[House Hearing, 112 Congress] [From the U.S. Government Publishing Office] DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2012 _______________________________________________________________________ HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS FIRST SESSION ________ SUBCOMMITTEE ON HOMELAND SECURITY ROBERT B. ADERHOLT, Alabama, Chairman JOHN R. CARTER, Texas DAVID E. PRICE, North Carolina JOHN ABNEY CULBERSON, Texas LUCILLE ROYBAL-ALLARD, California RODNEY P. FRELINGHUYSEN, New Jersey NITA M. LOWEY, New York TOM LATHAM, Iowa JOHN W. OLVER, Massachusetts ANDER CRENSHAW, Florida CHARLES W. DENT, Pennsylvania NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full Committee, and Mr. Dicks, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. Ben Nicholson, Jeff Ashford, Kris Mallard, Kathy Kraninger, and Miles Taylor, Staff Assistants ________ PART 4 DEPARTMENT OF HOMELAND SECURITY Page Science and Technology Budget.................................... 1 National Protection and Programs Directorate..................... 159 Terrorist Travel: Programs and Funding........................... 239 WMD Countermeasures--Threat, Programs and Funding................ 251 Federal Emergency Management Agency.............................. 357 Outside Witnesses................................................ 889 ________ Printed for the use of the Committee on Appropriations PART 4 S&T NPPD TTP&F WMDCTP&F FEMA Out. Wit. DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2012 ? ? DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2012 _______________________________________________________________________ HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS SECOND SESSION ________ SUBCOMMITTEE ON HOMELAND SECURITY ROBERT B. ADERHOLT, Alabama, Chairman JOHN R. CARTER, Texas DAVID E. PRICE, North Carolina JOHN ABNEY CULBERSON, Texas LUCILLE ROYBAL-ALLARD, California RODNEY P. FRELINGHUYSEN, New Jersey NITA M. LOWEY, New York TOM LATHAM, Iowa JOHN W. OLVER, Massachusetts ANDER CRENSHAW, Florida CHARLES W. DENT, Pennsylvania NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full Committee, and Mr. Dicks, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. Ben Nicholson, Jeff Ashford, Kris Mallard, Kathy Kraninger, and Miles Taylor, Staff Assistants ________ PART 4 DEPARTMENT OF HOMELAND SECURITY Page Science and Technology Budget.................................... 1 National Protection and Programs Directorate..................... 159 Terrorist Travel: Programs and Funding........................... 239 WMD Countermeasures--Threat, Programs and Funding................ 251 Federal Emergency Management Agency.............................. 357 Outside Witnesses................................................ 889 ________ Printed for the use of the Committee on Appropriations ________ U.S. GOVERNMENT PRINTING OFFICE 68-060 WASHINGTON : 2011 COMMITTEE ON APPROPRIATIONS HAROLD ROGERS, Kentucky, Chairman C. W. BILL YOUNG, Florida \1\ NORMAN D. DICKS, Washington JERRY LEWIS, California \1\ MARCY KAPTUR, Ohio FRANK R. WOLF, Virginia PETER J. VISCLOSKY, Indiana JACK KINGSTON, Georgia NITA M. LOWEY, New York RODNEY P. FRELINGHUYSEN, New Jersey JOSE E. SERRANO, New York TOM LATHAM, Iowa ROSA L. DeLAURO, Connecticut ROBERT B. ADERHOLT, Alabama JAMES P. MORAN, Virginia JO ANN EMERSON, Missouri JOHN W. OLVER, Massachusetts KAY GRANGER, Texas ED PASTOR, Arizona MICHAEL K. SIMPSON, Idaho DAVID E. PRICE, North Carolina JOHN ABNEY CULBERSON, Texas MAURICE D. HINCHEY, New York ANDER CRENSHAW, Florida LUCILLE ROYBAL-ALLARD, California DENNY REHBERG, Montana SAM FARR, California JOHN R. CARTER, Texas JESSE L. JACKSON, Jr., Illinois RODNEY ALEXANDER, Louisiana CHAKA FATTAH, Pennsylvania KEN CALVERT, California STEVEN R. ROTHMAN, New Jersey JO BONNER, Alabama SANFORD D. BISHOP, Jr., Georgia STEVEN C. LaTOURETTE, Ohio BARBARA LEE, California TOM COLE, Oklahoma ADAM B. SCHIFF, California JEFF FLAKE, Arizona MICHAEL M. HONDA, California MARIO DIAZ-BALART, Florida BETTY McCOLLUM, Minnesota CHARLES W. DENT, Pennsylvania STEVE AUSTRIA, Ohio CYNTHIA M. LUMMIS, Wyoming TOM GRAVES, Georgia KEVIN YODER, Kansas STEVE WOMACK, Arkansas ALAN NUNNELEE, Mississippi ---------- 1}}Chairman Emeritus William B. Inglee, Clerk and Staff Director (ii) DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2012 ---------- Wednesday, March 30, 2011. SCIENCE AND TECHNOLOGY BUDGET WITNESS HON. TARA O'TOOLE, M.D., M.P.H., UNDER SECRETARY FOR SCIENCE AND TECHNOLOGY DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY Opening Statement: Chairman Aderholt Mr. Aderholt. The hearing is called to order. This afternoon we welcome Under Secretary Tara O'Toole in her second appearance before this subcommittee as we examine the President's fiscal year 2012 budget to fund the Directorate of Science and Technology. A literally young enterprise, Science and Technology was established in 2003 with the new Department of Homeland Security, with its primary mission to ensure that the Department of Homeland Security, its agencies, and the border homeland security community can benefit from the applications of science and technology. As it has evolved as a component of the Department, Science and Technology has touched on virtually all activities of the Department of Homeland Security and has established an organizational structure that aligns with them. We have had long-standing concerns about whether Science and Technology is striking the right balance between long-term basic research and targeting near-term research for technologies that are ripe for deployment. There is no question some DHS research may not have a home anywhere else than DHS itself. It may not be a priority for other Federal agencies. It may have a long-time horizon or may lack a commercial market that could attract private funding. Still, such research may have value and should be considered when looking at S&T plans. However, there seems to be an implicit consensus that Science and Technology should concentrate on fielding technology its customers' need, a view I believe you endorse, Dr. O'Toole. I hope to hear today about the concrete impacts Science and Technology can point to, particularly for critical missions involving border and travel security, biometrics, and infrastructure protection. Science and Technology's approach to technology is to serve as a reliable and transparent clearinghouse for private-sector homeland security related research. Despite there being specific examples where Science and Technology has helped discover or accelerate development, testing, or review of such technology, there remains a perception in the private sector that Science and Technology and the Department of Homeland Security agencies who procure technologies remain difficult to connect with. Today I hope you will address this in tangible ways in which the Department of Homeland Security and Science and Technology in particular are working to attract and be more accessible to private-sector initiatives. More than anything, Science and Technology has to sell itself to Congress as a good investment and not a place where ideas may be generated only to be ignored by front-line operators. Last month's House action on H.R. 1 showed that many in Congress are uninformed about Science and Technology. Science and Technology needs more effective outreach about what it does and how the multibillion dollar investment in the enterprise is valuable to producing results. Until Science and Technology's role can be made more visible and its impact demonstrated more concretely, you will likely face challenges from those who are unfamiliar with your work and will question the value of funding research and development over other operational programs. Dr. O'Toole, we look forward to your testimony this afternoon. I know that you have your written record that you will present to us shortly, and it will be placed into the record in its entirety. Maybe take 5 minutes to summarize it in a few minutes. But before we call on you, I would like to recognize Mr. Price, who is our ranking member, for his opening remarks as well. Mr. Price. Thank you, Mr. Chairman. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.001 [GRAPHIC] [TIFF OMITTED] T8060A.002 [GRAPHIC] [TIFF OMITTED] T8060A.003 Opening Remarks: Ranking Member Price Mr. Price. Thank you, Mr. Chairman. Dr. O'Toole, I am glad to welcome you to the Subcommittee to testify once again on the importance of research and development initiatives to address gaps in homeland security. Your fiscal year 2012 budget request totals $1.176 billion, which is 16 percent above the fiscal year 2010 enacted level. However, once you factor out the $150 million requested for the initial construction of the National Bio and Agro-Defense Facility, the funding levels for ongoing research programs is about the same as what the administration requested last year. Our research and development efforts are critical to making the homeland more secure, and it is important that the resources we devote to R&D help to anticipate threats, rather than to merely respond. Time and time again, after a threat or event occurs, numerous companies come forward offering the solution to the latest problem. But really what we should be doing is thinking about what threats and vulnerabilities exist before events occur, which will permit us to have the technology already on our radar screens so that we can rapidly respond. There is an obvious case in point. After the Christmas Day bombing attempt, TSA was able to decide very quickly to procure advanced imaging technology to look for nonmetallic threats on a person because the agency had already been testing these systems successfully in limited operational settings. Since you assumed your position, you have looked at S&T's roles and responsibilities with a critical eye. Your predecessor took a proactive stance, seeking to ensure that the research S&T undertook was relevant to the operational needs of DHS components, and I know you have been continuing this hard look. As I understand it, you have asked your Directorate to do three things: First, annually review all basic and applied research and development activities as well as all of your proposed ``new start'' projects to make sure they are still necessary and to make sure we are not replicating research done either by other Federal Government entities or by other DHS agencies; Secondly, to survey scientific discoveries and inventions relevant to existing and emerging homeland security challenges; And, third, to more closely align your work with the needs of DHS components so that the end product is a technology that the agency itself will use in an operational environment. Now, the result of this hard look is a proposed reorganization of S&T that segregates research and development activities into innovation and acquisition efforts, keeping the university and laboratory programs intact. It also means that S&T may be involved beyond the research and development phase, for example by participating in operational testing and piloting of new technologies. Ultimately, this may mean--at least as I understand it--that S&T may be evaluating fewer concepts but that the ones they do assess are more apt to be used every day. Today, I look forward to discussing your proposed reorganizations so that we can get a better understanding of how S&T will identify and select promising technologies for further development and how you can find ways to efficiently leverage existing technologies into new uses as rapidly as possible. At the same time, I want to explore further some of the proposals in your 2012 budget request, including plans for the National Bio and Agro-defense Facility, human factors research--exactly where we stand on that--and disaster resiliency. As we begin to more closely examine your 2012 budget, it is important to note that no program is off limits to scrutiny. Our obligation is to take a balanced, realistic approach, to weigh risks carefully, and to make prudent investments. Dr. O'Toole, I have no doubt that you share this point of view; and I look forward to continuing to work with you and look forward to your testimony today. Mr. Aderholt. Thank you, Mr. Price. Dr. O'Toole, we look forward to your testimony. Thank you. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.004 [GRAPHIC] [TIFF OMITTED] T8060A.005 [GRAPHIC] [TIFF OMITTED] T8060A.006 Opening Remarks: Under Secretary O'Toole Dr. O'Toole. Thank you, Mr. Chairman, Ranking Member Price. I appreciate the opportunity to be before you today and discuss the DHS's Directorate of Science and Technology. Mr. Chairman, we spend about 20 percent of our R&D budget on basic research and the remainder on more applied development of knowledge, products, and technology. And, as you say, we cover the entire range of DHS's extraordinary span of missions in terms of supplying knowledge, products, scientific expertise, and technology to the DHS missions. I recognize that these are tough economic times, as you say, Congressman Price, and that we have to be responsible stewards of taxpayers' money and do our work efficiently and cost effectively. I would like to briefly review some of the initiatives we have taken since I became Under Secretary in November of 2009, a few of which have already been touched upon. The top priority in our strategic plan is to rapidly develop and transition our technologies and knowledge products to use in the field. This reflects the enormous operational needs of DHS for new technology products and for scientific analyses of its work and of its options. The best analysis, the most advanced technology in the world, is of no use unless it is actually in routine use by someone. So moving innovative solutions from the lab bench or the prototype stage into routine use, crossing the so-called ``valley of death'', is a challenge to all R&D organizations; and for many reasons it is particularly so in DHS. We are trying to bridge this gap in several ways. First of all, as you said, Congressman Price, we have instituted an annual review of our entire basic and applied R&D portfolio, including all ``new start'' projects. We asked internal and external experts to assess each project according to a set of criteria which we developed along with our partners in the components, which essentially gauge impact and feasibility or riskiness of every project. This allows us to measure all of our projects against a single framework regardless of the topical area of the project and also enables a more strategic approach to budget decisions. We have already used the results of the portfolio review, which we have done twice, to concentrate R&D funds on fewer projects to improve delivery of capabilities to end users and to reprioritize projects to redirect funding to better address the needs of our partners in the operational components. So, for example, the first review identified three programs with a similar focus on cargo and container screening. We were allowed by this review to combine all three projects into a single project, creating synergies and cost savings; and we took that money and redirected it. We also identified a high-impact explosives division project which was aimed at new computer software to improve detection capabilities of our x-ray and AIT machines. We increased funding of that project in order to speed its deployment. And, in fact, there is a new software program in use today, or going into use today, in the AIT machines which will reduce privacy concerns. Secondly, we have realigned the Directorate's organizational structure, which I think also serves our primary goal of transitioning more rapidly to use. I have executed one Federal reorganization and had no desire to do another one. But I think that this realignment actually does serve our strategic purposes. First of all, it is in line with the National Academy of Public Administration's 2009 top recommendation to reduce the number of reports to the Under Secretary. We did that, reducing it from 21 to 10. And, as I said, it directly supports our strategic goals. First of all, it is pretty well accepted in R&D circles that innovation comes from the seams between technical disciplines. So we recombined all of our technical divisions into a single group, which is known as HSARPA. This is going to make it a lot easier for our biologists and our engineers and our explosive experts and so forth to work together collaboratively in multidisciplinary teams, and these multi- faceted teams are actually what is required to really solve some of the complex problems DHS is facing. We also have initiated what we call APEX projects. These are very high- priority, high-value, fast-turnaround projects, again using multidisciplinary teams, which only go forward if there is a charted agreement between myself and the head of the component. These aim to solve real, urgent problems that the component head thinks are important. We have one APEX project going on with the Secret Service and another beginning with the Customs and Border Protection groups. We have also recognized that the special needs of first responders and our partners in State and local governments are different from those of the operating components, and we have established a dedicated office to serve them. This is being headed up by a career first responder, a former fire chief of Louden County, who also has a Ph.D.; and I think this organization is going to better enable us to meet the critical needs of that important set of groups. As was mentioned, we are working with the DHS Under Secretary of Management and the components to leverage S&T's technical skills--again, we are the core group of science and engineering expertise in DHS--to improve the front end of the acquisition process by helping the components to formulate clear requirements stemming from their mission needs. This will enable us to much more readily develop technologies that will serve their actual needs. We are already engaged by statute in the back end of the acquisition process, the testing and evaluation part of acquiring new technologies, but by the time you get to testing and evaluation, if you haven't established appropriate requirements, you may end up not getting the technology that you need or it may not work in the conditions in which you need to operate. we are also trying to instill a more systems engineering based approach to DHS operations in this new Office of Acquisitions and Analysis, and we have a new leader for that group who is the former head of acquisitions at FAA. Another important initiative--and this goes to your comments, Mr. Chairman, about the importance of connecting with the commercial sector and others, including the interagencies-- we intend to become ``best in class'' at technology foraging. Now we already do partner with the private sector, with other Federal agencies, with universities, and with other governments abroad, for that matter, and try to leverage their investments in R&D against the needs of DHS. In fact, we won two SBIR awards last year for our work. But it is really difficult to know who is doing what in the R&D community. This is a global community. It is churning out new products all the time, and it is difficult to keep up with. What we want to do is become best in class at surveying this dynamic and expanding world, identifying potential partners, discovering technologies in late-stage development which we might adopt or adapt for new purposes, new environmental conditions, or new scales. This effort, the technology foraging effort, is going to be based in the new Office of R&D Partnerships which will serve as an easy-to-use portal through which the rest of the world can access S&T. We are trying to make it much easier for commercial partners to work with S&T. There are a lot of them. There are a lot of potential commercial partners. And the small companies, which are often the most innovative, have a different series of difficulties working with government than do the large integrators; and universities have a different set of talents and problems in connecting up with government. But we are, for example, establishing industry days and other ways to make a better connection with the commercial sector as well as having established a new partnership with In- Q-Tel. In sum, as you said, we are a young agency. I think we have much to show for ourselves. Although I agree with you, Mr. Chairman, we have done a bad job of branding S&T products; and we hope to do better. I think we are evolving. I think these initiatives will make us stronger. And I look forward to your questions. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.007 [GRAPHIC] [TIFF OMITTED] T8060A.008 [GRAPHIC] [TIFF OMITTED] T8060A.009 [GRAPHIC] [TIFF OMITTED] T8060A.010 [GRAPHIC] [TIFF OMITTED] T8060A.011 [GRAPHIC] [TIFF OMITTED] T8060A.012 [GRAPHIC] [TIFF OMITTED] T8060A.013 [GRAPHIC] [TIFF OMITTED] T8060A.014 [GRAPHIC] [TIFF OMITTED] T8060A.015 [GRAPHIC] [TIFF OMITTED] T8060A.016 [GRAPHIC] [TIFF OMITTED] T8060A.017 [GRAPHIC] [TIFF OMITTED] T8060A.018 [GRAPHIC] [TIFF OMITTED] T8060A.019 [GRAPHIC] [TIFF OMITTED] T8060A.020 Mr. Aderholt. Thank you for your testimony. We will move now into the questioning portion of the hearing, and I will begin with the first question regarding the priorities and some of the things that are your priorities there at S&T. Science and Technology faces many competing priorities. Yet, because they are finite resources, your Directorate and our committee are forced to make tough decisions about which areas are most crucial and most critical to fund. In this light, please discuss with the committee your top research priorities for fiscal year 2012 and what you believe are the Department's biggest capability gaps. S&T PRIORITIES Dr. O'Toole. That is a tough question to answer, for the reasons you state. We face a huge need across a broad horizon of missions in DHS. I think it is fair to say that top priorities in the Department right now include aviation security, cybersecurity, preventing and being prepared to respond to an attack using either a biological weapon or a nuclear weapon, an IND, for example. Or now we are also, of course, with others in the government worried about nuclear accidents at power plants. And we also have to worry, of course, about border security. There are many moving parts under those large headings, but I think those are the big priorities. In terms of standout gaps in R&D, we would love to be able to detect explosives without touching anybody, without opening your laptop as you go through checkout or the checkpoint or taking off your shoes. That is a very difficult scientific problem on which we are making progress. We would like to know a lot more about signals, observable signals of human behavior that would indicate malintent. This goes, for example, to the core of suicide bomber detection. There is a lot to do in terms of biological defense. S&T's particular bailiwick has been detection. I think we have very persuasive data that show that we need to create the possibility of real-time detection of a biological weapon so that, for example, if it were discovered in a subway that Anthrax or another pathogen would be released we could immediately shut that subway down. Not 10 minutes later, not an hour later, but immediately. And we are striving for that, but we are not there yet. Mr. Aderholt. The priorities you mentioned I think are very good priorities, but have you aligned those priorities with your budget? And how do you measure Science and Technology's ability to address those priorities? Dr. O'Toole. Yes. And this is the purpose and the usefulness of the portfolio review. The criteria that we use in assessing a project include, for example, the impact of a project, a number of different ways of getting at the impact, including does a customer want this, is there a transition plan, how likely are we to really move this from prototype into widespread use. And we also assess feasibility. So somebody might have a really wild idea which, if we could bring it to fruition, would be terrific, but it is just not going to happen in the next 5 years, in which case it would score lower. And, again, we use people from the components as well as outside experts to do the scoring. We use those assessments to award funding or to take it away. And we have eliminated projects on the basis of the portfolio as well, as I said, plussing some up to speed transition or because we think this is a high-impact project. CYBERSECURITY Mr. Aderholt. You mentioned in your opening remarks about cybersecurity. The committee applauds the budget's increased emphasis on cybersecurity, and that is a subject we will actually address in another hearing later this week, but what critical cybersecurity needs does S&T plan to address with additional funding? Dr. O'Toole. We are focusing on trying to make the Internet more secure for users. So, for example, we have worked on a project called DNSSEC, domain name security, which is intended to assure that, when you go to a Web site, that is the Web site you really hook up with and to, you know, diminish the possibility that when you are trying to reach your bank somebody else is diverting your messages to their Web site. This particular tool has been adopted by many major companies, including--incorporated, for example, into Microsoft 7. We also have a couple of tools that are intended to increase our situational awareness of attacks on the Internet. So, for example, we have tools that detect people who are trying to hijack messages as they are relayed from one router to the next to their generation, as happened, for example, recently when for about 15 minutes all Facebook pages were being shunted to China. So those are two examples. We also have established a test bed for commercial companies to come in and try out their own defenses against cyberattacks. Obviously, you don't want to try out attacks and ways to stop them on the real Internet, because unforeseen bad things could happen. But you have to create a test bed that is large enough to actually mimic the Internet. So we have done that, and a lot of companies in the private sector have been coming in testing their own vulnerabilities as well as their own products. And one such product actually was developed by a company that subsequently got bought out by a big company. Mr. Aderholt. I have got some more questions, but we are going to have votes here in a few minutes, so let me go ahead and recognize Mr. Price. Mr. Price. Thank you, Mr. Chairman. Madam Secretary, let me ask you to help us understand the import of this reordering of the Directorate's agenda. As you said, there has been a fair amount of this in the history of the Department, and I know you wouldn't just needlessly undertake another review, so I am sure you have thought about this and rationalized it thoroughly. I just want to make sure that we understand it and understand the impact of this on your budget priorities. I am going to refer you here to your printed statement by way, I hope, of bringing out the rationale here. You have stressed the division of these research priorities into two broad categories: Research, development, and innovation, on the one hand; acquisition and operations support, on the other hand; and then of course keeping the laboratory facilities and the university program components pretty much as they are. And then the usual breakdown that we are accustomed to of topics of mission-related research is detailed under these headings. One big question, I gather you talk a lot about the ``valley of death'' and the need to pay more attention to that area between innovation and deployment. I gather that is one reason for this focus on what you call acquisitions and operations support; and yet that is an area where your overall budget actually goes down, although there is some variation within the subheads under that item. Then when you come to the more familiar list for research, development, and innovation, there are some striking changes. I know in your budget justifications you go into this in more detail, so I am really asking you to perhaps help us get the bigger picture here. There are some areas that you list as having no funding at present that you are wanting to invest in, radiation and nuclear detection, for example, radiation nuclear resiliency. There is one that we really don't need to have explained, I think, the cybersecurity emphasis. I think we all agree that is going to be a matter of increased emphasis. You have some major reductions here: Natural disaster resiliency cut by two-thirds. The hostile behavior prediction and detection, one component of the human factor's portfolio, goes from $22.7 to $14.6 million and so forth. I am not really asking you to get too much into the weeds of these individual items. We will have plenty of time to do that. What I am asking you is, to what extent are these changes and these budget priorities a function of this reordering that you seem to put considerable stock in? I am not certain I understand the rationale. And so the rationale is one thing but also the kind of budget consequences and the relative focus on different missionaries, I don't think we understand either. At least we need to understand it more fully. R&D FUNDING Dr. O'Toole. Okay. Fair question. First of all, I think the drop in the Office of Acquisitions and Operational Support is because of a one-time cost to the testing and evaluation and standards group that came in Fiscal Year 2010 that is not reflected in the current budget, but they have not been diminished in any way. The R&D funding for particular projects follows the portfolio review. We are asking for a different structure for our budget lines so that we can have a much more transparent layout of the projects that we are funding. Mr. Price. Let me just interrupt you there. You do use that term and, of course, we understand transparency is an important value. You are talking here about the ability to track and assess our progress, though. I mean, transparency in that sense more than the usual sense of transparency to the public or accountability in that broader sense? Dr. O'Toole. It would be both, and the latter is very important in informing the commercial sector as to what we are up to and what we are interested in. But what we would do is we would put all of our R&D under a single budget line; and we would then fund projects, whether it is disaster resilience or biodefense, according to our customers' needs and priorities, which do shift, and our ability to meet them. So disaster resiliency, for example, is devoutly desired by all of us, especially these days when we are watching Japan struggle with its trifecta of disasters. But we do not see many near-term, cost-effective ways that S&T can address that right now. One of the problems with projects and disaster resiliency, and we have developed several good products for disaster resiliency, and I will mention one, is that they mostly pertain to the critical infrastructure, to improving critical infrastructure. And that lies in private hands. So it is difficult to transition, for example, a device that will plug a damaged levee to municipalities that don't have any money to buy it. We invented such a device, and it works as far as we can tell, but we are having a hard time transitioning. So if transition to use is one of our priorities then those projects which lend themselves to transition are more likely to get funded. But this would be flexible. The acquisition emphasis is due to the fact that we have seen many technology acquisitions in DHS fail because they didn't start out with clear, specific, detailed requirements in the first place; and they would go way down the path of acquiring a technology only to find that it wouldn't work or it wouldn't work in the conditions in which it had to operate. So we think we can leverage S&T's technical expertise much more effectively if we worked as advisors on the front end when the components are deciding how to translate their mission needs into requirements for new technology and save DHS a lot of money, a lot of grief, and be very successful in getting the Components what they need, whoever develops the technology, whether it is S&T or the commercial sector or whomever. So this is not an expensive proposition, because we are basically acting as coaches in the acquisition office. We are not developing new technologies. We are not paying laboratories and so on and so forth. Is that helpful? Mr. Price. I think the key word here is support, acquisition and operation support, a kind of informing of that process. Mr. Aderholt. I want to make sure Mr. Dent gets a question here. It is 15 minutes before the vote. So to Mr. Dent. Mr. Dent. Thanks, Mr. Chairman; and, Madam Secretary, thank you for being here. In your written testimony, you articulate the need to equip our first responders with various tools to manage and execute their responsibilities in the midst of a terrorist attack or natural disaster or hazards approach. Can you describe the status of each program, including the self-contained breathing apparatus, the geospacial location accountability and navigation system for emergency responders, and the portable interoperable tactical operations center? Is S&T currently piloting each program? And, if so, what is the expected date to transition the project from a pilot to a commercially available technology? Dr. O'Toole. Thank you, Congressman. SELF-CONTAINED BREATHING APPARATUS Yes, we are working on all three of those programs. They are actually in late stages of development. The self-contained breathing apparatus is something first responders have been seeking for decades, actually; and what we have developed is a much smaller, lighter, more ergonomic self-contained air tank that fits on your back. Firefighters in particular have had difficulty fitting into tight spaces with the old models. This one supplies as much air but would be much easier to use, and this spring it is actually going into testing with the fire service and in the Chicago Fire Department. GEOSPATIAL LOCATION DEVICES The second device you mentioned is an effort to develop a kind of beeper that would locate firefighters in particular when they are working in areas that don't have transponders, so, for example, very high-rise buildings in urban settings. We have lost some firefighters in the past because their colleagues couldn't get to them once they ran into trouble. PORTABLE EMERGENCY OPERATIONS CENTER And the third is actually a two-part effort that includes a rapidly portable emergency operation center that you could literally carry to where it is needed and set up very quickly complete with communications gear and power supplies. Mr. Dent. How much funding is associated with those efforts? Do you know? Dr. O'Toole. I would have to get back to you on that, Mr. Dent. Mr. Dent. That is fine. [The information follows:] Mr. Dent. How much funding is associated with those efforts? Do you know? Dr. O'Toole. I would have to get back to you on that, Mr. Dent. Mr. Dent. That is fine. Response: Funding noted below.
Self-Contained Breathing Apparatus FY 2005: $1,793,820 FY 2006: $206,208 FY 2008: $263,938 FY 2009: $233,733 FY 2010: $225,000 Geospatial Location Accountability and Navigation System FY 2009: $1,950,600 FY 2010: $2,960,606 FY 2011 (Request): $3,112,757 FY 2012 (Request): $3,358,598 Portable Interoperable Tactical Operations Center FY 2004: $380,200 FY 2005: $730,025 RADIATION DETECTORS Mr. Dent. And, also, just on the issue of chemical, biological, radiological, nuclear attacks, what is the status of an intelligent personal radiation locator program and who is going to receive those pocket-size locators? I know the Japanese and others are pretty much purchasing them right now, as you can imagine. Is there any consideration for our first responders to get some of those same types of devices or equipment? Dr. O'Toole. Yes. There have been several generations of radiation detectors over the years, and I think most fire departments and police departments have some version of radiation detectors. The project you referred to is in its early stages and is an attempt to network individuals wearing these devices. So that if you were, for example, looking for an improvised nuclear device and you had a team of people out walking around, their radiation levels, the radiation that they were seeing with their devices, would be transmitted back to a central source and you could start to triangulate where a source might be. The device you are talking about also is a more sensitive detector of certain kinds of radiation like gamma rays and neutrons. We are not there yet, but there is no question there has been progress in belt-worn radiation devices over the years. Mr. Dent. I yield back. NATIONAL BIO AND AGRO-DEFENSE FACILITY Mr. Aderholt. I am going to ask one brief question, and then the remaining time I want to give to Mr. Price. I know he has got a few more questions. The rest of mine I can submit for the record, since we have a vote on. But I do want to ask you about the National Bio and Agro- defense Facility. And, of course, the request for $150 million for the construction indicates that it is a priority for you, but the central utility project has been delayed. What is the current project timeline? And in your assessment will it be done by 2018? Dr. O'Toole. We cannot begin working on the CUP until we either get a fiscal year 2011 budget and permission from Congress to proceed with construction or we get permission from Congress and Kansas decides that it will spend the remainder of its funds on building the CUP, which is unlikely. The schedule is probably going to be more impacted by the delay in waiting for the risk assessment requested by NAS than by the funding for the CUP. So we actually may make it to 2018 or it may be delayed by a year at this point. It is very difficult to say. Mr. Aderholt. Thank you. Mr. Price. Mr. Price. Well, let me just follow up on that. I have questions I, too, will submit for the record. But, as you know, the National Academy of Sciences did take a look at this project; and they came up with a rather high figure in terms of the risk of the release of the foot-and-mouth disease virus within the next 50 years. Now there are lots of concerns about that study, with some feeling I think that it exaggerates the risk because it doesn't consider mitigation strategies that will be included in the design and construction of the lab. But, nonetheless, a reassessment does clearly need to occur. You simply cannot have assessment findings out there that aren't effectively dealt with. All the versions that we have of the 2011 appropriations bill have called for safety and security reassessment, although they vary somewhat in the degree in which they make funding contingent on that assessment. But just abbreviating this here because of our time pressure, what further assessment do you believe is necessary and on what time schedule. Won't that need to apply to the entire facility, including the central utility plan? I mean, if there are going to be problems with respect to the entire facility--and we hope and believe there won't be in the end--wouldn't you want to have the assurances in place before you construct any component, including the utility plant? Dr. O'Toole. Well, first of all, for the record, the National Academy also, as you know, Congressman, stated very strongly that the country needs a facility like this. Mr. Price. I don't think there is any disputing that on this subcommittee. That has been our position all along. Dr. O'Toole. I appreciate that. In building a facility like this, which is fairly complex, we and others have done it before. It is actually better to have iterative risk assessment, as we were doing, so that you can actually build in safeguards as you get closer and closer to a complete design. We are, I think, about 35 percent complete in our design at this point, and what you want to know as you go forward are what are the vulnerabilities that we need to be looking out for. I expect that there will be a lot of people going back and looking at earthquake vulnerabilities in all kinds of settings in the next few months and years. So doing iterative risk assessments is not a bad idea if you use them to inform your thinking, but it doesn't make sense to assume that you are never going to mitigate anything you turn up as a risk as the National Academy did, and you need to do it at the end when you have all of your safeguards in place, not just those engineered protective devices but also your plans and your response protocols and so forth. Mr. Price. I know we need to go. I am going to ask you to elaborate that for the record in some detail, and we will work with you as to what that answer might entail. Mr. Aderholt. Thank you, Mr. Price. Dr. O'Toole, they just called the votes. Looks like we are going to be in a series of votes. So, in reference to your schedule and, of course, I know the members of the committee, we will adjourn the committee. But we will be probably submitting more than usual questions for the record because our time was limited here at the committee today. But we do thank you for your appearance and we look forward to hearing your testimony for the record. Mr. Aderholt. Thank you very much. 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T8060A.215 [GRAPHIC] [TIFF OMITTED] T8060A.216 [GRAPHIC] [TIFF OMITTED] T8060A.217 [GRAPHIC] [TIFF OMITTED] T8060A.218 [GRAPHIC] [TIFF OMITTED] T8060A.219 [GRAPHIC] [TIFF OMITTED] T8060A.220 [GRAPHIC] [TIFF OMITTED] T8060A.221 [GRAPHIC] [TIFF OMITTED] T8060A.222 [GRAPHIC] [TIFF OMITTED] T8060A.223 [GRAPHIC] [TIFF OMITTED] T8060A.225 [GRAPHIC] [TIFF OMITTED] T8060A.226 [GRAPHIC] [TIFF OMITTED] T8060A.227 [GRAPHIC] [TIFF OMITTED] T8060A.228 [GRAPHIC] [TIFF OMITTED] T8060A.229 [GRAPHIC] [TIFF OMITTED] T8060A.230 [GRAPHIC] [TIFF OMITTED] T8060A.231 [GRAPHIC] [TIFF OMITTED] T8060A.232 [GRAPHIC] [TIFF OMITTED] T8060A.233 [GRAPHIC] [TIFF OMITTED] T8060A.234 [GRAPHIC] [TIFF OMITTED] T8060A.235 [GRAPHIC] [TIFF OMITTED] T8060A.236 Tuesday, April 5, 2011. WMD COUNTERMEASURES--THREAT, PROGRAMS AND FUNDING WITNESSES WARREN STERN, DIRECTOR, DOMESTIC NUCLEAR DETECTION OFFICE ALEXANDER GARZA, M.D., ASSISTANT SECRETARY OF HEALTH AFFAIRS, DEPARTMENT OF HOMELAND SECURITY [Clerk's note.--The Department has redacted classified information from this transcript.] Opening Statement: Chairman Aderholt Mr. Aderholt. The hearing is called to order. Today we have a classified briefing to discuss the Department of Homeland Security's programs related to weapons of mass destruction. We expect to begin with a discussion of current risk and threat scenarios, The Department of Homeland Security programs to detect and deter such threats, and countermeasures being developed and deployed. To help us better understand these programs, we welcome Warren Stern, director of the Domestic Nuclear Detection Office, DNDO, in his first appearance before the subcommittee, and Dr. Alexander Garza, Assistant Secretary of Health Affairs and the Department's chief medical officer who is returning to us. So welcome to both of you. Although I understand you will both submit unclassified segments for the record, this hearing is intended to cover discussion of material that may rise to the secret level. I expect your presentations and the questions and concerns members may raise will fall in both classified and unclassified areas. Before we begin, I would like to remind members and staff that because information we receive over the next 2 hours is highly classified, it is not to be repeated in any unsecure setting or for any other than official purposes. We will have an official transcript that will be classified at the secret level, although we will ask the Department to review it and provide a redacted version, which, if appropriate, we will publish as part of our public hearing record. There will be no electronic devices--that includes pagers, BlackBerrys, or cell phones--in the hearing. If someone has inadvertently brought such a device into the room, please give it to our staff who will safeguard it outside until the hearing is over. The threat that weapons of mass destruction could be used by terrorists or other adversaries to attack the United States homeland has been a central driver of all of DHS operational agencies. These include CBP and ICE which seek to identify and deter weapons of mass destruction that could cross our borders or damage international supply chains: The Coast Guard, responsible for security of our coasts, ports, and sea lanes; TSA, which overseas transportation and other infrastructure security; and the Secret Service, whose protective mission also entails planning for scenarios involving threats of chemical, biological, radiological, and nuclear attacks; planning and grant assistance through FEMA and the National Protection and Programs Directorate; training at the Federal Law Enforcement Training Center; and the S&T research programs are also heavily focused on weapons of mass threats. For DNDO and OHA, addressing weapons of mass destruction is the priority mission. The Department of Homeland Security has responsibility through your offices to plan for and support development for new detection technology; lead interagency efforts to design and develop architects to detect and respond to threats; and to sustain testing, red-teaming, and forensic capability. And these efforts could not be more critical. As outlined in public reports, al Qaeda and its leadership have for years called for the use of weapons of mass destruction against the United States. This has never changed and it is clearly a reason for vigilance with regard to new and continuing threats from them and their confederates. In addition, the threat of biological or chemical weapons is not trivial and there is much basis to remain vigilant. The memories of the sarin gas attacks on the Tokyo subway system or the 2001 anthrax attacks in the United States are vivid examples. The fundamental questions we hope you address today include, number one, a review of the current threat environment in which your agencies have built your missions; number two, what unique roles your agencies play not only with the Department of Homeland Security, but in the larger national effort to plan for and address these threats; and number three, how DNDO's core mission may change with the shift of basic R&D to the S&T Directorate. Given the crucial importance of this topic to our security and to perhaps our very own way of life, I expect an animated discussion here this afternoon. I will ask Director Stern, to be followed by Assistant Secretary Garza, to summarize your written testimony in a brief oral statement to allow sufficient time for members' questions. Before you begin, I would like to recognize our distinguished ranking member, Mr. Price, for any remarks that he may have. And also I would like to recognize that Stephanie Gupta is having a birthday today, who is the clerk of the subcommittee. Stephanie is clerk on the minority side. And we wish her a happy birthday. And we will turn it over to you, Mr. Price. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.237 [GRAPHIC] [TIFF OMITTED] T8060A.238 [GRAPHIC] [TIFF OMITTED] T8060A.239 [GRAPHIC] [TIFF OMITTED] T8060A.240 Opening Statement: Ranking Member Price Mr. Price. Thank you, Mr. Chairman. I join you in wishing happy birthday to Stephanie Gupta and welcoming our witnesses here today. This hearing takes place as we all realize that terrorists are determined to attack our country again. Osama bin laden has made it known that obtaining weapons of mass destruction is a top priority and that, in his own words, al Qaeda seeks to inflict an attack akin to Hiroshima on American soil. Al Qaeda in the Arabian Peninsula has voiced similar desires. While the most widely used definition of ``weapons of mass destruction'' consists of nuclear, biological, and chemical weapons with the unique ability to kill large numbers of people with a very small amount of material, in this hearing we will primarily focus on the nuclear and biological threats. Since the end of the Cold War the U.S. has spent billions to successfully secure nuclear weapons, materials and technology in the former states of the Soviet Union. However, during this same period, the world has also witnessed a new era of proliferation with North Korea and Iran, passing key milestones in developing their nuclear weapons programs. In the Middle East and Asia, nuclear arms rivalries have intensified. In Pakistan, Dr. A.Q. Kahn led a nuclear proliferation network that served as a one-stop shop for countries aspiring to develop nuclear weapons. If not constrained, this continued proliferation could prompt nuclear crises and even nuclear use at the very time that we and the Russians are reducing our nuclear weapons deployments and stockpiles. While advancements in biotechnology have led to important progress in the medical field, it has also increased the availability of pathogens and technologies that could be used for terrorist ends. Al Qaeda in the Arabian Peninsula has had a particular interest in these biological weapons along with other attack methods. Many biological pathogens and nuclear materials around the globe are poorly secured and vulnerable to theft, with the risk of ending up on the black market and thus inevitably in the hands of terrorists. In December of 2008, the commission on the Prevention of Weapons of Mass Destruction, Proliferation, and Terrorism issued a report noting that, quote, unless the world community acts decisively and with great urgency, it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013. the commission believed that terrorists were more likely to obtain and use a biological weapon than a nuclear weapon and that the U.S. Government needs to be more aggressive in limiting the proliferation of biological weapons to reduce the prospect of a bioterror attack. Let us hope that in the intervening years, security has increased so this threat is not looming quite as large. Today I look forward to discussing what DHS's Office of Health Affairs and the Domestic Nuclear Detection Office are doing to reduce the likelihood of a nuclear or biological attack; the programs you are developing to quickly identify an occurrence; and how DHS, along with other Federal, State, and local entities will respond. While both of your budgets are relatively small, your missions are far-reaching and the results of failure could be catastrophic. Dr. Garza, Director Stern, I look forward to a frank discussion of these matters and welcome you to the subcommittee. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.241 [GRAPHIC] [TIFF OMITTED] T8060A.242 Mr. Aderholt. Thank you. And Director Stern, we will start with you, and we look forward to your testimony. Opening Statement: Director Stern Mr. Stern. Thank you. Good afternoon, Chairman Aderholt, Ranking Member Price, and other distinguished members of the subcommittee. I appreciate the opportunity to talk to you today about DNDO's goals, its missions. As you indicated, I have submitted testimony for the record, but I would like to spend a few minutes hitting some of the key points in that written testimony. As you may know, I have been at DNDO for approximately 7 months now, and I have learned a lot and imposed a few changes at DNDO. I bring to DNDO three basic principles: Discipline, transparency, and intellectual rigor. In terms of discipline. I am working very hard to ensure that we follow the legislative mandate that we have been given. In terms of transparency. I am trying very hard to ensure that we work with Congress and are transparent with Congress and, to the extent possible, with the American public. And in terms of intellectual rigor, I am trying very hard to ensure that there is a good oversight and peer review to ensure that what we are doing is supported by basic common sense. These three principles have led to two big changes at DNDO since I have started. One is the strategic plan for the global nuclear detection architecture. As you may know, Congress has pressed for many years that we develop such a strategic plan. And in my first 3 months, we, with seven other agencies of the U.S. Government who are responsible for this mission, drafted very carefully and cooperatively a strategic plan which we delivered to Congress at the end of last year. The other big change is how we look at the architecture. We have historically looked at the architecture, the detection architecture, in terms of static detectors, in terms of what the likelihood that a piece of nuclear material passing a detector will in fact be detected by that detector. But in terms of imposing an intellectual rigor on the way that we look at the architecture, it is much more defensible to look at the architecture as a defense architecture; that is, to assume that there will be some information that we will be able to respond to. And so what we are looking at the architecture now is a surge architecture. That is, how can we design an architecture that will allow the United States to surge assets in order to find nuclear radioactive material when there is some information available about that nuclear or radioactive material? This is one of the reasons that from the outset of my term, I focused very strongly on supporting State and local authorities and developing nuclear radiation detection capabilities. Of course, only the States and locals have the numbers of people that can get quickly to a site or to an area to look for nuclear and radioactive material. And I am very pleased, consequently, that in the President's fiscal year 2012 budget request we have additional support for the Securing the City program for New York and for one other city or urban area to be selected on a competitive basis. In terms of technology R&D, I see two key changes that we are making at DNDO. The first is to rely more on commercially available technologies than we ever have before. In the 6 years since DNDO was created, commercial technologies have changes in a rather fundamental way. And a lot of the applications that the U.S. Government needs are available in the commercial sector. So wherever possible in the future, we will use the 85, 90 percent solution that is available off the shelf commercially rather than developing our own capabilities. That leads us to focus a lot more in helping to set standards, which is part of our legislative mandate, and to test to those standards. So the second big technical change we are going to be imposing is to follow the National Academy of Science's recommendation of following a model test, model approach, in our evaluation of detectors, and you will see that change. You may or may not be aware that we are now recruiting for the individual who would head the office that does the modeling and the testing. And one of the key requirements for that post is to understand and be able to implement the National Academy's recommendations on the model test, model approach. So, Congressman, our research and development work will consistently be matched with the needs of the global nuclear detection architecture and the operational requirements of our end users. Our budget request is focused on preventing radiological nuclear terrorism by enhancing our ability to detect these nuclear radioactive materiels. And I appreciate this opportunity to talk to you today about any of the issues you would like to talk about related to the domestic nuclear detection architecture. Thank you. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.243 [GRAPHIC] [TIFF OMITTED] T8060A.244 [GRAPHIC] [TIFF OMITTED] T8060A.245 [GRAPHIC] [TIFF OMITTED] T8060A.246 [GRAPHIC] [TIFF OMITTED] T8060A.247 [GRAPHIC] [TIFF OMITTED] T8060A.248 [GRAPHIC] [TIFF OMITTED] T8060A.249 [GRAPHIC] [TIFF OMITTED] T8060A.250 [GRAPHIC] [TIFF OMITTED] T8060A.251 [GRAPHIC] [TIFF OMITTED] T8060A.252 [GRAPHIC] [TIFF OMITTED] T8060A.253 [GRAPHIC] [TIFF OMITTED] T8060A.254 [GRAPHIC] [TIFF OMITTED] T8060A.255 Mr Aderholt. Dr. Garza. Opening Statement: Dr. Garza Dr. Garza. Thank you, sir. Good afternoon. Chairman Aderholt, Ranking Member Price, and distinguished members of the committee, thank you for inviting me to testify before you today. It is a privilege to be here to discuss the Office of Health Affairs programs and funding that support the Department of Homeland Security's efforts to combat weapons of mass destruction. OHA serves as the principal authority for all medical and health issues for the Department of Homeland Securiy. We look at health through the prism of naional security, providing medical, public health, and scientific expertise in support of the Department's mission to prepare for, respond to, and recover from all threats. Our responsibilities include serving as the principal adviser to the Secretary and to the FEMA Administrator on medical and public health issues; leading and coordinating the biological and chemical defense programs; providing medical and scientific expertise to support DHS preparedness and response efforts; and leading the Department's workforce health protection and medical support activities. OHA furthermore serves as the point of contact for State and local governments on medical and public health issues for the Department. The threat of an attack using a WMD is real and so is the risk. As Congressman Price pointed out, the WMD Commission reported on December 3, 2008, that we must be vigilant in addressing several urgent threats, including bioterrorism. In their report, World at Risk, the Commission found that, and I quote, ``Unless the world community acts decisively and with great urgency, it is more likely than not that a weapon of mass destruction will be used in a terrorist act somewhere in the world by the end of 2013.'' Because DHS understands this threat, high consequence biological attacks were identified as a high-priority item within the Quadrennial Homeland Security Review. Today I will provide a short overview of OHA initiatives that help to mitigate these threats and prepare the Nation to respond to and recover from chemical and biological attacks. OHA lends our expertise to a number of initiatives across the Department that focus on the threat of biological attack. These efforts span the pillars of biodefense and include awareness, prevention and protection, detection and surveillance, and response and recovery. This end-to-end approach to biodefense is necessary in order to communicate the current national capability and develop a strategy for further biodefense improvement. OHA works closely with the DHS Science and Technology Directorate and the Office of Intelligence and Analysis to assess our current and emerging threats of natural or intentional events involving biological agents as well as chemical, radiologic, and nuclear agents to the U.S. population. OHA applies these risk assessments in operating, managing, and supporting the Department's biological defense programs. Our work is primarily focused on addressing the threat of biological attack through the BioWatch program, and surveillance through the national biosurveillance integration system. In addition, we focus on helping the build preparedness at the State and local level. The fiscal year 2012 budget request includes $7 million for the NBIS and $90 million for continued operations of our deployed BioWatch detection system. The fiscal year 2012 budget request also includes an increase of $25 million to fund the start of operational testing and evaluation for the BioWatch Generation-3 automated detection system. The Gen-3 system will advance current detection technology by significantly reducing the time to detection of a biological agent in the environment. This early detection allows communities to provide medical countermeasures to affected persons in a timely manner and thus saving more lives. OHA further coordinates the Department's health preparedness efforts to protect against high-consequence chemical events. Chemical events, whether from terrorist attack or accidental release, pose a significant homeland security threat. Chemical agents can cause immediate mass casulaties, numbering in the thousands if released in or near a densely populated area. Chemical is different from biological. The response window is shorter and far less forgiving. Therefore, our approach to preparedness for chemical events is much different. We focus more on building an overarching defense framework and building rapid response cabilities as well as enhancing community resilience. We are doing this now through a demonstration project in Baltimore that focuses on partnerships at the Federal, State, and local levels. Similar to the biological terrorism risk assessment, OHA uses the chemical terrorism risk assessment in prioritizing our programs. The fiscal year 2012 budget request of $2.4 million will allow OHA to continue to provide health and medical expertise related to chemical preparedness, response, and resilience in support of an integrated chemical defense framework to protect against high-consequence events. I want to thank this committee for the opportunity to testify and I look forward to answering any questions that you may have. Thank you. Mr. Aderholt. Thank you, Dr. Garza. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.256 [GRAPHIC] [TIFF OMITTED] T8060A.257 [GRAPHIC] [TIFF OMITTED] T8060A.258 [GRAPHIC] [TIFF OMITTED] T8060A.259 [GRAPHIC] [TIFF OMITTED] T8060A.260 [GRAPHIC] [TIFF OMITTED] T8060A.261 [GRAPHIC] [TIFF OMITTED] T8060A.262 CURRENT THREATS Mr. Aderholt. Thank you both for your summary of what your job priorities are and what you do to try to make sure that we have a safe Nation. One thing that I would like to start out is maybe let you refocus just a minute and maybe giving the subcommittee a brief summary of the current threat picture for weapons of mass destruction in this country. I think it would be of interest, I know, to myself and to other members of the subcommittee. So if you could take a few minutes and just talk a little bit about the current threats that are out there as we speak. Dr. Stern, we will start with you. Mr. Stern. Thank you. At DNDO we take the information that the Intelligence Community provides us in terms of the risks of various activities, and we try and build our defenses based on the likelihood that an adversary would take a given path; for example, to move nuclear or radioactive material, you know, into the United States. So we don't actually evaluate the actual likelihood that an entity like al Qaeda wants or is able to attack the United States, but rather we take the input from the Intelligence Community and build our models around that to try to identify how it is that we can detect those materials should they come through various pathways. Mr. Aderholt. Okay, Do you want to add anything? Dr. Garza. Sir, yes. I can tell you this, and part of it is in relation to what Director Stern says. We take the threat information and we build it into risk profiles on how we are going to direct our operational programs. So we work very closely with the Science and Technology Directorate who builds the BTRA, the Biological Terrorism Risk Assessment, and CTRA, the Chemical Terrorism Risk Assessment, as well as an integrated risk that combines both biological, chemical, and nuclear. Specifically to your question though, I can tell you this: [Redacted] Without getting into a much higher classification scheme [Redacted]. If we look at the biological terrorism risks assessment provided by S&T [Redacted] majority fo the threat. There are other agents on the list that we are concerned about as well. But [Redacted] does occupy the top spot. If you look at the integrated risk assessments--and I would ask you if you had further questions about that, you should get a brief from S&T. [Redacted] Nuclear material is much easier to control the movement of and the control of, where biological agents are ubiquitous in the environment and they are located in labs around the world. So the control and access to them are much simpler than it is for nuclear material. And using these risk assessments and the different threat information is what drives a lot of what our operational programs are in the BioWatch as well as others. Mr. Aderholt. Director Stern, let me ask you this: What particular scenarios are they putting before you that you have actually planned for? Mr. Stern. Yeah. This is following on what Dr. Garza said, the nuclear terrorism risk assessment. At DNDO, we do lead the DHS radiological and nuclear---- Mr. Aderholt. Is your mic on? Mr. Stern. Sorry. So at DHS, we do lead the radiological and nuclear risk threat assessment for the Science and Technology Division. But this document and series of analyses look at particular pathways and help us to prioritize pathways, not the overall risk. In the nuclear and radiological world, following on again what Dr. Garza said, there is a hierachy of risks in the sense that radiological materials are of less consequence but are commonly available both in the U.S. and overseas; whereas nuclear materials, nuclear weapon materials, are very carefully controlled. So there are different scenarios we look at. And as I mentioned in my introductory remarks, one of the things that we are shifting our focus on is to look at an architecture that is a surge architecture that, again, assumes we will have a certain amount of information regarding the attack that would be coming and that will allow us to more rigorously defend and detect--defend the U.S. and detect the nuclear or radioactive material. And that effort very much is linked to this nuclear risk assessment. And in the Intelligence Community we all, again, work together to identify what sort of information might be available in the case of the illicit movement of nuclear material and what wouldn't; that allows us to build our models and develop an adequate architecture. DOMESTIC NUCLEAR DETECTION OFFICE: STRUCTURE & PRIORITIES Mr. Aderholt. We may want to follow up with that shortly. But let me go ahead and address this. Of course, this is your first time, Director Stern, to appear before this subcommittee and a chance for us to get a sense of your vision of DNDO. It will come as no surprise to you that some have suggested your agency be folded in other parts of the Department of Homeland Security. Why does DNDO need to remain a stand-along operation within the Department? And what are your key priorities for the office going forward? Mr. Stern. I am not sure I fully agree with the premise. I believe that DNDO is a unique organization that is able and is focused on detection, detection systems, detection technologies, detection architecture. And there is no, in my mind, ideal structure for us. We need to be in a place where we have the access to the Secretary, like we do now, and to other agencies to keep this issue of improving U.S. defenses against nuclear terrorism in the forefront. But I don't assume that the only structure that is right is the one we have now. Mr. Aderholt. What is your explanation to other requests to move the transformational research activity to Science and Technology? Mr. Stern. You know, that decision was made, of course, before I came onboard. And like any such decision, there are pluses and minuses. The plus is, of course, it brings a lot of the long-term research and development across the Department into one place. And one of the negatives is one of the founding principles of DNDO of having an integrated system where we have research and development that leads to testing, that leads to production and acquisition. All together, that gets separated a little bit. Now I am sure that the Under Secreatary--Dr. O'Toole--of Science and Technology and I will have a very good working relationship. And I am sure no matter what happens we will make it work. But the key to success is to ensure that the mission of DNDO is not affected by this transfer. So there are pluses and minuses. But whatever Congress decides, we will do our best to make sure that it doesn't in any way harm the mission of DNDO. If I could continue because I--actually in your last question, I didn't finish the second part in terms of the criticisms of DNDO and my vision for the future. There have been, as you suggest, a number of criticisms in the past of DNDO. And this is why, you know, I very strongly believe in bringing to DNDO these three principles I outlined at the outset. One is discipline, and we need to keep very disciplined on the things we are doing so that we can focus on our legislative mandate. When I came onboard, there were a few things we were doing that sort of were on the edges of this. So I am trying very hard to bring it together so we can focus on this very clear mandate. In terms of transparency, part of the criticism of DNDO was this lack of cooperation and transparency with Congress. So I am trying very hard to ensure that with all congressional staff and others, you know, we are transparent: that you know what we are doing and understand why we are doing it. We won't always agree, but Congress has a fundamental right to know what we are doing and to effect that through the budget process. And third, this intellectual rigor. I think some on the outside have not viewed our activities as following a logical and defensible intellectual program. So I am trying very hard to make sure that anything we do, I can defend to you and to others in an intellectually consistent way. And that gets back to transparency. I look very much forward to having some of those on the outside who have criticized us in the past, such as the National Academy, to look again and hear what we have done and see to what extent the same criticisms apply. My vision is simply to focus on our legislative mandate and to do it well. Mr. Aderholt. How will DNDO system development acquisition and program activities be affected by the mover? And will you be a priority customer of S&T? Mr. Stern. Well, there are still some details we would need to work out. the transitional and applied research feeds into the solutions in development processes. So we are in the process now of trying to negotiate an MOU in terms of how that would work after they depart DNDO, if they depart DNDO. It is again a challenge. It is not insurmountable. The process works best when everything is well integrated, but again it is not the only structure that will work. Mr. Aderholt. Mr. Price. BIOSURVEILLANCE Mr. Price. Thank you, Mr. Chairman. Dr. Garza, let me turn to you and to the subject of biosurveillance. In 2008 this subcommittee directed the National Academy of Science to evaluate the BioWatch program and to compare it to an enhanced public health surveillance system. The National Academy of Science found that a network of sensors in strategic locations offered potential advantages in terms of the early detection of airborne agents. But the BioWatch's current methods of testing and evaluation needed improvement. Moreover, a system of this sort has inherent limitations both in geographical reach and in the range of agents it might be programmed to detect. Now, I notice you furnished a chart here today which diagrams some of the advantages in terms of early detection, early treatment, and lives saved, the advantages of a BioWatch- type system. But these inherent limitations, of course, still exist and will exist no matter how much we expand this system. And I don't think we have ever had an answer to the question, How much is enough? What are the outer limits, the boundaries that probably will determine the reach of this system? Since that report was completed, your agency has responded to some of the recommendations of the NIS report as you have been working on the Generation-3 technology. And I want to take up some of that in more detail in the second round of questions. But at this moment I want to focus on the issue of the inherent limitations in the BioWatch system. The National Academy's report made it quite clear that even if it were widely deployed, BioWatch would need to be complemented by improved intake and analysis of data through the public health system, which is inherently broader and more flexible than BioWatch's system of detection. So let me ask you three related questions about this. OHA has been working with Federal, State and local partners, including a consortium of government and academic institutions, and in my State of North Carolina to address this public health side of the biological detection equation. And as you know, North Carolina pioneered this years ago. Can you fill us in on the progress that you have made on these efforts? Secondly, how does OHA intend to engage more State and local partners in these activities? Assuming that this kind of data intake effort, this early detection, early analysis effort, that it is inherently going to be a partnership, it is not going to be simply run by OHA, it is going to require these partnerships at the State and local level, how do you plan to engage these partners? And then thirdly, to what extent is your work with State and local partners incorporated into the national biosurveillance integration system? Dr. Garza. Thank you, Congressman Price. So you are absolutely correct that the BioWatch system does have limitations in what it can perform. It has absolute responsibility for things that it does detect for. But it is part of a system, a larger system, as you appropriately mentioned, and part of a larger biodefense picture which does include biosurveillance. You also mentioned the program in North Carolina, and our work with the project in North Carolina has been very encouraging. And you know as well as I do that the State of North Carolina has a very good integrated system between public health, emergency departments, law enforcement, and the different communities that it takes to have a very robust surveillance picture. So with OHA working with the State and local and territorial leaders, that is an important mission of the national biosurveillance integration system. In addition to the work that we have been doing with North Carolina, we have also had outreach to several other States. And we are starting to make some forays into how can we work best with them. Now, part of that involves letting them have awareness or use of our tools within the NBIS system, particularly the biological common operating picture. So the States commonly understand what their own data is, but they frequently do not have the national picture on what data looks like. And as we all know in dealing with pandemics as well as other issues, it is very important for us to have global situational awareness, which is what the biological common operating picture is built to do; so that somebody from the State of North Carolina could see what is going on in the State of North Carolina or the State of Alabama or likewise, because it is only through this common situational awareness that we can best build that biosurveillance picture. So that is one part of engaging our partners. Other parts are a little bit more security-centric with other parts of our office, even outside of biosurveillance. We are quickly adapting to the notion that health does belong in our national fusion centers. And we have been advocating this across the country and at the national level, that public health does belong as part of a national security picture. So we have been advocating for and assisting with getting health partners into our fusion centers, where they can be sitting next to law enforcement and other disciplines to interpret data as well as reports coming in for the health effects and/or looking for other markers of what could potentially be a health-related event. So those are a couple of the ways that we are more engaged with the States. We are always looking for ways to further engage with the States and we really--we work very well with the State Public Health officials. I meet with them regularly, probably two or three times a year, to discuss issues like this. And we are very much engaged with them. Mr. Price. The presence of these public health efforts is of course a source of great strength and expanded reach for you. I suppose the downside of it though, the downside of the partnership, a character of this, is that if those partners aren't there, if these capacities aren't developed in a given State, then it is problematic how much you can achieve. Do you have any way of giving us an overview of how far along these capacities are? States, after all, are strapped for funds right now. I mean, there are plenty of competing priorities. We are confident that what is going on in North Carolina will be something of a model, something of a demonstration for the rest of the country. But do you have any kind of tabulated account of the capabilities that you are looking at in the various States, how far along you are toward having this kind of early detection and analysis capability; also requires, of course, data processing capacity. It requires a lot of things there. So there are some advantages and disadvantages, I would say, that come with the State-centric, State-centered nature of this effort. Dr. Garza. Yes, sir. So as far as tabulations go, we are currently exploring, or we are currently in the works of getting this biological common operating picture out to four States. As you know, we have been working a lot with the State of North Carolina to develop their capacity for integrated biosurveillance. You are correct that this does need to be a bidirectional flow between the State and the Federal Government. Unfortunately, in terms of biosurveillance, that data is very slow in coming because it has to go from local to State, and then usually to CDC, because that is the way the information flows. But I think some of the very best ways, though, that we could go about trying to improve information flow is looking for more novel approaches to gaining situational awareness. Now, Whether that is through different forms of data with poison centers, with emergency medical services data, and issues like that is something that we are exploring. Mr. Price. I understand that that diversity of data in fact is a very important consideration. I am told, for example, that there might be a certain payoff in tracking Pepto-Bismol sales at drugstores. That sort of thing could be indicative of a significant issue. Dr. Garza. Yes. You are absolutely right. Part of the strategy will be reaching out to some of our private sector partners as well, to do exactly what you are talking about, which is trying to get data from retail pharmacies on if there has been a run on cold and flu medicine, for example, in a period of time where you would not expect that to happen, such as during the summer months. So we are exploring those options as well. And I think we have a fairly good lead on getting that sort of private sector data. It is always difficult working with private sector data. It is always difficult working with private sector data just because of the business aspect of it, and people don't want to release their data on sales and things like that. But in working with some middle kind of--wherever the data is aggregated, I think we have a better chance of doing that. But I do want to get back to your point on funding, though. And that is, the majority of the funding for the public health partners does come through CDC and through HHS-ASPR as well as FEMA. So one of the things that our office does do is advise FEMA--and FEMA grantees typically spend a lot of money on emergency response equipment and, you know, law enforcement- type issues and things like that. So part of our job is trying to convince them that public health is an important part of emergency management and emergency response, and getting those public health partners the ability to apply for those FEMA grant dollars to support those public health initiatives that you and I know are so important. Mr. Price. Finally, just could you fill us in on the extent to which this is integrated into the NBIS? Dr. Garza. The integration of the States into the NBIS, sir? Mr. Price. Yes. Dr. Garza. As I mentioned, right now as it stands, it is very much a unidirectional flow which is going from the national to the States. The data that we do receive is a lot of--not what you would think as traditional data, whether it is looking for open-source reporting on disease states as well as getting different information from States from our fusion centers and various customers like that. But I do want to hit on that we have made tremendous strides I think in reaching out to the States to get that sort of bidirectional flow, as well as other partners. I recently participated with the DOD in an exercise. I am looking at just this issue. And the director--or I am sorry, he is the Assistant Secretary for Chem-Bio for DOD--is very much interested in partnering with DHS on this biosurveillance picture for a more global picture. As we know, DOD is deployed worldwide, so they have a particular interest in surveillance. We recognize that things that start overseas are going to be a risk to homeland security. So we do have a vested interest in making sure that we are partnered up. But we are always looking for ways to strengthen that relationship with our States as well. And I think we are headed down a good path. Thank you. Mr. Aderholt. Mr. Carter. ADVANCED SPECTROSCOPIC PORTAL DEVICES: IMPLEMENTING RECOMMENDATIONS Mr. Carter. Thank you, Mr. Chairman. My question is about the advanced spectroscopic quarterly ASP machines. I understand these machines are intended to screen people, cars, trucks, and containers for radioactive material at 600 U.S. ports. I also understand that the fiscal year 2012 budget will fund the procurement of 44 of these systems. As we talk about how over recent years DNDO has been criticized in its research development testing of the ASP machines. How has the research development testing of the 44 planned additional systems been improved? What procedures have you done to improve them? Do you feel that DNDO--or are you not able to double-check the improvement on these machines? And because you are having developmental testing, can you assure us that the money we are spending at this time is going to be well spent and the equipment procurement will not again be criticized by GAO or the National Academy of Science? Mr. Stern. Thank you for your question, Congressman. I guess I will answer your last question first which is, no, I cannot assure you that we won't be criticized by GAO or the National Academy. But I can assure you that we will do things in an intellectually rigorous way and in a disciplined way to minimize the likelihood of that. The request for funding for a number of ASPs in fiscal year 2012 is based on the assumption that the ASP makes it through testing, which is expected to be completed this year. That is not a foregone conclusion. Earlier this year, we began the last phase of field validation. We are at the tail end of that field validation, and we will go back to the Acquisitions Review Board to decide the path forward. And that path may be that, in fact, this device is ready to be fielded, or it may be that it is not, and it may be that it is time to terminate the program. But I am committed to following that process and ensuring that the result that comes out is a defensible result and something I can explain in clear terms to you. Mr. Carter. These are pretty expensive products, and some would say they are only marginally better than existing systems. I am wondering if you have looked at, secondly, inspection systems of the type--I don't have the mic turned on, I am sorry. Some say they are not any better than what we have already got. Mr. Stern. The certain threat materials--and this is a classified room so we can talk a little more broadly about it. [Redacted] So in answering your question, the ASP--the ASP device in secondary is a much better system than the current system we have in terms of dealing with the threat [Redacted]. But it is not necessarily the only system out there. [Redacted] And while we will be doing better, we won't be solving the problem with the ASP. Mr. Carter. And GAO and the National Academy of Sciences make these criticisms. I assume they put them in writing, and the people who are developing this product have looked at them and are trying to figure out how to solve what these folks are seeing as a problem, which may be your research and development might not have seen as a problem; is that correct? Mr. Stern. That is correct. I personally review all of these reports, and particularly the last National Academy report, very closely; and the test-model-test, or model-test- model approach they recommend is resulting in a fundamental shift in the way we do business at DNDO. Their recommendation for spiral development will be a fundamental part of the ASP program if it goes forward, or any other program. A number of their fundamental recommendations will be part of DNDO. Some of the other recommendations that they have made are good recommendations but are not necessarily practically implementable. But yes, we do follow the report, the criticisms. Again, this gets back to this intellectual rigor, and we incorporate it in what we do to the extent that we can. Mr. Carter. And the reason I ask the question, because the first time you answered the question, it was sort of we are trying to do everything we can that we are able to do. And I was wondering, I want to make sure you were looking at at least addressing the issues. Is it beyond the scope of what you think is capable? Do you reply to them in any form or fashion to say this is really not scientifically capable? Mr. Stern. Yes, if I could give you an example. The National Academy report which again, I have a fundamental respect for the National Academy and their recommendations. But one of their recommendations was that we consider in our cost/ benefit analysis a comparison with a device that doesn't really exist yet. They noted that if you took the data from an existing device and put it into a computer with a more advanced computer code, you would get a better answer. And it is a reasonable point. It is intellectually a reasonable point. But it is not really part of a cost/benefit analysis, because in a cost/benefit analysis, you examine the costs and benefits of devices that actually exist, not that in theory could exist. So we reply to the National Academy that it is a reasonable point but it is not something we can follow. I have no doubts that DNDO, with its current staff and current budget, can do a better job than probably any other organization in testing, in setting standards for nuclear devices. I am just not sure in the past we have approached it the right way, and I am committed to turning things so that we are approaching it in the right way. I think we test devices more rigorously, even in the past, than any other entity in the world. And you know in Washington, no good deed goes unpunished. The more we test, the more things we expose. Of course, other devices that are out there that haven't been tested, you know, don't get the same degree of scrutiny. So just the fundamental answer to your question is, yes, we are capable of implementing any recommendations that the National Academy or the GAO have made. Yes, we take them very seriously. And yes, they will affect what we do in the future in a fundamental way. Mr. Carter. Thank you. Mr. Aderholt. Ms. Roybal-Allard. GLOBAL NUCLEAR DETECTION ARCHITECTURE: STRATEGIC PLAN Ms. Roybal-Allard. Mr. Stern, in your opening comments, you mentioned that you have completed the strategic plan. And the lack of a plan was what GAO highlighted as part of the failure with regards to the ASP. They also said that as a result of the lack of a strategic plan that attention was taken away from other aspects that were important [Redacted]. It also mentioned that it delayed the creation of a global nuclear detection architecture, which we were talking about just a little bit earlier. Can you elaborate a little bit on your strategic plan and how it is put together as a guide for future investments in technology, and also how it is used in a way that focus is not taken away from other aspects or other responsibilities that you have? Mr. Stern. Sure. Thank you for the question. Yes, one of GAO's fundamental recommendations or criticisms, if you will, was that focus on the ASP detracted from our broader responsibility of looking at the global and the domestic nuclear detection architecture. And I actually agree with that. In the past, we have spent so much effort on this one device that we haven't spent adequate effort on other areas of the global nuclear detection architecture, on other pathways, as you indicate, Congresswoman. So I fundamentally agree with the criticism, and it is why when I first came on--I think my first 3 or 4 months with the seven other agencies that are responsible to develop the strategic plan, as Congress and GAO had recommended. The strategic plan begins where any strategic plan needs to. It defines what the global nuclear detection architecture is. Before the strategic plan, there was no interagency or any kind of a definition of where the architecture began and where it ended. So there couldn't be really discussion of the very important element of roles and responsibilities. So the strategic plan begins with the definition, which took quite some time and effort to hammer out. It then moves to fundamental goals of the architecture, and then fundamental objectives of architecture, and then performance goals and then, very importantly, the roles and responsibilities of the many agencies that are involved in this effort. So the strategic plan to me in any case is a framework for our efforts in the future. And you may have seen our budget briefings, for example; and our budget requests are all now put in the context of the roles and responsibilities and the performance goals that are identified in the strategic plan. And that gives Congress a degree of transparency into what we at DNDO, we at DHS and what, across the government, what we are doing and what we are spending on detection architecture, because you have specific performance goals and the roles that each agency plays within that. But the other big and more precise thing that came out of the strategic plan that worked for me was this recognition that, given the physical limitations for example, [Redacted], we needed to relook at the concept that we were using to define our efforts. And this is where we have come up with this surge architecture; that is, the ability to respond to certain capability--to certain threats quickly, and adequate resources, and that then leads ultimately to, as I described at the outset, the need for providing substantial assistance to State and local authorities so that the State and local authorities working with the Federal Government can surge assets in order to detect nuclear radioactive material when we are presented with information that will help guide us. So we begin with the strategic plan. That is the underlying framework for what we do, and that provides some degree of intellectual rigor and a transparency for Congress in terms of what we are doing. Ms. Roybal-Allard. That is what I wanted to ask you about, because my understanding is as part of what needs to be done is the development of a metrics system so that you can measure the performance of the global nuclear detection architecture. And as I understand it, at least according to CRS, without this metrics, it will be difficult for Congress to assess the effectiveness of new investments in the GNDA and to monitor progress towards the goals. So my question is then: Can you update us on the development of this metrics system and how soon can we expect it to be implemented so that we as Members of Congress, we can use it. Mr. Stern. Sure. And I agree completely with CRS, GAO, and you. So the strategic plan is the framework. The next document that you will receive, which should be--I hesitate to say, because of clearance, but within a month. Ms. Roybal-Allard. Possibly. Mr. Stern. We are working hard and we have a good first draft, is our annual review. And our annual review, which you have received, I think the last time, 2 years ago, will be very different this time in that it will be much more meaty. It will have the metrics which you indicate and I agree is necessary in order to take the next step in allowing you to evaluate progress on the global and particularly the domestic architecture. And we will have real details on the work that is going on across the government linked to those metrics, linked to the performance goals and the strategic plan and what we are trying to achieve and how we are trying to achieve it. So if that answers---- Ms. Roybal-Allard. So within about a month or so? Mr. Stern. Yeah. Mr. Aderholt. Mr. Latham. AGRO-TERRORISM Mr. Latham. Thank you, Mr. Chairman. And, Mr. Garza, you are being ignored there, Dr. Garza. One of the real threats I have always thought was having to do with agri-terrorism, contamination of the food supply and foreign animal disease outbreaks which could be brought into the country on a handkerchief, basically, and rub a few cattle's nose and have hoof-and-mouth disease and things like that. What are you doing to monitor that or how--talk about the coordination monitor. Mr. Garza. Yes, sir. So you bring up a very important point, which is it is not all just human health issues that we need to worry about. The food, agricultural, and veterinarian sector is something that does cause us a lot of concern. We do play a supporting role in that. Of course, USDA as well as the FDA play major roles in that. But we do support efforts from the Homeland Security's perspective with our food, agriculture and veterinarian defense branch. So I employ six veterinarians whose sole job is to work on those efforts. You rightly mentioned some of the concerns with food chain security and with organic disease such as foot and mouth disease. So as we all know, foot and mouth disease is now somewhat of a problem in the Far East and in Korea, especially in North Korea. And the effects of a foot-and-mouth disease outbreak on the United States would be devastating to the economy, especially to our ranchers. We export a lot of beef. It would absolutely destroy that market. The examples that we can use for that is simple as our H1N1 pandemic when people continued to call it swine flu, and we saw the pork industry be devastated just from the word ``swine'' flu. So our food, ag and vet defense branch is actively engaged with our partners at USDA and FDA. And some of the things that they have been working on are building metrics and tools for the States to use to build their own inherent capabilities, and some of these are on the Internet where the States can go. They answer a series of questions and it builds a risk model for them that says these are the things you need to be concentrating on, and it helps them plot out where they need to focus a lot of their efforts on. And so that is in partnership with the Federal interagency. In addition, we do monitor the intelligence information from around the world because, as you know, the food security supply chain is a tough, tough issue. We all saw it with the melamine in dog food and milk. Believe it or not--and you should probably get a brief on this as well--a good majority of the food products that the United States consumes are brought in from other countries, as far as the different bits and pieces. And so we are all connected in the food chain, and just one disruption in that with a dangerous chemical could cause a lot of economic as well as social disruption. So we are monitoring those things on intelligence and analysis. We are trying to build up State and local capacity. And we are working with our partners in the Federal interagency. ANTHRAX VACCINE Mr. Latham. Just one other question. What is the status and the quality and availability for a supply of vaccine for anthrax? Mr. Garza. The biggest procurers of vaccine are, of course, the Federal Government for the Strategic National Stockpile. Mr. Latham. Is that modern technology? Mr. Garza. Is the vaccine modern technology? It has been around for quite a few years. I can say that there are no harmful effects to most people, because I am a recipient of that through the DOD. You can make your own judgment on that. But it is a federally licensed vaccine. And in order to get licensure from the FDA, it does have to go through safety studies. And so a lot of the inherent biases against the vaccine were really built on cases of individual reactions more so than problems with the general population. So it is a safe vaccine. It is pretty limited on the people that can receive the vaccine. The problem with the vaccine is that the current dosing for it is very lengthy. And so you have to get at least five does in order to become fully immune. Now, we are doing--not we, OHA--we, the Federal Government, arer continuing to do studies to see if we can reduce the vaccine load to fewer amounts of inoculations in order to get full protection. But those have not been published yet. But that is really the hurdle that has to be overcome is that you need a vaccine where you don't have to have a large series of shots, because you lose people to follow-up and you are unable to complete the series and things like that. Mr. Latham. Thank you, Mr. Chairman. Mr. Aderholt. Mr. Dicks. ADVANCED SPECTROSCOPIC PORTAL DEVICES: CERTIFICATION PROCESS Mr. Dicks. Director Stern, what hurdles must be overcome before the Secretary certifies advanced spectroscopic radiation portal monitors? Mr. Stern. Before the Secretary decides on certification, the process is that it goes through field validation and then operational testing, and then ultimately she will decide whether it is time to certify or not. That presumes again, it makes it through each of these steps. We are at the tail end of field validation. There are some issues and we are trying to determine how to proceed. Mr. Dicks. It has been 5 years and apparently two of the three original vendors are no longer participating in the acquisition because they had technical difficulties that could not be overcome. Raytheon, the one of many vendors, continues to undergo testing. Is this a problem? Mr. Stern. Thank you for the the question. No. As you described it, that is the process as envisioned. There were actually a much larger number of companies that tried at the beginning, and as time went on and at various very precisely defined points, those numbers were narrowed. So in the end we get the best device at the best cost/benefit for the U.S. So the process you have described is accurate, but the fact that there is one vendor now as opposed to three, representing three different devices, the ASP, A, B and C, is not a problem. It is the result of the process. Mr. Dicks. During this period, it is possible that other radiation detection technologies being developed by the private sector may have advanced far enough along to overcome the need for ASPs in secondary? Mr. Stern. There has been, I think as I mentioned in my testimony, a lot of progress in the private sector regarding portal monitors and spectroscopic portal monitors. We are in our decision on our path forward doing our best to take into account that information. Again, we have to move through the ASP process before we can move to another process. I want to make sure that the U.S. makes the best decision possible with the limited resources that are available. So, yes, there has been a lot of progress and we are going to try to take that into account. Mr. Dicks. Would those be primary screening tools, the newer ones that we are talking about, the newer technology? Mr. Stern. Whether a device is primary or secondary is more an issue of negotiation with the Customs and Border Protection and their concept of operations. They all do in essence the same thing; that is, some of the devices you may be referring to are also advanced spectroscopic portals. So they have different sensitivities and different capabilities, but they would likely perform the same function unless somehow the concept of operations for CBP changes. Mr. Dicks. I assume these would also be utilized in our major ports; is that correct? Mr. Stern. I am sorry. Take a step back. There are devices that are made of plastic PVT that are deployed at our ports across the U.S. that don't really have much of a capability to identify isotopes. Then there are more advanced devices such as the ASP that could do a much better job of identifying different isotopes, and there are some in the private sector. In the U.S., I don't believe any of these advanced portals are deployed at our ports. Some of them are deployed in the interior and some are deployed overseas, including the ASP. But at our ports, we use almost exclusively now the plastic, the PBT, portals that do not identify isotopes very well. GOVERNMENT SHUTDOWN: CONTINGENCY PLAN Mr. Dicks. Let me ask you this: If there was a government shutdown, what impact would it have on both of your work? And are there urgent problems that would go unaddressed if that should occur? Mr. Stern. Well, we have a plan, a departmental-level plan in the case of a shutdown. So work definitely would go unaddressed. The urgent work would be addressed. Mr. Dicks. Thank you, Mr. Chairman. BIOWATCH GENERATION-3: COMPARISON TO GEN-1 & GEN-2 Mr. Aderholt. Thank you. Secretary Garza, the BioWatch Gen- 3 is designed to provide greater coverage at a decreased cost. What are the added capabilities of the Gen-3 system as compared to the Gen-1 and -2 systems that are currently deployed? Mr. Garza. Thank you, Mr. Chairman. The Gen-3 system is designed--the basic premise of the Gen-3 is to increase the time to detect. The reason why that is such an important aspect is that we have very limited time from the time of exposure to the time of illness where we can deploy medical countermeasures. And you always have to factor in how much time it is going to take to look at the results, to come to a decision process, to deploy the SNS and distribute medical countermeasures. And that is a fairly lengthy process. So the current Gen-1, -2, is anywhere from 24 to 36 hours from time of exposure to time of detection. The goal of Gen-3 is to decrease that time down to 4 to 6 hours. The other benefit of Generation-3 is that it will be expanding the distribution of the machines. So it will protect more of the population, we will be going from anywhere from 70 percent of the population protected within an urban environment, or, within the community, up to 90 percent. And it will increase the coverage of the United States population in total from 20 percent to 33 percent. The other added benefit of Generation-3 is that we will now start taking the program indoors where there is also an increasing threat. As everybody I am sure knows, if a terrorist was a thinking terrorist, they would want to go someplace where there was a high concentration of people where they could get the most bang for their buck, and clearly some of that would be indoors. So we are moving some of our machines also indoors from five locations up to 160. Mr. Aderholt. Would you continue to maintain that Gen-1 and -2 units? Mr. Garza. It would be a phased deployment of Gen-1, -2, up to Gen-3. So there would be a period of time where we would simultaneously run both systems until Gen-3 came up and running. At that time, we would phase out Gen-1, -2. We would still retain that capability, though, for surge capacity, as well as dealing with some national security events that we do throughout the year and other issues as we would need to use them. Mr. Aderholt. Secretary Garza, this would be--after having planned to have two vendors, last year you down-selected to just one vendor. What drove the down-select to one vendor? Mr. Garza. It was not technically a down-select. It was during the first phase of our program, there were troubles with the assays and algorithms of one of the vendors. Essentially what that means is it was giving us positive signals when the bacteria or the virus that we were looking for was not present, and it was giving us negative signals when it was there. And simply that is unacceptable. And so we worked with the vendor and, believe me, we have very high regard for competitiveness. We absolutely would like for more than one vendor to be involved in the competition. However, the science is going to trump that every day. So we gave the vendor some opportunity to correct some of the things that we were seeing, and they are completely able to come back into the process in a second RFP phase, granted they will have done certain things in order to be successful in that. But at the end of the day, we just couldn't go along with them continuing in Phase 1. BIOWATCH GENERATION-3: TESTING & EVALUATION Mr. Aderholt. You have initiated a field test of Gen-3 at the end of February that is still ongoing. What is the status of the field test? Mr. Garza. Yes, sir. The field test is ongoing right now in the [Redacted]. I am happy to report the machines survived the [Redacted] that they had [Redacted] and came through with flying colors. It is ongoing right now. From all the reports that I have received, it has been going very well. And I will just put this plug out for you. We are having a VIP day [Redacted] that all of your staff, I believe, have received or will receive invitations to go up and have a look at the machines, ask questions, and get more information on the field test. I believe the field test is going to run until the middle of June or July, and at that time we can take a look at the date and see how they performed. Mr. Aderholt. So you are safe to say those are operating up to your expectations at this point? Mr. Garza. At this point, I haven't seen anything that discourages me, no. Mr. Aderholt. Mr. Price. Mr. Price. Thank you, Mr. Chairman. I am going to follow up on this line of questioning and I want to clarify a couple of things you just said and then ask you for some further elaboration. You did terminate the contract with one of the two vendors, both false positive and false negative ratings unacceptably high. So you are saying that this second vendor could get back in the game only if these problems are overcome to your satisfaction? Mr. Garza. Yes, sir. Mr. Price. Are you making an estimation of how likely that is? Or are we going to in all likelihood be working here with one vendor? Mr. Garza. From my experience in looking at the testing procedures, it would be a steep climb to get back into. It is not impossible, though. But you have to--the testing and evaluation process that we have laid out, it was built to be rigorous because we understand the consequences that would follow given a positive test from these machines. And so we have to stick with what the science is telling us, that either these things will work the way they are expected to work and deliver us the information that we need. I did want to clarify one thing, though. We didn't terminate a contract. That has certain legalistic implications to it. So they are unable to proceed with the original Phase 1 of the contract. But we certainly have left it open for them if they can correct the issues that were involved and can give us reasonable assurance that they have been corrected. We are committed to a clear, transparent, and open competition. BIOWATCH GENERATION-3: PATHOGEN DETECTION Mr. Price. Well, I certainly agree with your assessment of how important it is to get this right. After all, we are talking about very important capabilities here, more rapid detection, detection done without an attendant, removing a filter and analyzing it and so forth. These are advances that we know we have to achieve if this system is to live up to its promise. In this classified setting, could you discuss what specific biological pathogens the Gen-3 system will test for and how that compares to what is currently in place? I understand that testing for more pathogens is one of the advantages. Mr. Garza. Yes, sir. Currently we test for [Redacted] agents. [Redacted] And that is all controlled information. So we picked those organisms based off of the Science and Technology bioterrorism risk assessment as the top [Redacted] organisms that are at the highest risk for the United States. Of those [Redacted] that territory. So they make up the bulwark of what we look for. Generation-3, though, has the capacity to test up to 20 agents. So we don't have to limit it [Redacted]. And if we receive intelligence or if we receive an updated risk information that these bacterial agents have changed, then we can certainly develop--we won't develop the assay, we will test the assay to make sure it works. But we can certainly employ that into the machines. We deliberately made the machines when we put out the request for information to make sure that they were expandable and compatible to do things like that. Mr. Price. Well, the feature of quicker turnaround and an automated turnaround has been much more thoroughly discussed, at least in this committee, than has this feature of more flexibility in terms of the ability to test for more agents, is that--in layman's terms, can you just briefly account for that expanded new capacity? Is it a matter of the way the machines operate, the machines are equipped, the way the machines are read? What are we talking about here? Mr. Garza. So the big difference between Gen -1/2 and Gen-3 is, of course, as you mentioned. We are basically taking all of the functions that are inherent to Gen-1 and Gen-2 and compressing them into a single unit. We have affectionately called it a ``lab in a box.'' The laboratory workers get really mad at us when we say that, so we don't mention it very much. But that is affectionately what it does. It doesn't mean that Gen-1, -2 could not expand to agents more than [Redacted]. Because what happens is the vacuum or the air collector collects air in the environment through a filter paper. You are correct; somebody has to go pick up that filter, take it back to the lab where the analysis is run. We only run it on [Redacted] agents right now. Clearly if we needed to run on more agents, we could do that. We could incorporate that into our laboratory capacity. It would take more work, more money, things like that. But the beauty of the Gen-3 is we could incorporate it all into the machine at once, or we can either up-select or down-select the number of agents that we could use, provided that we had an adequate assay. And the assay is the chemicals that are used to test for the DNA of the bacteria, and that is something that is very technically difficult to make sure that you get right, because you want to make sure you are hitting the right bug; you want to make sure you are not missing the right bug as well. BIOWATCH GENERATION-3: NATURALLY OCCURRING VS. INTENTIONAL PATHOGENS Mr. Price. Now, there are some consequences for some of these false readings that we have seen with the earlier versions of this equipment. There are dozens of instances, as I understand it, where the BioWatch filters have captured dangerous germs, although none of them have been the result of a biological attack. In some of these instances, it has taken weeks to determine that this is a naturally occurring pathogen. That is well beyond the time it would take public health professionals to see the results of a biological attack. Speaking of the supposed time advantage, in this instance it has been reversed. Is this kind of disconcerting pattern of false readings continuing? What cities have been affected by this? How long has it taken DHS and the local community to determine that it was not a biological attack going on? Mr. Garza. Yes, sir. So allow me to explain what occurs with that. So they are not false readings per se, because they detect absolutely what they are built to detect, which is bacteria, DNA of bacteria. This bacteria, as I mentioned during the briefings, is ubiquitous in the environment. [Redacted] But these are not false positives. They are true positives in the sense that we found DNA. They are not true positives in the sense--and I think what you were describing in that, they were intentionally released. Mr. Price. Yes. I understand. Mr. Garza. So we have through our experience in working with that, we have come up with different ways of identifying whether we believe that this is an intentional release or a naturally occurring event. And some of those are technical things such as looking at cycle times. We know that if we bake the DNA enough or multiply the DNA enough, that we are going to find something. And, frankly, all of those have been where we have very much expanded the DNA through multiple cycles. So looking at that, we discussed--of course we take this very seriously, though. So we don't just write it off as it is environmental and they are ready to go about doing their business. We always talk with our FBI partners, with our emergency providers; has anybody noticed an increase in cases in hospitals? And then the public health providers usually do a prolonged surveillance period to make sure we are not missing anything. Mr. Price. Mr. Chairman, I know my time has expired. I will have some additional questions for the record. If I could, just one question for clarification here, and then I will be done. You talk about this process that you go through and, of course, it needs to be a very careful process that leaves nothing to chance. How much of the experimentation and demonstration and work that is underway on Gen-3 is going to directly address this problem? Mr. Garza. There is quite a bit, frankly. So part of that is selecting for the bacteria that we know is going to be the most likely causative agent for an intentional attack, because there is a lot of ``near neighbors'' is what we call them, in bacteria. A lot of bacteria that are in the same family but some of them are disease-causing and some of them are not. And so developing better assays so that we can target more specifically the organisms that we know would be of a terrorist origin is part of the process that went into developing Gen-3. Mr. Price. Thank you. Mr. Aderholt. Mr. Dicks. Mr. Dicks. No further questions, Mr. Chairman. GLOBAL NUCLEAR DETECTION ARCHITECTURE: GAPS Mr. Aderholt. Director Stern, it is not feasible, either financially or practically for DNDO to close every gap that could be used to smuggle nuclear material into the United States, but it is your job to determine what the highest risk vulnerabilities are and to put a priority on which ones must be mitigated. At the same time, we understand that your efforts to build a more comprehensive, inclusive global nuclear detective architecture across the government is still at its beginning stages with most shown by DNDO as being at stage zero gap identification in the DNDO solution development process. What are the biggest holes in the GNDA and how are you working to rapidly close them? Mr. Stern. Thank you for the question, Congressman. There are lots of holes, frankly, in the global nuclear detection architecture. But the biggest reason is because of simple physics and the way we lead our lives. And I don't think that that is, frankly, going to change in any time in the foreseeable future without a fundamental change in detection technology, which will take a great deal of time. And this is why I am changing the approach that the DNDO takes towards architecture to look at this surge architecture. I had one of my guys do just an off-the-cuff estimate of what it would cost to actually close the gaps in a non-rigorous way. [Redacted] I mean, physics is very much working against us here. And so what we are doing is saying, look, in the case of an attack, it wouldn't just come out of the blue, there will be some intelligence. We spend $60 to $80 billion a year on the Intelligence Community for a reason: because there will be some information. So let us develop an architecture that assumes some level of information before we act, as opposed to just having static detectors waiting to see what might pass by it. So we have begun that process, working very closely with the Intelligence Community, and the National Counterterrorism Center in particular, to help define what information would likely be available. For example, would the pathway be available, would we know whether it is in a city or a region? And from that, we are going to develop our architecture that allows us to actually define and create clear metrics, define what is necessary to meet that threat. [Redacted] So we are changing the way we look at it. We hope to have our first model out later this year. I think you will get a lot more detailed information on the approach, and on the gaps, even in the current approach in the annual review which you will have again shortly. So I hope that answers your question. Mr. Aderholt. What progress can you report to in the past year and what do you anticipate achieving in the coming year? Mr. Stern. I am trying very hard, as I mentioned, to refocus DNDO in a number of ways. The first product will be this new surge architecture that will allow us to create clear and definable metrics, numbers of detectors, how quickly people need to get together in order to respond to attacks or attempted attacks. The other progress in the technical area that I am very focused on is shifting to this model test, model approach that the National Academy of Science has recommended. In terms of devices, we will have this year two new devices, the handheld human portable radiation detection device--which is a very precise device that CBP, the Customs and Border Protection, will deploy across the country--and also a much more advanced version of this handheld device that uses a Germanium detector, which is really the best around, but it is also human portable. So those are the primary accomplishments that I hope to look back upon at the end of this year. The biggest one, again, being changing the way that the DNDO operates and the way that we focus on the architecture and our device development. NUCLEAR FORENSICS Mr. Aderholt. DNDO's nuclear forensic programs represent a key mission for DNDO, establishing capability needed for government-wide forensic expertise. However, last year, the National Academy of Sciences in a classified report raised concerns about the adequacy of the Nation's nuclear forensic capability. And in your own justification for a $7 million increase, [Redacted]. What is your assessment of U.S. forensic capability? And do you agree with the concerns raised by the national academics? Mr. Stern. Yes. I mean, nuclear forensics is a very important part of the Domestic Nuclear Detection Office and a big focus of mine. There is much room for improvement in our-- our, being the U.S. Federal Government's forensics capability; in fact, global forensics capability, which is why we are seeking a significant budget increase for forensics. Now, it is important also to understand that while the Nuclear Technical Forensic Center is part of DNDO, most of the forensics money is spent at other agencies. We are a coordinator and a facilitator and we do a limited amount of research and development. But it is important that the other agencies that do the workhorse of the analysis also see improvements in accordance with the National Academy's recommendations. Mr. Aderholt. What specific improvements in forensic capacity will be made by additional funding you have requested? Mr. Stern. Well, the additional funding that we have requested, I really break down into two areas. One is to do some sort of fuel cycle modeling. As you may know, when we are doing forensics, we can analyze the particles; but if we don't have anything to compare it to--that is, a particle from where it came from--it doesn't tell us much. So we are working on a program, one, to help model fuel cycles that will provide some insight into the second part of the analysis; that is, where might this have come from? And the second big part is, I think you described earlier, is working very closely with the FBI to help establish a mechanism to ensure that there is a reliable system for doing forensics analysis that would actually hold up in a court of law. Mr. Aderholt. Mr. Price. Mr. Price. No further questions, Mr. Chairman. Thank you. I do want to thank our witnesses for wide-ranging and quite helpful testimony. Mr. Aderholt. Yes. Thank you both for your testimony here today. And there may be some additional questions that we will submit to you for questions, and some of the members who were not able to be present today. So again we appreciate your testimony before the subcommittee. So the subcommittee is adjourned. 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FEDERAL EMERGENCY MANAGEMENT AGENCY WITNESS CRAIG FUGATE, ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY Opening Statement: Chairman Aderholt Mr. Aderholt. The hearing is called to order. Good morning. Today we welcome the Administrator of the Federal Emergency Management Agency, better known as FEMA, Craig Fugate, to discuss his Agency's $8.2 billion request for fiscal year 2012. As we know, FEMA has continued to evolve in the years following Hurricane Katrina and has been required to make changes under the Post-Katrina Emergency Management Reform Act of 2006. This law expanded FEMA's responsibilities and authorities for disaster response and recovery in integrated preparedness functions. Today we want to hear from Administrator Fugate on how the transformation is proceeding and the challenges he faces in the coming year. We will also want to hear from him on some concerns we have of FEMA's budgeting. Over the last year FEMA has worked to help devastated communities rebuild itself. As a Member of Congress from a State that is very familiar with severe damage from catastrophic events, I know firsthand FEMA's successes and, regrettably, FEMA's struggles. Administrator Fugate, this Committee has a strong history of responding to your Agency's needs, providing funding that was so desperately needed to rebuild and reorganize FEMA in the post-Katrina era, and we will continue to do so, but that funding cannot be a blank check. Today our country faces disaster of a different kind, a fiscal disaster that will require change that some may find hard to accept. This means that today, more so than ever, we must budget responsibly for known requirements, and we must also ensure that funding is in line with measurable goals on the Federal, State and local levels. Administrator, I want to touch on two of the issues of greatest concern facing us this year in reviewing your budget request; first, your Disaster Relief Fund, or DRF, as it is sometimes referred to. As we sit here today, the DRF inches closer and closer to insolvency. Last year when faced with this exact situation, Congress bailed out the DRF with a $5.1 billion supplemental. Now, just a few months later, your Agency has informed us that the $5.1 billion was not enough, and you need an additional appropriations to complete this year. Today we believe you need almost $1.5 billion for this year, but, frankly, I am not sure how confident I am with that figure since it seems to change rather frequently. But whatever the number is, we know that it is significantly more than what is available, even when including the $5.1 billion extra Congress provided just a few months ago. How will you complete this year when we all know that the DRF is almost broke? We have asked repeatedly what FEMA will do, and thus far no one can answer, even as the balance in DRF continues to diminish. You are forcing Congress to address a situation, since, once again, the administration has failed to do so. In the current fiscal environment this means cuts throughout the entire Department of Homeland Security, cuts that may be unappealing to many, but cuts that are necessary in order to bail out FEMA. In other words, we are forced to take money from other Department of Homeland Security components to fill FEMA's shortfalls. While the shortfall in fiscal year 2011 is of great concern, the situation in fiscal year 2012 is alarming. The Department continually states that it funds to a rolling 5-year average, but the math does not work. By our math, based on your 5-year average, you need $4.6 billion just for the average cost of noncatastrophic events. Added to that we understand you need $3 billion for the costs associated with prior-year catastrophic events, costs you knew about before you submitted a budget to Congress, but failed to fund. This brings it to a total of $7.6 billion. However, your fiscal year 2012 budget only requests $1.8 billion for the Disaster Relief Fund. This puts individuals and communities at great risk. What we would like to hear from you today is your reasoning behind this. When I asked Secretary Napolitano this exact question just 4 weeks ago, she said you would recover more money from prior-year unobligated balances, and that you would seek a supplemental to cover the full cost. First, the President's budget assumes $900 million from prior-year recoveries. Thus far you have not adjusted that number, and we have seen no plan to show how this will be achieved. Second, what is more astonishing is that we sit here 6 months from the beginning of the next fiscal year, and your end game for fiscal year 2012 is to ask for an emergency supplemental even though this unfunded amount is not an emergency, and it was known prior to the submission of the fiscal year 2012 budget. This has to be one of the most startling examples of irresponsible budgeting shenanigans that this subcommittee has seen. I trust that during our discussion today you can add some insight as to this rationale for this request. The second issue in front of us today is the continuing lack of metrics for the billions of dollars we have invested in the first responder grants. Since 9/11, the U.S. taxpayers have invested over $33 billion in first responder grants. The question we ask year after year is how much safer are we, how better prepared are we, what are the gaps, how much more needs to be done; however, year after year we don't get answers, yet the Department asks for more money even though we have no quantifiable justification to support these requests. According to staff reports, you are working on metrics, but the Departments have told Congress the same thing many times in the past. FEMA has tried multiple times to create metrics, but all efforts have resulted in failure. Now we hear that a new revised Homeland Security Presidential Directive 8 will address the national preparedness, and thus FEMA is waiting on it before developing metrics. While we need to support our local fire responders, we must seek a method to determine what we are getting for the billions in grant funding we appropriate from this subcommittee each year. After almost a decade of investment, it is time to stop making excuses and address the situation with the seriousness that is needed so that our taxpayers have confidence that hard- earned money is being used as effectively as possible. In short, these grant programs were never meant to permanently subsidize local responsibility, but help bolster capability by buying down risk and addressing gaps so States and local governments could respond. However, to do this, we need to measure the capabilities and gaps so that taxpayer funds are invested in a wise manner. Administrator, these are not new concerns, and issues of which you are very familiar. I look forward to your thoughts and your insights as we have our discussions today on these problems and what progress you have made in the last year, as well as the challenges that remain. I would be remiss if I didn't, however, thank you for taking on such a challenging job that you have taken on at such an important time in our Nation's history, and this subcommittee understands the challenges that you have. As your written testimony will be placed in the record, I would ask that you take about 5 minutes to summarize it for the committee. But before you begin, I would like to recognize the ranking member Mr. Price for his opening remarks. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.315 [GRAPHIC] [TIFF OMITTED] T8060A.316 [GRAPHIC] [TIFF OMITTED] T8060A.317 [GRAPHIC] [TIFF OMITTED] T8060A.318 [GRAPHIC] [TIFF OMITTED] T8060A.319 [GRAPHIC] [TIFF OMITTED] T8060A.320 [GRAPHIC] [TIFF OMITTED] T8060A.321 Opening Statement: Ranking Member Price Mr. Price. Thank you, Mr. Chairman. Welcome, Mr. Fugate. We are glad to welcome you back to the Subcommittee to testify once again on the Federal Emergency Management Agency's work to prepare our country for disasters and to mitigate and minimize any losses. I want to thank you for your leadership of this critical government function. You have brought to the job the expertise and experience of a seasoned emergency manager, and you have left your distinctive mark on the Agency, building a more decentralized FEMA that is designed to be closer to the States and to respond to their needs more effectively. I am interested to hear how your work is progressing, including any measures of the success of your reforms. Our main purpose here today is to discuss your 2012 budget, and I want to flag some concerns as we get this hearing under way. The request for FEMA is $6.8 billion. That is 5 percent, or $339 million, below the 2010 enacted level. It appears that your Agency has been asked to do the most with the least amount of resources compared to other DHS components. In the current rush to cut government services, we need to be particularly careful that we do not sacrifice our Nation's preparedness for disasters. Disasters, after all, are going to happen. They are unavoidable, but many of their consequences can be avoided with the right preparation. I have already expressed concern to the Secretary about your 2012 request for disaster relief, which appears to provide only enough resources to last about halfway through the fiscal year. And the request does not recognize an additional $6 billion in catastrophic costs that are coming due. If we know the costs for ongoing recovery activities associated with large disasters, then it makes sense to provide Congress with a budget request that will meet those disaster relief obligations. Emergency supplementals should be used for unanticipated emergencies, not to meet half of the annual funding needs that we, in fact, can anticipate. It also worries me that your request substantially reduces funding in staffing levels within the management of the administration account. After I became Chairman of this Subcommittee, we spent 4 years making sure FEMA had sufficient staffing and resources to support States and localities in times of emergency, to provide efficient oversight over the billions of State and local first responder grants it is responsible for each year, and to soundly manage your Agency's finances, logistics, human capital and contracting efforts. We need to understand these reductions better to make sure that they in no way impede your missions. So you are going to need to let the Subcommittee know if that is not the case; otherwise we are going to want to scrutinize those reductions very skeptically. The budget request also substantially reduces funding for a variety of grant programs, including cutting assistance to firefighters by $140 million, and cutting in half funding for the Emergency Food and Shelter Program at a time when States and localities are still on shaky economic footing. We want to know if and how we can justify such reductions. On the other hand, I am pleased to note the modest increases you have proposed for Emergency Management Performance grants and Urban Area Security grants. And I am glad you are seeking to maintain funding for port and transit grants at the 2010 level. Especially as States and localities are cutting funding to emergency and public safety, these grants are a critical bulwark against the erosion of preparedness at the local level. Finally, your request more than halves funding for the Flood Hazard Mapping and Risk Analysis Program. We know that flooding is the most frequent and costly natural hazard in the United States. In fact, much of the northern half of U.S., from Montana to New York, faces an above-average risk of flooding in the next few weeks, according to the National Weather Service. FEMA is required by law to update flood maps and the risks associated with flooding every 5 years, so we need to know how you plan to continue meeting your statutory requirements with the significantly reduced resources. The alternative, of course, is an acceptance of greater risk and potentially greater cost to local communities and the Federal Government. So, Mr. Chairman, I hope that we can work together to address these problems as we develop our 2012 funding recommendations. And, Administrator Fugate, we look forward to working with you in this endeavor. I want to thank you for your service to the country. We look forward to a productive discussion today and continuing to work together for our resilient Nation. Thank you. Mr. Aderholt. Thank you, Mr. Price. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.322 [GRAPHIC] [TIFF OMITTED] T8060A.323 [GRAPHIC] [TIFF OMITTED] T8060A.324 Opening Statement: Administrator Fugate Mr. Aderholt. Mr. Fugate, we look forward to your testimony. Mr. Fugate. Good morning, Chairman Aderholt and Ranking Member Price, and members of the committee. I am here today to present the FEMA fiscal year 2012 fiscal budget. And given that you have already taken my written testimony, I just want to hit a couple key points, because I think you really would like to get into the Q&A piece of this and actually discuss some of the issues you have raised. Our mission is to support State and local first responders. There is this tendency that people think of FEMA as a response organization. What we do is coordinate and facilitate on behalf of the present homeland security Federal resources when disaster strikes and Governors request assistance under the Stafford Act. But alternatively, we also provide support to other Federal agencies when they need coordination on behalf of those authorities that you have given us. I have been doing this for a while in budget discussions. I have never been told to go do what you need to do, and it is a blank check. We have always had to work within the constraints of the budget. We have always had to prioritize. In many cases we have to make hard decisions that are not always easy, and that is the reality of coming from local and State government and dealing in constrained budget environments where the disasters do not stop and having to prioritize those issues and funds that are available to continue to ensure that we are ready to respond and support our citizens in their time of need. Because of the significant investment that was alluded to with the Post-Katrina Emergency Management Reform Act and the investments that have been made in the Agency, we have been working to take steps not only to implement the improvements required in the Post-Katrina Emergency Management Reform Act, but also to look at how we do business and further reduce that cost in the overhead of administering disasters. We are trying to do what we feel are the things that increase that efficiency, focusing continuously on the mission and the outcomes and taking a hard look at the business processes and asking questions: Why are we doing it this way? Is there a better way to do it? Can we reduce the overall cost without affecting our ability to deliver services? Some of this is the straightforward approach of why are we having to do all the traveling when we can use conferences and videoconferencing tools to meet that need, shutting off and turning off excessive equipment that isn't needed that was turned on during past disasters, looking at how we can leverage our resources and personnel to do a better job by reorganizing our team to reflect what we do, and looking at an outcome-based strategic plan. I will just close with this, Mr. Chairman, and prepare to take questions. When you read most strategic plans, they talk in various terms about what you want to do, but they very rarely put a number about what you are going to measure it against. And so in doing this, our strategic plan is based upon what are the types of events and outcomes we need to achieve in large-scale catastrophic disaster response. And we are looking at basing that outcome on the needs of the immediate response issues, the intermediate phases, into the long-term recovery aspects. Again, our mission statement as issued by Congress is to prepare for, protect against, respond to, recover from, and mitigate all hazards. But we also know that FEMA is not the team, we are part of the team. And we have to be able to make sure that our working relationship with our State and local partners, the private sector, and most importantly the public, is the foundation of how we address this country's risk from disaster. Thank you, Mr. Chairman. Mr. Aderholt. Thank you, Administrator. And we appreciate your testimony. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.325 [GRAPHIC] [TIFF OMITTED] T8060A.326 [GRAPHIC] [TIFF OMITTED] T8060A.327 [GRAPHIC] [TIFF OMITTED] T8060A.328 [GRAPHIC] [TIFF OMITTED] T8060A.329 [GRAPHIC] [TIFF OMITTED] T8060A.330 [GRAPHIC] [TIFF OMITTED] T8060A.331 [GRAPHIC] [TIFF OMITTED] T8060A.332 [GRAPHIC] [TIFF OMITTED] T8060A.333 [GRAPHIC] [TIFF OMITTED] T8060A.334 [GRAPHIC] [TIFF OMITTED] T8060A.335 [GRAPHIC] [TIFF OMITTED] T8060A.336 [GRAPHIC] [TIFF OMITTED] T8060A.337 [GRAPHIC] [TIFF OMITTED] T8060A.338 [GRAPHIC] [TIFF OMITTED] T8060A.339 [GRAPHIC] [TIFF OMITTED] T8060A.340 DISASTER RELIEF FUND Mr. Aderholt. I think, as you see from past hearings, that having the Members ask you questions directly about some of these issues, I think, will be most helpful. I think one of the things that I had alluded to in my opening remarks and that I think is certainly something that is of great concern to the subcommittee--and we have had these conversations before, but let me just get right to the point. You are running a substantial shortfall in the DRF that has not been addressed for the remainder of this year or in the budget for fiscal year 2012. The bottom line is the fiscal year 2012 budget and your fiscal year 2012 requests do not support the sizable disaster relief cost for the rest of the year or the next. The subcommittee needs to know the plan. How will you complete the year when you are already clearly short of the required funding for fiscal year 2011 by an estimated of $1.5 billion? Mr. Fugate. Mr. Chairman, the Disaster Relief Fund (DRF) and the history of how we fund that, this Nation, has been debated and discussed numerous times, and so I am going to present what I think is the philosophical approach that we have taken. I understand the issues you are raising. I will start with fiscal year 2011. We currently have a little over $1 billion in the Disaster Relief Fund. We consider that once we go below $1 billion, that we need to implement an immediate needs funding, which would limit funding to only those emergency actions in response and individual assistance, and would no longer support permanent work or mitigation projects from previous disasters. That also is contingent upon another issue that this committee and others have raised in the number of open disasters and funds that have been obligated in those previous disasters but were not drawn down. Last year we looked at open missions to Federal agencies and began closing out those disaster missions. That returned a little more than $2 billion back into the Disaster Relief Fund. Mr. Aderholt. Two billion dollars. Mr. Fugate. Yes, sir. This year we are looking at those disaster funds to State and local governments where the projects have been completed, but in the initial allocation they did not require all of the funds. Those balances have to be closed out, and in doing so would return back to DRF. We were projecting, as we started this process this year, about $120 million to $125 million per month. Last month we were able to close out and return $240 million back to DRF. Now, again, this is work that is already completed. We are not taking money away from State and local governments. What happens many times is when we do a project, the project may be approved for, let's say, a debris mission of $100 million. When the actual work is done, all the bills are paid, it may only have been $80 million, but as long as that obligation is there, that $20 million that could have been returned is not available to DRF because it is considered obligated. So as we go through that process and deobligate those funds, they go back into the DRF. And so this process this year is focused on those open disasters with State and local governments where the work has been done. This is not an appeal. This is not stopping projects. This is taking work that is already completed and determining if all the funds allocated were expended, and, if not, putting those dollars made available back into the DRF. So that process this year, again it is a little bit early to get an estimate, but we are looking at--again, I don't know if we are going to have last year's numbers, but there are substantial open disasters where the funds have not been drawn down, the work has been done, and we are looking to free those dollars up to go into the DRF. So, therefore, our best estimates still look at--if we get the 2011 request for the DRF, it would be a May-June time frame before we would reach immediate needs funding, but the unknown is how successful we are going to be in closing out disasters, and will that move that further into the year and reduce any additional amounts that may be required. So that is for this fiscal year. As to the 2012 budget request, I think this is where it is a question of when these disasters occur and the initial appropriations are given, how do you fund the outyears? And let's take Katrina, one of our largest disasters. The majority of those funds were not going to be expended in the first emergency supplementals. It requires literally years to rebuild. And I guess the question is: Do you place that into your baseline budget because this is a very large disaster that is going to take multiple years to pay out, or do you look at your averages, budget for that, and then look at the supplemental process for these extraordinary costs moving through the budget? I think this is a philosophical issue. This is not something that this administration has started with; this has been something that has been done in previous administrations, and in the outstanding large-scale disasters, supplementals were requested to pay for those large projects as they came through the system. Whether or not you can project accurately that number is another issue. From my experience as a State director in trying to do that within State, because you are dependent upon State and local construction projects, bids, everything that goes into that project, it is somewhat difficult to have a fixed number, and in many cases as a State director, we were asking for appropriations and authority that may not be actually drawn down that year because the projects did not come on line during that time frame. So it is, to me, again, how do we approach the large-scale disasters that are moving through the system that are multiyears but are not expected to be there 5, 6, 7 years out, and are going to be a bubble moving through the budget process against the top line of the total appropriations? And I think this is a philosophical question, Mr. Chairman: How do you budget that? Do you put that in your top-line budget and go, if this is my top-line budget, I am going to take that $5 to $6 billion that are moving through on those disasters and now make that my top line, or do I look at my top line on a recurring average and then place that on top? And again, I think it is philosophical as to how to best to do that, but this has been the way that this administration and the previous administration had addressed the DRF for those costs above the annual request for the appropriation. Mr. Aderholt. Let me just ask you straight up: Would you agree that there is $3 billion stated for fiscal year 2012 already, though; do we know that? Mr. Fugate. The exact number, Mr. Chairman, I would have to ask staff to look at what we project for recoveries. We also were budgeting into that what we were going to estimate for recoveries. So I can't say that is not the number; I would just say I don't know. [The information follows:] Mr. Aderholt. Let me just ask you straight up: Would you agree that there is $3 billion stated for fiscal year 2012 already, though; do we know that? Mr. Fugate. The exact number, Mr. Chairman, I would have to ask staff to look at what we project for recoveries. We also were budgeting into that what we were going to estimate for recoveries. So I can't say that is not the number; I would just say that I don't know. Response. The $3 billion figure represents a rough estimate of the catastrophic need for FY 2012. The estimate is based on a projection of annual total recoveries of $1.5 billion, project completion times that may fluctuate greatly, and an assumption that there will be no additional occurrences of catastrophic events. While the Administration continues to work on improving its DRF estimation capabilities, the variation inherent in the projection should be an accompanying caveat for any DRF figure. Mr. Aderholt. But it very likely is? Mr. Fugate. Yes, sir. I just don't know what recovery amount was built into that, if that was on that number, or would that go against it? Mr. Aderholt. And this would be for a catastrophic? Mr. Fugate. Yes. These would be for those outstanding large-scale disasters that are still working through the system. Mr. Aderholt. Let's talk about the 5-year average. Could you explain how you budgeted to the 5-year average in fiscal year 2012, which is $4.6 billion, even though you requested $1.8 billion? Mr. Fugate. Well, again, we look at trend data for those disasters, not catastrophic. And this number, again, is one that would go through the budget process trying to get to what that reoccurring average is. And that is a number that I think is, again, at the center of debate of how much that trend is going up, or how many catastrophic disasters are being built in that base. Mr. Aderholt. How much of this shortfall can be offset with recovered unobligated funding beyond the $900 million already included in the budget request? Mr. Fugate. Again, I have always been reluctant, Mr. Chairman, to talk about a number until we get in there, because there is a lot of unknowns. We think that it is over $1 billion, but we are not sure what that recovery looks like or the pace of that recovery. As we get more information this summer as we are doing this--again, last month we were only projecting about $120 million; we actually hit $240 million. Some of these projects are very large. If you close out one or two projects, you can get a very substantial number. Others have not that big of a number. So as we do it, it is not something that is easy to project until we actually have some time doing it, and seeing what those trends look like, and seeing what we are finding in these recoveries. And, Mr. Chairman, as soon as we get that kind of trend data, we see that pattern and get a better sense of that, we will provide it to the committee; but as it is now, starting that process, we doubled what we thought we were going to get this year. We saw a similar trend last year where we actually were recovering much more early on than we thought we were, and that tended to push out the requirements for additional funds. Mr. Aderholt. I may have some follow-up in a minute, but let me go to Mr. Price. GRANTS: STAFFING FOR ADEQUATE FIRE AND EMERGENCY RESPONSE Mr. Price. Thank you, Mr. Chairman. Administrator, I would like to lead off with a question about the fire grants and then move on to flood hazard mapping, either now or in the next round of questions. As you know, we continue to debate the appropriate level of funding for the SAFER program and for the fire grants. Fortunately on the House floor we are able to reverse the cuts that had been proposed in H.R. 1 and to restore full funding for both the SAFER program, the personnel program, and for the firefighter assistance grants. And your 2012 budget proposes $670 million overall for firefighter assistance grants, including full funding of $420 million for SAFER, but the fire grant equipment program is being reduced, which I, for one, will want to examine skeptically. You may want to say something about that. But I want to ask you a prior question about the personnel side of this. We understand that at a time of economic downturn, the personnel program performs a broader function than the SAFER grants normally do. In other words, it often is needed to restore personnel, to prevent layoffs, to help communities deal with economic diversity, hopefully to avoid layoffs in the first place. So along with the need for adequate funding comes a need for flexible rules, and in particular for a waiver of the cost-sharing and local matching provisions, and also a waiver of the requirement that these be new additional personnel. So we, of course, are hopeful about our economic recovery as we chart our way back to full economic health, but we know that local public safety budgets are not recovered, and that there is a good deal of unevenness around the country in the health of those budgets. Now, your testimony states that the fiscal 2012 request includes $670 million for firefighter assistance grant programs. Included in this amount are $420 million for SAFER grants to rehire laid-off firefighters and retain veteran first responders, totaling 2,300 firefighter positions. You do need a waiver to use SAFER funds to retain firefighters, and I want to ask you about an apparent omission, maybe an inadvertent omission, that this waiver isn't included in the 2012 budget. So the question is quite straightforward: Do you support the continuation of waivers to retain firefighters? And in your opinion, have the waivers been successful in stemming the tide of potential firefighters layoffs? Mr. Fugate. The first question, yes, sir. The second question, based upon the available funds, yes, sir, there have been those that have been rehired or those that we prevented the layoffs from. And in many cases, there has been more demand for the funds than the availability of those dollars. So the first question is yes. The second question, sir, is yes. GRANTS: ASSISTANCE TO FIREFIGHTERS Mr. Price. Yes, that is certainly my impression as well. When we were having the debate on the House floor over H.R. 1, at that point a number of firefighters from around the country made their way to Washington. They did a real service, I think, in doing that and in bearing witness to the difference these funds had made as their departments attempted to retain their full strength in terms of personnel. Will you say a word about the budget proposal with respect to the fire grants as compared to the personnel program, what kind of rationale underlies that request? Mr. Fugate. Yes, sir. Given the issues of looking at where we could make reductions and target those reductions, we felt in the current budget climate that we should continue to level funding for firefighter personnel, and that if we were going to have to look at a reduction, we would take it in the equipment support. We realized that neither--these options are not necessarily things people want to see, but because of the reality of the budget and the request to reduce our funding, we made the strategic decision for the positions themselves versus the equipment and other programs eligible under the AFG grants. Mr. Price. So that the decision is a function of the budget pressures you are experiencing and perceiving, not a reduced demand or any judgments necessarily about the program itself? Mr. Fugate. No, sir. I think this, again, comes back to we don't have unlimited resources. We generally see far more grant requests than we have funds. That is just a reality of what we are doing. But in looking at where we are going to make reductions and make those recommended reductions to Congress, we felt that reducing the grant programs for the equipment and other programs that are eligible was preferable than reducing the funding for the actual firefighters themselves, sir. Mr. Price. All right. I will wait on the next round for the mapping because I do want to get into that. Thank you very much. Mr. Aderholt. Mr. Crenshaw. Mr. Crenshaw. Thank you, Mr. Chairman. And thank you for being here. I know that you are from Florida. Mr. Fugate. Yes, sir. NATIONAL FLOOD INSURANCE PROGRAM: COVERAGE Mr. Crenshaw. And so you know a little bit about hurricanes. And I guess when you look across the country, as you said, we are always going to have disasters. I mean, we are going to have hurricanes, we are going to have tornadoes, we are going to have earthquakes. And I guess Katrina was a pretty good example, like $80 billion. And I want to ask you a little bit about what you think the Federal Government's role ought to be in helping States like Florida, who tries to kind of plan in advance through catastrophic insurance. And there have been proposals from time to time to have Federal legislation that would allow States to get together and to pool their resources, because if we assume that we are going to have these disasters, and we assume that they are going to be very, very expensive, it seems like one of the things we ought to be trying to do is try to help private dollars, insurance dollars, prefund some of those catastrophes. So could you talk a little bit about--I can't remember exactly what goes on in Florida, but I know there have been efforts to do that--how you think that works, and do you think that the Federal Government ought to set up some sort of program to expand that to where States are getting together where they are going to have an earthquake in California and a hurricane in Florida and a tornado in Kansas? What are your thoughts about that to help reduce the overall cost, because if we keep going like we are going, sooner or later there is going to be one gigantic hurricane even bigger than Katrina, and in these days of difficult dollars, it could really put a hurting on the Federal Treasury. Mr. Fugate. Congressman, coming from Florida, as you know, the primary issue here has been the affordability and availability of coverage for insurance for individual homeowners and businesses. And so I will limit the questions to that. I think it is another discussion about the cost of the impacts to the government and the government buildings and other facilities themselves. We currently administer a National Flood Insurance Program in the United States, which is a federally administered, federally backed by the U.S. taxpayer program of providing a type of insurance that the private sector does not provide. That program is not solvent; it has a lot of challenges and is currently being discussed for reauthorization. Currently FEMA, the National Flood Insurance Program, owes close to $18 billion to the Treasury due to payouts as a result of the hurricanes in 2005. In looking at how you address this, I think we have to be very careful that we engage the private sector in such a way that we don't increase the vulnerability or the burden to the taxpayers unless it is a strategic investment on behalf of the taxpayer to mitigate some of those risks. I think some of the things you discussed as providing, because of the interstate clause, States the ability to pool reinsurance rather than doing State by State may be an area to look at. We certainly are encouraged by the draft legislation that would look at how we could begin to engage the private sector in some aspects of the National Flood Insurance Program. But I think you are absolutely right. Most of the assistance that we provide in the individual assistance program is based upon lack of insurance, whether it was a particular exposure that wasn't covered by a homeowner policy such as the exclusion of floodwaters and requirement of a national flood insurance policy; whether it is exclusions by wind that you face in your communities where the various State insurers have basically said, ``We will provide everything but hurricane protection, and you are going to have to buy that from a State wind pool''; to earthquakes, now sinkholes, now mold. And I think it is going to be a growing challenge that if we are looking at the private-sector insurance to provide the bulk of the protection to individual homeowners in the private sector, that is something we need to look at. But I will caution against the Federal Government becoming a direct provider of that insurance. I think that the National Flood Insurance Program shows some of the challenges with that. And it may be more on the lines of looking at some of the interstate clauses of allowing the insurance commissioners in States to pool resources. The biggest issue is, unless you can geographically distribute your risk across areas, it is very difficult to reduce the total cost of that risk. If you are looking at a hurricane-prone State like Florida, could you offset some of that risk with a flood-prone or an earthquake-prone State so that you didn't have the same hazard in the same pool as what would happen if you just looked at the Gulf Coast States? Mr. Crenshaw. But in a bigger sense, a broader sense, you said it would be something worth looking at. But the catastrophic insurance pool that Florida has to kind of prefund those catastrophes as opposed to waiting until it happens and then kind of bail it out, like we do at the Federal level, do you have any thoughts? Is that kind of beyond what you have had to focus on from day to day, or do you think there ought to be some way to try to allow States that are subject to these disasters to pool their assets to broad--not just the individual property insurance owners, but in a broad sense deal with these major, major catastrophes, that it might be more affordable if States got together and pooled their resources? Mr. Fugate. Well, I think the Florida wind pool and the citizens insurance company, which is the State's insurer of last resort, offer cautionary tales of the pros and cons. As you well know, and as a Florida resident, if we have a catastrophic impact to the wind pool, the way they are able to pay that is everybody that owns an insurance policy will be charged a surcharge. We currently are paying surcharges for previous events. That model is very vulnerable to the large- scale impacts of a major windstorm, such as the great Miami hurricane in 1926, [and] would produce impacts in the $100 billion range. I don't think the State wind pool can absorb those catastrophic hits as currently designed, and I think that places an extreme vulnerability to everybody that has an insurance policy. You are going to have to subsidize that risk after the fact. So I think there are some perils to that, but I also think there are some advantages, because lacking that, the ability to have wind coverage in Florida would have gone the way of many of the private systems, that we would no longer provide that coverage. And that would cause the other economic impact of not being able to insure homes against a very prevalent threat in Florida. Mr. Crenshaw. Thank you. Mr. Aderholt. Mr. Carter. REMEDIAL ACTION MANAGEMENT PROGRAM Mr. Carter. Thank you, Mr. Chairman. In recent reports in January of this year by DHS Office of Inspector General, FEMA was criticized for not conducting after-action reviews of all disaster responses, as well as not communicating these reviews to FEMA personnel. The IG reported that FEMA has missed opportunities to learn from past experiences, and the IG gave FEMA six recommendations to improve its Remedial Action Management Program. What are you doing in response to these six recommendations, and how are you working to improve the remedial action program? Mr. Fugate. Congressman, we took the IG's reports to heart. We are implementing these. One of the things that we have done that is a shorter term is we have a series of no notice exercises that my staff have used--a term I use called ``thunderbolts,'' which we send out both an exercise team and an evaluation team to do quick reports and quick looks. I think one of our challenges, if we only look at the catastrophic large-scale disasters, the frequencies of those don't give us the improvement that we need in the short term. So we are not only looking at the IG's recommendations, we are also throughout FEMA, without advance notice, doing no notice exercises at both the headquarters and the regional levels, with both an exercise component and an after-action quick look report, to find those areas we need to address immediately to continue to improve against that. So we took it very seriously. We know that that process had sometimes become too convoluted and so complex that by the time we got the information, we were years into the aftermath of an event. So we have been focusing on, particularly in our no notice exercises, doing very quick action reports that occur within a week of the exercise to give us a snapshot of what worked, what didn't work, and what we have got to focus on. So we are implementing both the IG recommendations, but also are looking at a shorter-term process to really start building these lessons back quicker versus waiting for the formal reviews being completed and trying to build that into an after-action. DATA BACKUP SYSTEM Mr. Carter. I understand that FEMA lost 7 years' worth of after-action reports and best practices when a server failed last year. And in February of this year, this data was still unreadable, as I understand it. What is the status of that failure, and does FEMA anticipate being able to read this data? And what are you going to do to prevent this from happening again? Mr. Fugate. I am not sure what the forensics are going to be able to do with that server. It was a catastrophic failure, and I am not sure that we are going to be able to get any of that data back. Since then we have moved to the lessons learned system and actually have more of a cloud architecture to move away from a single point of failure. But it does show some of the state that our IT infrastructure was in, literally a server box without backup; therefore a single point of failure wiped out all the data. So as we move toward the DHS strategic plan for IT management and start moving things in the data centers and data clouds where we have the back-up and the redundancies, to eliminate the hardware failure, and then, more importantly, to continue to use things like the lessonslearned.gov site to post this information so it is not lost, and it is available to the response community. Mr. Carter. Had either you or previous FEMA Directors, noticed that you had a problem of a not-backed-up system and made a request of this committee or anyone to back up these systems in a time when at least the Nation looks upon FEMA as a massive disaster response--we realize what your real nature is, but we hearken back to our two or three great hurricanes in the gulf a while back, and everybody thought FEMA was in charge of everything, and then to realize that you had servers that were not backed up. When you listen to the radio, and they tell you about every 45 minutes you need a back-up of your data, it seems to me somebody should have noticed that. Has anybody made requests on that matter? Mr. Fugate. On that particular server, no, sir. Overall, yes, sir. We are, in part of our budget, looking at how we move from a system of server boxes into the data centers and data cloud. This is a migration within the Department of Homeland Security to move away from what I would call the single points of failure into a distributed cloud-based environment where we have the built-in back-up and security on these systems. Too often what we have found is we have been looking at our IT as we have a lot of different programs that have servers that don't have the support, don't have the back-up. And so as we have been identifying them, we are trying to move all that to the DHS data center approach and get away from individual boxes. So for that particular one, sir, I didn't have visibility until it happened, as an aftermath. But we had recognized that our current IT infrastructure was very vulnerable both to security, loss of data, and the vulnerabilities of not having these systems where they were secured and backed up and available to the rest of the team. Mr. Carter. Thank you, Mr. Chairman. Mr. Aderholt. Thank you, Mr. Carter. Mr. Dent. DISASTER ASSISTANCE OVERPAYMENTS Mr. Dent. Thanks, Mr. Chairman. Mr. Fugate, good to be with you. Last month FEMA began sending notice of debt letters to disaster assistance applicants who received improper Federal disaster assistance payments. The letters were to address the most recent disasters first, as I understand it. The letters are informing applicants of the amount and reason for their debt, and provide information on how to repay the debt or appeal FEMA's determination. First, how much money do you believe FEMA has outstanding in overpayments? Mr. Fugate. The number that was provided in the IG report was about $640 million. We think that number was less than that as we went through and--we actually had our national processing centers go through the list and began looking at that. That number has come down. And, Congressman Dent, I request that we give you that figure in writing, what we think that number is, based upon the last scrub of going through all those applications. But that process has started. As you pointed out, over 5,000 of those letters are going out to the most recent disasters, and we are working our way back through those numbers. [The information follows:] Mr. Dent. Last month FEMA began sending notice of debt letters to disaster assistance applicants who received improper Federal disaster assistance payments. The letters were to address the most recent disasters first, as I understand it. The letters are informing applicants of the amount and reason for their debt, and provide information on how to repay the debt or appeal FEMA's determination. First, how much money do you believe FEMA has outstanding in overpayments? Mr. Fugate. The number that was provided in the IG report was about $640 million. We think that number was less than that as we went through and---we actually had our national processing centers go through the list and began looking at that. That number has come down. And, Congressman Dent, I request that we give you that figure in writing, what we think that number is, based upon the last scrub of going through all those applications. But that process has started. As you pointed out, more than 5,000 of those letters are going out to the most recent disasters, and we are working our way back through those numbers. Response: To date we have identified $21,754,993.93 in recoupment dollars for applicants provided disaster assistance funding (October 2005 to present) through the Individuals and Households Program (IHP). This does not include any Katrina, Rita, or Wilma recoupments through the IHP as the review is still being conducted on this subset of disaster payment recipients. Mr. Dent. And I guess the second question would be do you know the kind of responses that FEMA has received to the letters being sent out to those individuals and families requesting a repayment, and are people responding to the letter, I guess? Mr. Fugate. Yes, sir, they are responding to the letter. In most cases they are questioning why they would need to repay. It is falling into several categories. In some cases errors were made in the process of determining eligibility; in some cases it is they had duplication of benefits. They had insurance that paid, but now they had gotten the assistance, or were having multiple parties that applied from the same household, and so multiple individuals have gotten that. The process we are trying to use is in many cases if we got more documentation, they may not have an outstanding debt. This is indicating, based upon what we know, they have an outstanding debt. If they have documentation that we are asking for, it may establish there is no debt, and that will close the case. If we do, however, determine that they do have a debt, and they owe money back, they have several options. They can pay in full. They can do a payment plan. But at the point at which they either are unresponsive or refuse to repay money after we have been able to make contact, ultimately these are referred to Treasury for collection. So this process starts with this is what we think you owe. Provide us information. If that information satisfies our request, it is closed; if not, and we still demonstrate you owe us, then the options are to begin a repayment program or to pay it in full. Mr. Dent. So essentially if somebody fails to respond to a letter, you refer the matter over to Treasury for collection; is that how it works? Mr. Fugate. Yes, sir. Ultimately, if we can determine that that is a viable case that we would not be able to get either them to respond to us or that they do not agree to repay it, ultimately it would go to Treasury if it is determined that is a repayment---- Mr. Dent. Is there an intermediate step? In other words, if they do not respond to the letter, do you go right to Treasury? Mr. Fugate. No sir. We will do additional attempts to notify. And again hopefully, again, as they get the letters, they will respond back to us. And in many cases if we can get some additional documentation, it may clear the issue up, and they were eligible in the first place. So we are hoping people will understand that. But it does provide that they have the right of appeal. This is a requirement that came about after a judge found that our process was not compliant and essentially we were no longer able to do recoupments to give you what it is, why we think you owe the money, and state clearly how to appeal that and how to notify us of your intention to pay. Mr. Dent. And my final question, is there going to be another round of notice of debt letters this year? Mr. Fugate. Yes, sir. Mr. Dent. Okay. I yield back. Thank you. PREPAREDNESS CAPABILITIES Mr. Aderholt. Thank you, Mr. Dent. As I stated earlier in my opening remarks, after almost a decade of the Department cannot measure if we are safer or more prepared from the $33 billion investment we have made in preparedness grants, over the past decade FEMA has made many attempts to measure capability, but none have been implemented. The continual excuses and delays must stop. The American taxpayer deserves to know what they are getting for their investment. Do you agree that there needs to be a quantifiable metrics that measures capabilities, that measures if we are safer or we are more prepared than we have been in the past? Mr. Fugate. Mr. Chairman, when we first started this and I was State director, I asked the questions: What are we building? How do we know it is built? And how do we maintain it? I think we can measure what we are doing. I think we can demonstrate in many cases significant improvements in everything from interoperable communications to enhancements and increased capability for bomb squads, hazardous material teams, increased medical capacity. We can give you numbers to show what we have invested in and what that has provided us. But do you have a matrix that asks what are we preparing against? And once we get to that number, then how do we maintain it, and what is the appropriate Federal share versus local and State share? And I think this goes back to one area that we have made progress in, which is to be able to measure the number of exercises and the participation exercises. I was asked one time, how do you know if we are prepared? And in many cases it always comes back to if a disaster occurs, was the response better? But my observation has been those communities that have engaged--particularly local elected leadership, State leadership--in exercises do much better in the response to both the disasters they have planned for and the things they have never had happen previously in their communities. We think that in measuring exercise, participation, frequency, and the effectiveness of those exercises is one of the better measures of showing increased preparedness. Those who do have historically performed better in their response; those who don't have greater challenges, particularly when it comes to the initial impacts decision-making in executive-level operations. Mr. Aderholt. Knowing that, of course, we agree on that, how long will it be before you can actually tell us that these grants are making us more safer and making us more resilient? Mr. Fugate. Good question. How do we define it? I think this is, again, coming back to what level are we going to define as prepared, and what measures are we going to use. I think that we are looking right now at our ability to measure and look at the exercises. I think that in looking at other things to measure is looking at--Mr. Chairman, if you will indulge me, this may take a little bit of time. But I think what I ran into when I got here was we always said we are going to respond better and faster. I asked, ``By how much? What are we doing? What are we planning against?'' We never really put a time frame on how fast response should be; we just said we want it fast. My observation is the first 72 hours of any disaster is the most critical time for changing the outcome for lifesaving and stabilization. That means you have to look at what capabilities have you built that are both local and State initial responses and what resources do you need to bring, and now you need to plan against these scenarios that produce the maximum impacts, whether it is an improvised nuclear device, a major hurricane, or major earthquake. NATIONAL LEVEL EXERCISE In NLE 11, our exercise that we are going to be conducting for the central U.S., part of this is to look at how rapidly can we get teams in to do some things that are very measurable, such as conducting and doing the initial search for the injured in the first 72 hours of a no notice event, and basing that upon the catastrophic impacts of the likely hazards we face, what we are calling the maximum of maximums; that now gives us something to start measuring. Given that we have X amount of teams, X amount of resources, we have built--and you look into reports from the States on how much additional search and rescue teams have been built at State and local levels that are not part of the Federal USAR (Urban Search and Rescue) teams. Can we get those teams there fast enough through mutual aid and other tools to get there, and what is our gap? That is how we are going to start measuring preparedness. We are going to put it up against the actual events this country faces, looking at a time frame that we are going to exercise at National Level Exercise 11, and looking at how quickly can we get there, if we can change that outcome, and what is the gap. And I think this then gives us a direction not necessarily to spend more money, but to look at where do we make investments elsewhere that have capabilities that have not been brought to bear, such as we don't engage the private sector in a lot of our search and rescue. But what about mine safety rescue teams? How would we engage them if we were in New Madrid, in Memphis, doing search and rescue to bring those teams on board? These are the kind of things we want to measure preparedness against. Take historical events that we know we can model what the potential impacts are; look at the first 72 hours, whether it is a chem bio. Can we distribute prophylactics in an anthrax attack in a major metropolitan area, and use those to plan against? And given what we have built, what do we need to maintain? Adjusting for what is not achieving that mission, but measured against the events and the time frames, how do we as a Nation respond to these types of events? Mr. Aderholt. I think the 72-hour time frame you discuss is very important. But going back to my original question, when do you think that we might get to see something like this put together? Mr. Fugate. I think the actual measuring tools we have developed in looking at how we demonstrate the response in the first 72 hours, we are looking at 13 critical areas of things that have to be accomplished. We are going to use these to test the system in NLE 11. And we are also using the concept we are calling the maximum maximum, looking at these large-scale scenarios, very similar to what we saw in Japan, and now using those to start looking at nationally how much capacity do we have to respond to that. And I think NLE 11 will give us a chance to look at that in real time and then further refine that. So this year what we are focusing on right now is the exercise component of measuring that. I think the next area that we are going to focus on is the Urban Search and Rescue Teams--both the 28 that are federally sponsored and the numerous teams that local and State governments built with their Homeland Security dollars and are currently maintaining with those dollars--and the urban security initiatives. And given that mix, tools such as the Emergency Management Assistance Compact, which the States have, can we effectively as a Nation mobilize not only the Federal teams, but also State and local teams to respond, and what does that measure, and how do we determine where we are at on that system? So in looking at this, start taking these pieces. And again, sir, in my observations process, everybody has been trying to come up with a finished product. I think we got to start doing this in pieces; that we know this is an area that we need to measure because it has a definite outcome. Let's get it in place and quit waiting for a finished document that we are going to go against to look at these issues. So we are going to start with exercising. The next area we are going to be looking at are the things like the teams that have been paid for and built and maintained. But starting with the search and rescue teams, look at the additional teams that have been built for the chem and bio effects, and start measuring that against these events. Mr. Aderholt. Thank you. Mr. Price. Mr. Price. Mr. Administrator, let me, before I get into my question, just commend you for that answer. I think there is a lot of common sense and experience reflected in that answer. We all would like to estimate risk more accurately, and we all would like to measure the effects of what we are doing more accurately. And you are suggesting a very practical approach to that which has to do with specific interventions. It is very important that we understand what works and what doesn't, and that we measure the impact of these interventions. There is a kind of Holy Grail, though, that we sometimes seem to be pursuing, a comprehensive method of estimating risk and allocating funds accordingly, and then measuring impacts in a similar kind of global way. I have worked as hard as anyone on this Subcommittee to try to refine our instruments for risk assessment and to refine our ways of measuring our impacts, but just looking at the range of programs you are talking about, I don't believe one size fits all. For example, just the range of grant programs that you administer. They vary in the extent to which they are risk- based. UASI grants, for example, are allocated on the basis of some rather straightforward risk assessments. Some other grants like the State grants, the EMPGs, are very decentralized; they are allocated according to population and other factors. And you leave, I think rightly so a good deal of the determination of how those funds are expended and where they are directed to your State and local partners. Other grant programs work on the basis not just of some central administrator's estimate of what the needs are out there, but they take into account the initiative that is being taken locally. We have a lot of our fire chiefs represented here this morning. The fire grants quite explicitly reward the fire departments that take initiatives, that help themselves, and that get their act together, and that make meritorious proposals. This area I want to question you about, floodplain mapping, is the same thing. FEDERAL EMERGENCY MANAGEMENT AGENCY: EFFECTIVENESS Mr. Carter. Thank you, Mr. Chairman. And I thank Mr. Price for his questioning, because it brings up something that I have some curiosity about. Locally, I have a town in my district, Salado, which has a creek that runs through it and there was an upper-end subdivision built in that watershed. These were houses $250,000 and up, and the flood maps showing an area, which everybody who ever lived in Salado for any length of time said, they are nuts, that is not out of the flood plain; that is in the flood plain. But it was insisted that those maps were accurate, and about 40 houses were built in that area. We had one flood that flooded those houses; and asked that the maps be corrected to indicate that obviously it had flooded, and amazingly enough they came back with the answer, those were accurate flood plain maps. Well, last year, we had a second flood came through. We lost all those houses, and they have finally said sort of an, oops, I guess we screwed up, even though half the world was telling us we were wrong, and we will look again and see if we made a mistake. To me, it is just a no-brainer, that if there are 60 houses that flooded twice, it probably ought to be considered flood plain. So it concerns me that this is cut back, too. I will have to admit that, because I think that was a mess-up. And then the conversation you were having with the chairman here. You know, when I first got on this committee, which is 6 years ago, there was an ongoing debate, and it is still ongoing at the local level: FEMA as a standalone versus FEMA as part of this Department. And I would assume, because that debate has been very vocal around the whole country, that someone would have done some kind of comparison of response and preparedness of FEMA when it was standalone versus FEMA as part of this Department, so there would have been some sort of metrics established. I just would have assumed that, if nothing else, some kid writing a dissertation should have probably written something on that. Do you have any information about any comparisons about FEMA as a standalone agency, which at least early on people kind of felt like we made a mistake putting them in this big Department and they should have been standalone all along? This debate has been on this committee since I have been here, at least the discussion has gone on. And were there any metrics used to make those kind of studies, or do you know? Mr. Fugate. Congressman, I am not aware of that. I can't tell you just the numbers. After the post-Katrina emergency management format, FEMA is now almost double the size it was when it was a standalone agency. Another significant event was in passing the post-Katrina Emergency Management Reform Act. For the first time, we actually had a mission statement and a purpose in legislation rather than the Stafford Act and appropriations language. So I think there is a clearer mission. It is a larger, more robust organization than we had when it was a standalone. As far as the issue should we be in or out of DHS, in my testimony during my confirmation hearing, I felt that the matter was resolved: We were part of DHS. We need to get back to work and focus on it. I felt that continuing discussions about whether FEMA was in or out was a distraction from my mission. I am very fortunate, working for Secretary Napolitano and being part of DHS, that I can tap into the resources of the other components, but I also have a tremendous amount of flexibility she gives me in order to be very responsive to the States when they have an issue. So I don't feel it has compromised FEMA's mission. I feel that we are a part of an organization that gives us a lot of capability from resources from our partners in the Coast Guard, Customs and Borders, law enforcement support from ICE. IMMIGRATION AND CUSTOMS ENFORCEMENT So I really, sir, I don't know if anybody has done a study. I know that you look at the numbers today and where we were previously as a standalone agency, we are bigger with more capabilities, more authorities that Congress has provided us. And my personal opinion is, sir, I have not been engaging in that debate. I have been focusing on the things we need to do to get FEMA where you expect us to be, to where the public expects us to be. Mr. Carter. I don't expect you to engage in that debate. I think that question has been satisfied. But I assume, because it was indicated that you are looking for metrics to analyze your effectiveness today. And, by the way, there are some of us who don't always think bigger is better in this world. Some of us think maybe lean and mean sometimes operates a little better. But that is a debate for another time. But you were saying that you were working to develop metrics, and I was wondering, because this debate was pretty loud and pretty long for a long time, that somebody might have done some studies that would at least set metrics up that you might could use to judge your department now. I guess that was my question. Mr. Fugate. No, sir. I think most of the things that people were measuring was our administration of the Stafford Act. And, quite honestly, that is a program that provides financial assistance reimbursement and has the ability to do tasking to other Federal agencies for disaster. But my experience as a State director and as a local administrator was that the things that we are talking about now, setting performance measures, have never been part of the national preparedness dialogue. People said we wanted to respond, but nobody defined what that meant. People said we wanted to go out and do all this stuff, but nobody put a time limit against it that says--I mean, quite honestly, sir, if you are injured in a disaster, how much time do you have? That sets the response posture, not what I am capable of doing. I think this has been the trap we run into. We plan for what we are capable of doing versus what the threat is. And I agree with you 100 percent: I don't think you need to be bigger. I am not asking that we have to constantly grow FEMA. I think you have got us to the critical mass. But I think we have got to define what outcome we are going to achieve, and then not fall into the other trap I have seen us do, and that is always look at a government-centric solution and forget there are tremendous resources every day in every community 1 minute before that disaster struck. Why do we start 1 minute after that and ignore the resources? Mr. Carter. I wouldn't expect anybody from Florida to have any other response than that, so I respect that. If I have time, I have one more question that troubles me. Mr. Aderholt. Time is up. We will let you on the next round. Mrs. Lowey. NUCLEAR CRISIS: EVACUATION PLANNING Mrs. Lowey. Thank you, Mr. Chairman. And welcome. The Indian Point nuclear facility is located near my district and is within 30 miles of New York City. The government has recently recommended a 50-mile evacuation zone in Japan. If a 50-mile evacuation were ordered for Indian Point, 20 million people would need to be evacuated, including Times Square, Wall Street, and parts of Connecticut and New Jersey. Mr. Fugate, you have an emergency preparedness background. Can you honestly tell this Committee that adequate plans exist to evacuate the most densely populated region of the country if there were an incident at Indian Point? Mr. Fugate. Well, based upon two assumptions that are not the current assumptions that the Nuclear Regulatory Commission [NRC] uses for planning is, one, that you would have a full population evacuation 50 miles from the point of the nuclear power plant. The current guidance is a 10-mile range. So based upon that, the area I am most familiar with, in working as part of the team that does the exercises and reviews those exercises with the NRC, is a 10-mile evacuation. I don't know if I could speak to the 50-mile evacuation, because that is not one of the plans that are currently there for nuclear power plants. Mrs. Lowey. Let me just say very clearly that Indian Point is up for relicensing in the year 2013, 2015, and you are the agency that is going to be responsible for the evacuation. So with all due respect, I am puzzled why you are sticking to the 10-mile radius. Your agency, as we know, would have the leading role with the response to a radiation leak at Indian Point. And given events in Japan, especially our own government's reaction, including advising Americans to evacuate a 50-mile area, which for Indian Point would include 20 million people, surely you would be closely evaluating your ability to protect the public. I don't understand why you are assuming and accepting a 10-mile radius. And wouldn't you be considering, based upon what happened in Japan, the 50-mile radius? Mr. Fugate. In the division of the responsibilities to determine what the protective areas and the protective measures are, those are provided in guidance from the Nuclear Regulatory Commission in consultation with the States. The actual evacuations are conducted by local and State governments with FEMA supporting them. Again, the current planning guidance, which FEMA does not establish but works to be able to exercise and test, is a 10-mile evacuation zone based upon those threats and scenarios that the Nuclear Regulatory Commission has identified. If at such time that radius was ever increased, we would again work with State and local governments to determine the effectiveness of those evacuations. As you well know, in licensing a nuclear power plant, part of that evaluation does require that the communities and State can effect a successful evacuation. So if that guidance changes, that would be the determination: Could you successfully evacuate a larger population in the time frames given, and if not, would that result in any impacts to licenser's ability to operate the plant? Mrs. Lowey. Now, you are saying if that guidance changes. Do you have any role, any input as to whether it is feasible to evacuate 20 million people from now that is 10-mile radius--Do you make that determination or do they? Mr. Fugate. We do not make the recommendations on the protective zones. And the 10-mile emergency protective zone is the one in which they look at the options of either sheltering in place or evacuations. Because FEMA does not make that determination, we would work with State and local governments if that changed to determine if that could be done and the time frames given in a power plant accident. So if that increased, that would obviously result in us having to go back, work with State and local governments, update the plan, and then exercise and evaluate that plan to see if you could achieve the evacuations in the time frames given. Mrs. Lowey. So I am a little puzzled. You are saying FEMA, that should have this expertise, doesn't have the input based upon Nuclear Regulatory Commission determination as to whether it should be 50 miles or 10 miles? You are not involved in this decision at all? Mr. Fugate. We are not the scientific advisers or the engineers that make those recommendations and determinations. We are part of the Nuclear Regulatory Commission regulations required to work with State and local governments to ensure whatever those protective measures are, they can be exercised and executed if an event occurs. Mrs. Lowey. I will let it go at this point. But I think there is a real question as to what FEMA's role is in determining whether an evacuation should be 50 miles--you know, I think my issue that is of great concern to me is when you consider relicensing, you don't consider it in light of new data and new information but based on the old data and the old information. So I am a little concerned that the Nuclear Regulatory Commission would not have any concentration process in place to deal with FEMA. But I will go on to another question before my time is up. UASI funding has continually been diluted by increasing the number of recipients, and what started as a program for seven urban areas now serves 64. Every area of the country deserves funds, I want to make that very clear, but not from the high- risk program. And I attached an amendment to H.R. 1 to limit UASI funding to the top 25 highest risked regions, restoring the program to its original intent. The 9/11 Commission report stated clearly that Federal Homeland Security assistance should not remain a program for general revenue sharing, end quote. Why then do you continue to disregard both the recommendations of the Commission and the intent of Congress in creating UASI by providing funding to localities that are neither high risk nor high density? And, again, I want to make it clear, they can get other pots of money. But why this pot of money? Did I hear--I thought I was asked to close, but as long as the chairman is very indulgent---- Mr. Aderholt. Your time is fleeting, but we will go ahead and sum up the last and answer. Mrs. Lowey. Some opponents of my amendment have stated that current UASI cities, such as Denver and Bridgeport, are key sites to the logistical planning of potential terrorist attacks. How much FEMA first responder funding did Colorado and Connecticut receive apart from the UASI program in fiscal year 2010? And if you don't have that answer, I am sure you can get back to me. Because it is my understanding that Colorado and Connecticut, for example, each received more than $20 million through other FEMA programs. Does that sound right? And, further, there is nothing stopping any State Homeland Security Office from distributing State Homeland Security GP and other FEMA grants in the localities on the basis of need, correct? Mr. Fugate. That is correct. As far as the actual numbers, I would request to get back in writing those actual totals and the grant fundings and the breakdown of those fundings for those States. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8060A.341 [GRAPHIC] [TIFF OMITTED] T8060A.342 [GRAPHIC] [TIFF OMITTED] T8060A.343 Mrs. Lowey. And I want to make it clear again; everyone should get funding, but not as a high-risk program that began as 7 and is now at 64. Thank you, Mr. Chairman. Mr. Aderholt. Thank you. Ms. Roybal-Allard. CATASTROPHIC PLANNING Ms. Roybal-Allard. Recent events in Japan have highlighted the risk that earthquakes pose and the need to improve our preparedness, as I am sure has been discussed here earlier. As you know, California is especially vulnerable. A seismic event in Los Angeles could claim countless lives and inflict more than $500 billion in damages. Now, Ms. Lowey, I understand, asked about a disaster affecting the nuclear power plant near New York, and I have similar concerns about California which has two nuclear power plants located near major fault lines. You have testified in the past about the importance of careful planning to have effective response in the event of a disaster. Could you describe FEMA's efforts to plan for a catastrophic earthquake in Southern California? And have you considered scenarios in which these States' nuclear power plants are seriously being damaged? And not only an earthquake, but our understanding is if it is of the magnitude of Japan, it could also result in a tsunami for the West Coast. Mr. Fugate. Yes, we have. In fact, we participate in the State of California's Golden Guardian exercises and work these types of issues and plan against catastrophics. I think one of the things that Japan showed us, we saw this with Hurricane Katrina, is oftentimes the original event cascades into additional impacts, such as the power plants being engaged or other types of technological disasters occurring as a result of the initial hazard itself. And so we have been working with the State of California. In fact, we are working with the entire West Coast, both for earthquake hazards but also tsunami hazards. It wasn't very widely reported, but we actually did have tsunami-related damages on our coast. It was fortunately not to the degree of loss of life or the impacts, but we were under tsunami warnings along the California coast in the aftermath of that. So our Region 9--and something that the ranking member pointed out--is we have been working hard to empower our regional offices, in our case, Region 9, which covers California, to work closer with the States on catastrophic planning, to look at not just again the tendency to say we are going to write a plan and put it on the shelf, but to engage in actual exercising and testing of those plans and those assumptions. We look at what happened in Japan as an opportunity for lessons learned to come back and ask the question: If you have this massive earthquake but you also now have additional issues, such as a nuclear power plant or other technological hazards that are occurring, how do you respond to them? So these are ongoing programs. This is an ongoing process. And I think it points out that too often we focus on our last big disaster, and in our case, it was hurricanes. But you can see a hurricane coming, as we have seen in Haiti, in Chile, in Christchurch and, unfortunately, in Japan. There is no lead time or warning for an earthquake. It happens. You have to be able to respond to it. So we plan and work with our partners to leverage both our resources capabilities. But we look at these very issues you brought up: The large-scale events, the multi-dimensions of multiple issues happening, and then begin looking at, how do you respond based upon the priority of lifesaving, life- sustaining, and the initial stabilization to begin looking at recovery? DISASTER RESPONSE: BUDGET CUTS Ms. Roybal-Allard. As you know, we are in the middle of dealing with budgets for the rest of this year as well as for next year. And to have a better understanding of what the impact of what some of these recommendations are with regards to the budget, I would like to focus a little bit on H.R. 1, which slashes more than $800 million from FEMA's grant programs. Now, unfortunately, these cuts come at a time when, according to the DHS Inspector General, State and local governments across the country have been forced to significantly reduce their spending on emergency management. So if H.R. 1 is enacted and we have these cuts, Los Angeles, as I understand it, stands to lose almost $60 million in critically important funds to protect the city against acts of terrorism, respond to natural disasters, and to improve emergency communications. What is the likely impact on your agency's operations if the capabilities of major cities like Los Angeles are diminished as a result of these cuts? And will a greater burden fall on FEMA in emergency situations if local governments lack the means to respond effectively? Mr. Fugate. My experience tells me that where local governments don't have the capability or resources to respond to the disasters and, as a State, having to bring those in, it costs us far more than those communities that had that basic preparedness. I know that from the perspective of what I have seen in disaster response at FEMA, for those States that have built those capabilities, in many cases, FEMA does not have to engage in a response role, but rather a recovery role, because they are able to manage their response. This is a tough question, I think. Mr. Chairman and for the members here, this is really I think getting to the crux of the grants. We don't want to supplant local responsibilities, but there is a cost to the taxpayer. And this is the balancing point we have to determine. I don't think you can indefinitely fund grants at a level that you can't sustain. But if you cut them too fast, a lot of this investment and capabilities built over time will not withstand that kind of reduction. Also, many of these local governments are engaged in multiyear enhancements, particularly in interoperable communication. So we may end up with half-built systems or systems that aren't completed, and we have already made that investment, yet we have never fully realized the benefits of the full package. So I think it is a question of balance. Where is it in the interest of the Federal Government, the taxpayer, to invest to build capabilities and capacities at State and local levels that would reduce the overall cost of Federal response and, more importantly, provide resources closest to those survivors in the most critical first hours to days of that event, versus what we could build on a national scale to essentially replace that, and the time frame of getting it there? I think there needs to be a balance. And that is why, again, from my experience and what I have seen as a responder, those investments that we in the State of Florida made in our local communities save significant cost in the response phase. Those communities that did not have those, it cost us far more because not only did we have to respond to the other needs, but we oftentimes had to augment their basic response. And that cost us far more in the events that I have been involved in. So it is a balancing act. But it is a decision that, in doing that, where is it--and, again, looking from the standpoint of the Federal taxpayer, where do those investments make sense? And where, if we do reductions, would it not adversely affect the Federal response in support? But there is a tipping point there where I--and I think it comes back to the frustration that the chairman has basically brought up, because we have not been able to come up with good matrixes, we can't really tell you what the impacts will be on the cuts, and so we are oftentimes dealing with the anecdotal data. And I think this is the challenge we have. We are going to deal and to face the budget realities, but we need to have the best data available so, as these decisions are being made, we don't end up with cuts that produce unintended consequences based upon our previous investments. GRANTS: FIRST RESPONDER Mr. Aderholt. Thank you. And let me just add on H.R. 1, certainly the goal was not to cut the grants. I think overall, as we head into the known cost for disasters and those had to be paid for, and so that is where I think it really goes back to. Let me switch to another issue that we have alluded to maybe a little bit but get into a little more, and of course, that is the slow execution of the first responder grants. Each year, FEMA says they are working to improve the execution, but based on the latest data provided to the Committee, grantees continue to lag in expending their funds. Could you tell us what you are doing to try to address this issue that we have seen over the past several years? Mr. Fugate. Mr. Chairman, this is as both--I have been on the receiving end of this as a State, where we could not draw down funds fast enough. And, again, the bulk of these programs are reimbursements. The locals and States expend their funds and seek their reimbursements, and in some cases these are multiyear projects. So we know that it takes several years for these grants, as they move through the system, to actually get drawn down out of the system. It doesn't mean that States and locals have not already obligated funds; they are already in contracts or in procurement, but they are reimbursements. I think our particular concerns are those that are at 4 years, where we see substantial amounts that haven't been drawn down, and the tendency that as we get to the 5th year and the failure to execute those funds, they come back to the Treasury. What we have been working with are the State administrative agencies that are appointed by the Governor to be the grant's administrator but also with the Homeland Security advisers and the State emergency management directors to give them visibility on what those numbers are. And I think it has been an eye opener for them to see what has not been drawn down, particularly in the subgrantees that have not finally submitted their reimbursements. They understand this. In fact, I addressed the new State Homeland Security adviser this morning at FEMA before I came over here. And, Mr. Chairman, I basically just told them flat out: You are looking at tremendous balances that haven't been drawn down, and you are looking at an austere budget environment. It is very hard to justify continuing requests for grants if we do not show progress on getting those disaster funds, those grant funds, drawn down so that we can show progress that we are completing projects and we are expending those funds. So they understand, and we are putting information in their hands on what those balances State by State look like, grant by grant, to bring attention to this but also to caution them that, we can explain why, but until you get those numbers coming down in this environment, it will be a constant pressure. Why are we continuing to put more money in grants when you still have tens of billions outstanding to be drawn down? What we get back--and this is what I know from State directors, in many cases, they have already expended those funds. They are going through the process of then getting their reimbursements. In some cases, they are in multiyear contracts trying to get this done. There are delays. These are things that you run into. But it is systemic across the board. As you have pointed out, some States have been much more aggressive in getting their funds expended; others have not. And I think putting those numbers out there is trying to shine the light on and explain to them the gravity of this situation. Mr. Aderholt. This might be too premature. But does that seem to resonate? Or is that still you are waiting to see how that---- Mr. Fugate. I saw a lot of eyes pop when they saw their first spreadsheet, sir. I think this has been one of these things that we have got to shine a light on and get the exposure out there. Once people saw the numbers, I think until they realized what it looks like when you look at that spreadsheet versus looking at the process of reimbursement. And so, hopefully, we can get greater traction. And, again, the proof will be when we start seeing these drawdowns, particularly in the older grant cycles, moving that up so we can start getting those funds disbursed back to the States and local governments for their expenditures. Mr. Aderholt. Have you considered reducing the request for funds based on the amount of funds already in the pipeline? Mr. Fugate. No, sir. It has been based upon--the one area that we did was, again, looking at fire grants of favoring employees, firefighters, versus future equipment purchases. But that was more driven by the budget pressures. In looking at these grants, I think if we were dealing with things that were short term or rather straightforward, not multiyear projects, you would see if you were not expending those funds. But I think part of the challenge is a lot of this is getting into what we call maintenance as we have seen some overall trends. It isn't so much we are buying and building new teams and equipment as much as trying to maintain and finish the projects that we have. But it comes back to, again, at a point--and this is I think the very difficult decision I think we are going to have to make: How much further investment? Once we have built some of this capability, what does it take to maintain it versus, do we continue adding more teams or capabilities based upon the various State initiatives? Mr. Aderholt. Thank you. Mr. Price. GRANTS: TRANSIT SECURITY AND PORT Mr. Price. Let me just follow up on the Chairman's line of questioning here, particularly in regards to two categories of grants that we funded in recent years and that have had particular drawdown problems. This subcommittee, as you may know, had extensive and repeated hearings on the transit security grants and the port grants in particular, those two programs. In the most recent data FEMA has given us 52.8 percent of the 2006 port security grants have not been drawn down yet, and this is money that is going to expire at the end of the fiscal year. And for 2007 we are talking about 84 percent of the transit security grants not being drawn down. So these figures seem to tell a similar story. So I wonder if you want to elaborate on those challenges in particular? I know they both involve or have involved some interagency coordination. We dealt in some detail with the TSA- FEMA intersection in the transit grants, and of course, Coast Guard has a hand in the port grants. We were looking at some hopeful streamlining of these processes we thought, yet the figures don't seem to suggest that this has worked very well yet. Mr. Fugate. I believe that there is--one of the things that we did was we never had a memorandum of understanding with TSA (Transportation Security Administration) on those grants to make sure we had clarity of our roles and responsibilities to administer the grants as they set the priorities. We have that with John Pistole now, who is the head of TSA. So we are starting to get some of those structures in place. But again, in many cases, an honest question to both you and the Chairman is, given that we have built in flexibility in these grants, given that we have built-in appeals, we oftentimes get requests from Members of Congress to grant these extensions. The flexibility there I think has the unintended consequences that we are not getting these funds expended, and that there always seems to be one more forgiveness to extend it because something came up, something changed, a direction changed. And I think it is the inherent nature of trying to maintain flexibility and retain those funds and to expend it that has in some cases not put any emphasis on getting this project done quicker. I think the 5-year--and I will expect, I will not be surprised that, with 2006 money that will lapse and go back to the Treasury, we will not have requests to see if we can appeal that. The answer is: we don't have the authority. You made it very clear, at 5 years, it is going back to the Treasury. But as we go through this process of giving flexibility, it does build in that in many cases, that urgency to get these funds drawn down gets bogged down in the process of trying to do these projects, deal with changes, and adjust those strategies. Mr. Price. Extending past the 5 years requires a statutory change. Right? I mean, that hasn't been under your discretion. Mr. Fugate. And that is, as far as I am concerned, if we don't--I mean, you have got to basically say, unless Congress gives us any more extensions, which I am not going to ask for or recommend, we have to close these projects. If you couldn't get it done in 5 years, we need to take the money back and put it into Treasury. But I think that it is getting to when you get to the third year, your fourth year, you are still not drawing it down. I understand the complexity of bid protests and environmental and historical reviews, new Governors coming in wanting to stop and review things. I understand all that. But your fourth year? That is troublesome. And in many cases, I think this is where we have to come back and do better work on the front end in trying to make sure that we are not the roadblock, that we are able to provide the grant guidance and that we are able to work with our applicants. But I think because of the flexibility in some of these grants and the changing situation we find ourselves in, we still see tremendous balances that have not been drawn down. NATIONAL FLOOD INSURANCE PROGRAM: LEVEE ACCREDITATION Mr. Price. Right. And I am sure the interventions and the appeals that you are talking about do occur. But the thrust of our efforts over the past several years has been to simply get this process unclogged at the agency and for the potential grantees to know what they are dealing with, what is expected of them, and to have reasonably quick turnaround. We really need to keep pushing on that. I know you agree. And we want to work with you to make that happen. Because if, as the Chairman suggests, current budget decisions are complicated by the fact that these balances are still there, and yet these are moneys that are needed; the demand is there. The purpose is quite clear, I think. We just need to get it done. Speaking of entreaties you and we get from colleagues, let me mention one final subject that has to do with levees. Late last year, many Members lobbied this Subcommittee to include a statutory change to the 2011 bill to prevent FEMA from refusing to account for flood control structures, such as levees, that are not to certain standards when FEMA is updating its flood maps. In other words, they are saying you should have to take some account of these structures. Now, this policy does have an impact, a major impact on flood insurance and related issues for some communities. This statutory change was not included in the omnibus or a full year CR, largely because of the lateness of the issue coming up. It is not that we didn't understand that it had some merit and was important to a number of colleagues. Now, in February, a bipartisan group of 27 Senators wrote FEMA asking the agency to halt its policy of treating levees in need of repair or recertification as if they didn't exist at all. A number of House Members have expressed similar concerns. Lawmakers argued that the agency should instead take into account the level of flood protection that each structure provides, even if that structure is in a weakened state. In early March, FEMA informed congressional leaders that the agency will take into account ailing dams and levees and the risk maps it generates for the National Flood Insurance Program. So I am asking you to fill us in on your intentions going forward. How do you intend to factor in levees that in the past you deemed as nonexistent or you treated as though they were nonexistent while they are being repaired or recertified when you develop risk maps as part of this flood insurance program? Mr. Fugate. Yes, sir. We kept asking the question: Why is this a binary decision? You can see a levee there; it is not fully accredited, but we are going to ignore and then map. But that levee affects the flood. So we basically came back and said, ``We don't have a defensible stand here. We need to do something different.'' And so staff agreed to look at, and what we are going to do is--It is not always an ailing levee. In some cases these are levees that are well engineered, well built, but they may be not quite as high as an accredited levee would be to offer protection for every area behind that levee to get it below 1 percent risk. So this will not always be levees that are in disrepair; it is just a levee system may not provide a reduction of that risk below 1 percent. So what we have asked our staff to go back and look at is-- and this will be an increased cost; it will slow down some of the mapping, but it will be more accurate--to take what the levee structure is as it exists, model the flood risk there, and produce those results. Again, this will not always be levees that are in disrepair. This may just be in areas where the levee system doesn't provide uniformity, minimizing the risk below 1 percent, which would trigger the special risk area for flood insurance but substantial areas would. So why are we not looking at that and just treating it as if it doesn't exit? So our staff is working right now on the technical aspects of how you model levees and dams as they exist to determine what that risk is in setting the rate for the insurance, and recognizing that not having a fully accredited levee is not a binary decision. It will be based upon the structures there, what protection they do offer, and will be based upon that risk. Mr. Price. And you are confident that you can come up with an objective assessment of this, even though binary decisions are sometimes crisper and seem more absolute. Making this kind of calculation certainly makes a lot of sense. You are confident that you can in fact come up with a metric? Mr. Fugate. That was the question we asked was, technically, ``How do we do that?'' They have already worked up some preliminary ideas. They have talked with the engineers and the people that do the evaluation and engineering of levees. And I think we have the ability to classify levees into different categories based upon what those impacts would be and model that. It will cost more money. It will take more time. But it will provide a much more accurate reflection of the risk versus just a binary decision, yes, you have got an accredited levee, or no, you don't. Because I think it was not accurately representing the true risk. And because we used that to base the flood insurance model, it oftentimes resulted in people being in special high-risk areas that would not be necessarily flooded based upon the levee protection offered. Mr. Price. Thank you. Thank you, Mr. Chairman. MOUNT WEATHER: CAPITAL IMPROVEMENT PLANS Mr. Aderholt. Thank you, Mr. Price. Let me close with one last question about Mount Weather. And of course it is a true strategic asset for our country, which houses the operations for management and for all hazard activities for multiple executive branches including the Department of Homeland Security. To address the issues with the aging of the facility, Congress has provided $155 million for capital improvements. I understand that much of the funding remains unspent. My question, what is the status of the capital improvement plans for Mount Weather? Mr. Fugate. Ongoing. That is why we actually reduced the request. We had been requesting a certain amount of capital improvements, and because we have a backlog of contract projects that have not been completed, we did not ask for that amount continuing. We want to get caught up on the work we already have authorized to contractors and the bid selection in that process. So rather than just getting a reoccurring capital, we wanted to get through the backlog of projects that are currently under contract or out to bid to do that work. Mr. Aderholt. What is causing the delay? Mr. Fugate. Sir, as you know, this is a facility that has a lot of--in a setting that is open--I think I have to remind myself to be very careful how I phrase this. But it is a facility that has a lot of unique characteristics that require extraordinary efforts and securing contractors that can operate in that environment. Also, the IT and some of the other infrastructures, it is not just something that we solely have responsibility and authority over. We have other partners we have to engage in. And because of that, we felt that we had a backlog that we were working through. That work is being done in the capital improvement program. But because of that outstanding balance and the work still to be done, we did not feel it was necessary to continue requesting money, although this work will continue. We need to get caught up on the backlog at work, quite honestly, sir. And, Mr. Chairman, I can give you a better briefing on that, but it would have to be a briefing that we would do on a secure level to give you some of the numbers and the breakdowns. Mr. Aderholt. And we may follow up on that. But we thank you for coming here this morning and listening to our concerns and questions. As I stated in my opening remarks, we are in this Nation in a fiscal crisis, one that requires tough decisions and responsible budgeting. That means, as you know, we can no longer fund known requirements through gimmicks or fund programs without having measurable outcomes. And certainly I think you and all of us know that the taxpayers deserve better. So, again, thank you for being here today. Thank for your testimony. Thank you for the work that you do at FEMA. We understand that you have many challenges at the Federal Emergency Management Agency. So we look forward to working with you as we try to address these issues. The hearing is adjourned. 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[GRAPHIC] [TIFF OMITTED] T8060A.843 [GRAPHIC] [TIFF OMITTED] T8060A.844 [GRAPHIC] [TIFF OMITTED] T8060A.845 [GRAPHIC] [TIFF OMITTED] T8060P3.001 I N D E X ---------- Page Science & Technology (S&T)....................................... 1 Biography: Tara O'Toole.......................................... 27 Cybersecurity.................................................... 29 Geospatial Location Devices...................................... 32 National Bio and Agro-Defense Facility........................... 33 Opening Statement: Chairman Aderholt............................................ 1 Ranking Member Price......................................... 6 Under Secretary O'Toole...................................... 11 Portable Emergency Operations Center............................. 32 R&D Funding...................................................... 30 Radiation Detectors.............................................. 33 S&T Priorities................................................... 28 Self-Contained Breathing Apparatus............................... 32 National Protection and Programs Directorate (NPPD).............. 159 Biography: Rand Beers................................................... 179 Phil Reitinger............................................... 181 Opening Statement: Chairman Aderholt............................................ 160 Ranking Member Price......................................... 164 Under Secretary Beers & Deputy Under Secretary Reitinger..... 166 Terrorist Travel: Programs and Funding........................... 239 Biography: Timothy Healy................................................ 245 Kevin K. McAleenan........................................... 246 Geoff O'Connell.............................................. 248 Joseph C. Salvator........................................... 249 Benjamin J. Stefano.......................................... 250 Opening Statement: Chairman Aderholt............................................ 240 WMD Countermeasures: Threat, Programs, and Funding............... 251 Advanced Spectroscopic Portal Devices: Certification Process........................................ 296 Implementing Recommendations................................. 291 Agro-Terrorism................................................... 295 Anthrax Vaccine.................................................. 296 Biography: Warren Stern................................................. 275 Dr. Alexander G. Garza....................................... 284 Biosurveillance.................................................. 287 Biowatch Generation 3: Comparison to Gen-1 & Gen-2.................................. 297 Naturally Occurring vs. Intentional Pathogens................ 301 Pathogen Detection........................................... 299 Testing & Evaluation......................................... 299 Current Threat................................................... 285 Domestic Nuclear Detection Office: Structure & Priorities........ 286 Global Nuclear Detection Architecture: Gaps......................................................... 302 Strategic Plan............................................... 293 Government Shutdown: Contingency Plan............................ 297 Nuclear Forensics................................................ 303 Opening Statement: Chairman Aderholt............................................ 251 Director Stern............................................... 261 Dr. Garza.................................................... 276 Ranking Member Price......................................... 257 Federal Emergency Management Agency (FEMA)....................... 357 Biography: Craig Fugate.......................................... 389 Catastrophic Planning............................................ 411 Data Backup System............................................... 397 Disaster Assistance Overpayments................................. 398 Disaster Relief Fund............................................. 390 Disaster Response: Budget Cuts................................... 412 Federal Emergency Management Agency: Effectiveness............... 403 Grants: Assistance to Firefighters................................... 394 First Responder.............................................. 413 Staffing for Adequate Fire and Emergency Response............ 393 Transit Security and Port.................................... 415 Immigration and Customs Enforcement.......................... 404 Mt. Weather: Capital Improvement Plans........................... 418 National Level Exercise.......................................... 401 National Flood Insurance Program: Coverage..................................................... 394 Levee Accreditation.......................................... 416 Nuclear Crisis: Evacuation Planning.............................. 405 Opening Statement: Chairman Aderholt............................................ 357 Administrator Fugate......................................... 372 Ranking Member Price......................................... 367 Preparedness Capabilities........................................ 400 Remedial Action Management Program............................... 396 Outside Witnesses................................................ 889 William Chandler................................................. 909 Colleen Kelley................................................... 900 William Millar................................................... 916 Jim Mullen....................................................... 911 Patricia W. Potrzebowski......................................... 905 Rep. Silvestre Reyes............................................. 890 Rep. Laura Richardson............................................ 895