[Senate Hearing 111-1097]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 111-1097
 
                 CHARTING A PATH FORWARD: THE HOMELAND
                   SECURITY DEPARTMENT'S QUADRENNIAL
                      HOMELAND SECURITY REVIEW AND
                            BOTTOM-UP REVIEW

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

                                HEARING

                               before the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 21, 2010

                               __________

        Available via the World Wide Web: http://www.fdsys.gov/

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




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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
JON TESTER, Montana                  LINDSEY GRAHAM, South Carolina
ROLAND W. BURRIS, Illinois
EDWARD E. KAUFMAN, Delaware

                  Michael L. Alexander, Staff Director
                    Beth M. Grossman, Senior Counsel
                         Troy H. Cribb, Counsel
            Christian j. Beckner, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
   Robert L. Strayer, Minority Director for Homeland Security Affairs
                  Luke P. Bellocchi, Minority Counsel
          Devin F. O'Brien, Minority Professional Staff Member
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     4
    Senator Voinovich............................................    11
    Senator Brown................................................    15
    Senator McCain...............................................    21
Prepared statements:
    Senator Lieberman............................................    27
    Senator Collins..............................................    30

                                WITNESS
                        Wednesday, July 21, 2010

Hon. Jane Holl Lute, Deputy Secretary, U.S. Department of 
  Homeland Security
    Testimony....................................................     6
    Prepared statement...........................................    33
    Responses to post-hearing questions for the Record...........    44

                                APPENDIX

Department of Homeland Security report titled ``Quadrennial 
  Homeland Security Review Report: A Strategic Framework for a 
  Secure Homeland,'' February 2010...............................    95
Department of Homeland Security report titled ``Bottom-Up Review 
  Report,'' July 2010............................................   202


                        CHARTING A PATH FORWARD:
                   THE HOMELAND SECURITY DEPARTMENT'S
                     QUADRENNIAL HOMELAND SECURITY
                      REVIEW AND BOTTOM-UP REVIEW

                              ----------                              


                        WEDNESDAY, JULY 21, 2010

                                     U.S. Senate,  
                       Committee on Homeland Security and  
                                      Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:06 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Kaufman, Collins, Brown, 
McCain, and Voinovich.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. The hearing will come to order. Thanks 
very much to everyone for being here. In particular, welcome, 
of course, to the Deputy Secretary of the Department of 
Homeland Security (DHS), Jane Holl Lute.
    In the 9/11 Recommendations Act of 2007, Congress mandated 
that the DHS carry out a Quadrennial Homeland Security Review 
(QHSR) as a way to develop and update strategies for homeland 
security within the Federal Government and ensure that the 
Department's programs and activities were aligned with that 
homeland security strategy. The Act required that the initial 
QHSR be provided to Congress by the end of 2009.
    The QHSR was modeled on the Quadrennial Defense Review 
(QDR) that was put in place in the 1990s to ensure that the 
leaders of the U.S. military would focus on emerging national 
security threats, that to some extent the requirement to do the 
QDR would force them to look above the pressing events of the 
day, over the horizon to the challenges that were ahead, and 
then to develop and present to Congress and the public the 
strategies and resources to counter them.
    The QHSR report, which was completed in early February, and 
the follow-on Bottom-Up Review (BUR) report, which was 
completed and issued just a few weeks ago, are meant to serve 
the same purpose for homeland security. They have the 
potential, I think, to be the catalyst for ongoing 
transformation and improvement of the Department, as well as 
across our entire homeland security community outside of the 
Department, and in that sense, we are very fortunate to have 
Ms. Lute with us because I know that she oversaw these two 
reports.
    This morning we want to hear about the results of the 
process, including the impact that it is having on strategic 
planning more broadly within the Department and at other 
homeland security agencies.
    I would like to hear about the steps that will be taken to 
implement the initiatives described in the BUR report, 
including how it will impact the Department's budget priorities 
in future years and how the Department intends to work with 
Congress on initiatives that may require statutory changes.
    Forty-four initiatives are described in the BUR report, in 
areas such as information sharing, management integration, DHS 
regional alignment, and the organizational framework for 
cybersecurity. In fact, cybersecurity, in a noteworthy change, 
has now made its way into the top five mission areas of the 
DHS, and I applaud that placement because that is exactly where 
I think it belongs.
    The Bottom-Up Review is also a broad narrative of the 
Department's key missions--I will say for myself too broad at 
least in its first iteration and various of its parts--and its 
goals for improving those missions, which sometimes in the 
report seemed too vague to me as I read them. I hope, Ms. Lute, 
that you will be able to develop those in some more detail 
today and in follow-on documents.
    When Congress created the Department of Homeland Security 
out of 22 different Federal agencies in 2002, we knew it would 
take time for it to mature into a cohesive agency that could 
focus its many parts on its two main missions, which are to 
take the lead in our Nation's fight against the Islamist 
terrorists who attacked us on September 11, 2001, and also to 
be able to respond better to natural disasters. I think 
overall, as I have said here many times before, the Department 
has done very well at achieving those missions, but it still 
has a way to go as we all acknowledge.
    The QHSR and the BUR are important steps on the path to 
achieving that goal, and I have questions that I am going to 
ask about that.
    I do want to say that we hold this hearing against the 
backdrop of a series of articles that has been in the 
Washington Post called ``Top Secret America'' that examines the 
new institutions and programs created after September 11, 2001, 
particularly focused on intelligence, but also including the 
Department of Homeland Security. So it makes this oversight of 
the QHSR and the BUR particularly timely.
    I think the Washington Post series has raised important 
questions about the big changes in our government since 
September 11, 2001. For instance, is too much of our war 
against the terrorists who attacked us on September 11, 2001, 
being outsourced to private contractors? That is a big question 
raised by the Washington Post series; it is one that has been 
of concern to this Committee for some significant period of 
time, actually going back to October 2007, when we held a 
hearing on the Department's reliance on contractors. At that 
hearing, the Government Accountability Office (GAO) presented 
the results of a review that they conducted at the request of 
Senator Collins and myself. We have consistently pressed the 
Department on this issue in the context of our oversight of 
specific programs since then, such as SBInet and cyber 
functions, for example, where there continue to be a 
significant number of private contractors involved. The former 
Under Secretary for Management, Elaine Duke, I think, tried to 
dig into this issue toward the end of the last Administration 
but did not get very far, and I am not sure she had much 
support from people above her.
    I am pleased to say that it does seem to me that a serious 
review of the contractor workforce is underway now under 
Secretary Janet Napolitano and Deputy Secretary Lute. At a 
briefing in December, we heard for the first time that DHS is 
trying to quantify the number of contract employees. The 
numbers that we have received are really quite remarkable. At 
an oversight hearing on this question a while ago, I was 
shocked to hear the number 200,000 contract employees that are 
working for the Department of Homeland Security, as compared to 
188,000 full-time civilian employees.
    After that hearing, Senator Collins and I wrote to 
Secretary Napolitano to ask for a more detailed breakdown on 
the contractor workforce so we could determine whether those 
contract employees were doing inherently governmental work in 
violation of the law. It is hard to imagine with so many that 
some of them were not, and I think we have to face that problem 
and deal with it so that the reality comes into conformance 
with the law.
    While we have been assured repeatedly by the Department 
that a review is underway, we still, as of this morning, do not 
have a timetable for when that review will be complete or a 
specific breakdown at the program level of the current full-
time employee to private contractor ratios.
    I hope, Ms. Lute, that you will be able to help us answer 
some of these questions today, and if not today, then as soon 
as possible. In my opinion, a lot of the growth of the homeland 
security and intelligence community of the U.S. Government 
after September 11, 2001, was necessary, and I do not know if 
the series in the Washington Post intends to say that the 
system is out of control, but I do not find from my inquiry 
that it is out of control, both because of the creation of the 
Department, which is exercising management and coordination 
authority, and also in the intelligence area because of the 
creation of the Director of National Intelligence who is doing 
the same.
    But there has been a lot of growth, and it has happened 
quickly. It is part of why we have been relatively fortunate 
since September 11, 2001, that, thank God, and thanks to all 
the employees of the government who have helped us do that, we 
have not been hit again with anything like September 11, 2001. 
But the facts in the Washington Post series, and all that we 
have been working on over the last 3 years here in the 
Committee, say that we cannot just let the machine operate 
without control from the Executive Branch and oversight from 
the Legislative Branch so that we are sure that we are spending 
taxpayer dollars in a cost-effective way.
    I look forward to discussing this and all the other topics 
that the QHSR and the BUR raise with you this morning. I 
appreciate your being here.
    Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman. Thank you for 
holding this hearing on the need to establish clear priorities 
for the Department of Homeland Security, the Federal entity 
created to help protect our country from terrorism and other 
threats.
    As has been stated many times, if you try to protect 
everything, you end up protecting nothing. So it is incumbent 
upon the Department, particularly when budgets are tight, to 
set detailed priorities to improve the preparedness and 
security of our Nation.
    The Department's Quadrennial Homeland Security Review is a 
good first attempt to outline strategic homeland security 
missions and goals. Yet, the Department itself acknowledged 
that the QHSR was incomplete, so it then conducted a follow-on 
review. As the Chairman has indicated, this assessment, known 
as the Bottom-Up Review, was intended to set priorities for 
security initiatives and reorganization at the Department.
    While I appreciate the Department's effort to undertake 
such a comprehensive analysis, the results are disappointing. 
Indeed, the two reviews simply do not compare to the level of 
analysis and planning that goes into the Quadrennial Defense 
Review and supporting documents. Let me give an example.
    In the QDR and in the Navy's shipbuilding plan, the 
Department of Defense outlined specific measurable goals, such 
as a 313-ship Navy. The 30-year shipbuilding plan includes a 
force structure, construction plan, funding assumptions, and a 
specific articulation of the risk inherent in the force 
projections. By comparison, the Department of Homeland 
Security's reviews amount essentially to high-level strategy 
documents that provide little in the way of concrete goals or 
the actions needed to achieve them.
    For example, the Department of Homeland Security reviews 
set some goals to eliminate unnecessary duplication, to 
decrease operational inefficiencies, and to promote 
cybersecurity. But without specific measurable plans, how can 
Congress hold the Department accountable for meeting these 
goals?
    In these documents, the Department highlights the critical 
need to address the threat of a cyber attack and indeed lists 
cybersecurity as one of five strategic ``pillars.'' I agree 
with that priority, but that seems inconsistent with the 
President's budget request for fiscal year 2011, which cut the 
Department's cybersecurity budget by $19 million. How can the 
Department shoulder even the general responsibilities of an 
entire pillar while cutting the associated budget? The 
documents do not explain that contradiction, nor do they 
outline how the Department plans to do more with less.
    As co-author with the Chairman of a comprehensive 
bipartisan cybersecurity bill, I am disappointed that the 
Department's reviews do not identify the authorities and 
resources that DHS will need to enhance its cybersecurity 
capabilities. The legislation this Committee approved last 
month would fill that gap.
    The Bottom-Up Review also fails to provide any specificity, 
as the Chairman has indicated, on how the Department will 
reduce its troubling overreliance on contractors. This is a 
concern that I have raised repeatedly with the Secretary, as 
has the Chairman and other Committee members. As the Washington 
Post investigation revealed, six out of 10 employees at the DHS 
Office of Intelligence and Analysis (I&A) are from private 
industry. This is on top of the revelation that an astonishing 
50 percent of the DHS workforce are contractors. This is 
unacceptable.
    Now, let me emphasize that I recognize that contractors 
play an important role in augmenting the Federal workforce in 
helping to meet a one-time need, but they cannot displace the 
need for permanent, well-trained government employees.
    But what does the DHS report say about this? Simply that 
``DHS will continue to build on contractor conversion efforts 
at an even more aggressive pace.'' That is not a plan. It is 
simply a platitude.
    Like a compass, the QHSR should aid the Department in 
aligning its budget requests with homeland security priorities, 
and in turn, these priorities would help Congress evaluate the 
President's budget request against measurable goals. The 
reviews that the Department has presented to Congress 
accomplish none of these tasks. They do not include a budget 
plan for the Department, nor do they assess how the 
organizational structure can better meet the national homeland 
security strategy.
    I also have to mention an issue that the Chairman and I 
have mentioned repeatedly about documents presented to the 
public and our Committee. The QHSR slights the strategic threat 
posed by violent Islamist extremists by refusing to call that 
real and present danger what it is. This is ironic considering 
that the introduction to the QHSR discusses the Christmas Day 
attack, an attack conducted by a violent Islamist extremist. 
The review does not reference ``violent Islamist extremism'' or 
any variation of that phrase in the entirety of its 108 pages, 
and it refers to ``homegrown extremists'' only once. That is 
astonishing given the alarming increase in the number of 
homegrown terrorist plots last year. In sharp contrast, the 
October 2007 National Strategy for Homeland Security uses the 
word ``Islamic'' 15 times and the word ``homegrown'' eight 
times.
    The Bottom-Up Review fails to describe how the Department 
will confront the threat of home-based terrorism. If DHS does 
not acknowledge in a forthright way the nature of the threat or 
explain how the Department intends to counter it, it is 
impossible for Congress and the American people to judge the 
Department's counterterrorism plans and whether they are 
adequately reflected in its budget and priorities.
    I look forward to hearing more from the Department's Deputy 
Secretary about how more concrete and actionable plans will be 
developed. That planning is essential to improve the efficiency 
of departmental operations and to build sensible budget plans. 
Only then will the time and effort--and I recognize there was 
tremendous time and effort put into these projects--spent on 
these reviews pay dividends in the form of a usable road map to 
better protect the American people.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you very much for that statement, 
Senator Collins.
    Ms. Lute, again welcome. Thanks for all your good work for 
our country, and we look forward to your statement now.

  TESTIMONY OF HON. JANE HOLL LUTE,\1\ DEPUTY SECRETARY, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Ms. Lute. Thank you very much, Mr. Chairman, Ranking Member 
Collins, and Members of the Committee. I am happy to be here 
today to discuss the Department's Quadrennial Homeland Security 
Review and the Bottom-Up Review and, in particular, how the 
Department of Homeland Security plans to implement the 
initiatives set forth in these two efforts.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Lute appears in the Appendix on 
page 33.
---------------------------------------------------------------------------
    As you know, and as you have pointed out, the submission of 
the QHSR report to Congress earlier this year marked an 
important first step in a multi-step process to examine and 
address fundamental issues that concern the broadest 
perspective of what is called the homeland security enterprise.
    The Bottom-Up Review was initiated in November 2009 as an 
immediate follow-up to complement the work of the QHSR with the 
aim to align the Department's programmatic activities and 
organizational structure with the broader strategic and mission 
direction identified in the QHSR. The BUR report itself 
reflects that endeavor and represents an intermediate step 
between the QHSR report and the President's fiscal year 2012 
budget request and future years, which will propose specific 
programmatic adjustments based on the QHSR strategic framework.
    The QHSR resulted in the articulation of a strategic 
framework and a positive, forward-looking vision for homeland 
security. Indeed, one of the initial challenges that we faced 
is that while homeland security had broad and widespread and 
extensive name recognition, brand recognition, there was less 
of a handle on what it meant to talk about a secure homeland. 
The QHSR lays out a vision for homeland security that says, 
very simply, we are trying to build a safe, secure, and 
resilient place against terrorism and other hazards where the 
American way of life, interests, and aspirations can thrive.
    Informed by this conception of homeland security that is a 
positive, forward-looking vision, the report also places 
emphasis on the fact that it takes an enterprise, the homeland 
security enterprise, a more complete and comprehensive 
understanding of the homeland security threats, and the need to 
achieve balance across the efforts related to security, 
resilience, and the important elements of customs and exchange.
    The QHSR strategic framework grounds homeland security, the 
achievement of this vision, in the accomplishment of five 
missions, and those missions are: Preventing terrorism and 
enhancing security; securing and managing our borders; 
enforcing and administering our immigration laws; safeguarding 
and securing cyberspace; and ensuring resilience to disasters. 
We believe that if we achieve these five missions and execute 
these five mission sets, we will go a long way toward achieving 
a safe, secure, and resilient place where the American way of 
life can thrive.
    The Bottom-Up Review is the second major step of a three-
part process that began with the QHSR. The BUR began with an 
activities inventory of all of the things the Department does 
on a daily basis. Of the 230,000 people that comprise the 
Federal workforce of the Department of Homeland Security, 
225,000 of them are in the operating agencies. This is an 
operating Department. What do we do every day? And how do those 
activities every day contribute to the five missions we have 
identified as essential to building a safe, secure, and 
resilient place for the American way of live to thrive?
    The BUR went beyond this taxonomy of the activities 
inventory and resulted in a clear sense of priorities across 
three main categories: One, how do we enhance our mission 
performance in the five areas I laid out? Two, how do we 
improve the way we run ourselves? And, three, how do we 
increase accountability for the resources that have been 
entrusted to us?
    We have laid out a number of priorities in the Bottom-Up 
Review, and these are priorities that we believe should be 
implemented by the Department over the coming quadrennial. This 
is a 4-year list of priorities. We will not accomplish all 44 
of the initiatives and enhancements in fiscal year 2012.
    Several key themes emerged out of the QHSR and the Bottom-
Up Review process. All of these are set forth in the Executive 
Summaries of the two reports, but I want to emphasize a few 
things that the QHSR and the BUR processes have brought 
forward.
    First, an emphasis on the importance of the resilience of 
individuals and communities to our Nation's security.
    Second, as the Ranking Member mentioned, the promotion of 
cybersecurity as a key homeland security mission.
    Third, the recognition in a set of strategic documents that 
homeland security is a shared responsibility and that all of 
us--citizens, businesses, communities, Federal, State, local, 
territorial, and tribal governments, nongovernmental 
organizations, and the private sector--are part of the larger 
homeland security enterprise.
    Fourth, the development through the Bottom-Up Review of a 
set of tools that will allow the Department for the first time 
to look at all of our activities across the five homeland 
security missions and assess their importance and 
contributions, not just from the perspective of the individual 
operating component, whether the Transportation Security 
Administration (TSA), the Federal Emergency Management Agency 
(FEMA), or the Coast Guard, but to each mission and to each 
specific set of critical functions. This will allow us to be 
better stewards of taxpayer dollars and to better manage the 
performance of our mission activities.
    And, finally, that the initiatives and enhancements that 
have emerged from the QHSR and the Bottom-Up Review will 
materially benefit the citizens of this country and their 
communities.
    It is unusual for a Federal department to have the 
opportunity to engage in the first principles that established 
it as a Federal agency and to engage in a comprehensive study 
of its missions from the bottom up and to evaluate each of its 
activities against priorities that have been identified from a 
thoroughgoing and broadly inclusive process. And DHS has 
benefited greatly from the experience.
    Finally, Mr. Chairman, we have learned a few lessons in 
this process, and as we look forward to the next QHSR, I would 
like to share with you a few of those lessons.
    First, senior leadership and engagement is critical. The 
support of Congress is equally critical as well, and the 
Department has benefited greatly from the support of this 
Committee and from other Members of Congress through this 
entire 18-month exercise that brought us to today.
    Second, timing is important. The QHSR was conducted over a 
transition year. We lost valuable time in terms of 
consolidating the work that had been done in an effort to 
address all of the requirements that Congress laid out for us. 
This is why we took the approach we did to break it into three 
parts: The QHSR, the Bottom-Up Review, and the submission of 
the budget for fiscal year 2012.
    Third, you must oblige yourself to take account of what has 
gone on before you. The Department of Homeland Security is 7 
years old. I have said in many forums that this is good news. 
It is not 1 year old for the seventh time. There has been an 
enormous amount of work, thought, discipline, and activity that 
have gone on that we have been able to build on, expand on, and 
move on from this point forward.
    In addition, the other major quadrennial reviews, including 
the QDR, and the first ever Quadrennial Diplomacy and 
Development Review, among others, must be synchronized, and the 
Administration made a concerted attempt to do just that. 
Today's security environment demands whole of government 
solutions and flexible and adaptable policy responses to 
difficult challenges.
    Thank you again, Mr. Chairman, for the opportunity to come 
speak with you today about implementation of the QHSR and 
Bottom-Up Review and the lessons learned for the future. I have 
submitted my full testimony for the record and look forward to 
the questions of the Committee.
    Chairman Lieberman. Thanks very much, Ms. Lute, for that 
opening statement. Let me say we will do 7-minute rounds of 
questions. Senator Collins left, but she will be back. She has 
an Appropriations Subcommittee meeting that she has to attend.
    Let me begin with the question, which is somewhat off the 
QHSR, but not really--which is about the private contractor 
workforce in DHS. I will give an example of some specific areas 
for concern.
    In the office overseeing the National Cybersecurity 
Protection System, there are 122 contract support staff but 
only 11 government employees. The latest numbers for the 
Intelligence and Analysis Section of the Department show that 
about 53 percent of its workers are contractors.
    In the Department's fiscal year 2011 budget submission, 
there were identified approximately 3,300 contractor positions 
that would be converted to Federal employees. Of course, at 
that rate it is going to be a long time, a lot of decades 
before we get the number of private contract employees down.
    In May, our Subcommittee headed by Senator Akaka and 
Senator Voinovich held a hearing, and the Chief Human Capital 
Officer reported on the broader process that the Department is 
undertaking through its Balanced Workforce Initiative to 
achieve the appropriate balance between full-time Federal 
employees and contractors. The BUR again notes that the 
Department will continue to build on these efforts, although no 
details on the review are provided.
    So let me ask you to address yourself to this question. The 
first really is process. When will we see the specifics of the 
Department's review of its private contractor workforce in 
relationship to the full-time Federal employees?
    Ms. Lute. Thank you, Mr. Chairman. We are working 
intensively on this issue. As you know, certainly, and Members 
of this Committee know well, the Department was stood up in 
part with an explicit reliance on a contract workforce to be 
able to get the Department up and running, and we continue to 
rely on hard-working contractors who come to work believing in 
the mission and the purpose of homeland security every day.
    The Balanced Workforce Initiative--and I just issued a 
series of instructions earlier this month to the leadership of 
the operating components regarding their personal association 
with the Balanced Workforce Initiative--is designed to give us 
a handle on strategic workforce planning. In order to do that, 
Mr. Chairman, what we also did as part of the Bottom-Up Review 
process was begin a procedure to allow us to align our 
accounting properly so that we could tell personnel costs 
across the operating component because they were all counted 
differently. So before we could run, we needed to walk; and 
before we could walk, we needed to crawl. And we are doing 
these things somewhat simultaneously. So we are getting a 
handle exactly on where our workforce and personnel are 
assigned, how they are assigned to the critical missions that 
are the sub-components of each of the missions outlined in the 
QHSR, and then we are moving through systematically on a 
priority basis to see where contractors are present and work 
aggressively to convert them.
    Chairman Lieberman. Do you have a timeline, a goal by which 
you hope to finish this review and report to us?
    Ms. Lute. Yes, we certainly hope to finish it this year, 
Mr. Chairman, and map our way forward.
    Chairman Lieberman. So you are saying this calendar year. I 
guess the question is whether as a result you may be able to 
undertake a significant realignment of the workforce for the 
fiscal year 2012 budget.
    Ms. Lute. We certainly hope to do that, Mr. Chairman.
    Chairman Lieberman. Let me ask you just for a quick 
response because you had a lot of experience in governmental 
administration. There is nothing inherently wrong with a 
private contractor being retained by a government agency. It 
has happened probably since the beginning of our government. 
But I wonder if you would talk a little bit about the balance 
there.
    For instance, on average, what is your sense of whether it 
costs us more, taking all the costs in mind and account, for a 
private contract employee or for a full-time Federal employee?
    Ms. Lute. It depends on the circumstances, Mr. Chairman. If 
it is for a short-term requirement, it may be more cost 
efficient to have contractors. For longer-term steady state 
need----
    Chairman Lieberman. More efficient because you are not 
building in the long-term commitment that comes with retaining 
a full-time employee.
    Ms. Lute. Exactly.
    Chairman Lieberman. Yes. I hope that will be part of your 
review. You are right that we expected in standing up the 
Department that, particularly in getting into areas that we had 
not been in before, like cybersecurity, there would be a lot of 
contract employees hired. But certainly the numbers are 
stunning, the number of contract employees larger overall than 
the number of full-time Federal employees. And I think this 
cries out for just what you have said in the title of the 
review, which is to balance the workforce consistent with the 
law.
    Let me leave that there and go on to a question about 
intelligence and analysis.
    The Washington Post series--I will lead into it with this--
talks about a growth in not just contractors but people 
involved in intelligence. And, of course, in creating the 
Department of Homeland Security, we created an entire new 
intelligence operation, which we hoped would have a kind of 
value-added to it, a unique aspect to it. And, again, I know 
that a lot of the employees of I&A at the Department of 
Homeland Security are contract employees. So I want to ask you 
two questions.
    First, if somebody reading the Washington Post series asked 
if you are just duplicating in this intelligence department at 
the Department of Homeland Security what exists elsewhere, what 
would you say?
    And second, I trust that you are trying to bring on more 
full-time Federal employees in the intelligence section of the 
Department of Homeland Security so that this imbalance of more 
contractors than full-time workers will be eliminated.
    Ms. Lute. Well, thanks, Mr. Chairman. First what I would 
say is no, we are not duplicating it. One of the things that we 
have been able to do over the past year and a half is really 
drill into what the value proposition of the headquarters of 
the Department of Homeland Security is, and I&A is a vital part 
of that.
    The value proposition of I&A is to equip the entire 
homeland security enterprise with the information and 
intelligence it needs to discharge all of the homeland security 
missions. There is no other part of the intelligence community 
that is oriented on that challenge, and I&A performs that 
function critically in support of all of the operating 
components. So that is what I would say primarily.
    Chairman Lieberman. So you would say that I&A in DHS is 
drawing from the rest of the intelligence community information 
that it is producing, but I&A is producing its own information 
that is also being shared with the rest of the community.
    Ms. Lute. Yes.
    Chairman Lieberman. One of our hopes when we created the 
Department was that a lot of the intelligence work that is 
naturally done by components of DHS, including the Coast Guard 
or the kind of information that Customs and Border Protection 
(CBP) comes up with, would be fed more routinely into the pool 
of intelligence from which everybody can draw, and also, of 
course, that DHS would play a unique role here in drawing 
intelligence from State and local law enforcement officials and 
also returning intelligence in accessible packages to them. Is 
that latter function being carried out by I&A at this point?
    Ms. Lute. It is, Mr. Chairman, and, in fact, this is an 
area where we really want to emphasize in building up the 
fusion centers that exist precisely for that purpose.
    I would back up and say, Mr. Chairman, with respect to the 
issue of terrorism and combatting terrorism and the potential 
for a terrorist strike in this country, the Department of 
Homeland Security has, through its border agencies and other 
agencies, daily interaction with the global movement of people 
and goods and substantial amounts of information regarding that 
movement in order for us to properly identify dangers where 
they exist and expedite legitimate trade and travel, which must 
go on. And we certainly are vibrant and active members of the 
entire whole of government approach in that regard.
    And, finally, Mr. Chairman, if I might, a word on the 
numbers with respect to I&A. Not surprisingly, you will hear me 
say that the Washington Post is wrong in saying that----
    Chairman Lieberman. You are not going to be punished in 
this room for saying that. [Laughter.]
    Ms. Lute. And, in fact, if all of our full-time Federal 
employees were on hand in I&A, the number would be closer to 
four out of 10 rather than six out of 10, and so this is an 
issue we are working on.
    Chairman Lieberman. Good. I appreciate it. You made a very 
important point at the end, which I just want to put an 
exclamation point next to. I know that the Committee knows 
that, for instance, in the really remarkable work done to 
apprehend Najibullah Zazi and David Coleman Headley before they 
were able to carry out terrorist acts, the intelligence 
sections, particularly the databases that Customs and Border 
Protection has, for instance, were critically important in 
apprehending those two. And, of course, it was CBP that stopped 
ultimately Faisal Shahzad before he left America on that plane 
after attempting to blow up the bomb in Times Square. So I 
thank you for that.
    Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you, Mr. Chairman.
    First of all, before I get into some of my comments and 
questions, I have been trying since February, again in March, 
and as recently as last week, to get an answer from the 
Department on whether or not the Biometric Air Exit Program 
should be decoupled from further expansion of the Visa Waiver 
Program. I am very frustrated about that kind of turnaround on 
a response to a Member of the U.S. Senate. I am the sponsor of 
the legislation on the visa waiver program. I have asked for 
that response time and time again, and I cannot get it, and I 
am very upset about it. And I am telling you about it, and you 
should tell the Secretary that I am about ready to go to the 
floor to talk about the incompetence of your Department in not 
being able to get back to a Member of Congress with a simple 
answer to a question, and you have had plenty of time to look 
at it.
    Second of all, this Department has been on the high-risk 
list since 2003--22 agencies, 210,000 employees, 225 
contractors, 45-percent increase in the budget--and I have not 
heard anything about more with less or we are working harder 
and smarter.
    We have a very difficult budgetary environment right now. I 
happen to be the Ranking Member on the Appropriations 
Subcommittee on Homeland Security, and we are trying to get the 
overall spending level down. And it appears to me that what may 
have been the Federal role in the aftermath of September 11, 
2001, seems increasingly less appropriate when you give 
considerations to some of the things that we are doing in the 
Department.
    The Committee has learned time and time again that FEMA 
does not employ performance metrics that adequately assess the 
results of grant program funding. The few metrics that do exist 
are output-based rather than outcome-based. As my colleagues 
know, measuring a program's outputs provides little insight 
into its effectiveness.
    FEMA also persistently fails to allocate State Homeland 
Security Program and Urban Area Security Initiative funding 
according to risk. A June 2008 Government Accountability Office 
report found that when determining grant allocations, FEMA 
assigns the same vulnerability rating to all localities 
regardless of their unique features. And that arrangement 
remains in place today.
    One of the things that I remember clearly when the 9/11 
Commission came back with their recommendations, they said 
homeland security assistance should be based strictly on 
assessments of risks and vulnerability, and not according to a 
general revenue-sharing arrangement like the kind that exists 
today. And I know that when September 11, 2001, occurred, I 
said we are going to have to spend more money, but we have to 
be careful--and I said this as a former governor and mayor--
that it not turn into a revenue-sharing program.
    So I am looking at your budget now to figure out some ways, 
maybe, that we can reduce some of the funding that is in that 
budget.
    For example, we have the firefighter grants. We still have 
$150 million in unobligated funds from the 2009 budget. We have 
not spent a dime of the $810 million in this fiscal year's 
budget. It would seem to me that in light of that we could just 
say put nothing in the 2011 budget when you have over $1 
billion hanging out there that nobody has even made application 
for.
    The Urban Area Security Initiative grants--at one time, in 
2003, we had 29. Today we have 64 of them. And instead of 
sending money to every city in America, we should restrict 
funding to the top cities that face the threats. We are in a 
tight budgetary situation today, and the Department ought to be 
looking at these programs and saying are these really relevant 
to securing the homeland.
    Our homeland security grants--today we spend $950 million 
on those, and the program gets funded year after year without 
anyone having an idea if these dollars are being used 
effectively to reduce risk in this country.
    So we have this whole business of evaluating and looking at 
risks and where is the money going to. When are you going to 
start to look at these things? One of the things that I thought 
the Department did several years ago is that you did an 
assessment of interoperability in the various States. That was 
terrific for me because I read the report, I went out to the 
four areas in Ohio, went to the cities, visited with them, 
spent a day asking what are you doing with interoperability, 
how is it working and so forth. You just cannot keep going the 
way you are going. And what are you going to do to start 
looking at some of this stuff? You are going to have a tighter 
budget, and it is going to get worse as time goes on. What are 
you going to do about this?
    Ms. Lute. Thanks, Senator. A couple of things.
    We recognize that we are in different budgetary times than 
the Department has experienced since its founding. Congress has 
been very generous to the Department of Homeland Security and 
expectations have grown equally. The mandate and 
responsibilities given to the Department are extraordinary, as 
this Committee well knows. But we must get a tighter rein on 
our spending, and we have tried to do that through the BUR 
process and doing what I have been calling the plumbing and 
wiring of institution strengthening so that we can be 
responsible stewards for the resources that have been given to 
us and that we can manage ourselves more effectively.
    Part of the BUR process has included, as I mentioned, an 
activities inventory. What are we doing every day and do those 
activities match to the missions, to the goals, and to the 
objectives that we say are most important? If they are not, we 
should really stop doing them or look at alternative ways to 
achieve what they were designed to do in support of those 
missions, goals, and objectives.
    Second, we are trying to align our account structure so 
that we can compare personnel across the Department, which we 
currently cannot do, so that we can compare investments across 
the Department, operating and maintenance costs across the 
Department, and understand the value proposition of applying in 
a border region, for example, the resources of CBP, TSA, 
Immigration and Customs Enforcement (ICE), and the Coast Guard 
appropriately, and do that in a way that is rationalized, as 
you mentioned, to risk.
    But I want to spend a moment on performance measures 
because the performance measures that we have been operating 
with in the Department do not reveal to the American public, or 
surely to this body or even to ourselves, the kinds of things 
that we need to see to know that, in fact, the United States is 
becoming more secure, that we are achieving our mission sets.
    Senator Voinovich. Let me just say this, as a simple 
matter. Some of this stuff is not real complicated, and I am 
familiar with what you have done on the border. I have had some 
problems with your buying airport screening machinery with body 
imaging capabilities. I have been briefed. You have done a good 
job of convincing me that it is needed. There are other things 
that are needed in the Department, but do you need to put 
another almost $800 million into the firefighter grants when 
you have not spent $150 million of the 2009 and 2010 money? 
There is an area, it seems to me, that could be looked at, 
where you could say to our Committee that you do not need this 
money right now. If you did not get this money, you could 
reduce your overall cost. You could, for example, replace a 
helicopter that you are going to need because one went down out 
in California. The urban security grants, giving all this money 
out all over the country to people--for what reason? Why are we 
doing it? What are you getting out of it?
    It just seems to me that you have an obligation to start 
looking at these programs and coming back to Congress and 
saying this is not needed right now. Even some of the areas 
that got a whole bunch of money in the beginning, they did the 
infrastructure, they put in the cameras, they put in all of the 
stuff that is necessary, and yet they are still getting about 
the same or even more money than they were getting before they 
made these capital expenditures.
    Now, I understand if they want to argue and say we need 
that money so that we can hire more people to do something that 
we would not ordinarily do, but we have to have some rationale 
about this. And your people ought to be getting at it.
    Ms. Lute. We agree, Senator. We are looking at all of our 
risk frameworks and approaches across the entire Department, 
not only in the context of the challenges and threats that we 
currently face, but also in the context of the investments and 
expenditures that have gone on before. We are very mindful of 
this, and we are also very mindful that as we outlined in the 
QHSR----
    Senator Voinovich. Let me say this to you: It was not 
reflected in the budget that you submitted to the U.S. Senate 
this year.
    Ms. Lute. What I can say to you, Senator, is that, as we 
have said in the QHSR, the security of the American homeland 
takes an enterprise. It takes informed individuals, it takes 
capable communities, and it takes a responsive Federal system 
all working together to achieve a secure homeland, and we 
recognize that the Department plays a key role in leading the 
Federal effort in this regard together with State and local 
officials.
    We are looking at all of our expenditures in the current 
fiscal climate and assessing all of our risk frameworks, and we 
believe we can and will do better.
    Chairman Lieberman. Thanks, Senator Voinovich.
    Secretary Lute, I do not think I heard you respond to 
Senator Voinovich's concern about a lack of a response to his 
questions about the Visa Waiver Program.
    Ms. Lute. I apologize, Senator. Inordinate delay is 
unacceptable. I will not offer an excuse. I believe the 
Secretary signed earlier this week a response to you.
    Senator Voinovich. We have talked about this.
    Chairman Lieberman. Yes, for sure.
    Senator Voinovich. You helped draft the legislation, and 
they put no money in the budget to pay for establishing a 
biometric air exit program.
    Chairman Lieberman. Right.
    Senator Voinovich. And I said, well, if you do not think it 
is necessary--and they said they do not think it is necessary--
then you ought to get back to us and say that we do not think 
it is necessary, that we are tracking this in some other 
fashion, and allow us to get rid of that provision and go back 
to the 10 percent rather than the 3 percent today.
    Chairman Lieberman. Yes, this is really important.
    Senator Voinovich speaks for the whole Committee on this, 
so I look forward to seeing what the Secretary's response is 
because as he said, we required that the biometric be in place 
before we allowed anyone to come into the program if they were 
over that 3 percent, and we actually put a waiver of 10 percent 
into the law, but we have suspended that pending the coming of 
the biometric. So that is a very important letter to have 
answered. Thanks for raising it, Senator Voinovich, and thanks 
for your response, Ms. Lute. And so please do everything you 
can to make sure that letter gets to Senator Voinovich quickly.
    Senator Brown, welcome.

               OPENING STATEMENT OF SENATOR BROWN

    Senator Brown. Thank you, Mr. Chairman. It is good to be 
here. I am going to have a few questions, and I will submit a 
couple for the record because I have a couple of other 
hearings. I am bouncing back and forth, too, so thank you.
    What do you think DHS has learned from this review that 
will translate to 2013? Are there any lessons that you can 
share with us?
    Ms. Lute. Leaders have to be engaged. This is a leadership 
exercise, and it has to be led from the top.
    Second, the timing of the review is important. Transition 
years are difficult to manage efforts like this if you are 
looking for as comprehensive an analysis of the homeland 
security enterprise as you are.
    The third lesson that I have learned is kind of a personal 
lesson, I suppose. Homeland security is very different from 
national security where I have spent my whole career. National 
security is centralized, strategic, and top-driven. Homeland 
security is decentralized; it is operational, and it is drive 
from the grass roots up. It is an enterprise that involves 
every American, every community, every State, territory, and 
tribal entity as well. So we need to have an inclusive process 
and opportunities for voices to be heard on these critical 
issues. We tried to do that in the QHSR. I would urge that this 
lesson be replicated the next time this occurs.
    Fourth, you must learn from what has gone on before you. Do 
not make the mistake of thinking that you are discovering 
things. Learn to distinguish what is new from what is new to 
you. Build on the work that has gone on thus far. Look at where 
the investments have been made. Understand the rationales. 
Build out the capabilities. Be explicit in understanding what 
it will take to achieve the missions that you say are so 
central to the vision you are trying to create. In our case, we 
articulate a safe, secure, and resilient place where the 
American way of life can thrive. We think it takes five 
missions: Preventing terrorism, securing our borders, enforcing 
our immigration laws, ensuring our cybersecurity, and ensuring 
resilience of the American society against all hazards.
    How will we know if we have achieved those objectives? The 
QHSR lays that pathway out. And have nerves of steel because 
there will be people who will challenge you and question you. 
It is their right to do so, and the outcome will be the better 
and richer for it if you face the big league pitching of the 
best ideas that are out there.
    Senator Brown. Thank you for that response. You talked 
about leadership and grass roots. Well, I think leadership 
starts from the top. I know I am new here, but taking so long 
to respond to Senator Voinovich's and Senator Lieberman's 
pretty simple request is really unheard of. And the thing that 
I am noticing is that there is a disconnect sometimes between 
the Senate and the Administration by not addressing very basic 
concerns because we are not making this stuff up. We usually 
get questions from our constituents who put us in office, who 
ultimately put people in the Administration in office, and we 
need to have the answers to a lot of these questions. And we do 
not need them in months. We need them usually in a day or two.
    And so I would encourage you and every other department in 
the Federal Government to get with it and start getting us the 
answers we need so we can respond properly.
    I also, as you may or may not know, am the Ranking Member 
on the Contracting Oversight Subcommittee, and we have had a 
lot of hearings, and I tell you that Senator Voinovich was 
right on the money. You have not used money, yet you are asking 
for more money. And we are using contractors, and we are giving 
them bonuses when they mess up and when they are in default, or 
they owe us money that they have owed us for years. So I do not 
if it is a question or a comment, but I would encourage you, 
because we are at $13 trillion and counting, if there is any 
streamlining, consolidation, or eliminating of overlap that you 
can do in your Department to save the taxpayers some good 
funds, that would be greatly appreciated.
    Ms. Lute. Senator, I would just say that I absolutely agree 
with that. I certainly agree with that. One of the initiatives 
that we are pursuing in the Department, and have been and now 
are reaching a point where we will greatly accelerate our work, 
is looking at our whole acquisition process. Can we improve our 
ability to set requirements in reliable ways that allow 
effective contract mechanisms? Do we have the kind of program 
management and oversight for those contracts as well, again, 
building on work that has been done previously.
    So what I can tell you is that through efficiency reviews 
that the Secretary has ordered over the past 18 months, we have 
saved over $100 million, and we look forward to sharing those 
details shortly.
    Senator Brown. Well, the comment, can you do this, yes, you 
can do it. You can do these things. Every agency can do these 
things. I tell you, the rhetoric--we have saved $100 million 
here--with all due respect, $100 million in Washington is 
nothing. We are talking billions here. I would like to see some 
real savings. And can you do it? Yes, you should do it, and so 
should every other agency make it their No. 1 priority to start 
saving taxpayer dollars and putting them where it is effective.
    And with regard to closing borders, yes, you should jump on 
Arizona and get that squared away right away because until the 
borders are secure in our country, how do we address all the 
other issues that flow down from that?
    I thank you, Mr. Chairman. I have other questions, but I 
have to get to the other hearing.
    Chairman Lieberman. Thanks, Senator Brown, very much for 
coming by and for asking those questions, and we will enter 
your other questions in the record.
    We will go to a second round of questions now.
    Ms. Lute, I know you have explained that the Bottom-Up 
Review includes 44 initiatives and enhancements that have been 
recognized by the Department as priorities for the next 4 
years. I understand, of course, that not every worthwhile 
project can be included in the list of priorities, but there 
are a couple that are omitted that are troublesome to me, and 
the one that I particularly want to ask about is rail and 
transit security because the fact is it seems to me that the 
Secretary and now John Pistole coming in at TSA have pledged to 
give more attention than has been the case in the past to rail 
and transit security. So I want to ask you why rail and transit 
security was not highlighted by either the QHSR or the BUR and 
what DHS plans to do to address those non-aviation forms of 
transportation, which, of course, in other countries have been 
attacked by terrorists and in our country in the case of Zazi 
were intended targets for attack?
    Ms. Lute. Mr. Chairman, we think we do identify mass 
transit, rail, and other transportation infrastructure as key, 
obviously, to the security of this country. We also highlight 
the vulnerability of these systems, recognizing that many of 
the systems exist in private sector hands. We highlight our 
awareness of the vulnerabilities of these systems to terrorist 
attacks. We have been and we will continue to work with the 
private sector in a concerted effort and also with the American 
public. The launching of the nationwide campaign built on the 
New York model of ``See something, say something'' is precisely 
designed to enlist the extraordinary capacity of the American 
public as well. And so we do believe that transportation 
security involves far more than aviation. Aviation is a 
priority. It will be something that we are stressing. The 
Secretary has been working, as you well know, through the 
beginning of this year on a stronger international aviation 
security regime because we know that if you have access to any 
part of the system, you potentially have access to the entire 
system, and we need to work on that as a priority matter.
    Chairman Lieberman. I appreciate that. So I take from your 
statement that rail and transit security, notwithstanding the 
particulars of those 44, remains a priority for the Department.
    Ms. Lute. Absolutely.
    Chairman Lieberman. Let me ask you about a couple of the 
structural changes that are called for in the Bottom-Up Review, 
which I found interesting. The first is the call for a ``single 
coordinating entity'' across the Department for 
counterterrorism activities. I know that in March of this year, 
Secretary Napolitano designated the Under Secretary for the 
National Protection and Programs Directorate, Rand Beers, as 
the DHS Coordinator for Counterterrorism.
    I wanted to ask you just to talk a little bit about why the 
BUR and you conclude that this is necessary and how you think 
it will help the Department achieve its mission of protecting 
our homeland security.
    Ms. Lute. Thanks, Mr. Chairman. What we are trying to 
achieve in our preventing terrorism and counterterrorism agenda 
is an ability to leverage all parts of the Department as 
relevant for addressing the terrorism threat and also to 
leverage in turn a whole of government approach where necessary 
to do so.
    It is very clear to us that beneath the level of the 
Secretary and myself, there does need to be a coming together 
and an ability to coordinate the various activities--CBP, TSA, 
etc. This is something that the Secretary takes very seriously, 
I take very seriously, and an enormous amount of our time is 
spent on ensuring that this country is protected against 
another terrorist attack.
    We believe also that we need to look in a very deliberate 
way at the tools that are available to us to prevent terrorism 
here domestically. We have our border tools. These are key and 
essential, as I mentioned earlier. We have law enforcement 
tools, not only the law enforcement resources that exist in our 
Department and the FBI and other parts of the Federal system, 
but also, importantly, the 800,000 State and local law 
enforcement entities as well. We have intelligence and 
information sharing, as we previously discussed, and we have 
the American public.
    So pulling all of these things together is something that 
we are working on. The designation of a coordinator is an 
interim solution pending a final review of how best to organize 
the Department to achieve these synergies.
    Chairman Lieberman. Good. Keep us posted on your work on 
that.
    The other proposal that I wanted to talk about, which I 
think makes sense and yet I also think will have some problems 
in being implemented, is the idea of realigning the various 
regional configurations within the components of the Department 
of Homeland Security into a single Department of Homeland 
Security regional structure. So what are we talking about? DHS 
units have seven different regional structures. The Coast Guard 
may have one, CBP may have another, and FEMA may have another.
    Obviously, one of the challenges in creating a single 
regional system for the Department is that the components' 
distinct organizations may in some cases have developed 
particular organizational needs. For instance, the Coast 
Guard's districts are typically focused on the coastal United 
States with a single large district covering much of the inland 
United States, while Customs and Border Protection's regions 
obviously reflect the importance of the border.
    In carrying out this recommendation, how are you going to 
balance these two public interests?
    Ms. Lute. You are absolutely right, Mr. Chairman. On the 
one hand, the existence of seven separate, different regional 
structures in addressing homeland security issues in the United 
States seems excessive. On the other hand, we do not believe in 
a simple one size fits all approach, unmindful of the 
particular needs, and you mentioned the two components that are 
the most geographically fixed.
    Chairman Lieberman. Right.
    Ms. Lute. So as we proceed forward, we would look to work 
closely with this Committee and other Members of Congress to 
achieve the kind of regional structure and approach that allows 
us to achieve the integration of homeland security efforts and 
mission accomplishment, mindful of the realities on the ground.
    Chairman Lieberman. So it is probably going to be hard to 
have a single departmental regional structure.
    Ms. Lute. It may be hard----
    Chairman Lieberman. Although you can certainly have less 
than seven.
    Ms. Lute. But we think certainly it is something that we 
need to look at.
    Chairman Lieberman. I appreciate that. Thank you. My time 
is up.
    Senator Collins, welcome back from the Appropriations 
Subcommittee meeting.
    Senator Collins. Thank you, Mr. Chairman, and thank you for 
explaining my absence as well.
    Ms. Lute, let me start where the Chairman just left off. I 
do believe that there are efficiencies and cost savings that 
can be achieved by consolidating some of the regional offices 
of DHS. But the Chairman's point about the Coast Guard is a 
very important one.
    Obviously, there are some regional offices where the Coast 
Guard's role is minimal, but on the coasts of this country, the 
Coast Guard is absolutely essential, and trying to shoehorn the 
Coast Guard into a broader DHS office may end up costing money 
and decreasing the effectiveness of the Coast Guard.
    Another agency, however, that you also need to take a close 
look at what you are doing in that area is FEMA. One of the 
lessons of the extensive investigation we did into the failed 
response to Hurricane Katrina was that there needed to be a 
regional FEMA presence that worked collaboratively all year 
round with its State, local, and other Federal partners and 
with the private sector, exercising together, planning 
together. As we found out during Hurricane Katrina, in the 
midst of a disaster is no time for people to be meeting each 
other for the first time, and yet that is exactly what we 
found. And that is why, as part of our FEMA reform bill, we 
specifically established FEMA regional offices.
    How do you see FEMA fitting into your consolidation of 
regional offices?
    Ms. Lute. Thanks, Senator. Craig Fugate and I have talked a 
lot about this because I could not agree with you more. When I 
was in the Army, we used to say that you fight like you train, 
and that is certainly true for crisis response. A crisis is no 
time to put together an ad hoc organization in haste. 
Relationships matter and an understanding of capabilities 
matters and an understanding of the geography, the access, the 
particular needs of a community matters, and regions will not 
substitute for the State and local knowledge that exists, but 
these regions have to be important complements and points of 
synergy and leverage, as this Committee knows very well.
    I have asked CBP and Coast Guard to begin the process of 
looking at whether and how we could consolidate some of our 
regional structures together with FEMA. Obviously, this bears 
on all of the operating components, as well, because they all 
have regional structures. But we do believe that we can 
consolidate some of the literally thousands of facilities that 
DHS has across the country.
    Senator Collins. I think that is absolutely the case, and 
you can save money and actually enhance efficiency if the 
agencies are co-located in many cases. But I would caution you 
against assuming that what works in Arizona for a regional 
office will work in New England. The needs and the roles of the 
various DHS agencies are extremely different depending on what 
region you are talking about.
    One of my frustrations with the Department and, frankly, 
with the Bottom-Up Review is that there are longstanding 
problems, which precede this Administration, that the 
Department still is not tackling and solving. And I want to 
give you two examples.
    At a hearing that our Committee held last month, the GAO 
testified that the Department still lacks a strategic plan for 
the screening of illicit nuclear and radiological materials 
that could come across our borders. The GAO first identified 
this necessity more than 7 years ago.
    Now, the QHSR does state that one of the Department's goals 
is to ``prevent the unauthorized acquisition or use'' of 
nuclear and radiological materials along with biological and 
chemical weapons. But the Bottom-Up Review does not provide the 
kind of strategic direction that GAO identified 7 years ago and 
that our Committee has repeatedly pushed. And the lack of that 
plan has directly caused DHS to waste money, hundreds of 
millions of dollars, and to go off in one direction 1 year and 
another direction the other year.
    It disappoints me that rather than completing this plan, 
the Bottom-Up Review just states that DHS will ``leverage the 
full range of capabilities'' and ``increase its leadership 
role.''
    Those are just buzz words. They do not substitute for the 
kind of plan for which the GAO has been calling for 7 years.
    When will DHS complete that important strategic plan? It is 
hard to think of something more pressing than making sure that 
radiological, nuclear, chemical, and biological weapons are not 
smuggled into this country.
    Ms. Lute. Senator, I agree with you. The BUR does identify 
as an initiative that we will increase efforts to detect and 
counter these dangerous weapons and dangerous materials, but 
how we will do that is the heart of your question.
    I have just convened a series of meetings on exactly this 
issue. I will chair a working group within the Department to 
generate a concrete plan for us to present--and we look forward 
to working closely with this Committee on that plan--on how the 
Department can play its role in reducing the risk of nuclear 
terrorism, the terrorism associated with these most dangerous 
weapons.
    In order to do that, we know that we must anticipate 
threats and protect against hostile use. In order to do that, 
we know we must ask: Who are the individuals seeking to acquire 
this? Where does this material exist? What are the lines of 
communications? What are the methods by which these individuals 
would seek to bring this material into this country? And what 
are the right strategies, leveraging, again, all of the 
resources that exist in the United States to protect against 
that?
    Senator Collins. So when will the plan be completed?
    Ms. Lute. We are in the process of working on it, Senator. 
I cannot give you a precise month, but I will go back and as a 
matter of urgency set a timeline and be in touch with you.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks very much, Senator Collins.
    Senator McCain, good morning.

              OPENING STATEMENT OF SENATOR MCCAIN

    Senator McCain. Good morning, Mr. Chairman.
    I was just looking at Appendix 1, the list of Bottom-Up 
Review initiatives and enhancements, and I must say that it is 
a wonderful and impressive list.
    For example, I guess, one is enhance the DHS workforce. 
That is a good idea. Increase analytic capability and capacity. 
That is a good idea. There are really a lot of great ideas 
here, I would say to the witness, and I would love to see some 
actual accomplishments that have been achieved over the last 7 
years or the last year and a half of this Administration as to 
how ``enhance the DHS workforce'' has taken place.
    And I was struck by, for example, number 17, comprehensive 
immigration reform. Now, maybe you could fill me in on what 
your agency is going to do as its initiative or enhancement of 
comprehensive immigration reform.
    Ms. Lute. Senator, as you know, the President has made 
clear his desire to pursue comprehensive immigration reform. 
The Secretary has talked about it equally. The enhancements 
that we talk about----
    Senator McCain. So is that an initiative or an enhancement?
    Ms. Lute. The comprehensive immigration reform is an 
initiative of the Administration. If I were to talk about the 
enhancement of the----
    Senator McCain. I thought this was not an Administration 
initiative. I thought this was a Bottom-Up Review of the 
homeland security initiatives and enhancements. So you are just 
saying that is an overall Administration goal, so, therefore, 
it is your goal. Is that what you are saying?
    Ms. Lute. The Department discharges the responsibility for 
administering and enforcing the immigration laws of this 
country, Senator, as you well know, and this is an important 
feature of the way going forward----
    Senator McCain. That is your job, to enact comprehensive 
immigration reform? That is your initiative?
    Ms. Lute. No. I apologize if I misspoke. What I said is we 
have the responsibility to administer----
    Senator McCain. To administer.
    Ms. Lute [continuing]. And enforce the immigration laws.
    Senator McCain. But not take the initiative.
    Look, the point is that this list here is really 
entertaining. Strengthen aviation security, create an 
integrated departmental information-sharing architecture. I 
would like to know what has been done in the last 7 years of 
these lists of initiatives and enhancements. Dismantle human 
smuggling organizations. There is nothing in this that anyone 
could argue with except that we would like to see some results. 
Apparently, the size of your organization continues to grow, 
and there seems to be arguments that our border is ``as secure 
as it ever was'' while the terrorism and violence on the other 
side of the border continues to grow, the latest being the car 
bombing in Juarez. And so these are enhancements and 
initiatives.
    What I would like to see, Mr. Chairman, is what the 
Homeland Security Department has done to carry out these 
motherhood-and-apple-pie initiatives and enhancements. And for 
you to come before this Committee and say that this is a list 
of initiatives and enhancements, I think, is laughable. And I 
would hope that maybe we would, as a Committee, demand that we 
know what the actual results are of these motherhood-and-apple-
pie initiatives.
    If I were you, I would be a little embarrassed to come 
before this Committee with this kind of a list of initiatives 
and enhancements, which are, at least according to your 
testimony so far, that we all agree that we ought to do better. 
I have not heard yet a single concrete example of what you have 
done to make these initiatives and enhancements a reality. And 
maybe you could supply those for the record.
    Ms. Lute. I would be happy to, Senator.
    Chairman Lieberman. Senator McCain, as you can hear from 
statements that I made earlier, and Senator Collins did, too, 
the BUR statements are general, they are vague. Let me ask you 
because it is my understanding, both from what you have implied 
here today and what the Department has said to our staff, that 
there are implementing directives to all 44 of these that are 
being circulated in the Department. Is that right?
    Ms. Lute. We are working on all of these initiatives, 
Senator, to give a concrete path forward on them, some of 
which, as I mentioned earlier, we will prioritize for the 2012 
budget submission when the President presents that. These are 
initiatives that we believe over the quadrennial speak to areas 
that would be high-priority areas of focus for us in 
strengthening our ability to execute the mission sets that we 
have outlined in the QHSR, which we think are central to 
achieving the vision that we have outlined.
    Chairman Lieberman. There is nothing classified about those 
implementation plans. So as you get them together, I think it 
really would be helpful to the Committee if you would send us 
copies of them because the state of the document now is 
unsatisfying because it is unclear because of its lack of 
detail.
    Senator McCain. Mr. Chairman, could I also suggest that 
maybe the Department of Homeland Security should look at what 
the Department of Defense does on the Quadrennial Defense 
Review where there are specifics as to what initiatives need to 
be taken, what action has been taken, and what needs to be 
done. I have been around here a long time. This is one of the 
more remarkable things that I have ever seen, and, frankly, it 
is kind of disrespectful to the jurisdiction of this Committee 
to hand us a paper like this and expect that to be in any way 
helpful to us in our oversight responsibilities of what is now 
growing to be one of the largest agencies of government.
    Chairman Lieberman. The idea of the comparison to the QDR 
is an important one. Actually, Senator Collins mentioned it in 
her opening statement, and I would urge you to take a look at 
that and respond.
    Senator Collins, you missed a round, so I want to give you 
the opportunity to ask some more questions at this point.
    Senator Collins. Thank you so much, Mr. Chairman. Most of 
them I will submit for the record so that I am not holding 
everyone up, but there are a few that I do want to pursue.
    Ms. Lute, I mentioned my disappointment at the lack of a 
specific plan for dealing with the nuclear and radiological 
weapons smuggling. But I want to give you another example of an 
area that this Committee identified first in June 2008, again 
in 2009, and again, the two reports you have provided do not 
have any specifics for correcting the problems. It is very 
frustrating that over and over this Committee has brought to 
the Department's attention severe shortcomings, and yet there 
is no sense of urgency on the part of the Department.
    In this case, it has to do with the Federal Protective 
Service, and what we found is that GAO did a series of covert 
tests that revealed serious security vulnerabilities of Federal 
buildings with explosive devices easily being smuggled into 10 
Federal buildings. And it is now 2010, 2 years later from when 
these problems were first brought to the Department's 
attention, and yet all that DHS says in the BUR report is that 
it ``now proposes to undertake a major redesign of the Federal 
Protective Service.''
    It is extremely frustrating to me to have a serious problem 
brought to the attention of the Department 2 years ago and all 
that is in the BUR is a statement saying that the Department 
now proposes to undertake a redesign. Why are we not further 
along?
    Ms. Lute. Senator, I hear your frustration on the issue of 
why we are not further along. I can assure you that the 
Secretary and I and the leadership of the Department come to 
work every day with a sense of urgency about all of the 
missions that we have in homeland security. The Federal 
Protective Service, as you know, was just placed into the 
National Protection and Programs Directorate (NPPD), and as a 
consequence of that movement, of these reports that have come 
to light, and of our sense of the importance of the mission, 
the organization, the nature of the workforce, the training, 
etc., we have an obligation to present a comprehensive plan to 
bring the Federal Protective Service to the level of 
performance that everyone has a right to expect.
    Senator Collins. Well, again, I want to see specific action 
in that area as well.
    Let me switch to cybersecurity, an issue that I think is of 
great priority, and I was pleased to see that it is identified 
as one of the five primary missions of DHS by your review.
    Do you agree that the Department needs new authorities and 
resources to perform its cybersecurity mission?
    Ms. Lute. We do think that the Department's ability to 
discharge its cybersecurity mission would be enhanced by those, 
yes.
    Senator Collins. The Department's budget request for the 
cybersecurity division for fiscal year 2011 is $19 million less 
than it was funded for this fiscal year. Do you anticipate that 
the Department will request additional funding for 
cybersecurity for the fiscal year 2012 budget so that you can 
fulfill this mandate?
    Ms. Lute. Without giving you a specific answer, Senator, we 
could. What we want to look at in our cybersecurity mission is 
precisely how do we fill out the space that we have been given 
with respect to responsibilities for securing the dot-gov and 
extending into the dot-com domain as well. How do we leverage 
the resources and existing capabilities across the Department? 
How do we work most effectively with the private sector in this 
regard?
    I mentioned earlier that doing something like the QHSR and 
the BUR takes nerves of steel. When we elevated cybersecurity 
to one of the five key missions of Homeland Security, there was 
quite a reaction--surprise.
    Senator Collins. From whom?
    Ms. Lute. From a number of stakeholders across the country. 
Surprise--as if people had not really been thinking about it as 
an element of our homeland security. And so the simple 
articulation of the mission alone achieved a kind of effect we 
were hoping to achieve, which is to create a culture of 
awareness, a culture of responsiveness and engagement on this 
important and critical mission. So as we build out the 
Department's capabilities in this regard, again, understanding 
that we are largely an operational Department, we will 
prioritize what our requirements are in the 2012 budget.
    Senator Collins. And, finally, I know that the Chairman 
brought up concerns about the Intelligence and Analysis 
Office's reliance on contractors. I want to talk about another 
issue with that office. A very important function of that 
office is to share information with State and local officials 
and first responders.
    As you may be aware, the Appropriations Committee put a 
rider on the office that fences in some of the spending and, 
more troubling to me, attempts to limit what the office can do 
by saying that it should only produce reports that are unique--
I am overstating it slightly, but it constrains the ability of 
the office to serve its customers because it says if there is 
any duplication, someone else should do it.
    Have you looked at that language?
    Ms. Lute. I have, Senator.
    Senator Collins. And do you have concerns about it?
    Ms. Lute. I do have concerns, Senator. The value 
proposition of our I&A office is to equip the homeland security 
enterprise with the information and intelligence it needs 
throughout the whole enterprise, including State and local 
officials, and that important, as the Chairman mentioned 
earlier, two-way sharing of information is so essential to the 
discharge of our missions.
    Senator Collins. I would strongly encourage you and the 
Secretary to put your concerns in writing to Senators Dianne 
Feinstein and Christopher Bond, who initiated the proposal. 
Unfortunately, it was not cleared with our Committee, but we 
are going to work with the sponsors and with other members of 
the Appropriations Committee to try to clarify it. It would be 
helpful for us to have a letter from you expressing the 
concerns and for the appropriators to have it as well. And as 
someone who sits on both committees, as does Senator Voinovich, 
I think you can be assured that we would attempt to try to 
resolve these issues.
    Ms. Lute. Thank you.
    Senator Collins. I will speak for myself actually on that, 
but I know the Chairman and I have discussed it.
    Ms. Lute. Thank you.
    Senator Collins. Thank you. Thank you, Mr. Chairman.
    Chairman Lieberman. Well, as usual, you can speak for me, 
too. I agree. It was actually a misunderstanding between me and 
one of the members of the Appropriations Committee, and I 
believe it was reflected at the Appropriations Committee markup 
that I supported this amendment, which I did not. And I am 
worried that it actually conflicts with existing law in terms 
of the authorities of the intelligence section of the 
Department of Homeland Security and will inhibit the capacity 
of the Office of Intelligence and Analysis at DHS to be of help 
to the Secretary, you, the other components of the Department, 
and most critically, as we have talked about, State and local 
law enforcement officials around the country.
    So I think I am going to work with Senator Collins and our 
colleagues on the Committee on this, but I want to second her 
request that the Secretary and you send a letter to the 
appropriators to let them know that this is not a good move on 
their part.
    Ms. Lute. Thank you.
    Senator Collins. Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Collins.
    I think we have cross-examined you enough generally within 
the Geneva Convention. I think we have not gone beyond those 
rules. Thanks for your effort on this. I think you have done a 
lot of constructive work, but on the BUR, the take-away is we 
really need more details. I think you are heading in a good 
direction, but it is hard for us to really judge until we see 
those implementing plans.
    I gather that the third part of this three-part approach to 
the look forward is the details that will come with the fiscal 
year 2012 budget, right?
    Ms. Lute. Yes.
    Chairman Lieberman. And that is where you hope to show us 
how you are going to implement it.
    Ms. Lute. Exactly, Mr. Chairman. As I mentioned earlier, 
one of the lessons learned is that the timing of a QHSR 
exercise, like such as was envisaged, is important. And we are 
conforming to the budget submission process, and then that is, 
as we have spoken about over 18 months, the third part of the 
exercise.
    Chairman Lieberman. I really want to ask that as you make 
more specific the implementation plans for these 44 initiatives 
and enhancements, you send copies to Senator Collins and me, 
and we will circulate them to the Committee, so that we will 
not have to wait until the budget is submitted next year to 
understand how you are going forward with some of these.
    Ms. Lute. We look forward to working very closely with both 
of you and with the Committee.
    Chairman Lieberman. Thank you.
    The record of the hearing will stay open for 15 days for 
additional statements and questions. With that, I thank you, 
Ms. Lute, and adjourn the hearing.
    Ms. Lute. Thank you.
    [Whereupon, at 11:35 a.m., the Committee was adjourned.]



                            A P P E N D I X

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