the Commandant is not to lose the readiness of 
those three vessels while we have a discussion about how to 
replace the two oldest ones, the Polar Sea and the Polar Star. 
So my efforts have been directed at maintaining the Polar 
Star's readiness and getting it ready for service in 2013, sir. 
But they are critical to the United States presence in the 
Arctic.
    Mr. Carter. Well, Admiral, I have never figured out why we 
would punish good performance and reward poor performance, but 
somehow common sense doesn't seem to prevail sometimes in the 
government. I, for one, am opposed to these cuts and will do 
what I can in my small part to hopefully have discussions to 
keep our Coast Guard ready.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Kirk.

              CLOSURE OF GREAT LAKES SEASONAL AIRSTATIONS

    Mr. Kirk. Thank you.
    I obviously have said to the Admiral before that I would 
not be alive but for the Coast Guard. And so I speak as one of 
those few Americans that actually are here because of the 
appropriations of the committees in the past and the work of 
the Coast Guard.
    I am concerned. We currently have one HH-65C at AIRFAC 
Waukegan and one at AIRFAC Muskegon. These two AIRFACs during 
the summer have saved 23 and 27 Americans, a total of 50 so 
far, in their deployments. That includes the dramatic rescue in 
2008 of the Fin Seeker, which was seven Americans saved. You 
gave the President's Award to Lieutenant Williams, Lieutenant 
Loeb, Petty Officer Petre, and Petty Officer Bemis for their 
heroism in that rescue.
    The budget has a proposal to order the Coast Guard to 
retreat from southern Lake Michigan and move assets to Traverse 
City. That would add an additional hour's flight time to a 
rescue in southern Lake Michigan. As you know, the average 
water temperature in Lake Michigan is 50 degrees Fahrenheit. 
Your charts show that a swimmer would be alive for 28 minutes 
if the flight time was from Waukegan or Muskegon, but that 
person would have been dead for half an hour if they fly from 
Traverse City.
    Now, this Committee has approved, between fiscal year 2004 
and fiscal year 2007, $3.5 million for helo engines for these 
five HH-65Cs. If decommissioned, that would mean we will have 
wasted $17.5 million of taxpayer moneys to decommission this. I 
understand, due to a recent casualty of an H-60 coming back 
from Vancouver, that the plan for redeployment may no longer be 
feasible.
    Now, I think I will be speaking for Gwen Moore, Melissa 
Bean, Jan Schakowsky, Danny Davis, Bobby Rush, Peter Visclosky, 
Joe Donnelly, Jesse Jackson, as well as Petri, Upton, myself, 
Ryan, Sensenbrenner, Hoekstra, and Senators Feingold, Kohl, 
Durbin, Burris, Bayh, Lugar, Stabenow, and Levin, in saying 
that the plan to leave a prompt rescue capability in southern 
Lake Michigan may no longer be feasible.
    But can you comment, after this casualty, whether this plan 
can be done anymore?
    Admiral Allen. Yes, sir. It is going to become problematic.
    As you know, the original premise was to put more capable 
helicopters into Traverse City that could cover all of the Lake 
Michigan area and the other areas up there year-round. Now, one 
of the problems is, challenges we have right now, Waukegan and 
Muskegon are seasonal detachments. In the winter, when we can't 
get to the water because it is frozen and we can't use our 
small boats, having the larger helicopters at Traverse City 
does make sense in the long run.
    Now, regardless of the merits and the demerits of Traverse 
City versus Waukegan and Muskegon, the sources of those H-60 
helicopters for Traverse City were going to be two from 
Elizabeth City and two from Clearwater. One of the aircraft 
that would be scheduled to go to Traverse City was the one that 
was involved in the accident in Utah.
    That aircraft is being pulled off the mountain and brought 
into Elizabeth City. We don't know whether it is repairable or 
not. Even if it is repairable, the time it is going to take to 
get that aircraft back into service is going to make any 
execution problematic in 2011, sir.
    Mr. Kirk. Yeah.
    Thank you, Mr. Chairman. You will have a lot of very happy 
Republicans and Democrats all along southern Lake Michigan if 
we can make sure that this reemployment doesn't happen. Having 
a helicopter show up a half an hour late just to pick up the 
body doesn't make a lot of sense. And so I appreciate you and 
look forward to working with you, Mr. Chairman.
    Mr. Price. Thank you.
    We had votes called, but--oh, Mrs. Lowey is here. Mrs. 
Lowey.

                   MARITIME SAFETY AND SECURITY TEAMS

    Mrs. Lowey. Thank you, Mr. Chairman.
    And I am delighted, even though there are votes, I am 
delighted to see you again and thank you for your service prior 
to your retirement. I send best regards from my daughter to 
you, as well. And I really do appreciate the open, honest 
exchanges we have had on this Committee. So thank you again, 
and good luck to you.
    Let me just ask one question, because I am deeply concerned 
with the proposal to transfer the Maritime Safety and Security 
units currently based in New York City to Boston. These 
personnel provide both harbor and port security, assist local 
first responders during major events, respond to specific 
threats along the New York waterways.
    And your written testimony does discuss deployment of these 
teams based on risk and threat. So, given the constant threat, 
unfortunately, faced in the New York region and the presence of 
numerous waterways and water-accessible landmarks, how can you 
justify eliminating a key anti-terror unit in our most targeted 
region?
    And what is the estimated response time for a team from 
Boston to reach lower Manhattan or the Indian Point Energy 
Center on the Hudson River?
    Admiral Allen. Thank you for the question, ma'am.
    As we discussed earlier with the Committee Members, given 
the funding levels provided and the need to recapitalize the 
Coast Guard, we had to make some tough choices on force 
structure, which is the only place you can go to meet the top 
line funding levels we were provided.
    To make that happen, five Maritime Safety and Security 
Teams from around the country are being disestablished and will 
be covered regionally by other entities. So it is not a 
transfer from New York to Boston. The budget proposes that the 
function basically would just be eliminated and would be 
covered from Boston. I just want to be clear on that.
    Mrs. Lowey. And also you said ``covered by other 
entities.'' What entity would take the place in New York?
    Admiral Allen. Ma'am, when we took a look at these teams, 
we looked at the current footprint in the local area. Separate 
from the Maritime Safety and Security Team in New York, there 
are about 700 Coast Guard personnel in New York. It is our 
largest command in the country and our largest concentration of 
Coast Guard people. And so, we looked at the geography, the 
amount of Coast Guard resources that were already there and how 
to best manage risk with the reduction. We would move to a 
regional response. These are deployable specialized forces. 
These are not the assets that do search and rescue that are 
there every day working in the harbor; many times they are 
deployed some other place in the country.
    And so, what we would do, with the seven remaining teams, 
is come up with regional coverage for the rest of the country, 
and it would include the areas where the teams would be 
removed. In one case, the team being removed from New York 
would be covered. The next two closest would be either Boston 
or the Tidewater area, ma'am.
    Mrs. Lowey. So you feel the 700 Coast Guard that remain, 
they could do the job of the Maritime Safety and Security 
units?
    Admiral Allen. They basically have slightly different 
missions, ma'am. The folks that are there right now are doing 
the everyday search and rescue, aids to navigation, boarding 
the ships and everything that the Coast Guard normally does in 
a harbor.
    The Marine Safety and Security Teams can do that locally, 
but they also deploy in places like Guantanamo Bay, Cuba and 
the Middle East, in response to hurricanes, tsunamis or 
whatever. That is what they are there to do. So they don't 
always work in New York Harbor. They happen to be based there.
    So the current level of operations for search and rescue 
and other activities in New York will be undiminished, but a 
deployable unit in New York that could be available for surge 
will not be there, ma'am.
    Mrs. Lowey. So I guess--and what do I have, a minute left. 
I am still trying to understand whether the important role of 
the safety and security unit will be performed, some of the 700 
will be trained to do just that, or will New York, if, God 
forbid, there is another emergency, have to depend upon the 
Boston unit to rush down?
    Admiral Allen. I understand, ma'am. Immediate search 
capability in the harbor will be covered by the existing 700 
that will remain there, yes, ma'am.
    Mrs. Lowey. Thank you.
    Mr. Price. Thank you very much.

                             PERSONNEL CUTS

    We are rushing off to a vote. Mr. Rogers tells me he has no 
further questions, so I would like to wrap this up.
    But I do want to ask you to drill down a bit in these 
personnel cuts. And perhaps you can furnish some of this for 
the record. Because I want to know about the near-term impact, 
and I also want to know about what the plan looks like 
eventually for personnel levels and the implications of that 
for mission capabilities.
    As virtually every Member has mentioned here today, the 
Coast Guard budget proposes significant cuts in its military 
ranks in fiscal year 2011. Now, about 100 of these are because 
military positions are becoming civilian positions. I don't 
think there is much dispute over that. It follows the 
recommendations by GAO and others.
    However, the bulk of these personnel cuts are accounted for 
by asset decommissionings. It is my understanding that 850 FTEs 
or 426 positions will be lost through the decommissioning of 
four high-endurance cutters and one medium-endurance cutter. 
Now, these are not necessarily total losses because the four 
high-endurance cutters are going to be replaced with the two 
National Security Cutters that are apparently ready to go. But 
that is an area of controversy. I think there is less 
controversy over the decommissioning of the ACUSHNET, a medium-
endurance cutter.
    Now, 200 more FTEs, as Mrs. Lowey has been stressing, are 
lost from planned decommissioning of five Maritime Safety and 
Security Teams, MSSTs. Additionally, to be factored into this 
is the personnel requirements of the replacement cutters. The 
high-endurance cutters, the ones that are being decommissioned, 
require 166 crew members compared to 108 on the National 
Security Cutter, the NSC. There are some other offsetting 
factors, having to do with time away from the home port and the 
rotation of the crews and so forth.
    How does all of this net out? That is really what I am 
asking you. What kind of workforce plan have you developed for 
the recapitalized fleet, both what we will have available in 
2011 and what we will have available long term?
    And just to throw one additional element into the mix, our 
understanding in some briefings prior to these hearings, Coast 
Guard personnel indicated--and I am quoting here--that they 
could best mitigate immediate capacity gaps to a restoration of 
fiscal 2011 proposed active-duty workforce reductions. In other 
words, the implication was that, in looking at the capacity 
gaps, that the focus should not be so much on the 
decommissionings as much as on, for example, the MSST 
reductions.
    Help us sort this out, the best you can give us in the way 
of an oral response here. And then I think we will want for the 
record a more precise sorting out of these personnel 
reductions, where they come from, what their implications are, 
what kind of replacement vessels are required, what are 
anticipated, what their requirements are. But the bottom line, 
as I said initially, is on mission capabilities.
    Admiral Allen. Yes, sir.
    As far as mission impact, we will be removing 42 percent of 
our deployable specialized force capability with the 
decommissioning of the Maritime Safety and Security Teams. So 
that is a 40 percent reduction in our ability to surge and 
deploy. These are the forces that go where you need them. As I 
mentioned earlier, they are not particularly anchored to where 
they are. And that could be for a Katrina, Haiti or whatever. 
That is a 42 percent reduction.
    There will be a loss of about 5,000 ship hours in 2011 
compared to 2010. And that will have to be managed by our 
operational commanders with the remaining ship days they have 
left, and they are going to apply that to the highest risk.
    Regarding the workforce, we have two challenges. Number one 
is to actually get down to where we can support with 
appropriated funding the pay for the number of people that are 
in the 2011 budget with the workforce we already have. And that 
is a reduction, as you noted, of more than 1,000 people. We 
also have the added problem of a drop in our attrition from a 
projected 12.2 percent 2 years ago to less than 7.5 percent. So 
we have people that are staying in the Coast Guard.
    We have a challenge of how to pay for the workforce we have 
in addition to the reductions that will be coming up next year 
and how to manage the workforce to get it down to those levels. 
And that is a significant challenge, sir.
    Mr. Price. All right. We clearly need to sort this out. We 
need to know in a very straightforward way the implications for 
mission capabilities of the decommissionings--which, of course, 
some of the personnel reductions are a function of--together 
with, the new ships coming on-line and the MSST reductions, 
which, on the face of it, do appear to be quite substantial. We 
understand you are anticipating some redeployment of those 
forces----
    Admiral Allen. Yes, sir.
    Mr. Price [continuing]. There, too, which could mitigate 
some of the impact. But the bottom line for us is the mission 
capability, and we need to know that for next year. But we also 
want to know where this is heading. Perhaps you can provide all 
this for the record. Where is this heading? We know what you 
are proposing for next year. What is the picture going to look 
like 2, 3 years out, both with respect to the ships that out 
there, the personnel that are out there, and the capabilities 
that we have?
    Admiral Allen. Yes, sir.
    [The information follows:]

    The 2011-2015 Capital Investment Plan provided with the Fiscal Year 
2011 President's Budget Request shows the current funding projections 
for major surface, air, and C4ISR acquisitions over the next five 
years. The Capital Investment Plan and Deepwater Implementation Plan 
reflect service priorities to assure we achieve the capabilities 
defined for our recapitalization goals. In summary, it shows 2.8% 
growth in capital investments during FY 2011-2015.
    As new acquisitions come online, Coast Guard will continue the 
current practice of requesting follow-on funding under the Operating 
Expenses account to add new billets associated with crews and shoreside 
support for the new assets. Coast Guard will also continue to eliminate 
billets associated with legacy assets as they are decommissioned. 
Because new assets must be operational before legacy assets are 
decommissioned and because new personnel must be trained before they 
begin operation of the new asset, there will be periods of overlap 
where Coast Guard must maintain both new and legacy billets. Thus, 
until the bulk of the Deepwater program is behind us, comparisons of 
apparent increases (e.g., FY 2009) or decreases (FY 2011) in FTP levels 
to the prior year will not accurately reflect changes in Coast Guard's 
capacity or capability. The Coast Guard's performance measure results 
and future targets are the best available indicators we currently have 
to evaluate trends in capabilities.

    Mr. Price. Thanks very much.
    Mr. Rogers.
    Mr. Rogers. Thanks for your service, Admiral.
    Admiral Allen. Thank you.
    Mr. Price. Thank you very much.
    The subcommittee is adjourned.

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                                         Wednesday, March 10, 2010.

          FEMA--PREPARING FOR DISASTERS AND MINIMIZING LOSSES

                                WITNESS

W. CRAIG FUGATE, ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY

               Opening Statement of Chairman David Price

    Mr. Price. The Subcommittee will come to order.
    Good morning. Today we welcome the Administrator of the 
Federal Emergency Management Agency, FEMA, Craig Fugate, to 
discuss his Agency's role in preparing for disasters and 
minimizing losses, and how the $7.3 billion request for fiscal 
2011 will assist in that effort. The Post-Katrina Emergency 
Management Reform Act of 2006 expanded FEMA's responsibilities 
and authorities for disaster response and recovery and 
integrated preparedness functions so that FEMA was responsible 
for all emergency management functions and activities. Now, 
more than 3 years later, we want to know how far we have come 
in rebuilding FEMA.
    During my tenure as Chairman of this Subcommittee, I have 
made strengthening FEMA a top priority. All of our Subcommittee 
members, take seriously our responsibility to provide FEMA with 
the support the agency needs to fulfill its mission. As a 
representative of a disaster-prone State, I have witnessed 
firsthand that having an effective emergency management 
capacity can be a life-or-death matter, and if disaster 
planning is done right, it can make millions, possibly 
billions, of dollars' worth of difference in property losses.
    During the past few years, this Subcommittee has provided 
resources to enhance the professionalism of FEMA's disaster 
workforce and to help clarify chain-of-command issues for 
disaster response. We have pushed FEMA to find solutions to the 
housing mess in the Gulf Coast by encouraging work with the 
Department of Housing and Urban Development, and we have 
commissioned studies by the National Academy of Public 
Administration, the Government Accountability Office and the 
Inspector General on topics ranging from building robust 
regional offices to adequately addressing human capital issues.
    We expected that with stronger authorities and sufficient 
resources, FEMA would grow to be an agency that would be quick 
and well organized in its support of States and localities in 
times of disaster or emergency. We expect an agency that has 
efficient oversight over the billions of dollars of State and 
local first responder grants it is responsible for each year. 
We expect sound management of the agency's finances, logistics, 
human capital and contracting.
    Having served now for nearly a year as the FEMA 
Administrator, Mr. Fugate, we look forward to hearing your 
thoughts on where improvement has been made and how we can 
continue to work together to make FEMA a stronger and more 
capable agency.
    The fiscal year 2011 budget does not include substantial 
programmatic increases or policy changes, but proposes to 
realign resources to more accurately reflect the agency's 
workforce structure. My biggest concern with the budget is the 
request for disaster relief. With this request, it is likely, I 
fear, that the fund will be depleted 4 or 5 months into fiscal 
year 2011. That would leave us where we find ourselves right 
now, in a precarious situation in which the fund is running low 
on balances.
    I would hope the new administration would not continue the 
flawed budgeting methods of the past, ignoring the known costs 
of outstanding catastrophic events when formulating its 
request. So I trust that during our discussion today, you can 
add some insight as to whether we should believe that this 
request is adequate.
    Recent reports from the inspector general call into 
question the agency's management of disaster funds. While I 
recognize there is a difficult balance between being responsive 
to the needs of a State in the midst of a disaster and being a 
good steward of the taxpayers' dollars, these reports of 
wasteful spending do concern us, and we will need to discuss 
how we can fix this problem.
    I believe we still have some work to do when it comes to 
fully utilizing FEMA programs to ensure our communities are as 
resilient to disaster as possible. We want to explore how 
FEMA's programs are coordinated with other Federal programs to 
be certain we are fully leveraging our support to individuals 
and communities. Perhaps the best opportunity for collaboration 
exists with the Hazard Mitigation Grant Program and its 
intersection with recovery activities such as rebuilding homes 
and public infrastructure in the aftermath of a disaster. We 
all know that that interface hasn't worked always as well as it 
should, and we want to make sure that we are not wasting 
opportunities.
    During our hearings with Secretary Napolitano two weeks 
ago, I brought up concerns with the implementation of 
congressional intent, as well as the award timing, for grants 
intended to hire and retain firefighters. We are facing an 
economic crisis at the local levels of government. We want to 
make sure Congress and the administration are on the same page 
when it comes to the urgency of keeping our local firefighters 
on the job.
    We are now discussing the fiscal year 2011 budget, but, 
meanwhile, we are still awaiting award of fiscal year 2009 
grants for firefighters. The Secretary stated that measures 
have been put in place so that a lag of 18 months will not 
happen in the future. The Department has not yet identified 
what those measures are, so we hope to address the issue here 
today.
    While we want to support our local first responders, we 
also continue to seek a method to determine what we are getting 
for the billions in grant funding that we appropriate each 
year. The problem of defining and measuring preparedness for 
our first responders and State and local communities has eluded 
us since these grant programs began. The Committee provided 
funding in last year's bill to bring stakeholders together to 
examine the problem so we can finally work toward a solution. I 
am hoping to hear there is a clear way forward regarding this 
issue so that we can assure the American public that we are 
more prepared to respond to a disaster than we were 10 years 
ago, and that we are utilizing our funds in a targeted and 
prioritized manner.
    Administrator Fugate, as someone with a distinguished 
background of public service in State and local emergency 
management, I am sure you are attuned to a number of these 
concerns. As the leader of FEMA, you have been tasked with a 
great responsibility to improve the country's ability to 
prepare for, respond to, recover from, and mitigate against 
disasters and emergencies.
    I thank you, we all thank you, for taking on such a job at 
such an important time, and we look forward to your thoughts on 
what progress you have made in the last year, as well as the 
challenges that remain.
    We have a good turnout of colleagues this morning, 
indicative of interest on both sides of the aisle. I do want to 
announce that because of an important meeting at the White 
House with the President of Haiti, President Preval, and 
everyone knows that FEMA has been involved extensively in the 
emergency response efforts in Haiti, as well as the Coast 
Guard, and a number of our Homeland Security agencies. It is 
important that the Administrator be at that meeting, so we will 
adjourn this hearing at promptly 11:15.
    We will try to move things along in the meantime. We have a 
lot of interests, but I trust we can all be efficient in our 
handling of the time, and that we will have ample time here to 
explore a full range of issues.
    We will ask you to abbreviate your statement for the 
record. Your full statement will be entered, of course, but we 
are going to ask you to limit your oral remarks to 5 minutes.
    [The information follows:]

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    Mr. Price. Before you begin, I want to recognize our 
distinguished Ranking Member for his comments.

           Opening Statement of Ranking Member Harold Rogers

    Mr. Rogers. Thank you, Mr. Chairman, and welcome, Mr. 
Fugate, for what marks your first appearance before this 
Subcommittee.
    Given your extensive emergency management experience at the 
State and local level in Florida, I look forward to hearing 
your insights on how FEMA is performing and how the Agency can 
improve.
    It was a little more than 4 years ago when FEMA was 
literally on life support. In the wake of Hurricane Katrina, 
and despite laudable efforts by many FEMA employees in the 
field, the organization was considered largely broken and 
dysfunctional. But since that time, Congress has provided 
substantial direction for reform as well as robust 
appropriations in an effort to enable the Agency to fulfill its 
mission of ensuring our Nation's resiliency to attacks and 
disasters.
    However, FEMA still lacks fundamental processes and 
controls to properly account for its personnel and to 
effectively measure its efforts to improve our Nation's 
preparedness.
    Now, I understand many people within FEMA are working hard 
to overcome these glaring deficiencies, but this begs the 
question, how can FEMA truly be effective at executing its 
mission when its own house is not in order? Put another way, 
the vital role FEMA plays in our Nation's homeland security 
isn't cheap. Since 9/11, we have appropriated more than $30 
billion in first responder grants, and spent billions more on 
disaster relief.
    Considering the costs of preparedness and disaster response 
and recovery, how do we know whether FEMA is capable of 
ensuring every single dollar is accounted for, as well as 
working hard to make our Nation safer and more prepared? This 
is the fundamental question I hope to examine here today with 
you.
    FEMA must be a nimble and adaptable agency that understands 
and rapidly responds to the needs of local emergency managers 
and first responders, as opposed to a bloated, sluggish 
bureaucracy that fails to deliver when our Nation needs it 
most. After all, all response is, in fact, local, and FEMA 
primarily exists to augment and enable that local response. I 
think, being active on the State and local level, you would 
agree with that.
    This is all the more reason FEMA must be aware of the 
status of emergency management capabilities all across the 
country. From what I have read, I believe Mr. Fugate has 
relatively strong views on the roles and responsibilities 
throughout FEMA and the States in preparing for, responding to 
and recovering from disasters and attacks.
    This Subcommittee, which has earnestly set out to enhance 
FEMA's capacity, largely thanks to Chairman Price's insistence, 
needs to have unwavering confidence that each and every scarce 
dollar we appropriate is making a positive contribution to our 
Nation's resiliency.
    Like the Chairman said, Mr. Fugate, I don't envy you. You 
have a truly thankless job since we only call upon you when 
things go bad. But with your familiarity with hurricanes and 
disasters, I know you have learned to stand up in the storm, 
and we look forward to hearing from you today.
    Finally, let me also state for the record how grateful I am 
to the men and women of FEMA who came to the aid of the 
citizens of Kentucky in the wake of horrific ice storms and 
floods last year. Their efforts made a tremendous difference in 
Kentucky's response and recovery to that emergency, and I want 
to pass on my sincere appreciation to you and the men and women 
of FEMA for their great effort.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you very much.
    [The information follows:]

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    Mr. Price. Mr. Administrator, please proceed.

                       Statement of Craig Fugate

    Mr. Fugate. Thank you, Chairman Price, Ranking Member 
Rogers and distinguished members of the Subcommittee. Chairman 
Price, first thanks for allowing me to testify earlier because 
of the prior engagement. I will submit my written statement for 
the record, and I will keep my remarks short so that we can get 
to the questions you are raising.
    I take very serious my responsibility as a fiscal steward 
of dollars. I also take very serious my responsibility to 
ensure that, as a partner, that we are working as a team on 
behalf of the President and the Secretary of Homeland Security 
to support Governors and local governments when disaster 
strikes. As I like to remind people, FEMA is not the team, we 
are part of a team, and that team effort has to be built upon 
both trust, but also effective in a rapid response during 
disasters, as well as supporting recovery, and, as the Chairman 
pointed out, never to miss the opportunity to invest in 
protecting property and building back in such a way that we 
minimize future risk. It is a responsible way to manage our 
risk when we look at disasters not in just a response phase, 
but also when rebuilding or before a disaster, how we can 
mitigate that.
    Our request, as you pointed out, Mr. Chairman, is about 
$7.3 billion. Not a lot of big, major policy changes. Probably 
most substantially and of concern that has been raised is our 
effort to answer some questions regarding funding levels and 
consolidation of some grant programs. We are working from our 
budget recommendations from last year that support our process 
uses for going forward with our budgets. We also looked at the 
consolidation of grants based upon, in some cases, input from 
our users, but also my experiences as a state emergency manager 
at the state administrative agency.
    One of the things that was oftentimes a paperwork burden is 
that having to apply for each grant individually and then being 
locked into that allocation, can only be for that use, versus 
being able to prioritize across those funding streams. Now, 
what we are looking for here was not to take away from the 
intention of the grants but, again, to provide flexibility to 
the applicants as well as reducing the number of grant 
applications by being able to submit one grant for the funds in 
a package, and that was the effort there to consolidate those 
grants.
    I should point out, I am going to give one example, one of 
the challenges I faced, and then I would defer, Mr. Chairman, 
to questions. I think it would be much better in this short 
time to be able to answer questions directly.
    In my confirmation process, I was briefed on a situation 
that FEMA had found itself about $100 million over budget in 
salaries, which to me as a state administrator and a former 
state director, I ask, how do you get $100 million over what 
your budget is for salaries? That, to me, is what happened. And 
for a variety of reasons, what it turned out, quite simply, 
there was no institutional controls that came back and made 
sure that as positions were added, those salaries were 
subtracted against our salary overall, and that visibility was 
not done at a level that could have presented that.
    Fortunately, the Acting Administrator Nancy Ward and our 
Chief Financial Officer Norm Dong had started the process, 
before I ever got there, of beginning the work to: A, deal with 
that over, but also put in the institutional controls so we 
don't find ourselves spending more money than we have in 
salaries. I mean, to me, I couldn't conceive, how do you get 
there?
    So, again, as you point out, a lot of what we are doing is 
self-discipline. I found ourselves at FEMA using the Disaster 
Relief Fund to fund a lot of ongoing activities that were not 
tied to a disaster. And I said, what are we doing here? Well, 
we have been doing that; it is kind of what we have done. I 
said, we are not doing that. Disaster Relief Fund has to be 
tied to disasters. So we have been working very hard.
    We found a lot of our--what we call our CORE employees, 
which are our term employees that were supposed to be tied to 
disasters, doing day-to-day work. So we have been working with 
Committee staffs. We have been working to get these positions 
in our budget moved to our authorized funding strength. If 
these positions were actually needed to do our day-to-day 
operations, they should be funded out of our budget, our M&A, 
not out of the DRF. That caused some consternation with folks 
because we hadn't done that before.
    We also found ourselves using a lot of our disaster 
assistance employees to fill in gaps across a program that 
weren't tied to disaster. And I shut that off to varying 
degrees of success as I continue to find and unearth occasional 
people I have missed.
    But I am trying to set the tone and the discipline that we 
are to operate within the budget we are allocated, for the 
purpose it is to be used, and if we cannot, we have a duty to 
come back and clarify and express what those needs are. So as 
you point out, the process of putting in those institutional 
controls at the highest level and then holding managers 
accountable has become one of our cornerstones.
    The other direction that we had very clear in the Post-
Katrina Emergency Management Reform Act was to empower and 
strengthen our regions. But in many cases many of the decision-
making authorities that were previously in the hands of the 
regional administrators had not been delegated to them, it was 
done at headquarters.
    I asked Nancy Ward, who was acting as Regional 
Administrator and is returning to her position as Regional 
Administrator, and I asked a simple question: Nancy, what do 
you need that you are currently not authorized to do that you 
should be? And we gave her those authorities and gave it to the 
region.
    So we are very serious about this. In 10 months, as you 
point out, there are a lot of challenges. But I never lost 
sight of the focus that we have to be ready for the next 
disaster by building a team, and at the same time I am 
responsible as a fiscal steward for the U.S. taxpayer, every 
one of them.
    Mr. Price. Thank you very much.
    [The information follows:]

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                          DISASTER RELIEF FUND

    Mr. Price. I certainly want to commend you on both of those 
efforts that you have just encapsulated, the attempt to tighten 
up the management controls, and the budget dollars going where 
they were intended, and also the regional focus. I am sure we 
will want to explore these matters more fully.
    I will start with a question, probably not surprisingly, 
having to do with that Disaster Relief Fund and the kinds of 
projections contained in the budget.
    You have in the budget two requests for the Disaster Relief 
Fund, for fiscal year 2011 and then a fiscal year 2010 
supplemental.
    Mr. Fugate. Yes, sir.
    Mr. Price. That kind of anticipates what I want to ask you 
about.
    You are continuing to rely on the 5-year average cost of 
disasters, excluding large events, and that approach obviously 
has some rationale. But the problem is the Department knows 
that it is still liable for costs associated with continuing 
recovery after these disasters.
    Just yesterday we received a letter from the OMB Director 
reiterating an urgent need to replenish the disaster relief 
account for the current year. So we find ourselves in this 
position of running low on balances as a result of this lack of 
sound budgeting in past years, and we really do need to break 
that pattern.
    Prior to running low on balances, the fund was being 
depleted at a rate of about $500 million per month during this 
fiscal year. If we continue to see obligations at this rate 
into fiscal year 2011, the budget request is going to be 
sufficient only for about 4 or 5 months of funding.
    So how can you explain the rationale for this request? Why 
have you not more fully factored in the known costs associated 
with past disasters into these estimates, and have you 
considered alternative methods of budgeting for major 
disasters?
    Mr. Fugate. Mr. Chairman, my answer is going to be the one 
that I am going to defer back to further guidance to you in 
that the way that I understand we have submitted our request 
for the Disaster Relief Fund is to take the bubble of 
catastrophic disasters out and budget for what we had seen as 
the historical averages.
    My experience in Florida after Hurricane Andrew was we did 
what you are recommending. We actually put into the budget what 
we anticipated the full amount of authority we would need for 
reimbursement of federal funds. The problem with that was it 
created such a large bubble in our budget, it distorted 
everything else when people looked at the overall budget line. 
It was not seen as a separate line; it was looked at by total 
agency budget. So when you looked at our total agency budget, 
we had a disproportionate bubble that was moving through the 
system that was tied to catastrophic disasters, but not related 
to the day-to-day operations and their disasters that we would 
normally experience.
    Ultimately, we ended up with so much authority in the years 
when the disasters begin to spin down that we were carrying, in 
some cases, for an agency that probably had a routine budget of 
a couple of--maybe about $20, $30 million, I was carrying in 
excess of close to $750 to $800 million in authority.
    So what our experience in Florida was was to--if we were to 
do that, was to separate out and have our core budget based on 
our expected activities, and not show a bubble of catastrophic 
dollars moving through our budgets. My understanding here at 
the Federal level, that has been the approach of looking at how 
we submit our budget request is not looking at the bubble, but 
the sustained requirement.
    Mr. Price. Well, as a matter of fact, I would have to 
acknowledge that this Subcommittee has not always been fully 
supported by other partners in this process in terms of our 
conviction that really we ought to be budgeting more adequately 
for the major disasters as well as the routine ones, and that 
we shouldn't be systematically relying on supplementals to deal 
with this. It is also true, of course, that to fully anticipate 
these items makes for a much larger budget request, and it does 
have implications elsewhere in the budget. So as you are 
dealing with a tight budget and trying to do justice to a 
number of priorities, it is very tempting to kind of defer this 
and to assume that it be dealt with off budget or out of the 
regular process.
    But I appreciate your candor on this. I mean, we are going 
to need to deal with the numbers and also with the budgeting 
practice that lies behind them.
    Let me just quickly ask you on a related note, you are 
aware, no doubt, the Inspector General recently indicated some 
issues with how FEMA closes out disasters. This recent report, 
states that as of September of 2008, unobligated or 
unliquidated obligations for the 744 open disasters were 
approximately $16 billion; $500 million of that was for 
disasters declared prior to 1999. These go beyond a decade ago. 
So if this funding is sitting there 10 years later, and it may 
not be needed, could it be deobligated; could it be made 
available for current disaster relief opportunities, for 
example, to relieve us in our present time of need?
    I understand that your CFO may have completed an exercise 
in which they were able to identify some of these funds for 
deobligation. So, questions: How much funding in open disasters 
have you been able to identify for deobligation? Will that be 
available for the current shortfall that we are addressing? 
What permanent changes here do you think you need to put into 
place to ensure better control and policies for the disaster 
closeout process?
    Mr. Fugate. Mr. Chairman, I would like to submit the actual 
numbers in a written response so I don't give you the overall 
bad numbers, in my memory, but I believe it was several hundred 
million dollars that has already been--because we went back 
through and de-obligated, and we found a lot of open missions, 
actually some of our Federal agency partners and others, that 
we were able to--it was actually dollars that weren't spent, 
they hadn't been actually drawn down, but they were on paper 
obligated in the mission assignment. We were able to go back 
through and just do that part of the scrub and ensure that that 
agency had not expended its funds, had not needed to draw down 
those dollars, and fund those back into the Disaster Relief 
Fund.
    But it points out to one of the things that we are looking 
at as far as a closeout process. We put so much emphasis on 
getting disasters up and running, we have never focused in on 
the same desire to close them. And in many cases it is not so 
much that these funds are still going to be spent as much as we 
have not done the final scrub of how much was obligated, how 
much was authorized but not drawn down, and then revert that 
back into the DRF.
    And that is a resource issue. It is also a management issue 
to prioritize that as you have new disasters coming on and 
staff who are pulled to getting those disasters up and running, 
is to put the same effort into closing out disasters, 
particularly these older disasters where it is oftentimes a 
final accounting that is required. But until you do that, you 
still show in the books obligations, which means you cannot 
free those dollars back up to go into the DRF.
    But I will have the CFO submit for the record what we have 
actually done so far, and what we anticipate we will be able to 
do, and what our plan is to go forward in closing out the 
oldest disasters and working ourselves up to getting within, 
you know, about a 4- to 5-year process that disasters, except 
for the extremely large ones, should be fully accounted for, 
expended, and in the closeout mode unless there are some 
extenuating circumstances that go beyond that.
    But generally it doesn't do the applicant any good to have 
this hanging there. It doesn't do us any good, and it ties up 
allocations based upon those outstanding obligations that 
needed to be reconciled in an administrative closeout.
    [The information follows:]

    FEMA has de-obligated $760 million from open disasters in FY2010. 
FEMA has identified several hundred million in potential de-obligations 
for contracts and grants that could be restored to the DRF, but it will 
take some time to work through the details and ensure the funds are no 
longer needed. FEMA estimates that up to $100 million can be de-
obligated within the next 45 days that could alleviate some of the 
shortfall. The additional funding that we recover through an aggressive 
de-obligation effort might add one or more weeks of funding back into 
the DRF.
    The Chief Financial Officer (CFO) has issued a FEMA-wide Directive 
on Managing Open Obligations that requires FEMA offices to perform a 
quarterly review and annual certification and validation of all open 
obligations. Invalid obligations will be de-obligated in a timelier 
manner and funds returned to the DRF. The CFO has a dedicated team 
reviewing all unliquidated obligations (ULOs) that will expedite and 
institutionalize the process for reviewing and de-obligating open 
obligations. The CFO, and OCFO senior leadership, has incorporated the 
reduction of ULOs as a performance measure in their FY2010 performance 
plans. The Office of the CFO is also working with the HQ program 
offices and the FEMA regions to develop standard policy, processes, 
doctrine, and training for a more streamlined disaster closeout process 
throughout the agency.

    Mr. Price. Thank you. We will await that, and we hope, in 
terms of the dollar implications for our current needs, that we 
can have an indication very soon of what we may be looking at 
there.
    Mr. Rogers.

                            STAFFING ISSUES

    Mr. Rogers. Thank you.
    Mr. Director, I appreciated your opening remarks, which you 
have made on the subject that is of most importance to us, and 
that is the fiscal dealings of the Agency. I noticed that you 
did it without reference to notes, which to me tells me that 
you have this in your head, and it is on your mind, and I like 
that.
    However, the IG of the Department, in his audit and his 
report, covered a lot of topics that you have mentioned, 
summary, in your opening statement.
    But, anyway, the Budget Office said that the Agency lacked 
visibility and control over its staffing, as you have admitted. 
The Budget Office found that they did not know exactly how many 
employees they had on board, did not have formal billet 
structures per office, and were hiring employees at rates above 
what the budget could support, and that created what FEMA 
called a structural pay shortfall, which cost about $35 
million.
    And then subsequently the Subcommittee directed the IG to 
do an audit on the issue in the fiscal 2010 appropriations 
bill, and it was not a glowing report. But it did say that the 
IG found that FEMA has reconciled the discrepancy on the 50-
employee double hiring that took place. It is unclear whether 
FEMA simply reallocated those positions or looked for a cost-
saving offset.
    The IG's work on the determination of whether or not the 
$35 million would close the shortfall or not was still 
outstanding. What can you tell us about that?
    Mr. Fugate. That is probably one of the challenges. As we 
started looking at how many positions were in a non-disaster 
role, that was what we call a CORE position, to identify where 
they were, they were almost like rabbits. Every time we thought 
we got them counted, we found somebody had a few more that 
nobody knew about. And that went back to that original issue. 
Without those institutional controls, we had positions being 
filled at rates above what we could sustain, and we had 
positions that were being used that there was no way to track 
down and get to.
    We have been scrubbing and scrubbing and scrubbing. I know 
one of the frustrations for staff is we came up with our 
initial numbers. We then found more staff that were in CORE 
positions that had not been made known to us and that we had to 
add in.
    I think we are close to having this resolved, because our 
position is by the end of this Fiscal Year and going into the 
Fiscal Year 2011 request, we will not have any known, again, I 
will say, that we are aware of. We may find somebody figured 
out something we didn't see coming. But it is our goal to not 
have any positions funded out of the DRF if they are not in the 
disaster. And that our recommendation for the budget reconciles 
converting those CORES into full-time positions funded out of 
that M`A allocation for those costs so that they are funded 
appropriately, they are justified.
    But you also alluded to another issue that I found 
ourselves dealing with. We have a lot of positions and a lot of 
job descriptions, far more than I think are necessary. I think 
our job descriptions add to this in that so many are tailored 
specifically to a position versus looking more generically at 
those jobs.
    And we also have found that in many cases we have a lot of 
people at very high grades over time; that we want to go back, 
and when positions become vacated, before we automatically make 
a decision that we are going to refill at GS-14 or GS-15, we 
are scrubbing the job description to make sure that the grade 
is appropriate to the work. And when it requires it, we are 
going to downgrade those positions to more adequately reflect 
what a reimbursement should be for the work being done versus 
merely refilling positions that may have been at a rate far 
beyond what the workload would have required.
    Mr. Rogers. Good. I am glad to hear that. We are going to 
hold you to that.
    The IG--we are not through with him yet, nor are you--we 
are going to be sure that the IG can complete its audit, and 
that we have complete confidence that you have got the proper 
controls in place. So we will continue to work with the IG to 
help you achieve those goals.
    You know, it has been a feeling for a long time that due to 
the emergencies that happened, not regularly, obviously, that 
FEMA has sometimes become a place to park very expensive 
personnel, and we don't want that to happen anymore. I hear 
you, I think, saying that it has stopped.
    Mr. Fugate. Yes, sir.
    Mr. Rogers. Can you say that louder?
    Mr. Fugate. Yes, sir. It is my goal to make sure that we do 
not--we found ourselves oftentimes looking at job descriptions 
that seem to have the position and the work, and what actually 
was being done did not always match up.
    So this caused me multiple problems. A lot of the staff in 
FEMA that should have been considered for promotion weren't 
promoted because it was too great of a jump from a GS-12 to GS-
13 or GS-15. So we wanted to come back and, A, ask, well, what 
was the requirement for that position to be that high in the 
first place? Was it to meet a salary requirement, or was it to 
actually meet the workload? And to be honest with you, sir, I 
don't think that you could make a clear difference that it was 
based on workload in far too many cases that I have seen.
    So we are taking those positions, and it is our intention 
to make sure that the work justifies the position, but also, if 
it requires to downgrade those positions, to downgrade them 
before filling them, and also develop a better process to grow 
leadership within FEMA, rather than having to seek each 
opportunity to go outside of FEMA. I think there is a proper 
balance between bringing people from the outside, but also 
making sure that those people that have the skills and things 
that they take very seriously, that they have an opportunity to 
move up. And when you bring positions and try to fill them at 
such a high grade, you literally cut off your best and 
brightest from moving forward.
    Mr. Rogers. Well, to help you achieve that goal, I am going 
to be talking to the Chairman and urging that we perhaps 
withhold some of the funds until we see that that is being 
achieved.
    So in due course of time, Mr. Chairman, I may want to talk 
to you about that.
    Mr. Price. All right. Thank you, sir.
    Mrs. Lowey.

                 URBAN AREAS SECURITY INITIATIVE (UASI)

    Mrs. Lowey. Thank you, Mr. Chairman.
    I must say, Mr. Administrator, it is refreshing to find 
someone of your caliber and insight and determination, and we 
wish you good luck. It is really unfortunate that the past 
administration left you in such a difficult position, but we 
appreciate your honesty and your direct approach to straighten 
up the shop, shall we say.
    Let me ask you a few questions. I have been concerned about 
the high-risk urban area program. It was created to support 
only high-risk urban areas. Now, you actually began serving 
seven cities, but it has now ballooned to 64 potential 
recipients for fiscal year 2010. Further, the administration's 
fiscal year 2011 proposal consolidates numerous other grant 
programs into UASI, which I am concerned will further diminish 
the likelihood that only the most high-risk areas will receive 
the funding they need.
    So I have a few questions related to that. First of all, 
Administrator Fugate, Congress does not set a floor for the 
number of UASI recipients. Is it likely that FEMA will be 
awarding funding to all 64 areas that are eligible to apply?
    In previous years, I have been told that the Department's 
political leadership determined the number of UASI recipients. 
Who decided to increase the number of fiscal year 2010 UASI 
recipients to 64, and what assurances can you give us, who 
represent high-risk areas, that UASI was created to serve, such 
as New York, that they will not be shortchanged by 
consolidating other grants into this program?
    So if you can explain your approach, what we can expect, 
where do we go from here. Thank you, again, for your 
straightforward responses.
    Mr. Fugate. Well, the first one I will answer is the 
commitment to the high risk. The list of cities is actually 
broken into two groups: Tier I, which are the highest, and Tier 
II, which are considered secondary or lesser threat, but, 
because of the population and vulnerabilities of that, would 
warrant additional financial assistance through the Urban Area 
Security Initiative Program.
    As I understand it, particularly with the city of New York, 
they have, since the inception of the program, been the highest 
recipient and received the most funds. And as a primary target 
for certain terrorist organizations, that warrants. However, I 
would caution, we have a tendency in this country to always 
prepare for the last event, the last attack, and assume that 
all future attacks will follow the same future pattern. That 
would be true if our adversaries don't change. But the reality 
is, as we have seen, terrorism may come from offshore. It may 
come from home. It may be based on ideologies. It may not be 
based on a particular political bent as much as a disagreement 
or an action that an individual or a small group may take 
against some part of our communities.
    So our goal is to look at how we base our funding to 
support against the known adversaries, against those threats, 
but also recognize that our enemies are adaptive, they seek out 
our vulnerabilities. And if we make one area of the country 
protected and leave other parts totally vulnerable, there is no 
reason to suspect they wouldn't change their tactics and take 
advantage of that.
    So we look and take very seriously the process. And, yes, 
it is a true statement that the political leadership makes 
these decisions, because we are the ones that the Senate 
confirmed. We are the ones that the President has appointed. It 
is our duty to do our best to reconcile the needs of an 
adversary that is never going to stay the same against our 
funding ability and trying to manage our risk against those 
threats that we have had experience with, those threats that 
are emerging, and those threats that we have not yet 
anticipated, but, again, concerns being when we have large 
population centers, that vulnerability cannot be understated. 
And, again, we have prioritized the funding in the Tier I based 
on the historical threat we are in in this current environment, 
but recognizing that our adversaries aren't all the same, and 
the threats don't stay static.
    Mrs. Lowey. I understand, and thank you for your thoughtful 
response, except I wonder what confidence can you give us that 
the high-risk areas won't be short-changed? I am not saying 
there shouldn't be other funding of the programs for any 
potential--I don't want to say operation--threat, but I want to 
feel confident that in high-threat areas, areas that remain 
high-threat, that they won't be short-changed in this program.
    I certainly welcome other areas getting all the assistance 
they need, but perhaps it shouldn't be in the UASI program.
    Mr. Fugate. Well, the tools we are giving in the budgets we 
work with, we are, again, supporting those high-risk areas at 
levels that we have recommended previously. And some of the 
consolidation, again, it was similar to the State Homeland 
Security grant consolidation to give the locals more 
flexibility within those funding streams.
    Mrs. Lowey. Thank you. I think my time is up.
    Mr. Price. Thank you.
    Mr. Carter.

                        INTEROPERABILITY GRANTS

    Mr. Carter. Thank you, Mr. Chairman.
    More than $43 billion in Federal grant money spent in 2004 
and 2008 to improve interoperability among first responders 
nationwide. This is more than any other DHS initiative. FEMA 
states that in 2009, they distributed 56 interoperability 
emergency grants for a total of $48.5 million.
    Are these grants still focused on purchasing equipment, or 
is there added focus on the planning and organization aspect? 
Equipment alone cannot provide interoperability. I am most 
especially interested because my district, as Williamson County 
and all the surrounding counties directly north, lost to the 
Tier II city.
    Mr. Fugate. Sir, interoperability means if all the radios 
are talking, but nobody is talking together, then we haven't 
solved the problem. You are absolutely right. A lot of the 
emphasis has to be on building who talks to whom, and how they 
need to communicate, and what they need to communicate before 
you apply a technology solution.
    So a good percentage of these funds have been going for 
planning, exercising and training, and then providing limited 
capitalization. Ultimately the goal is before we go off and 
invest large sums of dollars in interoperable solutions, we 
have to have the planning done, the coordination done, and 
including the governance, because most of these solutions are 
not done within a specific jurisdiction. They are oftentimes 
regional or statewide. And we have found, and my experience has 
always been, it is best governed when it is not directed from 
the top down, but the locals build their governance, how they 
are going to operate, and then apply the technology solutions.
    So there has been considerable investment in this, but a 
lot of these programs are focused on developing and working 
with the plans. In fact, within DHS, we serve as the 
secretariat for a lot of the emergency communication within our 
10 regions as they work with the states as they develop their 
regional communication plans.
    Mr. Carter. Planning and organization are critical and 
crucial, and there are those who will take the bull by the 
horns and try to work with others to put together plans and 
solutions and organizations, and there are others who need to 
be taken by the hand and dragged across the line. And it sounds 
like you are moving in that direction, and I think that is very 
critical, because the first excuse you hear if something goes 
wrong, we couldn't talk to each other. So I thank you for that, 
and I thank you for being on top of that problem.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Ms. Roybal-Allard.

                              PREPAREDNESS

    Ms. Roybal-Allard. Thank you, Mr. Chairman.
    In your prepared statement, you mention under the 
``Enhancing the Preparedness of Our Nation,'' you say that we 
must start with our citizens, and that it is critical to 
response and recovery success. Yet, according to the Norman 
Lear Center at USC, a magnitude 7.8 seismic event in downtown 
Los Angeles could claim close to 2,000 lives and inflict more 
than $200 billion in damages.
    And although California is nationally best prepared for a 
disaster, a recent study published by the University of 
Southern California found that rates of preparedness have been 
stagnant over the past decade. Only 30 to 40 percent of 
California families have adequate disaster supplies, and most 
are unfamiliar with basic earthquake safety procedures. This 
lack of knowledge is especially acute in minority and low-
income communities.
    Could you please tell the Subcommittee how FEMA is working 
with State and local authorities in California and other 
vulnerable States to educate the public about disaster 
preparedness in general, earthquake preparedness in particular? 
And also as part of that question, if you could also talk about 
how FEMA is doing outreach to--of minority communities and 
those that have limited English proficiency, because as studies 
have shown, and as Hurricane Katrina and Rita and California 
wildfires have demonstrated, there are significant challenges 
faced by Latinos and other groups with limited proficiency 
during a disaster.
    Mr. Fugate. That is a lot of ground to cover.
    The short answer is in emergency management historically we 
have talked about the public being prepared, but then we don't 
really follow up on what does that mean. If you read most 
documents, and you look at the way we look at the public in 
general, we look at the public as a liability. We look at 
them--I don't say that in a negative way, I just say we plan 
for having to take care of everybody. Instead of recognizing 
that in the disaster you have described--quite honestly, I 
don't really care how much money you are authorizing me, it 
couldn't get there fast enough.
    And the other part of the problem is if we have a system 
that is based on a government-centric approach of trying to 
meet all those needs, the most vulnerable citizens won't get 
served. And so we are trying to change this dialogue when we 
talk about preparedness. It is not just something that is a 
good thing to do, it is absolutely necessary.
    My experience, when I went down to Haiti about a week after 
the earthquake, the Haitians were taking care of themselves, 
because it was that difficult getting outside aid in. And time 
and time again we underestimate what people will do and can do. 
And we often take what I must call almost a parental approach 
to engaging the public.
    I think we have to change that and stop looking at the 
public as a liability, but as a resource, because as you point 
out, we have a tendency, in emergency management, and I will 
say this is true probably in a lot of other areas of the 
government, to plan for what is easy to implement versus what 
the needs are in a disaster. And what I have found time and 
time again is if we don't factor in that the children and the 
infants, the elderly and the frail, the people with 
disabilities and language barriers are not what we plan for up 
front, it fails.
    And so both changing that culture within FEMA, but within 
the emergency management community, but also recognizing that 
we have a tremendous ability, if we can figure out how to 
effectively harness tools such as social media, we have seen 
time and time again that the public actually solves the problem 
faster than the government response.
    But our tendency has been it is not official, it is not 
something we can control, and it is not something we are 
directing, and there is a fear of the public engagement. But 
the reality is--in this type of situation--we need neighbor 
helping neighbor. We need them telling us what is going on 
rather than us waiting for official reports.
    And we need more outreach as we already started working 
with various coalitions and constituency groups ahead of a 
disaster to establish dialog of how to get information out, 
preparedness information, and identify the unique needs that 
various communities have. But it is a mindset and a culture.
    You know, I am finding myself doing a lot of cultures, like 
being fiscally accountable, you know, and holding ourselves to 
that, but also changing this idea that government itself is 
going to solve all these problems. Well, the reality on a day-
to-day basis, the private sector does a lot of things that we 
would depend on them to get back up and running.
    So we are working, particularly in earthquakes, the lessons 
of Haiti to apply into our catastrophic planning, looking at 
the Chilean response and factoring that in, and continuing to 
work with our partners at the state and local level as we 
prepare for other types of no-notice events of that magnitude.
    But the underlying issue has been we have got to get away 
from what I call our government-centric approach to solving 
this problem and work to engage the public as a resource, 
because if we don't, the most vulnerable citizens will not get 
the help they need because everybody else is competing when 
they could have been part of the solution.
    Ms. Roybal-Allard. Let me also suggest that you consider 
working with Members of Congress. We all do all kinds of 
workshops and outreach to our constituents and could also help 
you in terms of meeting those needs.
    Mr. Price. Thank you.
    Mr. Calvert.

                        URBAN SEARCH AND RESCUE

    Mr. Calvert. Thank you, Mr. Chairman.
    I understand you are going over to the White House later 
today and to thank some of the people that responded at the 
Haiti disaster. Part of that, of course, is the urban search 
and rescue teams, and we have a number of them in California, 
certainly around the United States. They are necessary, 
obviously, for domestic events, but obviously helpful in 
disasters such as Haiti.
    Under the budget request, there is a significant cut in 
what is proposed. As you know, these task forces claim that the 
actual cost to these teams are about 1.8 to 2.2 million per 
team, and we are contributing approximately $1 million per team 
to these teams.
    I also understand that when this program was first 
conceived, that it was supposed to be a minimal impact to these 
local agencies, and, obviously, that is not the case. And, as 
you know, many of these communities are strapped anyway, and 
they have to maintain an inventory, vehicles, keep that up to 
date, maintain the rest.
    I am also concerned because I understand that, talking to a 
number of these groups throughout the country, that the bottom 
line is that there is really not a lot of local benefit 
relative to the cost. But 50/50 split may sound good in the 
context of most Federal mandates, but in this case the locals 
aren't receiving a 50 percent benefit. At least that is what 
they claim.
    What do you feel about that? Is there any movement as far 
as what we can do to help these search and rescue teams 
throughout the United States?
    Mr. Fugate. Well, the request we placed into this year's 
budget is a request based on last year's request.
    As far as the shared responsibility, we are meeting 
actively with the chiefs of the urban search and rescue teams. 
As you point out, it was originally conceived that these teams 
are not standing full-time federal teams only authorized for 
federal response, and there is no prohibition against that 
equipment or personnel being utilized on a day-to-day basis.
    And so my understanding is the program as originally 
created was a shared responsibility, the benefit of the team 
for that community versus the funding that the Federal 
Government provided to go outside of their community during 
disasters.
    During a disaster response, FEMA picks up the majority of 
what we have identified and what the teams have identified 
costs, including such costs as backfilling their positions 
while they are deployed.
    But I guess this is the fundamental question you are 
raising is what is the equitable split for a joint funding of a 
resource that is not on a day-to-day basis federalized except 
during disasters? And we are in discussions with the chiefs of 
the USR teams. We are actually having an after-action with 
those chiefs here in the next week talking about the Haiti 
response and lessons learned.
    But, again, the program was established upon a shared 
funding, shared responsibility, as these teams were not a 
federal standing team, but rather a local team that we provide 
funding to that had the capability to deploy out of their 
community.
    Mr. Calvert. Well, you know, we are in the process of 
working toward this markup on this bill here soon, and we are 
hearing from a number of these teams saying that they may not 
be able to sustain--some of them talking about shutting down 
their operation based upon their budget costs that they are 
incurring back in some States, especially in California.
    So if you can get back to us while we are going through 
this process of marking up this bill, that would be helpful, 
because I know the city of Los Angeles, San Francisco, others, 
Orange County, all these teams are under tremendous stress 
right now, and they want us to get back to them as soon as 
possible.
    [The information follows:]

    FEMA staff provided a briefing on the FEMA National Urban Search 
and Rescue (US&R) Program to Congressman Calvert and his staff on 
February 24, 2010. Among the issues discussed in the briefing was the 
funding of the US&R Program during disasters and day-to-day operations. 
A Haiti After Action Conference focused on US&R occurred on March 23-
24, 2010. An After Action Conference Report will be completed and can 
be provided to Congressman Calvert.

                              NEPA PROCESS

    One other quick question regarding the NEPA process and 
these grant programs to the ports. As you know, in a State like 
California, we have the CEQA process, which is even more 
intense than the NEPA process, and these grants are being held 
up. You know, we have one of the largest port facilities, the 
largest port facility in the country in the Port of L.A.-Long 
Beach, and it seems, in my opinion, nonsensical that the 
Federal Government does not allow a State's environmental 
requirements supersede the NEPA requirements and allow the FEMA 
grants to move forward. It is just holding up the entire 
program, I understand months, if not years, in some of these 
programs.
    Would you like to comment on that?
    Mr. Fugate. I follow the law that Congress passed, which 
says I must do NEPA reviews on those types of projects, and I 
have no relief if the state has a higher standard. That is the 
law that I have to follow in those regards.
    Mr. Calvert. Would you be willing to address or review that 
process and make recommendations to the Congress to see if we 
can't streamline that process?
    Mr. Fugate. I would be willing to work with the Committee. 
I think it is important that we--as long as we can achieve the 
original intent that Congress laid out in the NEPA process 
through alternative means that are less burdensome, but achieve 
the same outcome, we would be willing to provide technical 
advice and expertise based on our experiences.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Calvert. Thank you.
    Mr. Price. Thank you.
    Mr. Farr.
    Mr. Farr. Thank you, Mr. Chairman.
    Congratulations on your appointment, and welcome. I think 
of you as the chief first responder in the Nation, and you are 
talking to a Congress of which all 435 Members think of 
themselves as first responders because we get calls on every 
human concern in American society in our offices, and so we 
have to respond to those, and we go home every week.
    My concern, and I think I share some of the concerns Mr. 
Rogers pointed out, is the first responders are always at the 
local level, and I hope you never forget where you came from, 
because you have moved from a State, and a big State with a 
$745 million budget and overseeing 67 counties and local 
governments, to a $7 billion budget. And, frankly, I think that 
if we really did our jobs, FEMA would work itself out of a 
position. So I hope you kind of think of how can we transfer 
all of this sort of money in Washington to essentially the 
communities' ability to want to prevent disasters with 
mitigation, and, two, to respond? Because the first responder 
is, indeed, that. And, you know, in order to get FEMA involved, 
you have got to go through the declaration process. I don't 
want to wait around and try to figure out when my home is 
destroyed or something happens in my community whether it is 
going to meet a threshold that it will get a State or national 
disaster declaration. I want somebody there to help alleviate 
the situation immediately.
    And I am kind of interested in your discussion. I think 
what FEMA ought to be doing and where it failed in Katrina is 
the responsibility to have a check-off system, to see if, in 
fact, your plans and your local response is doable; whether you 
have the capable staff to do it, the equipment to do it; and 
whether you have the capacity, whether the financial capacity 
is there to respond.
    That is where I think your professional at the--you, FEMA, 
at the Federal level is to check off to see whether these local 
plans and all the best wishes of governments. I wonder how you 
did that in Florida with the 67 counties and how--whether you 
got involved--see, I don't think you ought to give money to 
premitigation unless people will do zoning changes and 
retrofits and building codes.
    I mean, California, not because of FEMA, we responded with 
a very conservative Governor. Governor Deukmejian, after the 
Loma Prieta earthquake, went out and raised the sales taxes, a 
Governor who said he would never vote to raise taxes under any 
condition. Disaster came. He said, this is the exception to the 
rule.
    He raised the sales taxes, most of them being paid for in 
southern California--the earthquake was in northern 
California--for a number of years to retrofit everything, every 
structure in California for earthquake preparedness. So all of 
our bridges and highways and everything got--overpasses all got 
retrofitted paid for by local money. You ought to be checking 
off to see if the States are doing that, and they ought to be 
not getting the money without having integrated it.

                         PREDISASTER MITIGATION

    So my question goes to why are we doing, out of a $7 
billion budget, only keeping the program funding for 
predisaster mitigation at $100 million and leaving it flat? It 
seems to me that is where the action is, and that is where the 
money ought to be spent, and your background ought to know how 
to do that very well.
    Mr. Fugate. Two ways you could approach that: Are we 
actually using the grants to do mitigation, or are they ending 
up not being awarded competitively; and, two, oftentimes the 
level of work that would need to be done could never be 
addressed by any sustained funding that I think Congress would 
be in a position to provide. The real effect of those 
predisaster dollars----
    Mr. Farr. Part of that is to make sure that the local 
governments, I mean, whether the county, city or State, has put 
the resources into doing it. I mean, they are coming back here 
and relying on the Federal Government to do what is a local 
responsibility for that first responder capability.
    Mr. Fugate. And this goes back to, I think, is why--and 
having to answer this hard question: Why is it a good 
investment for the U.S. taxpayer for $100 million of 
mitigation, which, quite honestly, is not going to 
significantly change a large-scale disaster impact? It is seed 
money, and it provides planning.
    Mr. Farr. But why keep it flat when it is so essential to 
do the upgrading and the preparedness?
    Mr. Fugate. Again, we had to look at our overall budget and 
make decisions about what we would be able to continue and 
where we would have to hold funding. And our experience tells 
us that the real benefit from that mitigation program is the 
planning and efforts it takes to continue to provide seed 
money.
    Before this program and the wisdom of Congress to even 
begin to address this, we provided no funding before disasters. 
We always did it after the horse got out of the barn. We only 
did mitigation after a disaster struck. So this is really a 
tool for us, I would say, is sort of like some sand to try to 
make a pearl. It is a catalyst to get State and local 
governments who would not otherwise have the wisdom or the 
disaster to think about mitigation to at least begin that 
process.
    You also point out one other important part of this, that I 
don't have current tools, and I am not sure I would be the 
appropriate entity to have tools. But we do know the best 
mitigation is often effective in enforced zoning, building 
codes that are built and enforced to the hazards, but these are 
primary inherent State responsibilities. Our role at the 
Federal level oftentimes is encouragement, not necessarily 
directing that as a separation of----
    Mr. Farr. But in your commenting on disaster planning, can 
you make that comment that your zoning and your building codes 
are not adequate?
    Mr. Fugate. I have actually gone back and pointed out that 
one of our challenges with 50 States, the territories and the 
District is the most effective way to mitigate that we have 
seen in your experience in California, our experience in 
Florida is to have building codes that reflect the hazards we 
face and build our homes and build our schools and build our 
communities stronger and better.
    But there is, you point out, tremendous cost to that and 
oftentimes a resistance to do that, because I hear this a lot: 
Well, if we do that, homes won't be affordable. I have also 
seen the other half where people lost their homes----
    Mr. Farr. Won't be insurable either.
    Mr. Fugate. That is exactly right. I have seen far too many 
people who lost their homes because we didn't spend the extra 
money to protect them. The insurance did not cover their 
losses. They were upside down on their mortgages, and they 
walked away homeless.
    Mr. Farr. I hope that you can comment to the States, as we 
try to assist them in checking off their plans, is that they 
need to do some work and give them examples of other 
communities that have done it. Because I think we fail to do 
that premitigation, we are going to be the Haiti rather than 
the Chile.
    Mr. Price. Thank you.
    Mr. Rothman.

                             FLOOD MAPPING

    Mr. Rothman. Thank you, Mr. Chairman.
    Mr. Administrator, great pleasure meeting you, and thank 
you for your service at the State level and here at the 
national level. You have had quite a career, and we hope that 
this will be the crown jewel of your accomplishments, and we 
wish you well.
    Two questions. First one is about flood risk mapping 
contracts. I am told that for the last 5 years, FEMA has been 
working on developing updated flood insurance rate maps which 
try to assess the risk both in places that flood often and in 
places that could flood disastrously.
    FEMA has recently decided, so I am told, to revise their 
contract process for firms doing survey work on the Agency's 
watershed studies related to digital flood insurance rate maps, 
transferring the contracts from local firms in the area 
affected by flooding to larger national firms.
    If this is so, my first question is why did FEMA decide to 
stop contracting local firms to do watershed surveys for 
digital flood insurance rate maps when, so I am told, in a 
straight-up competition, the national firms were beaten out by 
the local firms in terms of price and qualifications?
    Mr. Fugate. I would like to provide a detailed written 
report on this. I will give a summation as I understand it.
    As I was briefed on this issue I encountered early in my 
tenure was that we had requirements that our staff believed 
that we were required to follow certain contracting 
requirements when it came to professional and technical 
services, that that process was done under our contracting and 
under federal contracting rules to secure those services, and 
part of that was a process by which we broke the contracts into 
regional contracts, and we allowed consortiums of contracts to 
come in.
    Mr. Rothman. Sir, if I may, I know my time is brief. If the 
lawyers were to tell you that under the laws that govern FEMA, 
it would be permissible to deviate from that model and go to a 
circumstance where local firms who were just as qualified or 
better qualified, who could provide the services for less 
money, were available. If your lawyers told you that your model 
could be changed so that these local small business people 
could get these contracts instead of the national firms who 
charge more, would you be willing to consider that, sir?
    Mr. Fugate. I am a big fan of buy local, hire local. So in 
response to that, as long as the quality of the product met the 
requirements, was cost-effective, I have no preference on how 
we go about, you know, the contracting as much as you point out 
getting a product that meets the requirements that is cost-
effective.
    Mr. Rothman. Right. But what I heard from you, sir, is that 
your understanding is that the lawyers basically said you were 
locked into this regional approach.
    If you were to learn from the lawyers or anyone else you 
respected more, or other lawyers who you respected more, that 
you were able to do it differently, get the quality you needed 
at a lesser price and buy local, would you do that?
    Mr. Fugate. Without having that information, and attorneys 
can agree to disagree, so I would, you know, be very interested 
in what my counsel says, and as long as--I mean, to me, I do 
not have a preconceived opposition to contracting with local 
firms.
    Mr. Rothman. No, I understand that. But if you were given 
both choices and that scenario, wouldn't you choose the local 
firm if you were allowed to by law?
    Mr. Fugate. If we got the same quality of work that was 
cost-effective within the contract provisions, I would not 
oppose it. I prefer to hire local, buy local whenever possible 
in our programs.
    Mr. Rothman. Great. Glad to hear that, sir. I look forward 
to your written response to flesh that out.
    [The information follows:]

    RESPONSE: The original series of contracts awarded to support the 
Map Mod Program consisted of one very large Headquarters level contract 
and many much smaller contracts in each FEMA Region. There were between 
two and six Regional contracts in each Region, depending on the level 
of need.
    FEMA realized that having 25-30 Regional contractors reduced the 
Regional and Headquarters staff's ability to adequately manage this 
large number of contractors and reduced FEMA's ability to provide 
consistent oversight. In anticipation of the expiration of the single 
Headquarters level contract on September 30, 2009, the decision was 
made to reduce the number of contractors involved in the day to day 
watershed surveys. This decision resulted in the award of three follow-
on contracts in March 2009 to provide watershed surveys. Additionally, 
two additional contracts were awarded for program Management and 
Customer/Data Services. By separating the large contract into three 
distinct service categories, it allowed FEMA to not only increase 
management's ability to monitor performance, but also substantially 
increase the amount of funding directly awarded to small business.
    All of these contracts fall under FAR Part 36.6, which deals with 
the acquisition of Architect/Engineer services. This portion of the FAR 
requires the selection of the most highly qualified firms to perform 
the work. In selecting the most highly qualified firms, the entire 
team's qualifications, including all partners, subcontractors, 
consultants, etc., are considered. The consideration is not limited to 
just the firm responding to the pre-solicitation. The requirement to 
evaluate the entire team's qualifications negates the assertion that a 
local contractor was able to beat out the national firms on the basis 
of the local firm's individual qualifications.
    The engineering community that supports the previous contracts and 
the current Risk MAP contracts consist of approximately 12 large 
national level engineering firms and many smaller firms throughout the 
nation. The firms that held the previous Regional contracts consisted 
of various teams which in almost all cases included one or more of the 
large national firms as either the prime contractor or a substantial 
subcontractor. These partnership/subcontracting arrangements were 
formed to bolster the firm's chances of being selected as one of the 
most highly qualified firms.
    Pricing is not considered in the initial phase in determining the 
most highly qualified companies. Price negotiations occur after 
selection as most highly qualified firm. In fact, FAR 36.6 and the 
Brooks Act effectively prohibit the use of price comparison between 
firms as a selection criterion.

                      OVERSEAS DEPLOYMENT OF TEAMS

    Mr. Rothman. Finally, there was a recent article in a major 
newspaper that talked of the heroic work of FEMA in Haiti, and 
we all applaud your work and the work of those who work under 
you at FEMA in sending what the article described as, let's 
see, a number of teams from FEMA to Haiti. It was 6 American 
teams, according to the article, out of a total of 43 
international teams, rescue teams, 6 out of 43, but our 
American teams, according to the article, were responsible for 
a third of the lives saved.
    This article goes on to encourage FEMA to increase the 
number of the 28 overseas teams that we can deploy, saying that 
28 is not enough. Lots of budget constraints. Just wondering 
what your response is to that kind of a request for additional, 
more than 28 teams.
    Mr. Fugate. Well, the first part of this is that FEMA was 
doing--was providing support to USAID, who was the lead, so we 
were responsible to USAID, who was part of the international 
response.
    As far as the teams that went, there are two teams that are 
currently what we call dual-hatted. FEMA provides funding for 
the domestic response; USAID provides funding for the 
international response. Because of the proximity of Haiti, we 
actually deployed four more teams who were not pre-trained for 
international response, meaning they didn't have their 
passports and a lot of this stuff.
    We were able to get those teams into Haiti, the Department 
of State worked with us to get those teams into Haiti, but we 
felt that there may be some opportunity to look at increasing 
the number of teams that are qualified for international 
response, and we are working with Administrator Shah now at 
USAID on what he would see that need to be.
    As far as increasing numbers of teams based upon that 
response to Haiti, we are still based upon our funding levels 
now, the level of participation now, and looking at the after-
action reports of Haiti.
    There is oftentimes a question of how many more teams--and 
again, we should not forget that many of the funds that we 
provide in the Urban Area Security Initiative, in the State 
Homeland Security programs have also developed and built robust 
search and rescue urban teams that are not federally sponsored 
for deployment, but are part of our statewide and nationwide 
response. My response in Florida----
    Mr. Rothman. And can they be called upon for a nearby 
international disaster?
    Mr. Fugate. Well, again, we are able to provide mutual aid 
within state. We, again, at the request of USAID, are working 
with Administrator Shah to see how and what additional 
resources within the teams we have we could provide.
    Mr. Rothman. Thank you, and well done, sir.

                        POSTDISASTER MITIGATION

    Mr. Price. Thank you. And let me echo that on behalf of all 
of us. As we said at the beginning of the hearing, we really 
are appreciative that you and your Agency reached out in the 
way that you did, and we know you saved lives and made a huge 
difference.
    Let me use the occasion also to remind Members that we are 
looking at a hard deadline of 11:15 to conclude this morning 
precisely because the Administrator has to meet with President 
Preval at the White House.
    Let me follow up on Mr. Farr's line of questioning very 
briefly, because I want to get into the firefighter grant 
administration as well, but let's turn very briefly to the 
postdisaster mitigation. I think we are all well aware of the 
arguments for predisaster as opposed to postdisaster 
mitigation. On the other hand, the experience in our State and, 
I am sure, many other places is that postdisaster mitigation 
does often find a more receptive audience, because after a 
disaster has hit, and you are looking at the recovery effort 
and rebuilding, there is often a recognition of the need to 
build to better standards and to prevent such disasters in the 
future.
    So in North Carolina and lots of places around the country, 
we have made very, very good use of postdisaster mitigation 
support. It didn't work that well in New Orleans, although it 
does appear belatedly to be kicking in in New Orleans in a more 
positive way. I was back in New Orleans in January, and we saw 
many encouraging signs after years that some especially housing 
efforts were coming together, better coordination with FEMA and 
so forth, and postdisaster mitigation is kicking in as well, 
but pretty late, really, to have much effect on a lot of the 
rebuilding.
    Funding took a long time to become available. It wasn't 
well coordinated, I expect you would agree, with other recovery 
activities. For example, many people have now already rebuilt 
their homes with the Road Home Program. Now they are learning 
that postdisaster hazard mitigation money is available to them 
to elevate those homes so they would be less prone to flooding. 
In some cases they are getting these grants and now going back 
in and altering their earlier construction, but it clearly 
would have been so much better if there had been a coordinated 
approach at first that had made a blending of funds available 
and would have resulted in building homes to better standards. 
Retroactively a lot of people have very little interest in the 
grant, although some are drawing on the grants.
    So, what are your thoughts on that? How can we encourage 
better coordination among Federal recovery programs, and in 
particular, is there a way to learn from the New Orleans 
experience and get these postdisaster mitigation grants 
available earlier in the recovery process and integrated more 
effectively with other resources that are available to 
individuals, business owners and so forth?
    Mr. Fugate. Mr. Chairman, I think you hit the first thing 
that was, to me, the most obvious stumbling block: You couldn't 
even get the public assistance program up and going and getting 
projects obligated. Generally in the lifecycle of disaster, 
local and state governments are focused mainly on those things 
that were destroyed, damaged or they are having to rebuild. And 
then they move into the mitigation phase as they start getting 
lock-ins from their allocations, which are generally about nine 
months to a year into that you finally get your final lock-in, 
and you know what you have to move forward.
    When you take up to five years to get your public 
assistance program going and projects, it is hard for local 
governments to really think about mitigation and the state to 
really think about mitigation. And so you get this natural wave 
of public assistance as a high priority, but as you get to a 
stabilization, now you start doing your mitigation. This time 
the gap was too far; we missed opportunities.
    The other thing that I have observed, both in my state and 
in this response, is we miss opportunities when we are 
rebuilding damaged structures. You have given us two very 
powerful tools in mitigation, section 406, which applies to 
those structures that are damaged during a disaster, that we 
can build them back; not just back to what was replacing them, 
but actually provide additional funds to build them stronger 
against the next hazard. And those funds have to be written 
into those projects as we are going through.
    We have the bad tendency, sir, to sometimes do what I call 
what is easy versus what is right. And when you are writing 
literally hundreds, if not thousands of project worksheets, 
sometimes people are more interested in production and not 
always taking the opportunity to come back and say, are we 
capturing every possibility to build this back in a way that 
reduces this impact from future disasters?
    And then the programs you are talking about in post-
disaster mitigation, section 404, which is a percentage of the 
overall disaster which the state can now administer through 
grant programs to do such things as helping elevate homes, or 
leveraging with Community Block Development Grant dollars to 
mitigate things that may not have been damaged or destroyed, 
but are vulnerable in that state.
    You gave us a very powerful tool in the Disaster Mitigation 
Act of 2000 to encourage states to develop statewide and then 
local hazard mitigation plans, and if they develop an enhanced 
mitigation plan, provide a higher percentage of funds post-
disaster.
    Something that we have to constantly reinforce is that if 
you wait for a disaster to think about what you need to do to 
mitigate against that threat, you are oftentimes going to miss 
opportunities. If you took the time ahead of time to think 
about it and at least have that plan, you would have an idea of 
the threats you face and the projects you would like to do. And 
that is why I think the predisaster mitigation plan is so 
important, because PDM gives states that don't have any active 
disasters a chance to at least go through some of the process 
of applying for grants and looking at mitigation.
    But if we don't build it back better, we don't mitigate 
against the hazards, and we oftentimes in these very large 
disasters stay so focused on just getting things done, we are, 
unfortunately, at risk to repeat that the second time and miss 
opportunities when you could have gotten projects done early in 
the process that the communities would have embraced and would 
have really changed the future.

                           FIREFIGHTER GRANTS

    Mr. Price. I couldn't agree more, and I am encouraged to 
hear that with your leadership we are going to be building this 
kind of thinking and planning into our response to major 
disasters from the very first, so that it is not an 
afterthought, but that it is a resource that we are fully 
utilizing.
    Let me move on quickly because we have other questions. But 
I do want to underscore the concern this Subcommittee has had 
with the economic downturn, the recession that our communities 
have faced. Our main vehicle has been through the Recovery Act 
and also through our regular appropriations bill for the 
current year, where, as you know, we made a shift, a temporary 
shift, but a significant shift, in our firefighter grant 
program toward personnel. And we included waiver authority with 
respect to cost sharing and matching provisions. We also gave 
you additional flexibility with respect to the continuation of 
effort requirements, saying that these funds could be used not 
just for new hires, but for preventing layoffs and for rehiring 
people who had been laid off.
    In other words, we are addressing the situation that many, 
many local communities are facing and trying to make certain 
that whatever strains development in their budget do not result 
in reduced public protection. That is the bottom line, and 
congressional intent, I think, is fully--is clear in this 
respect. And we want to make sure that we are on the same page 
in terms of realizing this intent.
    In particular, I am concerned, as I said in the opening 
statement, about the time lag in getting these funds out, and 
we also wonder whether we are really applying these funds, as 
fully as they might be to prevent layoffs, to retain 
firefighters in place.
    I understand the COPS program, which is operating under 
similar, temporary, revised provisions, has been able to 
implement guidelines to allow for police officers not to be 
laid off. I wonder why we can't do this more effectively for 
firefighters, or what you would say about how we can do it.
    The House did include precise language in the jobs bill 
that passed in December, and I, of course, have communicated 
with you and with the Secretary about these concerns.
    Do you expect more fully to utilize the waivers on cost 
sharing and other local matching provisions in this 2010 grant 
cycle? Will you fully implement congressional intent for this 
program to be used to retain firefighters?
    Mr. Fugate. Mr. Chairman, to the best of our ability, I 
hate to sound like a bureaucrat, but as we got additional 
authorities, and then we had the fire station construction 
grants coming into those cycles, we found ourselves having to 
reissue guidance several times and also implementing the waiver 
so we weren't prohibiting what our language would have 
suggested would be supplanting for maintaining your workforce.
    As I understand it, we now have got our grants going out 
the door. We are awarding grants. We look to have, I believe, 
the AFG grants and SAFER grants pretty much complete and 
awarded for this year by May.
    We understand the frustration in working this through, but, 
again, given the tools and the system we have, as we got 
additional changes, we had to go back and continue to update 
the process and the application, and the fire station grants in 
the middle of this became our priority to get those out. And we 
had to literally take staff to work on that to get those out to 
come back to the other grants. I am not offering an excuse, I 
am just trying to go explain what we did.
    The other thing I am very proud of is the Senate has 
recently confirmed our new grants administrator, who has come 
on board the past week to help us not fall back into a 
situation where we get this far behind in the grant process, 
and are structuring ourselves as we anticipate going forward in 
2011.
    Mr. Price. Well, all these programs are important, but 
there is a priority clearly on the personnel issue; as 
important as the fire grants are, the facilities and the 
equipment grants, the personnel issue and making certain that 
stressed communities and their budgets don't result in the 
reduction in basic protection is our priority.
    And so we know there are a variety of measures that we have 
undertaken here in the way of waivers, in the way of a stress 
on retention. Maybe not all that will work equally well. We do 
need to work with you to know what is working and how we can 
make this have its desired effect in local communities.
    Mr. Fugate. The other part of your question was, there are 
probably a lot more communities that could be applying for 
grants that have not, so we are working more outreach, working 
back through the various associations, I Chiefs, International 
Association of Fire Fighters, but also through our U.S. Fire 
Administration, with our Chief of U.S. Fire Administration 
Kelvin Cochran, of really trying to get outreach and explaining 
to people what these grants can do.
    I sometimes think the unknown in the sense of how hard it 
may be or what the relative worth of competition would be for 
these, but this is one area that I am very proud of that in 
selecting grants is actually done by the peers, of bringing in 
peer review and actually going through and doing peer review. 
That is kind of a unique thing for the Federal Government is 
actually asking the people that ultimately are the people that 
use these programs or at the local level to come in and help 
provide the input on prioritizing those competitive grants.
    Mr. Price. Well, that kind of proactive effort to make sure 
that the communities, communities most stressed and in need, 
are aware of the opportunities, are aware of the temporary 
changes that have been made that may give them an opportunity. 
I think that is extremely important to be proactive in that 
regard.
    Mr. Rogers.
    Mr. Rogers. Well, on that subject, know that there are two 
points of view on this thing. I have a real problem with using 
FEMA monies designed for emergency purposes to subsidize the 
regular operating expenses of local first responders, which is 
purely a local responsibility. By definition, Federal Emergency 
Management Agency is for emergencies.
    I know the stimulus bill allows those cost-sharing 
requirements to be waived temporarily, to spend stimulus 
funding, but the Chairman has agreed that only will go through 
fiscal 2010, and that when the new appropriations bill for 
fiscal 2011 takes effect, that will not be a part of the law.
    So I do have a real reservation about becoming the sponsor 
and payer of regular, local firefighting or other types of 
first responder operations, which everyone admits and agrees is 
a State and local responsibility.

                     MEASURING GRANTS EFFECTIVENESS

    Now, Mr. Farr, brought this up, and let me go ahead with it 
a bit further, and that is the administration of the grants 
programs. You know, we have spent $31.7 billion for first 
responder grants since 9/11, and we began to question what sort 
of requirements surround the awarding of those grants and 
whether or not we can say that those grants have contributed to 
the capability of States and local communities to respond to 
all hazards. In other words, can we effectively, objectively 
evaluate whether or not these grants are doing what we intended 
that they do, and that is improve the capability of local 
communities to respond, because, absent any kind of objective 
measurement, these grants are no more than a cost-sharing 
program for local operations.
    Can you tell us--well, and in fiscal year 2009, we provided 
$5 million to, quote, develop tools to measure the achievement 
and effectiveness of certain grant programs, including how 
grants increase the capability of States and local communities 
to respond to all hazards, and that resulted in the cost to 
capabilities, so-called, process, C-to-C. In fiscal 2010, we 
raised concerns about whether that truly, really was measuring 
the impact of these grants. We asked the GAO to continue to 
push FEMA to follow through on the congressional direction. The 
Administration has now put a hold on that initiative. So where 
are we?
    Mr. Fugate. The short answer is if we were looking for a 
measurement to judge against, the cost to capabilities was not 
taking us there. We found ourselves going into widget counting 
and not really being able to demonstrate real capability.
    We took the direction, we have heard the issues and 
concerns, and we think that a better way to develop this is to 
go back out to the community itself, ask them to come in and 
help us design how we do this.
    I can tell you with absolute certainty that you have built 
capability that has been demonstrated, but most people don't 
know about it.
    I had the opportunity to be part of the team from the State 
of Florida that went to provide, under emergency management 
assistance, compact assistance to the State of Mississippi in 
Katrina. The communication, the search and rescue teams, 
interoperability, I would say almost 99 percent of all the 
things we were able to take were leveraged against our Homeland 
Security dollars and the investments that the State of Florida 
had been making to build capability for all hazards.
    While many people could not talk, from the coast to 
anywhere else, we had direct communication with our folks on 
the field and the most impacted communities on the coast of 
Mississippi directly back to our State EOC; one of our former 
staff members back here developing maps in GIS from data that 
Mississippi sent us on their system, that we sent back out of 
our interoperable solution to county EOCs that couldn't even 
get dial tone out to the their EOCs.
    So we do know that we have built that. What we cannot do is 
provide that in such a way that we can look at that investment 
strategy and those outcomes based upon a real capability that 
we need to demonstrate, how much of that capability have we 
built up, and the most important thing, as you point out, that 
it is a shared responsibility. Again, 4,500 folks responded 
from Florida, about 6,000 over the life of that disaster.
    The funding did not pay for the people, but they gave us 
tools we would not otherwise have had and capabilities that we 
built and we used. And nobody had ever anticipated or ever 
thought we would send that many people to another state in a 
hurricane mutual aid response, but those capabilities were 
strictly because of the funding we got from Homeland Security 
dollars and the Urban Area Initiative Security dollars to build 
that capability, including sending urban search and rescue 
teams that were not the federal teams, sending interoperable 
communication that we built for our in-state response, that we 
were able to deploy a lot of incident management teams to 
join--just the planning process of getting law enforcement, 
fire, EMS to plan and talk about how we were going to spend 
grant dollars, build a robust capability to respond that would 
not have otherwise been there without the catalyst of those 
dollars.

                          KATRINA ARBITRATION

    Mr. Rogers. Now, let me switch gears on you real quick 
here. I am running out of time, and you are, too.
    The 2011 budget request was originally accompanied by a 
2010 supplemental request for $3.6 billion to cover known costs 
for disasters for the balance of 2010, in addition to the 1.6 
billion appropriated in the 2010 Appropriations Act.
    But in the meantime, FEMA has recently lost several 
arbitration rulings pertaining to household liabilities on 
damage from Katrina. Central among the arbitration rulings was 
the January 27 decision on Charity Hospital in New Orleans. The 
Federal arbitration panel ruled that FEMA should provide $474.8 
million to replace the hospital, substantially more than your 
$126 million repair estimate. That three-judge panel ordered 
you to award the amount to Louisiana for the State-owned 
hospital since the cost of repairing the hospital would be more 
than 50 percent of the replacement cost.
    What is striking about the unanimous ruling is that the 
panel said, and I quote, FEMA did not present a sound basis for 
challenging Louisiana's Office of Facility Planning and 
Control, and that FEMA reps who performed the damage estimates 
did not have the necessary experience and expertise to perform 
costs and repair assessments. So this could get pretty doggoned 
expensive real quick, as the ruling has demonstrated.
    You have submitted a 2010 supplemental request for $5.1 
billion, which is $1.5 billion more than the original 
supplemental of 3.6-, but that includes an estimated $1.2 
billion to cover the cost of arbitration findings.
    Now, what can we do about this? They said that you do not 
have adequate experience and expertise to perform assessments. 
What do you think?
    Mr. Fugate. I read the report, and unfortunately validated 
a lot of my concerns about some of the things we are sending up 
for arbitration. We have since in some cases settled, because I 
disagreed with what positions we have taken.
    We have also gone back and looked at--and I was very 
fortunate to have part of our team a former State public 
assistance director, Beth Zimmerman, to join our team to help 
us.
    And you get to a point that to me is of great concern, and 
that is we should have been--whatever that arbitration tells 
us, we need to take that to heart of what went wrong and why it 
went wrong and how do we fix it to make sure that in future 
disasters we have the right expertise--a hospital is a very 
complex building. It is not like I am going out and surveying a 
warehouse--and to make sure we have the right expertise and 
right competencies in complex projects.
    And I think, lesson taken to heart, that when we are out 
with our contract support doing public assistance, and we have 
a complex project like a hospital, it should be a no-brainer to 
us that we have to solicit expertise far beyond what you would 
normally see in other types of public assistance processes.
    But I read that report, and I drew the conclusion, 
unfortunately, that each one of these arbitrations is probably, 
unless there is a technical reason--we went ahead and went back 
on our budget request and said we need to factor in the full 
awards. In some cases we have been able to settle. And we also 
have the Recovery School District of Louisiana, which is an 
aggregation of all the school projects, finally coming to a 
proposed settlement there, which is not an arbitration, but it 
was--instead of treating each school as a project looking at 
the entire school district, that estimate is about $1.1 
billion.
    Mr. Rogers. But they said that you did not have adequate 
assessments, didn't have the expertise to do adequate 
assessments. What are you doing about that?
    Mr. Fugate. Well, again, we are going back to look at who 
would you contract with and having contingency contracts for 
subject matter experts to come in when we deal with those types 
of technical responses. If we do not have that core competence, 
sir, then it is our duty to identify where we would get that, 
whether it would be from another Federal agency, or whether 
that would be contract support to give us that information, so 
when we do those assessments on those complex structures, we 
have the right experts to do that assessment.
    Mr. Rogers. Well, I mean, you have already been hit with 
almost a half a billion dollars on one building, so this could 
get expensive real quick.
    Mr. Fugate. Based upon the existing outstanding 
arbitrations, that was factored into our request for the 
supplemental, and we have, in some cases, already settled some 
of those or are working to settle some of those based on a 
consensus that we are not going to be able to, in our cases, 
win these arbitrations. And we had actually in our initial 
supplemental, we are figuring about middle-of-the-road 
settlements. So we took that and we came back and said, we need 
to assume that if these are all lost, what does that look like, 
and make that the request for the supplemental versus the 
assumption that they weren't going to go against FEMA and that 
we had factored too low.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Ms. Roybal-Allard.

                         EMERGENCY ALERT SYSTEM

    Ms. Roybal-Allard. Mr. Fugate, I would like to ask you a 
little bit about our Federal Government's ability to 
communicate with the public in a national crisis. A report by 
GAO in September of 2009 said that the Emergency Alert System 
was ineffective and unreliable, and that it had--it lacked 
redundancy. There were gaps in coverage and a lack of testing 
and training, among other shortcomings.
    The GAO analysis also found that the Integrated Public 
Alert and Warning System Program, which FEMA envisions as an 
alternative to EAS, has been grossly mismanaged, and that 
little progress has been made since 2007.
    Can you inform the committee as to what progress is being 
made in regards to the alternative program, and what is it that 
is being done to address the weaknesses of the current system 
in the event that we have a disaster prior to the completion of 
this new program?
    Mr. Fugate. I would like to submit a full answer in writing 
due to the time.
    [The information follows:]

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    Mr. Fugate. But, briefly, we have taken to heart those 
recommendations moving forward. Two key milestones was the 
publication of the Common Alerting Protocol, latest version. 
That is the standard for integrating the systems. It is an XML 
standard, allows us to not be type-specific, but allows us to 
use a lot of different types of devices.
    The second piece is the Cellular Alert System, that the FCC 
publish rules on that. We are working with the industry to 
implement that. That will move into that.
    And, finally, the third part is we had nationally, which is 
kind of surprising, the first national test of the national 
activation of the Emergency Alert System in Alaska. We did have 
some technical issues with some stations; however, overall, the 
system from the origination here in Washington did reach 
Alaska, did trigger the system, did go out.
    There were some stations that had technical difficulties 
that we are working on, and we will provide a full report on 
the status of what we have done based upon that report and how 
we are moving that program forward.
    Ms. Roybal-Allard. I appreciate it. Thank you.
    Mr. Price. Thank you, Mr. Carter.

                         LEON RIVER FLOODPLAIN

    Mr. Carter. Mr. Chairman, I realize we are running out of 
time, so I am just going to ask you to do me a favor. There is 
an issue in Texas on the Leon River, and it looks like to me 
that multiple branches of the Federal Government have come into 
the Leon, and they are proposing to put it--to try to take a 
river, which was moved into a fast-flowing river, so it 
ultimately goes into a water-storage lake where we get drinking 
water.
    Now somebody has decided they needed more wetlands, so the 
engineers are going to reengineer that river to put it back 
into its original banks. Then FEMA is coming in, based on that, 
and writing new floodplains, which is putting a huge community 
all inside the floodplain. In addition, quite honestly, the 
Corps is probably going to flood all these communities, because 
they are redoing the river for some environmental group that 
wants to change it back to wetlands. It has kind of got people 
thinking that the government is insane.
    Take a look at the Leon and see what you can do to help. I 
appreciate it. I know your time has run out. I am not going to 
ask for an answer, because I doubt if you know about the Leon. 
But if you do, I am glad to hear it, and I would sure 
appreciate your taking a look at it.
    Mr. Fugate. We will take a look at it, sir, and we will 
have our staff get with your staff, follow up.
    [The information follows:]

    FEMA is currently working with the Member's staff to schedule a 
meeting to discuss the matter further.

    Mr. Carter. I am going to be all over the engineers, I can 
promise you.
    Mr. Fugate. Yes, sir.
    Mr. Price. Thank you.
    Mr. Administrator, we thank you for your good work, for the 
energy and experience you brought to this job, and your 
continued cooperation with this Subcommittee.
    Mr. Fugate. Thank you, Mr. Chair.
    Mr. Price. With that, we will adjourn the hearing and go 
with you to greet our friends from Haiti.
    Mr. Fugate. My honor, sir. We are trying to be green and 
carpool.

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                                          Thursday, April 15, 2010.

DHS CYBER SECURITY PROGRAMS--WHAT PROGRESS HAS BEEN MADE AND WHAT STILL 
                         NEEDS TO BE IMPROVED?

                               WITNESSES

PHIL REITINGER, DEPUTY UNDERSECRETARY FOR NATIONAL PROTECTION AND 
    PROGRAMS DIRECTORATE
REAR ADMIRAL MICHAEL BROWN, DEPUTY ASSISTANT SECRETARY FOR CYBER 
    SECURITY AND COMMUNICATIONS

               Opening Statement of Chairman David Price

    Mr. Price. The Subcommittee will come to order. Today we 
welcome to the Subcommittee the Deputy Undersecretary for the 
National Protection and Programs Directorate, Phil Reitinger, 
and the Deputy Assistant Secretary for Cyber Security and 
Communications, Rear Admiral Michael Brown. We will be 
discussing the 2011 budget for cyber security programs at NPPD 
and the DHS role implementing the Comprehensive National 
Cybersecurity Initiative.
    Gentlemen, we thank you for joining us for this 
unclassified portion of our hearing. I would like to note for 
Members and staff who just arrived that since we are now in 
open session we will not be able to discuss the specifics of 
particular threats or technologies, since much of that 
information remains classified.
    The open network architecture that makes the internet such 
a powerful and transformative force in our modern world 
simultaneously creates vulnerabilities for exploitation by 
those who seek to disrupt contemporary life or to inflict 
damage on our country. The internet is an awe-inspiring, 
borderless community connecting the most far flung reaches of 
the globe. However, enemies that were once safely kept at a 
great distance from our country can now find their way directly 
onto the desk of the Secretary of Defense, for example.
    In a similar way, with so much of our contemporary life now 
on line, sensitive information that used to be kept safely 
locked in a bureaucrat's filing cabinet can now be stolen with 
little more than a few mouse clicks. Thirty ton steel vault 
doors are no longer effective at securing deposits when cyber 
bank robbers execute virtual stickups that generate million 
dollar hauls.
    Much of our nation's infrastructure is now managed through 
sophisticated web-based control systems and could be at risk of 
takeover or destruction by weaknesses in the very systems that 
make it run so efficiently.
    The DHS role in our nation's cyber defense is explicitly 
defined under the Comprehensive National Cybersecurity 
Initiative or the CNCI. DHS is responsible for securing the 
online presence of our government's civilian agencies. This is 
no small challenge.
    Part of the strategy to strengthen federal cyber defense is 
to consolidate literally thousands of internet connection 
points across agencies into a more manageable number of Trusted 
Internet Connections. DHS is also responsible for implementing 
data traffic monitoring systems to detect nefarious activity 
and stop it before cyber attacks get out of control.
    The 2011 budget proposes $379 million for the National 
Cyber Security Division, an $18 million or 4.6 percent cut from 
the 2010 enacted level. Most of this reduction is attributable 
to one-time 2010 costs not repeated in 2011 and projected 
savings that will result from hiring federal employees to work 
on DHS cyber security programs in place of government 
contractors. There also are large, unobligated 2010 balances 
that are likely to carry into 2011, given the time it takes to 
acquire and install the network hardware that DHS is deploying.
    This is not to say, however, that proceeding at DHS' 
proposed pace will suffice to close the security gaps in our 
federal system. A recent survey of information technology 
professionals in government, the Federal Cyber Security Outlook 
for 2010, found that 74 percent of federal IT administrators 
expect a cyber attack from a foreign nation within the next 
year. Perhaps even more troubling, 59 percent of those 
surveyed--this is information technology professionals in 
government--said that their agencies had already been attacked 
by viruses or malware in the past year, while 22 percent 
reported attacks by foreign governments or terrorist 
organizations.
    Furthermore, a recently published GAO analysis of civilian 
cyber security activities raised troubling questions about the 
effectiveness of cyber security collaboration across government 
agencies. The budget proposes a $5 million initiative to 
increase federal cyber security collaboration, but we have to 
question why several years after the CNCI was initiated it 
takes new funding to make government agencies work together 
better.
    I am also concerned about what I see as a growing 
leadership vacuum in efforts to defend our nation's privately 
owned cyber assets. Both the public and we in Congress 
recognize that shoring up government networks will not be 
enough to protect private computers from a theft of valuable 
intellectual property, from real financial losses or severe 
disruption that would ensue if essential services like electric 
power or wireless communications are compromised.
    Many now realize that a sophisticated, coordinated and 
sustained cyber attack is a serious threat to our nation's 
economic vitality. Unfortunately, DHS has taken limited 
initiatives in this area, not much beyond promoting best 
practices and encouraging private companies to implement their 
own cyber security solutions.
    We all know that interconnected computer networks are only 
as safe as their weakest security links and so today we need to 
examine closely what role DHS should play helping the private 
sector secure the critical assets without which our modern 
society simply cannot function. Given the breadth of these 
topics and their relevance to nearly every aspect of 
contemporary life, we will clearly have an interesting 
discussion today.
    Mr. Deputy Secretary, please summarize your written 
testimony in a five minute statement so that we will have time 
for a direct exchange of questions and answers. Your full 
statement of course will be entered in the hearing record.
    Before you begin, I would like to recognize our 
Subcommittee's Ranking Member, Hal Rogers, for his opening 
remarks.
    [The information follows:] 

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           Opening Statement of Ranking Member Harold Rogers

    Mr. Rogers. Thank you, Mr. Chairman, and thank you, 
gentlemen, for being with us today. Deputy Undersecretary 
Reitinger, welcome for what marks your first appearance before 
our Subcommittee. Given your combination of government and 
private sector experience, we look forward to hearing your 
views today.
    As the Chairman noted, the threats to our cyber 
infrastructure, including military, governmental and private 
networks, are as dynamic as any threat that is presently 
confronting our nation. It is not exactly a state secret that 
our country is behind the curve in countering those threats. 
Our networks are simply not as resilient as they need to be in 
order to respond to what is a constantly evolving enemy.
    But perhaps more than any other critical Homeland Security 
issue, I am concerned that cyber security is largely 
misunderstood. Cyber threats reach far beyond IT networks. They 
have the potential to impact virtually all aspects of our 
critical infrastructure from military hardware to Wall Street's 
financial systems, from our electric power grids and the 
control of dams to our personal computers and handheld devices, 
so there is a genuine urgency to address our numerous cyber 
security needs.
    But far too many pundits and so-called cyber experts use 
this urgency to simply clamor for more government, more 
staffing, more coordination, as opposed to asking more tangible 
questions like what specific tools, resources and legal 
authorities are needed, what tasks need to be done in both the 
near and long terms and what technologies need to be developed 
in order to better meet our cyber security needs.
    So what I want to know today is what we are doing to get 
our cyber security right. More to the point, I do not want to 
get lost in vast IT jargon and reams of data. We must wrestle 
this monstrosity known as cyberspace down to where mere mortals 
can understand it because you are looking at mere mortals up 
here. I want to better understand how DHS is applying the 
taxpayers' dollars to develop and deploy the necessary skills 
and capabilities to effectively wage this cyber security fight.
    That brings us to the status of the Comprehensive National 
Cybersecurity Initiative, CNCI, the government's overarching 
effort to shore up our network vulnerabilities and improve our 
cyber security capability that was lost in January of 2008.
    Today, more than two years after the CNCI was launched, I 
would like to gauge DHS' progress in meeting some of the most 
pressing goals and objectives of this effort, including shoring 
up our network vulnerabilities by reducing and consolidating 
the government's internet connections, establishing better 
defenses through the development and deployment of modern 
network intrusion detection and monitoring systems and 
improvement of the government's collaboration with the private 
sector who owns more than 85 percent of our nation's critical 
infrastructure.
    And in addition to a progress report on these key tasks, we 
need to better understand how DHS is approaching the numerous 
technological, legal and policy changes that may be inhibiting 
critical progress on moving our nation's cyber security 
forward. After all, far too much is at stake to fail.
    As I said at the opening of my remarks, we are way behind 
in this fight with what is an extremely nimble and cunning set 
of adversaries. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Secretary, please begin.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                      Statement of Phil Reitinger

    Mr. Reitinger. Mr. Chairman, Ranking Member Rogers, 
distinguished Members of the Subcommittee, it is a pleasure to 
appear before you today to discuss the Department of Homeland 
Security's cyber security mission and related budget request.
    The Fiscal Year 2011 budget is geared toward increasing the 
cyber security posture of the Nation and lays the foundation to 
improve our capability to respond to cyber threats. The Under 
Secretary regrets that he could not be here today himself 
because he is absent in order to attend a funeral.
    As a nation, it is essential that we are aware of and 
focused on the cyber threat. Just as important, the government 
must move quickly and purposely to address cyber threats in 
technology, and malicious actors change rapidly. As you know, 
Mr. Chairman, threats are becoming more targeted, more specific 
and more serious. For example, system information is routinely 
stolen through cyberspace from government and private sector 
networks.
    Perhaps more ominously, malicious cyber activity can 
instantaneously result in virtual or physical consequence that 
can threaten national and economic security and public health 
and safety. Thus, while we strive to prevent the loss of 
intellectual capital through our networks, we are also working 
to ensure that the systems that operationally control our 
critical infrastructure, the power grid or communications 
infrastructure, for example, remain accessible and reliable in 
terms of crisis.
    The nexus between physical and cyber worlds is an essential 
mission area for the Department and one that must remain 
closely linked. Thanks in large part to the support of this 
Committee, the Department has made significant progress in the 
cyber mission, and I would like to highlight a few of these 
points.
    First, we continue to work with OMB on reducing and 
consolidating the number of external connections federal 
agencies have to the Internet through the Trusted Internet 
Connections initiative. This effort allows us to focus on 
monitoring and, eventually, prevention efforts into limited and 
known avenues through which traffic must flow while also 
establishing baseline security capabilities and validating 
agency adherence to those security capabilities.
    Second, DHS is deploying Einstein 2 to these trusted 
internet connection points. Einstein 2 uses passive sensors to 
identify when unauthorized users attempt to gain access to 
those networks. Einstein 2 already provides us with visibility 
into nearly 180,000 events a month.
    Third, building upon enhanced situational awareness, we are 
testing the technology for the third phase of Einstein, an 
intrusion prevention system that will provide the Department of 
Homeland Security with the ability to automatically detect 
malicious activity and disable attempted intrusions before harm 
is done to our critical networks and systems.
    For all these deployments, it is important to note that 
Einstein capabilities are being carefully designed in close 
connection with privacy experts. Protecting civil rights, civil 
liberties and privacy remains foundational to our efforts.
    Fourth, we also recognize that our efforts on federal 
networks must be coupled with strong private sector and 
nonfederal partnerships. Here we are focused on implementation, 
finding things that work and expanding them. To that end, this 
year NPPD wants a pilot program that enables the mutual sharing 
of cyber security information working with our private sector 
partners in the financial sector, the Department of Defense and 
the Financial Services Information Sharing and Analysis Center.
    We are also working on a pilot that brings together State 
fusion centers and private sector owners and operators of 
critical infrastructure to provide secret-level classified 
cyber security information.
    Fifth and last, as strong as the technological successes of 
the past year are, these accomplishments are reliant upon our 
ability to obtain an increasing number of dedicated and skilled 
people. To this end, the National Cyber Security Division 
tripled its federal workforce in Fiscal Year 2009, and we hope 
to more than double that number this year to 60 by the end of 
the fiscal year.
    Going forward, we are moving aggressively to build a world 
class cyber security team, and we are focusing on key 
priorities that address people, processes and technology. These 
include continuing development of the Einstein systems 
capabilities, developing the National Cyber Incident Response 
Plan in full collaboration with the private sector and other 
key stakeholders so we can respond as one nation to a 
significant cyber event, and increasing the security of 
automated control systems that operate elements of our national 
critical infrastructure.
    Chairman Price, Ranking Member Rogers and distinguished 
Members, let me thank you for the strong support you have 
provided the Department and express my willingness for both 
myself and Rear Admiral Brown, the Deputy Assistant Secretary, 
to answer any questions you might have.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                         EINSTEIN 3 DEPLOYMENT

    Mr. Price. Thank you, and we will proceed with those 
questions and I will ask the first one having to do with the 
CNCI deployment schedule.
    The Einstein system of course we know is a key element in 
the DHS Cybersecurity Initiative. It is an internet traffic 
monitoring technology which records data flows in and out of 
federal networks, helping analysts identify irregular data 
patterns. Current Einstein technologies require significant 
analytical support, but DHS plans eventually to release a third 
generation Einstein deployment that would automate the system's 
data pattern analysis.
    Given delays releasing the first and second generation 
Einstein systems, it is not clear that DHS can remain on 
schedule to have Einstein 3 deployed by its own deadline of 
2013. As you know, furthermore, on Monday the GAO released a 
report noting that Einstein 2 has not yet been deployed to all 
of the nondefense agencies, indicating delays even with the 
current network traffic monitoring technology, so obviously 
that frames my question.
    Last year we were told that Einstein 3 would be deployed by 
2013. Our latest information shows that deployment contracts 
are not even likely to be awarded until the second quarter of 
2011. That raises doubts about whether the system can be fully 
built and deployed in under two years.
    So what is the current schedule for Einstein 3 deployment? 
When can we be assured that Einstein 3 will be fully deployed 
to federal networks? And then just as a follow up I will 
anticipate in asking the question what happens in the meantime? 
What vulnerabilities will remain in federal networks until 
Einstein 3 is deployed, and how are you planning to mitigate 
those vulnerabilities in the meantime?
    Mr. Reitinger. Thank you, Chairman. Let me answer the third 
question first, and then I will answer the first and I will 
probably ask Mike to talk about the Einstein 3 deployment 
schedule.
    First, in the meantime it is important to note that 
Einstein, either as deployed or as Einstein 3, is not a silver 
bullet. We need a broad spectrum of capabilities that help to 
protect federal networks.
    So all of the things that I talked about are relevant to 
helping to secure those networks, including ensuring that we 
have robust instant response processes, we are adding the 
people to U.S.-CERT to be able to analyze the traffic that we 
are already getting and providing appropriate alerts, advice 
and assistance to federal agencies. So there are significant 
efforts across the enterprise in order to help secure them in 
the environment we are in right now.
    I would like to say on the first point that we were ahead 
of schedule on Einstein 2, the deployment of the Einstein 2 
capabilities, at the close of Fiscal Year 2009, and we plan to 
complete and fulfill the schedule this year. So at present we 
are deployed to 12 federal agencies and to four Internet 
service providers under the MTIPS, the Managed Trusted Internet 
Protocol Service, to provide service to federal agencies, and 
we are on schedule to deploy to the 21 designated federal 
agencies and those four ISPs by the end of this year.
    As I mentioned, we are already getting valuable data off 
the sensor arrays to the effect of 180,000 events per month, 
and we going forward will increasingly be able to use that data 
to provide effective advice to federal agencies.
    With regard to the deployment schedule for Einstein 3, 
Mike, I would ask you to address that, please.
    Admiral Brown. Right now we are in the midst of completing 
the third phase of the test of the technology. That will be 
completed in May. That test is extremely important to the 
deployment schedule for Einstein 3.
    As you mentioned, we do expect, after working with the five 
Internet service providers, to be able to award the contract in 
the second quarter of Fiscal Year 2011 and based upon that to 
complete our deployment schedules by Fiscal Year 2013 for 
Einstein 3, sir.
    Mr. Price. So you are saying it is feasible even with an 
awarding of the deployment contract being delayed until the 
second quarter of 2011, it is still feasible to meet the 2013 
deadline that you set for yourself?
    Admiral Brown. Yes, sir. Two major reasons that we are 
taking as part of the risk mitigation piece. One is the fact 
that the exercise demonstration of the technology is proving 
thus far that it works in the operational environment it is 
intended, and the second piece was the decision to employ the 
technology that the Department of Defense uses. That also 
significantly reduces the risks associated with technology and 
the deployment strategy.

        TRUSTED INTERNET CONNECTIONS AND CYBER SECURITY THREATS

    Mr. Price. Mr. Secretary, let me make sure I heard you 
right about the Trusted Internet Connection aspect of the 
program. The GAO report also focused on that, which of course 
is a key aspect.
    GAO found that none of the 23 nondefense agencies covered 
by the TIC program have completed all the requirements to 
ensure safe and secure Internet connections so I want to see 
what the schedule is for getting that TIC aspect implemented.
    Are there complications you have uncovered that we should 
know about that have generated delays, and can you assure us 
that this is back on schedule?
    Mr. Reitinger. Yes, sir. When I spoke about being ahead or 
on schedule, I was speaking about the deployment of the 
Einstein 2 capability.
    Obviously as we have gone through the overall Initiative 1, 
the Trusted Internet Connection Initiative, there have been a 
number of things that have been uncovered. In addition, we have 
had essentially to create that team from the very start so that 
the initial projections probably were too aggressive.
    That said, we have staffed up the team. We have the right 
people on board. We are continuing to build that team, and I 
think we are being particularly thorough in our efforts on 
compliance validation building, the capability to more 
aggressively work with agencies, respond to their requirements, 
get them the information they need, and ensure we are moving 
forward on the initiative.
    In terms of future projections for the initiative, again I 
will ask Mike to supplement.
    Admiral Brown. The vast majority of the high-priority items 
that are not being met by the departments and agencies deal 
with their ability to reduce their Internet access points 
behind the trusted Internet connection.
    The vast majority of departments and agencies say that they 
will complete those efforts in Fiscal Year 2010 and Fiscal Year 
2011, and that is part of the ongoing process that we are using 
with those departments and agencies to make sure that they 
maintain their plan of action and milestones to be able to meet 
that.
    Mr. Price. By vast majority do you mean approximately like 
what number?
    Admiral Brown. Sir, I will have to get back to you on the 
specific numbers.
    [The information follows:]

    RESPONSE: Among the 20 agencies designated as Trusted Internet 
Connection Access Providers (TICAPs), 14 provided forecasts for 
migrating their network bandwidth from current non-TIC external 
connections to approved TIC connections, as well as their anticipated 
bandwidth requirements through 2014. This helps DHS's planning capacity 
for EINSTEIN sensors and analysis systems. TICAP agencies provided the 
following forecasted completion dates: FY 10 and earlier--seven TICAP 
agencies; FY 11--one TICAP agency; FY 12 and later--six TICAP agencies.
    Additionally, 21 TIC seeking service agencies provided forecasts 
for migrating their network bandwidth from current non-TIC external 
connections to approved TIC connections, as well as their anticipated 
bandwidth requirements through 2014. Agencies seeking service provided 
the following forecasted completion dates: FY 10 and earlier--nine 
seeking service agencies; FY 11--five agencies; FY 12 and later--seven 
agencies.
    EINSTEIN 2 (E2) is currently installed at a total of 12 departments 
and agencies (D/As), and US-CERT has conducted an operational 
evaluation of 11 of these
D/As--these sites are now recognized at Initial Operating Capability 
(IOC). E2 has also been installed at the four GSA Networx Managed 
Trusted Internet Protocol Services (MTIPS) vendors. The NCPS Program 
Office still requires signed Memoranda of Agreement (MOAs) from eight 
D/As (for a total of 20 D/As) to complete required Initiative 2 
deployments to support the President's Comprehensive National 
Cybersecurity Initiative (CNCI). The NCPS Program Office expects the 
remaining eight deployments will be completed by the end of FY 10.

    Mr. Price. All right. We would appreciate that for the 
record. I want to make sure I understand the relationship of 
this question to what you earlier said about the timeframe for 
21 of the 23 agencies in your answer to the first question.
    Admiral Brown. Yes, sir. Two different things that we are 
talking about.
    Mr. Price. Yes. That is right. Can you clarify that?
    Admiral Brown. Yes, sir. The first with respect to Einstein 
2 deployment. We are ahead of schedule. That schedule calls for 
DHS to deploy Einstein 2 intrusion detection capability at the 
21 departments and agencies that are going to have that 
capability installed. We are ahead of schedule, 12 operational. 
The rest will be completed this fiscal year.
    The other aspect of the initiative is how the departments 
and agencies are reducing their Internet access points at the 
same physical location where they will be monitoring their 
network operations and ensuring the security, including the use 
of our Einstein 2 system. That is what is taking a longer time 
in the deployment of Einstein 2.
    Mr. Price. Thank you. That is helpful. Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman. Correct me on these 
numbers. I am told that there is 210 billion emails sent per 
day equating to more than two million emails per second, 32,000 
cyber attacks occur worldwide each day and that there are more 
than 4,000 active terrorist websites. Are those numbers correct 
roughly?
    Mr. Reitinger. I could not say about the last. I would say 
that certainly in terms of the number of emails it is vast and 
I am surprised that the number of attacks is that low. There is 
a significant amount of traffic and a significant number of 
attacks and events.
    Mr. Rogers. As I understand it, there are really three 
categories of cyber security threats. One is criminal cyber 
threats such as identity data theft, service disruptions and so 
forth; then there are homeland security threats such as 
penetration of networks that support critical infrastructure, 
including government nonmilitary computer systems; and then 
thirdly national security threats, espionage, theft or 
unauthorized disclosure of defense related data, disabling of 
weapons systems and the like.
    And I gather in this setting that we are in today we cannot 
talk about that third category, but we do want to talk to you 
about the other two. There are I am told more than a hundred 
foreign intelligence organizations attempting to hack into U.S. 
networks and that the U.S. was the country most frequently 
targeted by denial of service attacks in 2008, which accounts 
for 51 percent of the worldwide total.
    Getting back to those three categories--criminal, homeland 
security and national security--which one is getting the most 
threats?
    Mr. Reitinger. Sir, I do not know if I can say the most 
threats. We actively need to defend against the full spectrum. 
In point of fact, the same capabilities to attack are for the 
most part available to less sophisticated attackers as to more 
sophisticated attackers.
    With the tools that are available now, an unsophisticated 
attacker, a script kiddie who just downloads a tool from the 
Internet and runs an attack, can launch a fairly sophisticated 
attack, so we need to be able to defend against the most 
sophisticated and dedicated adversaries down to the lowest 
level criminal, if you will.
    And in point of fact, they are all increasingly targeting 
attacks and after things of value. We are well beyond the world 
where somebody wants to hack into a Webpage and put up a 
particular point of view or simply embarrass you. Criminals, 
foreign intelligence services, the full spectrum of entities, 
want access to valuable information or actual digital money to 
finance what they want to do.
    And even if they are doing something like building a 
botnet, breaking into computers and assembling lots of 
compromised computers together in what amounts to Internet 
artillery, then they are still going to use that to make money, 
either to steal personal information or perhaps to rent it or 
sell it to someone else so that they could use it.
    Mr. Rogers. Now, 85 percent of infrastructure is privately 
owned, right, so we are talking 15 percent of the nation's 
infrastructure, IT infrastructure, is governmental owner 
controlled. Now, you are attempting to channel all governmental 
communications through certain channels that you call Trusted 
Internet Connections. Am I on track so far?
    Mr. Reitinger. Absolutely.
    Mr. Rogers. And you are trying to reduce the number of 
governmental points of contact so that you can more effectively 
police what goes through these TICs. You stop me when I get off 
track, will you?
    Mr. Reitinger. I will do that, sir.
    Mr. Rogers. I am trying to understand this. But according 
to the Department, as of March 31 you are only 40 percent of 
consolidation into those TICs. Is that right?
    Admiral Brown. Yes, sir. I would say the number is 12 of 21 
departments and agencies have their actual trusted internet 
connection sites physically identified and stood up.
    Mr. Rogers. So you are less than halfway to your goal of 
consolidating the TICs. When do you anticipate you will have 
that work done?
    Mr. Reitinger. Well, the deployment to the 21 agencies and 
to the Internet service providers will be done by the end of 
this year. Full activation will extend to the next year, and we 
will be in the process of working at that point I think with 
smaller agencies to get them to move to obtaining service 
either from one of those federal agencies or through the 
networks.
    I apologize if I get jargonistic, sir. As you know, we are 
deploying to some internet service providers, getting them to 
obtain Internet service from those internet service providers 
so they get access to that TIC, Trusted Internet Connection, 
service.
    Mr. Rogers. So what is holding us up?
    Admiral Brown. Sir, it is two things. All of the 
departments and agencies by the end of this year will know and 
have identified where their physical locations for network 
traffic will be located.
    What is holding us up is the fact that all of the 
departments and agencies have to route all of their traffic to 
those physical locations and so it is time and effort that they 
have to put in to make sure that they are behind those Trusted 
Internet Connections. That is the biggest hurdle that they have 
to come over.
    Mr. Rogers. Obviously this is critically important and is 
the path to cyber security for the government. However, in 
spite of the obvious need to move and make this complete, your 
budget request for next year cuts cyber security by $18.4 
million, well below the current year funding level.
    At a time when you are trying to complete the installing of 
Einstein 2 and simultaneously develop and install Einstein 3, 
how can you justify coming to us with a budget request, knowing 
these kinds of bold goals that you are after, and cut funding? 
How can you do that?
    Mr. Reitinger. Sir, I would say the following. We are 
trying to be judicious in our request to make sure that we can 
appropriately spend the money that this Committee and the 
Congress gives us and spend the people's money appropriately.
    Second, the cut that you referred to is primarily both a 
transfer of some funding, the National Cyber Forensic Institute 
money, to a different part of the Department of Homeland 
Security, an elimination of a set of one-time expenditures--for 
example, movement to data centers--and also reduction in 
certain dedicated expenses that we did not request be continued 
into this fiscal year.
    So the actual program related funding that we have 
requested year over year has not gone down to nearly that 
degree, sir.
    Mr. Rogers. Well, can you achieve the goals you have set 
for yourself and for us with this reduced funding?
    Mr. Reitinger. Sir, what I would say is when the budget was 
built, we built it on the information that was available to us 
and we made the best request available. We are in an 
environment where every day we learn something new. As with the 
ongoing exercise, we are learning new things.
    Therefore, it is highly dynamic. If we believe that 
additional resources are called for to enable to execute our 
mission we will work those processes within the Administration 
and come back to this Committee and other appropriate 
Committees to request the funding to accomplish that.

                    CYBER SECURITY BUDGET STRUCTURE

    Mr. Rogers. Let me just make one final point, Mr. Chairman, 
on this point. The Cyber Security Division has told the 
Subcommittee that its current budget structure is inhibiting 
operations and clouding the execution of funds. Can you explain 
how the revised budget structure you are proposing will improve 
the execution of funding for cyber security?
    Mr. Reitinger. I would say, sir, that the budget structure, 
the PPA structure that we are operating under, is one that is 
not aligned with the current organizational structure, and what 
we had proposed to this Committee was that we have a budget 
structure that aligns with the organization and initiatives we 
have going forward that would enable in our view easier 
management and allocation on our end and perhaps better 
oversight and transparency for this Committee and so that is 
the proposal that we have made.
    Mr. Rogers. Well, Einstein 2 is a passive operation that 
tells us when we have been hacked. Einstein 3, when you perfect 
it, will hopefully prevent hacking. So these are very important 
obviously goals, and what I want to finally ask you is can you 
achieve those goals with the funding requests that you have 
made?
    Mr. Reitinger. Sir, we believe that the funding request 
that we made is appropriate to the data we had when the budget 
was built. As I said, if we believe we can make more progress 
and there is a good justification for it, we will have those 
discussions with the Administration and come back to this 
Committee with the additional data and the justification for 
that.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Rodriguez.

                DHS LEAD FOR PREPARATION AND PREVENTION

    Mr. Rodriguez. Thank you very much, and let me thank you 
for being here with us today and indicate to you that in San 
Antonio, and I had been on the Armed Services Committee before 
and prior to 2000 we had done an exercise. We called it Dark 
Screen in San Antonio. A local exercise. No federal money, by 
the way.
    We did it on our own, and from a local perspective we got 
the utilities. We worked on it for a couple of years and came 
up with some items there and some recommendations. We saw some 
pretty good things with the universities there locally.
    But I wanted to ask you. I know that it is important for us 
to move forward on the 23 agencies on the federal level, but 
what concerns me is that we are looking at it from top down. 
With Dark Screen we looked at it from bottom up and we are 
still working on that.
    What agency within Homeland Security is engaged in the 
preparation for first responders to deal with cyber attacks? I 
know FEMA responds to the disasters, but as far as I know they 
are not doing anything in the area of cyber unless you tell me 
otherwise. But who in DHS is responsible for preparing the 
States and the local communities in these areas?
    Mr. Reitinger. Sir, for the most part in terms of the 
preparation and prevention we would be the lead. Obviously FEMA 
would be the lead in terms of preparedness, consequence 
management after any sort of event, physical or cyber, and we 
would work closely with them, but we actively work now with our 
state and local partners.
    We have a strong relationship with Multi-State ISAC, with 
the National Association of State CIOs, and we work directly 
with them on state-specific issues. Moreover, a lot of our 
effort, broader efforts, specifically include state and local 
involvement. For example, our efforts to raise awareness in 
this last year.
    We raised the game significantly, I think, on National 
Cyber Security Awareness Month, which occurs in October of 
every year. It was very gratifying at the launch for the first 
time to have the Secretary of Homeland Security and the Deputy 
Secretary of Defense stand up together and give the same 
message.
    Mr. Rodriguez. Do we have a team in case of either a 
manmade disaster or any time we have a hurricane or anything? 
Do we have a team that operates?
    I just had a situation in two counties, Maverick and 
Hidalgo, where we could not communicate with our office for a 
whole day. By the way, during that period of time people could 
not get any money from their banks or anything. We never knew 
actually what actually happened. Do you have a team that 
responds to a situation like that when they happen?
    Mr. Reitinger. Yes, sir, we do. We have a group of people. 
We have several groups of people that do telecommunications and 
information technology incident response. For information 
technology----
    Mr. Rodriguez. And that is under who under DHS?
    Mr. Reitinger. That reports up through Admiral Brown and 
then Greg Schaffer too, sir, so that would be a part of U.S.-
CERT. They would be responsible for coordinating.
    We brought all of those teams together in the National 
Cybersecurity and Integration Center, which we opened in 
October and Chairman Price was present for, and we are building 
out the plans, as I suggested in my testimony, that will enable 
us to respond as one nation, which is the National Cyber 
Incident Response Plan.
    I would say that state and localities, particularly through 
the MS-ISAC, are directly participating in the development of 
that plan.
    Mr. Rodriguez. Now, let me follow up a little bit better as 
it deals also in this same area with local communities. Have we 
come up with any collaboratives with universities for training 
and other purposes?
    I know we created in San Antonio and I know in other 
communities a Bachelor's and Master's and Ph.D. in this area, 
and I know we have also some universities that have been 
looking at the legal aspects of it. Are we working and reaching 
out to these institutions throughout the country?
    Mr. Reitinger. Yes, sir. We have robust collaboration with 
universities. As part of our work on education and awareness, 
we are devoting increasing tallies to that. We are also working 
with universities to make sure we are providing our own people 
with the training that they need through, I believe, Carnegie 
Mellon. We get some role-specific training for some of our 
employees.
    And we are working directly with the Naval Postgraduate 
School at the moment to find the right way to perhaps develop 
additional technology expertise. So we are working broadly 
across the spectrum with players, including academia.
    Mr. Rodriguez. I do not want to lose sight of the fact 
because I know we are working from top down, but those natural 
disasters and things occurred locally and so in terms of 
looking at it also from the local and State, from the bottom 
up, as we move forward.
    Mr. Reitinger. Yes, sir.
    Mr. Rodriguez. Thank you.
    Mr. Price. Thank you. Ms. Roybal-Allard.

                      COORDINATION AMONG AGENCIES

    Ms. Roybal-Allard. During your testimony you talked about 
the importance of coordination, partnerships with the private 
sector, team building and so forth, yet according to a GAO 
report in March of this year it says that agencies have 
overlapping and uncoordinated responsibilities for cyber 
security activities that have not been clarified by the 
Cybersecurity Initiative.
    A key example is the lack of agreement regarding which 
agency is responsible for leading efforts of cyber information 
sharing and situational awareness, and then it goes on to give 
examples. It also cites that a former Acting Director of the 
NCSC said that due to a lack of coordination among the top 
level agencies and the White House has not been fully 
operational, and it was unclear what responsibilities it was to 
assume for the federal government as a whole.
    The conclusion by GAO was that CNCI is unlikely to fully 
achieve its goal of reducing potential vulnerabilities, 
protection against intrusion attempts and anticipating future 
threats to federal information systems unless roles and 
responsibilities for cyber security activities across federal 
government are more clearly defined and coordinated. They also 
cited a lack of measurement for effectiveness to gauge 
progress.
    So my question is what progress is being made to address 
these concerns so that you can be successful in meeting your 
goals?
    Mr. Reitinger. Thank you, ma'am. So let me say a couple of 
things and then I am going to ask Mike to add anything he would 
care to.
    I would say that defining roles and responsibilities is an 
area where we need to do further work. I think significant 
progress has been made over time, and in particular with the 
creation of the Comprehensive National Cybersecurity Initiative 
roles and responsibilities among the different agencies, who is 
the lead for different initiatives, was much more clearly 
defined.
    That process is moving forward, and one of the specific 
outcomes of the Cyberspace Policy Review, which the President 
initiated upon election and came out in May of last year, was 
the need to have a new national strategy that I think would go 
even farther, given what we have learned heretofore, better 
defining roles and responsibilities.
    I think that is going to be a key action item for the new 
cybersecurity coordinator at the White House, Howard Schmidt, 
and I know he is heavily focused on that.
    Ms. Roybal-Allard. Well, can you just tell me what is 
preventing you or what are the obstacles that are in front of 
you that prevent you from clearly defining a role so that we 
continue to have this overlapping of activities?
    Mr. Reitinger. I am not sure if it is a set of obstacles. 
It is simply that things come up and they have to be addressed. 
The events change. What we need to accomplish changes, and we 
need to keep the roles and responsibilities current so we are 
actively working those and better defining roles and 
responsibilities as we go forward.
    Within our particular mission space, for example, we have a 
specific effort, as I mentioned when I was giving my oral 
testimony, the National Cyber Incident Response Plan. Perhaps 
the most essential part of the National Cyber Incident Response 
Plan is to make sure that we have got a clearly defined set of 
roles and responsibilities for all of the Federal Government 
players and the private sector in the event of an incident that 
affects national security.
    And so there are a lot of people who are interested in how 
that pie looks and what piece of it they are responsible for. 
So that is a fully collaborative process that we are driving. 
We brought the private sector in at the very start. We brought 
the government agencies in at the very start. It is a long-term 
process that will lead to a draft that we intend to test in a 
Cyber Storm exercise at the end of this year.
    So I guess all of that is to say I think we can continue to 
define roles and responsibilities and clarify them, but we are 
likely never to be done with that. We will probably need over 
time to keep those roles and responsibilities current as 
capabilities and the threat environment we live in changes.
    Mike, did you want to add anything to that?
    Admiral Brown. The only thing is the fact that over the 
past several months to support that development of the Incident 
Response Plan we have had multiple exercises, including the 
private sector participants, so that we can clearly understand 
under different scenarios everybody's responsibility with 
respect to cyber security. That is the biggest thing. Everybody 
does have specific responsibilities.
    Ms. Roybal-Allard. So are you disagreeing then with the GAO 
reports that there is a lack of clearly defined and coordinated 
responsibilities?
    Admiral Brown. I think the answer is what we needed to 
have, which is what the Cyberspace Policy Review stated, was a 
National Cyber Incident Response Plan, and that is what we have 
all been working on since August to develop.
    Ms. Roybal-Allard. And when will you be finished with that 
plan?
    Mr. Reitinger. As I said before, ma'am, we intend to have a 
full-fledged draft that is executable in time for Cyber Storm 
III, which will be in September or October of this year.
    Mr. Price. Thank you very much. We will turn to Mr. Farr.
    Mr. Farr. Thank you, Mr. Chairman. Let me see if I totally 
understand. Your role with Homeland Security is .gov. Is your 
role as an Admiral with .mil, or are you----
    Admiral Brown. No, sir. I am Department of Homeland 
Security. I am assigned to the Department of Homeland Security 
to conduct its mission. I just happen to be a Department of 
Defense Navy officer.
    Mr. Reitinger. Admiral Brown is an example of the 
collaboration between the civilian side and the Defense side. 
He is effectively detailed to the Department of Homeland 
Security and serves as the Deputy Assistant Secretary for Cyber 
Security and Communications.

                      BUDGET FOR CYBER ACTIVITIES

    Mr. Farr. What is the total budget that you can disclose? 
What is our budget for cyber activities?
    Mr. Reitinger. The budget for the National Cyber Security 
Division request for Fiscal Year 2011 is I think $378 million.

             CONTRACT EMPLOYEES AND PRIVATE SECTOR PARTNERS

    Mr. Farr. Okay. And how much of the cyber security workload 
is performed by contractors?
    Mr. Reitinger. Well, we spend program funds on contractors. 
We have increasingly worked to have more and more of our work 
performed by government employees. My thoughts on that----
    Mr. Farr. So taking that back from contractors, or we grow 
that into federal employees?
    Mr. Reitinger. It really, sir, is making sure that we build 
out the expertise of our government employees. As I am sure you 
know, it is difficult to hire in this environment. Cyber 
security experts are still few in number, and hiring them is a 
highly competitive activity. We have been very successful in 
the last year in getting people on board, and we intend to 
continue to grow the federal workforce.
    I like to say when I came on board roughly a year ago we 
were down to about somewhere between 20 and 25 people, 
government employees in U.S.-CERT. Through the great efforts of 
Greg Schaffer and Mike Brown, we have raised that to around 50 
now, and we are trying to get that to 100 government employees 
by the end of the year. So during the course of the last year 
we have converted roughly 100 positions, if you will, from 
contractors to government employees.
    Mr. Farr. That is the right direction. I would like to 
invite you to come out and see what our cyber capabilities are 
on the Monterey Peninsula because Homeland Security has its 
school where you are getting Masters' and Ph.D.'s, and I think 
we can expand that training capability with the linkages that 
we have there.
    Could you also give us who are some of your private sector 
partners?
    Mr. Reitinger. Excuse me?
    Mr. Farr. Who are some of your private sector partners?
    Mr. Reitinger. Sir, we work with private sector partners 
across the entire spectrum under the National Infrastructure 
Protection Plan framework, so that includes multiple sectors, 
including communications and information technology and what 
you might think of as more traditional sectors like electric 
power and financial services.
    So we have, and work with both directly, with those sectors 
and through the Cross-Sector Cyber Security Working Group 
companies in all of those sectors. For example----
    Mr. Farr. This is under your Incident Response Plan?
    Mr. Reitinger. Well, we work directly with the sectors. 
Some of the lead work would be done by the IT and 
communications sectors. With regard to the IT sector, the 
former chair of the IT sector was Juniper. Now the chair of the 
IT sector is Microsoft. So it changes over time, but that is 
representative.
    A number of companies from CSC--not CS&C, but CSC. There 
are multiple companies that are involved in that work. I know 
that the first call which involved the private sector to work 
to develop the national cyber incident response process had 
over a hundred people on it, many of them from the private 
sector, and so there is a fairly broad level of participation.

                         INCIDENT RESPONSE PLAN

    Mr. Farr. I am just curious because the whole Incident 
Response Plan has essentially been developed out of the public 
sector, actually out of CalFire in California. It is a disaster 
response plan, and yet to develop the Incident Response Plan 
for cyber disasters is more of a private sector it seems. I am 
just curious about it.
    Mr. Reitinger. Sir, that goes back to Mr Rogers' comments. 
We are dealing with an environment where the vast majority of 
critical infrastructure is owned by the private sector. As 
Admiral Brown said before, everybody has a role here. We need 
to make sure when bad things happen that everybody knows what 
they need to do and how they can work together to respond to 
bad things.
    One thing about a cyber incident is it is unlikely to be 
geographically limited. Certain consequences may be, but it 
could easily be nationwide, and so we will need the right 
capabilities to bring together all those players from the 
Defense Department to the Department of Homeland Security to 
multiple states and localities and private-sector partners 
across the country to be able to respond effectively.

                          BROADBAND EXPANSION

    Mr. Farr. Just the last part of that. Is there in that 
analysis the ability to--you know, we have the big broadband 
expansion in the stimulus package, and I have been very curious 
because I represent a real rural area of California, and yet 
right down the main of that we have fiber optic cable to come 
to the Naval Postgraduate School, but within 25 miles of that 
you cannot get a cell phone. You cannot even in fire incidents. 
We cannot even get satellite communication. We have to park a 
communication ship offshore; usually not a military ship, but a 
civilian ship.
    So it seems to me that they are in one of those gaps that 
broadband is not addressing and I do not know whether you are 
addressing it. Is there some dialogue between what we are 
giving in our grant and the need to do broadband expansion and 
cyber security planning?
    Mr. Reitinger. Sir, I would say the big topic of broadband 
expansion is probably outside my mission space, as critical as 
I recognize that it is.
    We, however, are very concerned with broadband expansion. 
How do we ensure that the people who are involved are secure as 
they increasingly connect to high bandwidth connections? And 
there is a part of what works, a part of DHS that reports up 
through Admiral Brown and Greg Schaffer to me, that looks 
specifically at how do we ensure that we have things like 
priority communications across Internet base networks and 
telephone networks, so that is something we are concerned 
about, how we can make sure that we can get through to 
everybody in the event of an emergency.
    Mr. Farr. But not necessarily a geographical isolation or 
anything like that? That would not be part of it?
    Mr. Reitinger. The actual broadband expansion is something 
that would be done by other agencies like NTIA, sir.

                  2010 CYBER SECURITY EXPENDITURE PLAN

    Mr. Price. We appreciate both of you being here for what 
has turned out to be a fairly long morning with the classified 
briefing and then this public hearing. I think we do have some 
further questions, and I know we will submit more for the 
record, so I would like to proceed with the final fairly quick 
round of questions.
    I will lead off with a reference to the 2010 expenditure 
plan. The Subcommittee received this plan for the National 
Cyber Security Division last month. In this document DHS has 
substantially reorganized the program's plan from six goals in 
the 2009 plan to 47 separate initiatives in 2010. Now, of 
course it is not just the numbers that matter, but what those 
numbers signify, but it is fair to say that the Cybersecurity 
Initiative has grown, has matured, and has become more complex.
    I wonder if the increasing number of action items in this 
expenditure plan may represent a challenge to the orderly 
execution of the program, especially since, as a number of 
Members have mentioned, we are dealing overall in the 2011 
budget with a modest cut to the Cyber Security Program.
    So I want to ask you a question for your oral response and 
then you may well want to elaborate for the record. What is the 
relationship between the apparent increasing complexity of the 
Cyber Security Program and the 2011 budget? How closely was the 
2011 budget based on the achievements that DHS plans for 2010? 
Of course, this is an expenditure plan that arrived in Congress 
well after the 2011 budget arrived, so there is a question I 
suppose of synchronization here.
    Is the budgeting cycle for cyber security efforts 
synchronized with the program's implementation? We are looking 
for not just assurance, I think, but perhaps further details 
about the way the more detailed expenditure plan, which we 
awaited for some months, the way that that is reflected. The 
question is is it faithfully reflected in the 2011 budget 
request?
    [The information follows:]

    RESPONSE: The apparent increased complexity of the National Cyber 
Security Division's (NCSD's) program structure reflects the 
Department's multi-layered approach to the Nation's current and future 
cybersecurity posture. The Department's cybersecurity budgeting cycle 
is synchronized with cybersecurity program implementation. The 
Department's FY 2010 NCSD expenditure plan and FY 2011 NCSD budget 
justification were developed based on the FY 2010 NCSD budget request. 
NCSD's planned FY 2010 achievements were identified based on the FY 
2010 budget and are consistent with the FY 2011 budget request. As 
such, the FY 2011 budget is fully informed by DHS's planned FY 2010 
cybersecurity achievements.
    The decrease in the NCSD budget request for FY 2011 was caused by 
many factors, including the elimination of one-time or non-recur 
investments and DHS' prioritization of spending across the department. 
However, core cybersecurity programs such as EINSTIEN will continue in 
FY 2011.

    Mr. Reitinger. Sir, let me briefly say, and I would be 
happy to supplement in a question for the record, that I 
believe we are.
    I personally apologize to you and to the Committee for the 
length of time it took to get you the expenditure plan. That is 
a matter of focus for us, and we got it to the Committee more 
rapidly this year than we did last year, and we will do it more 
rapidly next year than we did this year if that is a 
requirement. I apologize, and we will work to make sure that 
that does not recur.
    Second, I believe that the efforts are synched. We are 
planning in the out years. We are planning long term for what 
we need to accomplish, and I think the reason you see an 
increasing complexity in our expenditure plans is we are having 
more people. We are bringing on the people, the human capital 
that we will need to be able to execute on a broader mission 
space.
    I think you will increasingly see a greater strategic focus 
in what we do because just earlier this year for the first time 
the Department of Homeland Security, in coordination with the 
interagency, released a Quadrennial Homeland Security Review, 
which says this is what we are trying to accomplish. These are 
our mission areas. These are our top line goals.
    One thing I would point out for this Committee is that for 
the first time cyber security was identified as one of the top 
five mission areas on a par with securing the borders with the 
entire Homeland Security enterprise, which is an interagency 
enterprise. So you will see an increasing focus and priority on 
this area and alignment of budgeting and initiatives with that 
strategic direction.

                      CYBER SECURITY COORDINATION

    Mr. Price. Let me just quickly follow up on a related area 
of questioning which Ms. Roybal-Allard pursued; that is the 
coordination among federal agencies that you are striving for.
    Your budget does address that very directly with a single 
funding item doubling the cyber security coordination funding 
from $5 million to $10 million. What specifically is that all 
about?
    Mr. Reitinger. Sir, that is about the National Cyber 
Security Center, which was established under HSPD-23/NSPD-54. 
That organization was not funded until FY 2010, except through 
some transfers, and received its initial funding of $5 million 
thanks to this Committee and to the Senate for FY 2010, which 
is creating an initial operating capability.
    The National Cyber Security Center is dedicated to enabling 
collaboration across the six cyber centers such as both U.S.-
CERT and the NCIJTF, which is run by the FBI for law 
enforcement purposes. All of that collection of centers to 
enable them to collaborate effectively together to be able to 
share information amongst themselves and to enable common 
situational awareness across all of the different areas of data 
and knowledge that the U.S. Government has.
    The $10 million request is to move out of an Initial 
Operating Capacity into a broader scope of responsibility. It 
is an expansion from, I believe, 14 federal FTP in this year to 
40 FTP next year.
    Mr. Price. Thank you. Mr. Rogers.
    Mr. Rogers. What can you say in this setting about where 
the attacks are originating?
    Mr. Reitinger. I think I would say in this setting, sir, 
that attacks can occur from anywhere to anywhere and that we 
need to be mindful and protect against the full spectrum of 
threats.
    One of the things that is important to note is one can 
appear to see an attack coming from a particular place where 
that just is the location of a computer system that an attacker 
has routed his or her communications through, so actually 
attributing conduct and finding the ultimate source of attack 
remains a significant item of work, demonstrated by how 
difficult it is to bring criminal prosecutions for criminal 
elements that are involved in this activity.
    Mr. Rogers. Well, obviously some of the attacks are from 
States, are they not?
    Mr. Reitinger. There is a full spectrum of threats, sir, 
and it goes up to the State level. Yes, sir.
    Mr. Rogers. Including military?
    Mr. Reitinger. I think I would rather not characterize that 
in this context, sir.
    Mr. Rogers. All right. Can you tell us some of the States 
that are involved?
    Mr. Rogers. Again, I would rather do that in closed 
session, sir.
    Mr. Reitinger. All right.
    Mr. Farr. Foreign States or domestic States?
    Mr. Rogers. Yes, is Kentucky involved? [Laughter.]
    Mr. Reitinger. I can neither confirm nor deny that. 
[Laughter.]
    Mr. Rogers. I plead the Fifth, too. How far behind are we 
on Einstein 3?
    Mr. Reitinger. Sir, I would say that our deployment 
schedule is about--with regard to where we are right now, as 
opposed to when we intended to deploy, about a year behind 
where we would like to be given the barriers that we faced.
    Mr. Rogers. Barriers like what?
    Mr. Reitinger. The barriers include the need to develop the 
contracts, and the need to work with our agency partners to 
ensure that all of the right legal and oversight structures are 
in place, a wide collection of activities.

                        EINSTEIN 3 CAPABILITIES

    Mr. Rogers. Well, how would you characterize the 
vulnerability of government networks to some damage or 
penetration without the real time intrusion detection and 
monitoring capability of Einstein 3?
    Mr. Reitinger. I think all networks, Federal Government or 
otherwise, are subject to significant threats and significant 
risks, sir, but as we deploy, or as we now test Einstein 3, and 
work towards deployment of operational capability, we are in 
the process of deploying other protections, working with our 
agency partners to make sure that they have the information 
that they need, and taking a series of actions.
    There is simply, sir, no silver bullet here, and Einstein 3 
is not a silver bullet. We need to make sure that we build 
defense in depth and have multiple ways in order to help 
protect both government and private networks.
    Mr. Rogers. Well, the goal, of course is to prevent 
penetration in real time of our networks. Can you assure us 
that Einstein 3 will achieve that goal?
    Mr. Reitinger. Sir, I can assure you that the technology 
when deployed will significantly enhance our security posture, 
and enable us to do things that we cannot currently do in the 
.gov domain.
    But it again will not be a silver bullet. It will not stop 
all intrusions. We will be looking for particular indicators of 
malicious activity, and attackers' techniques change over time. 
Plus, there are different spectrums of threats.
    Someone could simply walk into--you know, take a government 
computer home, a laptop home, and plug it into their network, 
have it compromised when they do that because they have got an 
infected machine on their home network.
    So we are going to have to be vigilant and continue to 
build multiple protections in defense in depth as we are doing 
right now.
    Mr. Rogers. So, Einstein 3 will not be the final answer?
    Mr. Reitinger. Oh, no, sir. There will be an Einstein 4 and 
other parallel protections that go along with it. It is an old 
saying if you will, and cyber security is not a destination. It 
is a journey.
    And it is a little tired, but it is true. We are dealing 
not with a set of static threats, like is there going to be an 
earthquake or not, but an adaptive and reactive set of 
adversaries that are going to see what we do, and change what 
they do, across the full spectrum, and we are going to need to 
keep responding to what they do in order to ensure protection.
    Mr. Rogers. Finally, we have not talked much about the 
private sector here today, although we should because it is 85 
percent owners of critical infrastructure. What can you tell us 
about how you are working with the private sector in this 
regard?
    Mr. Reitinger. Sir, we are working again with the private 
sector across the spectrum. We are sharing information with 
them. And as I mentioned in my testimony, things like the pilot 
that we are sharing information with the financial services 
sector, three different financial services, ISAC.
    We are working and we have private sector participants 
already at our telecommunications response center, the national 
coordinating center, and we are going to be working to add 
additional private sector representatives from other sectors, 
including IT and perhaps additional ones, at the national cyber 
security and communications integration center, because we want 
to have a joint operation center that will enable us with the 
private sector to work jointly.
    We are working with them on exercises, and making sure that 
we have got the right processes as I said before in the 
National Cyber Incident Response plan to be able to work 
together as one nation.
    We have worked with them on specific initiatives under 
Initiative 12 or Project 12 of the Comprehensive National Cyber 
Security Initiative, and in particular under the National and 
Infrastructure Protection Plan framework, for example, last 
year released the first ever risk assessment of the IT sector, 
in full collaboration with the IT sector coordinating council.
    The last thing that I would point out is that we are 
working with them in particular, if you will, technological 
silos. So we are working directly with control systems vendors 
and other entities worried about control systems, to help 
increase the security of control systems.
    So one could talk about our work with the private sector, 
and nearly everything that we are doing, we are doing something 
in that space with the private sector.
    Mr. Rogers. Could you apply an Einstein 2 tech system to 
the private sector on a voluntarily basis, and afford them some 
of the protections that Einstein 2 and 3 gives to the 
government techs?
    Mr. Reitinger. Sir, I would say that one could deploy an 
intrusion prevention system in order to protect part of the 
private sector. We right now are focused on deploying that to 
protect the .gov domain.
    Mr. Rogers. Thank you very much for your testimony and your 
work.
    Mr. Reitinger. Thank you, sir.
    Mr. Price. Thank you. Mr. Rodriguez.

           PRIVATE SECTOR PARTNERSHIPS AND TRAINING EXERCISES

    Mr. Rodriguez. Thank you very much, and let me go back a 
little bit on this discussion. Have we done any exercises with 
the private sector or do we have any projects going on that you 
are aware of now?
    Mr. Reitinger. Oh, absolutely, sir, particularly in cyber. 
Over the course of the last few years, we have done big 
exercises, like Cyber Storm I and Cyber Storm II.
    Mr. Rodriguez. Yes.
    Mr. Reitinger. And just in the last few months working on 
the National Cyber Incident Response Plan, we have done three 
table top exercises that involved the private sector.
    Mr. Rodriguez. One of the things that concerns me is with 
universities. Have any incidents occurred that are less likely 
to be publicized because they hurt the universities, especially 
if a crime is occurring?
    And in the area of crime, I would presume the same thing 
applies to banks. I am concerned that we do not know what is 
occurring in the private sector, or what might be occurring.
    You mentioned in terms of when we find out. I would presume 
that some attacks we have not found out about yet. So do we 
have--is there a need there to do some additional work with the 
private sector, and also in the area of crime, and with the 
police and preparing them as to how to deal with these issues 
through cyber in the area of crime in the local communities?
    Mr. Reitinger. Sir, you are taking me back not to my 
current role, which is more cyber security focused, than in the 
former role that I had as a prosecutor in the Department of 
Justice. I think that your questions are spot on, sir.
    Even back then, back to 1995 and before, the questions were 
raised about are we getting enough reporting, because people 
can be very reluctant to report cyber intrusions because it 
could adversely affect their reputation.
    And that has been an item of work not only in our community 
to make sure that people and companies know that we can provide 
assistance to them, but in law enforcement so that they can 
take appropriate action.
    Companies over time have gotten more used to reporting, and 
things like breach disclosure laws have certainly helped in 
that regard. But we need to continue to develop that. We still 
have to make too many decisions in cyber security based not on 
data, but based on religion.
    And I do not mean that in the technical sense, but people 
make decisions based on what they believe and what they think 
to be true, rather than based on what the data shows. So we 
need to continue to build those relationships to get that data, 
and that is a significant item of work for us to make sure.
    For example, with the financial services sector, the whole 
point behind the pilot that we are conducting is that that is 
not how we push information to the sector. It is bilateral 
information sharing.
    How do we share information so that we give them relevant 
data, and they give us relevant data, so we can all have the 
information that we need both to generate situational awareness 
and to allow us to protect our systems?
    Mr. Rodriguez. And you hit the nail on the head, because I 
know that with the universities we had to create legislation to 
require them to report any assaults, or anything against women, 
because they were not forthcoming.
    I assume that the private sector is not going to be 
forthcoming either unless we require that information, or allow 
some umbrella of protection for us to follow through on that. I 
am really concerned whether our local police are also capable 
of following through on some things that might be occurring 
through cyber, of if we are not there yet in terms of the 
training that is required.
    And so you are also telling me that we are providing 
training in the local community? Who was doing that once again?

                        LOCAL COMMUNITY TRAINING

    Mr. Reitinger. Sir, training the local communities is done, 
I think, by primarily in a distributed way. Through our efforts 
under National Cyber Security Awareness Month, and more 
generally around awareness, make active efforts to inform 
everyone, including critical infrastructure, but down to 
individual end-users about the way they can protect themselves.
    And we make a very focused effort during Cyber Security 
Awareness Month. I mean, just one case in point. During Cyber 
Security Awareness Month this last year, I sat down in a local 
station, or in a satellite studio and did over 20 local 
interviews with different local TV stations around the country 
to help raise cyber security awareness in their community, and 
that sort of activity is continuing.
    One other thing that I wanted to mention. There are 
mechanisms that enable us to protect information that the 
private sector shares with us. In particular, the Protected 
Critical Infrastructure Information program, the PCII program, 
which is run under DHS, provides protection to voluntarily 
share vulnerability information. So we have mechanisms to go 
forward in that space.
    Mr. Price. Thank you. Mr. Farr.

                      EINSTEIN DEPLOYMENT SCHEDULE

    Mr. Farr. I want to follow up Mr. Rogers' question. How far 
behind is Einstein, or how far behind do you think .gov is from 
.mil?
    Mr. Reitinger. Sir, that is hard for me to compare because 
the environments are so very different. The .gov environment is 
far more complicated, and far more distributed, and has far 
more connectivity, and more owners than operators. I really do 
not know how to answer that question.

             RESPONSIBILITY FOR FINANCIAL EXCHANGE SECURITY

    Mr. Farr. Well, let me follow up Mr. Rodriguez's question, 
and following up on who is responsible for the exchanges, the 
commodity exchange and the stock exchanges for cyber security? 
I would think of all the energies that would be hacked, and 
jammed, and manipulated, would be the exchanges, because that 
is there 24-7, and global, and a lot of international players 
are involved in the exchanges, because you can do the whole 
thing over the Internet.
    So it seems to me to be one of the most massive cyber 
security items would have to be in that area. Is that our 
government's responsibility, or is that all just the cyber 
section?
    Mr. Reitinger. Sir, you raise a very good question. This is 
an important point. The ultimate responsibility for cyber 
security is going to lie with the owners and operators of the 
networks. So it is important to us to not fully own the 
security of .gov.
    It is the Department of Homeland Security's responsibility 
to secure its own networks. It is the Defense Department's 
responsibility to secure its networks. It is the--pick an 
agency. It is the Department of Interior's responsibility to 
secure its networks.
    Similarly, the same is true in the private sector. So what 
we have got to do is get into a world where cyber security is a 
part of the DNA of every entity, and we in government, 
particularly in the parts of the government that report up to 
me, the National Cyber Security Division, are both making that 
easier providing the data that those companies, or government 
entities, need to protect themselves, and provide certain 
technologies or capabilities to deal with issues that are hard 
to deal with on a one-by-one basis.
    Mr. Farr. It also seems that we have to stay ahead of the 
curve, the intellectual curve. We have got to have the 
brightest people in the world working for us.
    Mr. Reitinger. Absolutely.
    Mr. Farr. And do we?
    Mr. Reitinger. We have some very incredible people both in 
the government and in the private sector, sir. You would be 
amazed at some of the expertise that exists both in the private 
sector and in government to address some of these issues.
    But if we do not maintain a focus on developing the 
capabilities in our universities, and in hiring people, and 
making sure that people know being a deepest pool, a cyber 
security pool, we are going to have a lot of trouble.
    We have got to start getting kids when they are six and 
seven years old thinking about programming, and getting them 
involved in security, and doing end-to-end work so that when 
they graduate from a university, they are ready to go to work 
for a private-sector company, or a government agency, and they 
are the world experts.
    Mr. Farr. And Silicon Valley is very cool and very rich, 
and very profitable. Thank you, Mr. Chairman.
    Mr. Price. Thank you, and let me thank both of our 
witnesses for very helpful testimony, and for the good work 
that you are doing in a very challenging area, and one that we 
are going to be paying careful attention to in the weeks ahead 
as we draw up the 2011 budget. But you have been a great help 
to us this morning and we thank you.
    Mr. Reitinger. Thank you, sir.
    Mr. Price. With that the Subcommittee is adjourned.

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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Allen, Thad W....................................................   351
Brown, Michael...................................................   755
Fugate, W. Craig.................................................   453
Garza, Alexander.................................................   115
Goldstein, Bernard...............................................   115
O'Toole, Tara....................................................   115
Reitinger, Phil..................................................   755
Rossides, Gale D.................................................     1
Sosin, Daniel....................................................   115
Sullivan, Mark...................................................   273


                               I N D E X

                              ----------                              

Transportation Security Administration: Are We Making Smart Investments 
                   For Real Transportation Security?

                                                                   Page
Opening Statement of Chairman David Price........................     1
Opening Statement of Ranking Member Harold Rogers................     7
Statement of Gale Rossides, Acting Assistant Secretary, TSA......    13
Advanced Imaging Technologies................................29, 50, 59
Advanced Imaging Technology Deployment...........................    36
Air Cargo Security...............................................    79
Air Marshals.....................................................    39
AIT and Metal Detectors..........................................    33
AIT Installations at Airports....................................    34
AIT Passenger Response and Privacy...............................    31
AIT Manpower Requirements........................................    51
Austin, Texas, Internal Revenue Service Security Incident........    35
Aviation Regulation and Other Enforcement........................    89
Bonuses..........................................................   103
Cargo Screening..................................................    47
Checkpoint Technologies..........................................    58
Contracts........................................................    96
Effectiveness of AITs............................................    32
Explosive Detection Systems (EDS)................................    66
Federal Flight Deck Officer and Flight Crew Training.............    90
Federal Flight Deck Officer Program..............................   114
General Aviation.................................................    83
Hiring...........................................................    95
Israeli Model....................................................    45
Language Training................................................    40
Large Aircraft Security Program..................................    82
Liquid Detection Technologies....................................    62
Maintenance and Utility Costs for Screening Technologies.........    72
O'Hare...........................................................    46
Portable Trace Machines..........................................    63
Private Aircraft Regulation......................................    34
Profiling........................................................    44
Questions for the Record Submitted by Chairman David Price.......    58
Questions for the Record Submitted by Ranking Member Harold 
  Rogers.........................................................   112
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................   114
Reception and Representation.....................................    94
Screening Partnership Program....................................    88
Secure Flight....................................................    83
Screening Partnership Program....................................   112
Standards for Incoming International Flights.....................   113
Standoff Detection Technologies..................................    64
Standoff Detection...............................................   112
Surface Transportation Security..................................    90
Terrorist Watch List.............................................    44
Training for Screeners...........................................    52
Training Mandates for Transit Workers............................   114
Transit Security Grants..........................................    49
Transportation Security Officers.................................    74
Transportation Security Support..................................    91
Travel...........................................................   110
Unions...........................................................    39
Unobligated Balances.............................................   110
Working with Europeans on Watch Lists............................    46

          Biosurveillance: Smart Investments for Early Warning

Opening Statement of Chairman David Price........................   115
Opening Statement of Ranking Member Harold Rogers................   121
Statement of Dr. Alexander Garza, Assistant Secretary, OHA.......   125
Statement of Dr. Tara O'Toole, Under Secretary, S&T..............   137
Statement of Dr. Bernard Goldstein, Chair Committee on 
  Effectiveness of National Biosurveillance Systems..............   150
Statement of Dr. Daniel Sosin, Acting Director, OPHPR, CDC.......   165
Assessment of BioWatch Enhancements..............................   259
BioThreats.....................................................200, 202
Biosurety........................................................   261
BioWatch Deployment Plans........................................   191
BioWatchGeneration 1/2...........................................   207
BioWatch Generation 3............................................   268
BioWatch Generation 2 and 3......................................   179
Bonuses..........................................................   238
Border Officer Tools and Safety Program..........................   211
Centers of Excellence............................................   212
Chemical Programs--Detection.....................................   226
Command, Control and Interoperability............................   226
Continuity of Operations Planning................................   203
Contracts........................................................   230
Cyber Security Assessment Project................................   226
Demonstrations and Pilot Programs................................   212
Generation 2 Testing.............................................   207
Generation 3 Procurement.........................................   209
H1N1 Lessons Learned.............................................   190
Hiring...........................................................   230
Increased Management and Administration Personnel................   210
Insider Threat Protection........................................   227
Institute of Medicine Recommendations............................   267
Integration of Biosurveillance Systems...........................   197
Local Coordination...............................................   187
NAS Recommendations vs. Administration Plans.....................   256
National Bio and Agro-Defense Facility (NBAF)..................184, 196
National Biosurveillance Integration Center...............189, 193, 209
NBAF.............................................................   262
Plum Island Animal Disease Center................................   228
Private Sector...................................................   185
Public Health Response...........................................   194
Public Health Surveillance.......................................   266
Public Health....................................................   199
Questions for the Record Submitted by Chairman David Price.....207, 256
Questions for the Record Submitted by the Honorable Ciro D. 
  Rodriquez....................................................261, 262
Questions for the Record Submitted by the Honorable John R. 
  Carter.........................................................   265
Questions for the Record Submitted by the Honorable Ken Calvert268, 269
Questions for the Record Submitted by the Honorable Mark Kirk....   266
Reception and Representation.....................................   229
Resilient Social Networks Project................................   227
Standards........................................................   184
Substantial Investment in the Biowatch Program?..................   265
T&E for Generation 3.............................................   208
Technical Questions Regarding BioWatch...........................   269
Travel...........................................................   251
University Programs..............................................   228
Unobligated Balances.............................................   252
Working with the Department of Defense...........................   186

              United States Secret Service: FY2011 Budget

Opening Statement of Chairman David Price........................   273
Opening Statement of Ranking Member Harold Rogers................   277
Statement of Mark Sullivan, Director, U.S. Secret Service........   281
2008 Campaign Cost Overruns......................................   296
2012 Campaign Budget.............................................   293
2012 Campaign....................................................   349
Anti-Counterfeiting Investigations in South America..............   307
Bonuses..........................................................   326
Contracts........................................................   312
Design of U.S. Currency..........................................   308
E Street Barricades..............................................   349
Hiring...........................................................   312
Intensity of Threats Against Protectees..........................   294
Overtime and Retirement Pay......................................   299
Questions for the Record Submitted by Chairman David Price.......   312
Reception and Representation.....................................   317
Replacement Cycle for Secret Service Vehicles and Small Arms.....   303
Secret Service Financial Crimes Investigations...................   303
Secret Service Information Technology............................   301
Staffing and Overtime............................................   318
Travel...........................................................   328
Unobligated Balances.............................................   328
USSS Field Offices...............................................   329
USSS Investigations..............................................   335
White House State Dinner Incident................................   297

                       Coast Guard: FY2011 Budget

Opening Statement of Chairman David Price........................   351
Opening Statement of Ranking Member Harold Rogers................   355
Statement of Admiral Thad W. Allen, Commandant, U.S. Coast Guard.   361
Acquisition Workforce............................................   401
Aids to Navigation...............................................   430
Aircraft Maintenance Backlog.....................................   429
Alteration of Bridges............................................   446
Automatic Identification System..................................   431
Backup to GPS....................................................   396
Capital Investment Plan..........................................   377
Closure of Great Lakes Seasonal Airstations......................   385
Coast Guard Reserves.............................................   433
Collective Bargaining............................................   451
Contracts........................................................   428
Cost Growth......................................................   397
Development of FY2011 Coast Guard Budget.........................   376
Drug Interdiction................................................   381
Effect of FY2011 Coast Guard Budget Cuts.........................   378
Full Time Equivalents (FTEs).....................................   449
FY2009 DHS Financial Systems Audit...............................   395
Haiti............................................................   451
HH-65C Helicopters...............................................   448
ICE Breakers.....................................................   384
Independent Life Cycle Cost Estimates............................   394
Intelligence.....................................................   383
Management.......................................................   405
Marine Debris....................................................   403
Maritime Safety and Security Teams...............................   386
Military/Civilian Mix............................................   432
Mission Effectiveness Program....................................   449
Mission Readiness................................................   452
National Capital Region Airspace Security........................   431
National Security Cutter.........................................   401
NSC Schedule.....................................................   448
Overseas Contingency Operations..................................   396
Past GAO Recommendations.........................................   404
Performance Measures.............................................   394
Personnel Cuts...................................................   388
Polar Operations.................................................   393
Questions for the Record Submitted by Chairman David Price.......   393
Questions for the Record Submitted Ranking Member Harold Rogers..   448
Questions for the Record Submitted by the Honorable C.A. 
  ``Dutch'' Ruppersberger........................................   449
Questions for the Record Submitted by the Honorable Nita M. Lowey   450
Research, Development, Testing and Evaluation....................   432
Shore Maintenance Backlog........................................   428
Slowing Acquisitions of Key Assets...............................   393
Small Boat Threats...............................................   450
Unobligated Balances.............................................   434
USCG as Systems Integrator.......................................   398
Vessel Maintenance Backlog.......................................   429

          FEMA--Preparing for Disasters and Minimizing Losses

Opening Statement of Chairman David Price........................   453
Opening Statement of Ranking Member Harold Rogers................   459
Statement of W. Craig Fugate, Administrator, FEMA................   464
American Samoa Disaster..........................................   524
Bonuses..........................................................   717
Contracts........................................................   526
Disaster Housing Assistance Program..............................   523
Disaster Recovery Strategy.......................................   513
Disaster Relief Contracting......................................   512
Disaster Relief Fund...........................................477, 512
Disaster Support.................................................   525
Emergency Alert System...........................................   502
Emergency Management Assistance Compact..........................   523
FEMA Staff.......................................................   518
FEMA Trailers....................................................   748
Fire Grants......................................................   750
Firefighter Grants...............................................   497
Flood Insurance..................................................   521
Flood Mapping....................................................   492
GPD/NPD..........................................................   522
Hiring...........................................................   526
Indian Point Energy Center.......................................   749
Individual and Community Preparedness............................   519
Interoperability Grants..........................................   483
Katrina Arbitration..............................................   500
Leon River Floodplain............................................   508
Measuring Grants Effectiveness...................................   499
National Flood Insurance Program.................................   753
NEPA Process.....................................................   487
Nuclear Terrorism Response.......................................   750
Operation Stonegarden............................................   746
Overseas Deployment of Teams.....................................   494
Port Security Grants.............................................   515
Postdisaster Mitigation..........................................   495
Predisaster Mitigation...........................................   491
Preparedness Measurement.........................................   520
Preparedness.....................................................   484
Questions for the Record Submitted by Chairman David Price.......   512
Questions for the Record Submitted by the Honorable Alan Mollohan   748
Questions for the Record Submitted by the Honorable Ciro D. 
  Rodriguez......................................................   745
Questions for the Record Submitted by the Honorable Ken Calvert..   752
Questions for the Record Submitted by the Honorable Nita M. Lowey   749
Reception and Representation.....................................   526
Staffing Issues..................................................   479
State and Local Preparedness.....................................   745
Streamlining Port Security Grant Process.........................   752
Transit Security Grant Program...................................   749
Travel...........................................................   728
Unobligated Balances.............................................   742
Urban Areas Security Initiative (UASI)...........................   481
Urban Search and Rescue..........................................   486

DHS Cyber Security Programs--What Progress Has Been Made and What Still 
                         Needs to be Improved?

Opening Statement of Chairman David Price........................   755
Opening Statement of Ranking Member Harold Rogers................   760
Statement of Phil Reitinger, Deputy Undersecretary, NPPD.........   766
Statement of Rear Admiral Michael Brown, Deputy Assistant 
  Secretary for Cyber Security and Communications................   766
2010 Cyber Security Expenditure Plan.............................   789
Authentication and Malware.......................................   846
Baseline Information on Attacks..................................   848
Bonus............................................................   833
Broadband Expansion..............................................   788
Budget for Cyber Activities......................................   787
Chemical Security Regulation.....................................   810
Contracts........................................................   828
Control Systems..................................................   804
Coordination Among Agencies......................................   785
Cyber Security Budget Structure..................................   783
Cyber Security Coordination....................................790, 799
DHS Lead for Preparation and Prevention..........................   783
Einstein 3 Capabilities..........................................   792
Einstein 3 Deployment............................................   778
Einstein Among Security Operations Centers.......................   844
Einstein Deployment Schedule.....................................   795
Federal Protective Service (FPS).................................   815
Governance, Risk and Compliance..................................   845
Hiring...........................................................   827
Incident Response Plan...........................................   788
Local Community Training.........................................   794
Next Generation Networks (NGN)...................................   805
NPPD Field Offices...............................................   837
Office of Bombing Prevention.....................................   814
Office of Emergency Communications (OEC).........................   808
Private Sector Partnerships and Training Exercises...............   793
Protective Security Advisors.....................................   810
Questions for the Record Submitted by Chairman David Price.......   799
Questions for the Record Submitted by the Honorable Alan B. 
  Mollohan.......................................................   849
Questions for the Record Submitted by the Honorable C.A. 
  ``Dutch'' Ruppersberger........................................   844
Reception and Representation.....................................   833
Responsibility for Financial Exchange Security...................   795
Supercomputing Sensor Technologies...............................   849
Travel...........................................................   836
Trusted Internet Connections and Cyber Security Threats..........   779
Unobligated Balances.............................................   835
User Authentication..............................................   802
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