[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2012

                              ----------                              


                        THURSDAY, APRIL 14, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Barbara A. Mikulski (chairman) 
presiding.
    Present: Senators Mikulski, Feinstein, Reed, Lautenberg, 
Pryor, Brown, Hutchison, and Murkowski.

                         DEPARTMENT OF COMMERCE

                         Secretary of Commerce

STATEMENT OF GARY F. LOCKE, SECRETARY

            OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI

    Senator Mikulski. Good morning, everybody. The Commerce, 
Justice, Science, and Related Agencies Subcommittee will come 
to order.
    Today, we are going to take the testimony of Secretary Gary 
F. Locke, our Secretary of Commerce. Secretary Locke has also 
been nominated by President Barack Obama to be our Ambassador 
to China. I hope this will be his last hearing before us, not 
because he hasn't done a very good job as Secretary of 
Commerce, but because we know he will play an important role.
    We really think that Secretary Locke brought such 
incredible expertise--not only his own background in the State 
of Washington, but he, as the Governor of the State of 
Washington, had to look within his own State and look outward 
to the Pacific Rim, where there are challenges in everything 
from opportunity, like trade, to the stealing of our 
intellectual property.
    So he brought great skills here, and we want to hear, as he 
reviews the 2012 budget, how he made use of the money we have 
already given him. We have given him close to $8 billion in the 
stimulus money, particularly in important fields like 
broadband.
    He has attacked the U.S. Patent and Trademark Office 
(USPTO) backlog. He ensured that the 2010 census was done, 
inheriting what was, as even Secretary Gutierrez, his 
predecessor, said, ``a terrible mess''; pursued smart grid 
standards; and generally used his keen executive skills to 
clean up some of the things that he had inherited that even 
were deeply troubling to Secretary Gutierrez. And at the same 
time, the Department of Commerce should be one of our main 
innovation, job-creating agencies.
    So we want to hear now, Mr. Secretary, as you look at 2012 
and we look ahead--and we know we need to have a more frugal 
Government, which means a better use of the money we have--we 
also want to know how we can create jobs without having an 
industrial policy of picking winners and losers. We feel that 
the Department of Commerce is important to do this.
    The President's request provides a total of $8.8 billion 
for the Commerce Department, an increase of $800 million. There 
are those that would say that is a staggering event, but pretty 
much, the Department of Defense can blow that on a satellite. 
And I am very prickly about satellites these days.
    But for $8 billion, I think we can get a lot of jobs and a 
lot of value. It is the economic engine, and we look forward to 
hearing more about that.
    As we look at it, we know that within the Department--the 
Commerce Department is really a Department of departments, 
which really poses some significant management challenges. At 
the local level, we know that there is a very small agency, the 
Economic Development Administration (EDA), which, for $325 
million, is supposed to provide financial wherewithal for local 
communities to lower their unemployment rate.
    One of the most important agencies in terms of job growth, 
I feel, at the Department of Commerce, is USPTO, because it is 
our new ideas, well protected through a patent process against 
the theft overtly and covertly of intellectual property, that 
provide us with the new jobs. All of us, going back even to 
Secretary Gutierrez, were deeply troubled by the backlog. We 
would like to hear how you are going to do that.
    We could go agency after agency, but one of the two other 
areas of great keen interest to me is, number one, the 
International Trade Administration (ITA), which is, how are we 
going to be in the trade business? But not only for the big 
boys to sell big things, whether it is weapons systems, 
agriculture, et cetera--that is great. But I worry and think 
about opportunities particularly for small- and medium-sized 
business and how we do that. And I know that will be one of 
your issues as you go even farther back home west.
    On the accountability thing, I am really worried about 
satellites. I worry about the National Oceanic and Atmospheric 
Administration (NOAA) satellite program, where we are on saying 
good-bye to the National Polar-orbiting Operational 
Environmental Satellite System (NPOESS) and hello to the Joint 
Polar Satellite System (JPSS). I worry about keeping our 
contract on track. But I am also worried that we don't go dark 
in our weather forecasting because one of the things that is 
really, I think, an important role of the Department of 
Commerce and NOAA is its weather forecasting.
    I will elaborate more on that on my time in my questions. 
So we want to hear about the problems you have solved, and how, 
with the money that the President is proposing, how you see 
this as a job-generating, opportunity-generating, intellectual 
property-protecting agency.
    Senator Hutchison.

           OPENING STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. Well, thank you, Madam Chairman.
    I agree very much with the chairwoman regarding USPTO. If 
there is anything that is essential for us to bring our 
entrepreneurs and our new ideas into productivity, it is USPTO 
and also to protect them. So I hope that we are making progress 
in the backlog there, and I support that priority.
    I also am very supportive of and concerned about weather 
prediction and modification. Living on the Gulf of Mexico, I 
have seen how the predictions have saved hundreds of thousands 
of dollars and at least hundreds of lives because I saw in 
Hurricane Ike the ability to tell people exactly when the 
hurricane was going to hit and to have evacuations that allowed 
for safety.
    However, of course, JPSS, which is essential for that kind 
of tracking and prediction, seems to be troubled. And as of 
now, the reorganization for that program is not being funded. 
So I think we need to hear about that particular project and 
what is going to right that ship.
    And I have to also mention that I have introduced a 
weather-modification bill for the last four sessions of the 
Congress, just to try to get NOAA to be able to do the research 
that would be necessary to know where weather modification 
science is. And if you have cloud seeding in the Midwest, what 
does it do to the Northeast? And I think we need to study that, 
and NOAA used to do it, but about 20 years ago, they stopped.
    And I think we need to know more basic science, and we also 
need to use that to determine if we should or should not engage 
in weather modification, and particularly with the ferocity of 
hurricanes and the damage that is now doing to our country 
from--obviously, we saw Katrina, but all the hurricanes just 
produce a massive destruction path.
    And if there is weather-modification information that we 
could glean, I think it would be wise to make that investment. 
But we have never been able to get the support, really, of any 
administration, including the last one, to do that. And so, I 
would like to pursue that with you.
    Last, but not least, I do want to say that I hope that 
through the capabilities that you have in your Department 
regarding trade, that we will see more movement in the free 
trade agreements, particularly with Colombia and South Korea. 
We need to assure that we are doing everything we can to 
support Colombia, which has cleaned up its drug problems, and I 
think we need to do everything to help their economy with ours 
at the same time.
    And I think we should be pursuing free trade agreements 
throughout Central and South America because I think that is 
where our best potential trading alliances are.
    So, with that, I thank you, Madam Chairman.
    And I will also end by saying that you have done a very 
good job. You really have, and we will miss you, as you take 
off for your new assignment in China. But I think you are a 
good choice for that position, and I think you will represent 
our country very well.
    So, with that, good luck to you in the future. And for the 
same reason as the chairwoman said, I hope that we don't see 
you in this subcommittee again.
    Thank you.
    Senator Mikulski. Secretary Locke, why don't you proceed 
with your testimony, and then we will move to immediate 
questions.

                   SUMMARY STATEMENT OF GARY F. LOCKE

    Secretary Locke. Thank you very much, Chairwoman Mikulski 
and Ranking Member Senator Hutchison and distinguished members 
of the subcommittee. I am pleased to join you to talk about the 
President's budget request for the Department of Commerce for 
fiscal year 2012.
    Since I joined the Department of Commerce 2 years ago, we 
have focused on delivering our services more efficiently and at 
less cost to the taxpayers, and those efforts have paid off. As 
the chairwoman indicated, the 2010 census was completed on 
schedule and under budget, returning $1.9 billion to the 
taxpayers. That was more than 25 percent under budget for 
fiscal year 2010.
    Our EDA has cut the time it takes to award grants from 6 
months to less than 1 month--18 business days to be precise. 
The USPTO, when the President took office, had a backlog of 
some 800,000 applications. We reduced that by 10 percent last 
year, even as applications surged by 7 percent. And in just a 
few weeks, applicants will be able to seek ``express service'' 
to have their patents evaluated within 1 year for a very small 
extra fee.
    The Congress, during both the Bush and Obama 
administrations, gave the Department of Commerce some $2 
billion to prepare the Nation for digital television 
conversion. Ninety-nine percent of the households successfully 
made that conversion without any interruption in their 
broadcasting, and yet we achieved that program 25 percent under 
budget, returning to the Treasury some $500 million.
    Our smart grid program: we have been able to develop 
standards with the private sector. We have accomplished within 
18 months what took the telecom industry almost 5 to 7 years to 
develop by way of standards.
    So our efficiencies and cost savings are not one-time 
achievements. We have instituted comprehensive performance 
management processes throughout the Department, which should 
help our reforms stand the test of time.
    It is in this context of proven savings and performance 
that I hope the subcommittee will consider Commerce's fiscal 
year 2012 budget--a request that is, as the President has said, 
a down payment for resolving our long-term fiscal problems.
    Our 2012 budget request is lean. It cuts out outdated 
programs and drives major efficiencies in others, and our 
budget incorporates $142 million in savings, thanks to 
aggressive acquisition reform and other administrative savings.
    At the same time, it contains key investments that will 
help America win the future by spurring innovation, increasing 
America's international competitiveness, and supporting 
scientific research. These are the core missions of the 
Department of Commerce.
    On the innovation front, the Department of Commerce is 
responsible for providing the tools, systems, policies, and 
technologies that give U.S. businesses a competitive edge in 
world markets. That is why we are requesting additional funds 
for our National Institute of Standards and Technology (NIST), 
including an increase of more than $100 million for research 
into advanced manufacturing technologies, health information 
technology, cybersecurity, as well as interoperable smart grid 
technology.
    These investments in standard-setting and in basic 
research, which are often too risky or too expensive for the 
private sector alone, have historically spurred waves of 
private sector innovation and jobs.
    To further support innovation, our 2012 budget also 
requests that USPTO gain full access to its fees so that we can 
expand the already substantial reforms undertaken by Under 
Secretary David Kappos, working with our line staff, labor 
organizations, and career managers. These reforms will help get 
cutting-edge inventions and technologies into the marketplace 
quicker, which will create even more jobs.
    The Commerce Department, through our ITA, is playing a key 
role in the President's National Export Initiative, which seeks 
to double U.S. exports by 2015. And American companies, 
especially small and medium-size ones, rely heavily on our 
Federal Government support available under the National Export 
Initiative, and I hear about it everywhere we go. These 
companies often face significant hurdles in getting access to 
working capital to produce the goods that they want to sell 
abroad, and they are having difficulty finding reliable 
customers and vendors, foreign customers and vendors for their 
goods and services.
    Our ITA helps many companies clear these hurdles. Last 
year, we helped more than 5,500 U.S. companies export for the 
first time or significantly increase their exports. These are 
primarily small, medium-size companies. And we coordinated an 
unprecedented 35 trade missions to 31 different countries, and 
our efforts are paying off. With United States exports up 17 
percent last year over 2009, exports to China were up. Goods 
exports to China were up by 32 percent and exports so far this 
year are 15 percent more than last year's impressive gains. In 
fact, exports in the month of January reached their all-time 
high in U.S. history.
    And for fiscal year 2012, the budget envisions more funds 
for activities like business-to-business match-making services 
and identifying and tackling and resolving trade barrier issues 
that U.S. companies face around the world.
    Finally, I want to touch on the critical work done by our 
NOAA, an agency that is a key source of scientific information 
and increasingly critical to America's economy. Last year, NOAA 
played a pivotal role in responding to the BP Deepwater Horizon 
oil spill by responded by providing targeted weather forecasts, 
oil spill trajectory maps, and by ensuring the safety of gulf 
seafood.
    Several weeks ago, NOAA issued its first tsunami warning 
just 9 minutes after the tragic earthquake struck Japan. NOAA 
was able to so quickly sound the alarm because of strong 
congressional support. In 2004, before the tsunami that struck 
Indonesia, NOAA had only six buoys in the Pacific to detect 
seismic and wave activity. But today, thanks to the Congress, 
we now have 39 such buoys.
    The work that NOAA does to predict and respond to weather 
and natural disasters saves communities. It saves them money, 
and most importantly, it saves them lives.
    What I have discussed, of course, is just a fraction of 
what the Commerce Department does. We are a Department of many 
bureaus, but there is one common theme--to help American 
companies be more innovative at home and competitive around the 
world.

                           PREPARED STATEMENT

    I would like to direct you to our written testimony for 
more detail on what our Department does. In the meantime, I am 
more than happy to take your questions.
    [The statement follows:]

                  Prepared Statement of Gary F. Locke

                              INTRODUCTION

    Chairwoman Mikulski, Ranking Member Hutchison, and distinguished 
members of the subcommittee, I am pleased to join you today to talk 
about the President's budget request for the Department of Commerce for 
fiscal year 2012. I very much appreciate the commitment this 
subcommittee's members show to the Department and our mission.
    Since I joined the Department of Commerce 2 years ago, we have been 
focused intently on two key priorities: helping American businesses be 
more innovative at home and more competitive abroad. Our fiscal year 
2012 budget request reflects those priorities with investments to spur 
innovation, increase our international competitiveness and support 
scientific research and our coastal communities.
    Our innovation agenda is focused on building a foundation for 
private-sector economic growth and empowering entrepreneurs and 
businesses large and small to invent, grow and hire.
    That's why our Economic Development Administration (EDA) is working 
to help local communities identify their own unique strengths and 
develop regional economic clusters. Rather than pursuing a one-size-
fits-all approach, EDA is supporting private-public partnerships' 
bottom up strategies to respond to changing regional conditions and has 
more than halved the response time for its grant applications--from 128 
to 20 business days.
    To make it easier for groundbreaking ideas to move from research 
labs--or an inventor's garage--and into the marketplace, we're 
reforming the U.S. Patent and Trademark Office (USPTO) to accelerate 
patent examination and improve patent quality. We overhauled management 
processes at USPTO, and cut the application backlog by 10 percent, even 
as the volume of applications has increased by 7 percent.
    As the Department works to strengthen American businesses at home, 
we've also played a lead role in the President's National Export 
Initiative (NEI), working to connect more U.S. businesses to the 95 
percent of consumers who live beyond our borders.
    It's important to note that although the United States is a strong 
exporter, only 1 percent of our companies export and of those that do, 
58 percent only sell to one market. We can and must do better.
    While the quality and costs of American companies' goods and 
services ultimately determine their success in the international 
marketplace, many firms--especially small and medium-size enterprises--
rely heavily on the Federal Government support available under the NEI.
    These companies often face significant hurdles in:
  --Getting access to working capital to produce the goods they want to 
        sell abroad;
  --Navigating complex foreign customs, rules, and regulations;
  --Forging relationships with key foreign governmental and business 
        decisionmakers; and
  --Ensuring they get a fair shake when competing with other foreign 
        firms for lucrative government procurement contracts.
    The Commerce Department is working successfully with our partners 
throughout the administration to help companies clear these hurdles.
    Last year, U.S. exports of goods and services increased nearly 17 
percent more than 2009--the largest year-to-year percent change in 20 
years. This puts us on pace to achieve the President's goal of doubling 
American exports over 5 years. During the first year of the NEI, the 
Department assisted more than 5,500 U.S. companies to export for the 
first time or increase their exports. Small and midsize businesses made 
up 85 percent of those successes. Our International Trade 
Administration (ITA) coordinated an unprecedented 35 trade missions to 
31 different countries, with nearly 400 companies. Participating firms 
anticipate $2 billion in increased exports from these missions. In 
addition, ITA's Advocacy Center has assisted U.S. companies competing 
for international contracts, and other U.S. export opportunities, worth 
$18.7 billion in U.S. export content, supporting an estimated 101,000 
jobs. We've recruited nearly 13,000 foreign buyers to visit major trade 
shows here in the United States, facilitating approximately $770 
million in export successes and supporting more than 4,100 domestic 
jobs. And, ITA has successfully resolved 82 different trade barriers in 
45 countries that were adversely impacting a broad range of industries. 
This includes successfully encouraging Russia to enact a World Trade 
Organization compliant law that provides authority for its customs 
officials to interdict suspected counterfeit goods.
    In addition, through the work of the Minority Business Development 
Agency, Commerce assisted more than 6,600 minority business enterprises 
in attaining almost 1,000 contracts and more than 500 financial awards, 
with a combined dollar value of $4 billion.
    Part of the reason why we have been so successful at increasing our 
assistance to U.S. businesses is that the Department's senior 
leadership is focusing everyone on delivering their services more 
efficiently, more effectively and at less cost. We can also help 
American companies thrive by making the Commerce Department run better, 
which has been a top priority of mine and my entire management team.
    Consider the 2010 census, an undertaking that many experts 
identified as ``likely to fail''. The experts were proved wrong, as the 
2010 census was completed on schedule and under budget, saving 
taxpayers $1.8 billion.
    Commerce has worked extensively with the White House on the 
National Strategy for Trusted Identities in Cyberspace, which is an 
initiative to work collaboratively with the private sector, advocacy 
groups, privacy experts and public sector agencies, to improve the 
privacy, security, and convenience of sensitive online transactions. 
The goals of the Strategy are to protect individuals, businesses, and 
public agencies from the high costs of cyber crimes like identity theft 
and fraud, while simultaneously helping to ensure that the Internet 
continues to support free speech, innovation, and a thriving 
marketplace of products and ideas. The final strategy is set to be 
released shortly, fulfilling one of the near-term action items of the 
President's Cyberspace Policy Review. Its implementation will be led by 
the Department of Commerce's National Institute of Standards and 
Technology (NIST), which plans to set up a program office to coordinate 
Federal activities and bring the public and private sector together.
    A year after I arrived at Commerce, the Department stepped into a 
pivotal event with the explosion of the BP Deepwater Horizon oil rig on 
April 20, the largest oil spill in U.S. history. Within hours the 
National Oceanic and Atmospheric Administration (NOAA) responded by 
mobilizing ships, aircraft, and personnel to provide targeted weather 
forecasts and oil spill trajectory maps and EDA applied resources to 
help gulf communities. ESA provided the data needed to estimate the 
economic impact while NOAA-protected gulf seafood through closures and 
careful reopening of fisheries in Federal waters. We learned through 
the BP Deepwater Horizon oil spill and other events that we cannot have 
healthy economies without healthy communities and healthy ecosystems 
and that good science and stewardship is good business.
    The destruction and loss of life resulting from the catastrophic 
disaster in Japan are heartbreaking. Nine minutes after the March 11 
earthquake struck, NOAA issued its first tsunami warning for Japan, 
Russia, Marcus Island, and the Northern Marianas Islands as part of the 
coordinated global response to this tragic natural disaster. Shortly 
thereafter, timely watches, advisories, and warnings were extended to 
vulnerable coastal areas of Alaska, British Columbia, Washington, 
Oregon, and Hawaii well ahead of the arrival of the first waves. The 
NOAA-developed Deep-ocean Assessment and Reporting of Tsunami (DART\\) 
stations detected and tracked the tsunami as it traveled from Japan 
across the Pacific Basin. The NOAA-issued tsunami warnings along with 
its education efforts allowed communities both here and across the 
globe to take action that saved lives and reduced property damage.
    America is still in the process of economic recovery, and we at the 
Commerce Department must continue to build upon the past 2 years of 
successes. The President's fiscal year 2012 budget request for the 
Commerce Department makes tough choices--many of them reductions to 
programs that we might like to continue under normal economic 
conditions. But we also have the responsibility to prioritize 
investments in those things that are critical to winning the future. 
The President's request recognizes that this is only possible when the 
United States out-educates, out-innovates, and out-builds our economic 
competitors. For that reason, the fiscal year 2012 request for the 
Department of Commerce makes several targeted reductions and is 
focusing on organizational effectiveness in order to focus on 
investments in innovation, international competitiveness and science as 
well as supporting our coastal communities--to spur job creation here 
at home and improve American competitiveness in the global marketplace.

                               REDUCTIONS

    With his fiscal year 2012 request, President Obama pledged to root 
out ineffective, outdated, or duplicative programs to cut or reform, 
taking further steps toward reducing our long-term deficit. In all, the 
Department's fiscal year 2012 budget proposes ending, reducing, or 
restructuring more than 15 lower-priority programs.
    First, this budget cuts what is ineffective and outdated. For 
example, the Emergency Steel Loan Guarantee program made its last 
guarantee in 2003, and its elimination alone results in $43 million in 
savings. Other reductions reflect the need to transition to new funding 
models, as in NIST's Baldrige Performance Excellence Program. To 
transition the program to be completely privately funded, the program's 
funding is reduced by $2 million.
    Second, hard choices were made among competing priorities. The 
termination of the Public Telecommunications Facilities, Planning, and 
Construction (PTFP) program saves $20 million, and streamlines the 
current structure under which both the PTFP and Corporation for Public 
Broadcasting programs fund equipment for noncommercial television and 
radio stations.
    Last, this budget strives for efficiency. The proposal to 
restructure ITA saves $20 million through the streamlining of 
administrative functions, closing some overseas posts, and focusing on 
high-priority markets and industries.
    By eliminating the Trade Adjustment Assistance for Firms program, 
discontinuing the Trade Adjustment Assistance for Communities program, 
and ramping up the Economic Adjustment Assistance (EAA) program, our 
Economic Development Administration will be able to get funding out 
more quickly and at a much lower cost to areas disrupted by import 
competition or other factors. EAA is the most flexible program in EDA's 
toolbox, tailoring economic recovery strategies to communities' needs 
with far lower overhead costs than Trade Adjustment Assistance. The 
elimination saves $15.8 million.
    We also took a hard look at our statistical programs and products 
within this budget, eliminating six statistical programs and reducing 
funding in three others at the Census Bureau, for a savings of $16 
million. We targeted programs, such as the separate publication of E-
Business statistics that had, over time, been incorporated into other 
data collection efforts, thereby achieving greater efficiency.
    But by far, our top saving initiative focuses on reforming the way 
the Commerce Department does business. We are doing more while spending 
less. We plan on saving $142.8 million in fiscal year 2012 as part of 
the President's Administrative Efficiency initiative. The Department is 
digging into how we handle acquisitions and other administrative 
functions to find places where we can leverage our buying power. We 
have a six-point plan to reform acquisitions in order to deliver 
greater savings, greater results and greater efficiencies. Specific 
measures include saving taxpayers $57 million in fiscal year 2012 
through bulk buying and other smart purchasing strategies, stronger 
metrics to measure and increase performance, a new approach to 
requirements definition and validation, an enterprise-wide approach to 
identifying and managing high-risk projects, and a new Center of 
Excellence to best serve every bureau within the Department. Last, we 
anticipate savings in information technology through data center 
consolidation and slowing the replacement cycle for computer hardware.

                              INVESTMENTS

    At the same time the fiscal year 2012 budget makes some tough but 
responsible choices that will put Government on a sounder financial 
footing, it also reflects this administration's commitment to invest in 
areas that will help create jobs here at home and better position 
America in an increasingly competitive global economic environment. 
Because of the savings discussed above, the Department is able to 
reinvest $39.2 million to strengthen valuable programs. The budget does 
this by focusing investments in innovation, international 
competitiveness, science, and support for coastal communities.

Innovation
    In his State of the Union Address, the President said: ``The first 
step in winning the future is encouraging American innovation'', and he 
promised to deliver a budget that would ensure the Nation's ability to 
achieve that goal. The Department of Commerce is responsible for 
providing the tools, systems, policies, and technologies that give U.S. 
businesses a technological edge in world markets. Key components of the 
Department's innovation tools are:
  --NIST's cutting-edge research laboratories;
  --USPTO's protection of intellectual property that fosters the 
        entrepreneurial spirit;
  --the EDA's regional innovation clusters; and
  --the National Telecommunications and Information Administration's 
        (NTIA) efforts to accelerate the adoption of a wireless 
        interoperable network for public safety, optimize the use of 
        Federal spectrum, and increase broadband access.
    NIST is a key agency identified in the President's Plan for Science 
and Innovation, the administration's Innovation Strategy, and the 
America COMPETES Reauthorization Act--which the Congress approved with 
broad bipartisan support at the end of last year. For fiscal year 2012, 
the Department is requesting $763.5 million for NIST laboratories, 
which includes an increase of more than $100 million for research into 
advanced manufacturing technologies, health information technology, 
cybersecurity, interoperable smart grid technology, and clean-energy 
research and development.
    In fiscal year 2012, NIST will also expand its extramural programs 
to support technological innovation through a request of $75 million 
for the Technology Innovation Program, an increase of $5.1 million, to 
continue to fund high-risk, high-reward research competitions in areas 
of critical national need such as advanced robotics and intelligent 
automation, manufacturing, energy, and healthcare. NIST is also 
launching a new Advanced Manufacturing Technology Consortia (AMTech) 
Program, a public-private partnership program for industry-led research 
and development (R&D) aimed at increasing the Nation's return on 
scientific investment, collapsing the timescale of technological 
innovation, and ultimately expanding the value added captured by the 
domestic economy for emerging technologies. The $12.3 million requested 
for the program will provide grants to industrial consortia to develop 
roadmaps for research that will broadly benefit our Nation's industrial 
base.
    NOAA's atmospheric and ocean, coastal, and Great Lakes research 
programs turn scientific discovery and innovation into products and 
services for our communities and businesses. The President's budget 
request for 2012 includes $212 million for the Office of Oceanic and 
Atmospheric Research (OAR). NOAA is proposing to strategically realign 
this existing core research line office to better support the goals of 
the America COMPETES Reauthorization Act of 2010. OAR will refocus its 
work to serve as an innovator and incubator of new science, 
technologies, and applications, and an integrator of science and 
technology across all of NOAA.
    A prime example of NOAA's work in advancing innovative technologies 
for weather forecasting is the adaptation of naval radar technology for 
use in severe weather and tornado forecasting. Multi-function Phased 
Array Radar, developed by the Navy for use on ships, is being adapted 
by NOAA and its partners, for severe weather forecasting. This work is 
improving the average lead time for tornado warnings. NOAA is also 
leading the way in weather and climate modeling and research. Since the 
1980s, NOAA has more than doubled the accuracy of hurricane track 
forecasts. And public and private sector decisionmakers look to NOAA 
for climate products such as the air-freezing index to provide home 
builders with information on which to design home foundations. Also, in 
fiscal year 2012, the President's budget invests $2 million to advance 
our capabilities to understand and forecast atmospheric conditions to 
support wind energy generation in the United States.
    USPTO's work in fostering innovation is a crucial driver of job 
creation, economic recovery, and prosperity. American innovators and 
businesses rely on the legal rights associated with patents in order to 
reap the benefits of their innovations. Processing patent applications 
in a quality and timely manner establishes a business environment that 
cultivates new ideas, technologies, services, and products by ensuring 
their protection. USPTO has committed to taking action on a patent 
application within 10 months by 2014--a significant reduction from the 
slightly more than 2 years on average it currently takes to first 
address a patent application. The current backlog of more than 700,000 
patent applications stands as a barrier to innovation and economic 
growth. USPTO has committed to reducing the patent backlog to less than 
353,000 by 2014. The fiscal year 2012 budget for USPTO continues to 
request full access to fees, which is estimated at about $2.7 billion 
for fiscal year 2012. The request allows USPTO to levy a 15 percent 
surcharge to optimize patent and trademark quality and timeliness. 
Doing so will aid intellectual property policy, protection, and 
enforcement worldwide.
    The fiscal year 2012 budget also supports innovation and economic 
opportunity by ensuring taxpayer investments in broadband are managed 
responsibly and achieve results. In fiscal year 2012, NTIA will 
continue its work in fostering greater access to and use of broadband 
services throughout the Nation. NTIA completed the award of its 
broadband grants at the end of fiscal year 2010 and now the funded 
projects are being implemented. The projects will be built between now 
and fiscal year 2013. The fiscal year 2012 budget includes funding for 
proper oversight of the program to guard against waste, fraud, and 
abuse by the grantees--many of whom have never received a Federal grant 
before.
    The Department's establishment of the Broadband Technology 
Opportunities Program (BTOP) from the ground-up has yielded some 
valuable lessons and insights that may be applied to future 
initiatives, including the President's Wireless Initiative. A key 
finding is that the strongest, most sustainable project proposals are 
those where communities take a comprehensive approach in defining their 
critical broadband needs. In the BTOP context, we refer to these as 
``comprehensive community infrastructure projects'' because they engage 
a wide range of local partners, addressing the needs of multiple target 
groups and leveraging public and private resources. Connecting anchor 
institutions, including local public safety first responders, or 
improving their connection speeds can have a multiplier effect 
throughout a community: as residents discover the benefits of broadband 
access at work or at school, they are generally more likely to adopt 
broadband at home. This is a lesson I believe can and should be applied 
to similar programs going forward.
    The Department will also receive about $1.5 billion in mandatory 
funding to be offset by spectrum auctions to support the President's 
Wireless Innovation and Infrastructure Initiative (WI3). NTIA, along 
with the Federal Communications Commission, will find 500 MHz of 
spectrum within 10 years that can be applied to commercial purposes in 
support of WI3. Of this funding in fiscal year 2012:
  --$1.4 billion would be for NTIA to establish and develop a 
        nationwide interoperable public safety broadband network;
  --$100 million would be for NIST to work with industry and public 
        safety organizations to conduct research and develop standards, 
        technologies, and applications to advance public safety 
        communications; and
  --$20 million for EDA to accelerate the development of innovative 
        wireless applications that can accelerate job creation and 
        promote the competitiveness of the regional economy.

International Competitiveness
    The Department of Commerce embraces its core mission to improve 
U.S. global competitiveness and foster domestic job growth--and to do 
so while protecting American security. The President's fiscal year 2012 
budget request will increase U.S. exports, ensure effective export 
control and trade compliance, and make certain that trade remedy laws 
are enforced.
    Exporting is good for American business, good for American workers, 
and good for American jobs. That is why President Obama announced NEI 
and set the goal of doubling U.S. exports over 5 years to support 
several million American jobs and foster long-term sustainable economic 
growth.
    We jump-started the NEI in fiscal year 2010 by pursuing new 
relationships with the business community. In addition, as previously 
mentioned we led a record 35 trade missions to 31 countries with 400 
companies to promote industries including renewable and nuclear energy, 
as well as infrastructure, construction, and aerospace. One recent 
example of a successful trade mission involved Suniva, based in 
Atlanta, Georgia, which manufactures high-efficiency silicon solar 
cells and high-power solar modules using low-cost manufacturing 
techniques. The company is focused on the mass adoption of high-
efficiency photovoltaic technology and the significant economic, 
social, and environmental benefits it brings to the world community. 
The company found potential partners on a clean-energy trade mission to 
India in 2009. They returned the next year with the ITA and secured 
several long-term customers with an estimated value of $18.7 million.
    With a relatively small and strategic Federal investment in export 
promotion, we can build upon our aggressive efforts to help American 
companies sell their American-made goods overseas. The fiscal year 2012 
budget request for the ITA includes an increase of $78.5 million to 
support NEI-related efforts, which will encourage new companies to 
export, and help current exporters expand to more markets. These 
efforts mean leading more trade missions; helping U.S. companies win 
more foreign procurement bids; bringing more foreign buyers, 
distributors, and partners to U.S. trade shows; and providing more 
business to business matchmaking services to U.S. companies. In 
addition, a key part of the NEI involves ITA's continued work to assist 
companies and create trading opportunities by identifying, overcoming, 
and resolving trade policy issues and ensuring that our trading 
partners fully meet their obligations under our trade agreements.
    The Bureau of Industry and Security (BIS) advances U.S. national 
security, foreign policy, and economic objectives by ensuring an 
effective export control and treaty compliance system, and by promoting 
continued U.S. leadership in strategic technologies. A major 
administration-wide effort to reform the current morass of bureaucracy 
that constitutes our export control regime is underway. Our focus, 
quite simply, is to build higher fences around fewer items--to focus 
resources on protecting those products that are truly sensitive. The 
fiscal year 2012 budget recognizes the important role of BIS programs 
and supports the national security mission with a request of $111.2 
million. This includes an increase of $10.8 million for an Export 
Enforcement Enhancement initiative that increases staff for counter 
proliferation, counter-terrorism, and national security programs and 
investigations.
    Another key priority for the Department is strengthening the 
Nation's cybersecurity infrastructure, which is vital to the economic 
and national security interests of the United States. The fiscal year 
2012 budget requests an increase of $81.3 million for cybersecurity, of 
which $37.9 million secures Commerce Department systems and $43.4 
million supports NIST's work on the U.S. Government and national 
security infrastructure.

Science
    The Department of Commerce also supports science with a focus on 
generating and providing timely data and analysis to support effective 
decisionmaking by policymakers, businesses, and the public. Before 
discussing other science-related initiatives, I'd like to speak on the 
NOAA's Joint Polar Satellite System--JPSS.
    For fiscal year 2012 we are requesting $1.07 billion for JPSS, an 
increase of $687.8 million more than the fiscal year 2010 enacted. This 
large increase reflects the impact of not receiving our fiscal year 
2011 request for this vital program. Even with this large increase, we 
are looking at a 12-18 month delay in the delivery of the first 
satellite and a very high likelihood of a gap in our polar satellite 
coverage. Continued inadequate funding only further jeopardizes this 
program. JPSS is essential for the Nation and provides the backbone of 
all National Weather Service forecasts beyond 48 hours. Without JPSS, 
our ability to provide timely and accurate weather forecasts and severe 
storm warnings for both civilian and military users will significantly 
diminish, thereby placing lives, property, and critical infrastructure 
in danger.
    While we all wish that the predecessor NPOESS program had not had 
the history it did, the administration created a new structure that 
works, and we need this funding to ensure we can continue to provide 
this essential service to the Nation. I look forward to working with 
you to resolve this issue.
    Finding the resources for JPSS was not easy. It was one of the 
tough choices the Department had to make and is one of several major 
science-related initiatives in the fiscal year 2012 request. The 
President's fiscal year 2012 request supports steps needed to improve 
the understanding of our climate and proposes a no-cost reorganization 
within NOAA: establishing a Climate Service line office. NOAA spends 
more than $350 million on climate science and decision support, with 
the majority of spending spread across three different line offices. 
The current arrangement complicates coordination and the ability for 
NOAA to provide information to decisionmakers who can use it--whether 
it's local governments looking at meeting a growing community's water 
needs, State governments looking at building a new road or bridge, or 
businesses looking at long-term site locations and investments. This 
new line office will allow NOAA to more effectively and efficiently 
provide reliable and authoritative climate data, information, and 
decision-support services. The climate service is primarily about 
providing one place for people to go to access and be able to use the 
data we are already gathering--at no additional cost to taxpayers. A 
streamlined Climate Service would increase NOAA's ability to more 
efficiently and effectively respond to the demands we are hearing from 
businesses and communities for science based climate information to 
help them make sound investments that lead to economic growth and 
innovation, and improve public safety.
    The Bureau of Economic Analysis (BEA) provides the tools to 
identify the drivers of growth and fluctuation, and to measure the 
long-term health and sustainability of U.S. economic activity. One of 
the most valuable services the Department provides both the business 
community and policy makers are timely, accurate, and reliable economic 
data to inform their decisionmaking. These key decisionmakers would 
benefit from innovative statistical tools updated for the dynamic 
changes in the U.S. economy to make evidenced-based choices about 
growing their businesses and creating policy that fosters economic 
expansion. To answer this demand, BEA will focus in fiscal year 2012 on 
producing new economic statistics and tools to enhance its evaluation 
of the economic performance of U.S. industries. The fiscal year 2012 
request invests an additional $10.3 million to create these new 
products, which includes a new suite of statistics showing the 
purchasing power of American households and how it varies across 
different households and over time. This will give small businesses 
information they need to grow.
    The U.S. Census Bureau is the premier source of information about 
the American people and our economy. More than just numbers, this 
information supports important policy decisions that help improve the 
Nation's social and economic conditions. The Census Bureau completed 
the 2010 census and has turned to releasing that data. In the fiscal 
year 2012 request, the Census Bureau turns its attention to early 
planning for the 2020 census with a focus on cost containment, 
including an Internet option, and identifying research-based design 
options. The fiscal year 2012 budget includes $69.3 million to begin a 
3-year research and testing phase for the 2020 census--with a goal of 
designing a census that costs less per household while maintaining 
quality. The fiscal year 2012 budget also includes money to ramp-up for 
the economic census, which collects data every 5 years from all 
businesses in America to provide information that is used throughout 
the private and public sectors and that is vital to producing accurate 
economic statistics.
    The Census Bureau's demographic statistics programs provide 
policymakers with social and economic data needed to make effective 
policy and program decisions as well as provide source data used to 
create the U.S. official measures of employment, unemployment, consumer 
prices, poverty, and widely used measures of income and health 
insurance coverage. The American Community Survey (ACS) provides the 
primary source of demographic and economic data for small geographic 
areas. As the Federal Government's most comprehensive demographic 
survey, ACS results are used to distribute more than $400 billion in 
Federal funds. The fiscal year 2012 budget requests $8.8 million to 
complete the expansion of the ACS sample size to improve the 
reliability of the data at the tract level.

Coastal Communities
    The Department of Commerce has the responsibility to sustainably 
manage our Nation's oceans and coasts to promote economic 
sustainability and to ensure that future generations will also have the 
ability to enjoy and earn their livelihoods from these same resources. 
Impacts to water quality, fish stocks, and coastal habitat all impact 
our coastal communities through potential reductions in local fishing 
businesses that are the heart of so many coastal communities, tourism, 
and storm protection.
    The National Marine Fisheries Service (NMFS) manages living marine 
resources throughout the Nation's coastal zone and protected areas. We 
are faced with the challenge of ending overfishing, improving fisheries 
management, and putting fisheries on a path to sustainability. Working 
with the Regional Fishery Management Councils, in fiscal year 2010, 
five fisheries stocks were rebuilt. Based on estimates, rebuilding U.S. 
stocks has the potential to increase the annual commercial dockside 
value by 54 percent, which is an estimated $2.2 billion. The fiscal 
year 2012 budget requests $1 billion for NMFS, $7 million less than the 
fiscal year 2010 enacted. Within the request, $54 million is to provide 
start-up costs for fisheries recently shifting to catch share programs, 
and to develop new catch share programs that incentivize more effective 
fisheries management. Recognizing the importance of increasing the 
number and timeliness of stock assessments, a total of $67 million, 
including $15 million to expand annual stock assessments which provide 
the scientific basis for setting appropriate catch limits.
    Our oceans, coasts, and marine resources are a source of untold 
wealth. America has 95,000 miles of shoreline and the world's largest 
Exclusive Economic Zone at 3.4 million square nautical miles. The 
oceans and coasts provide many goods and services to the Nation, 
including food from wild fisheries and aquaculture, goods from maritime 
commerce, ship and boat building, energy, minerals, tourism, 
recreation, and pharmaceuticals. Nearly 80 percent of U.S. import and 
export freight is transported through seaports. The fiscal year 2012 
budget requests $559.6 million for NOAA's National Ocean Service (NOS), 
including $8 million to support a National Working Waterfronts grant 
program to assist fishing dependent coastal communities adversely 
impacted by changes in regulations or environmental conditions that 
affect fishing resources on which the community depends and $20 million 
in grants to support regional partnerships for the development of 
comprehensive coastal and marine spatial planning.

Organizational Effectiveness
    The Department of Commerce is also committed to organizational 
effectiveness and is undertaking a number of initiatives to streamline 
Government and improve how we deliver existing services to businesses 
and other customers. Through CommerceConnect, we are working to connect 
our infrastructure of web portals and customer service technologies, 
call centers, field offices in 18 cities, and training for customer-
facing staff among the Commerce Department bureau's and their 70+ 
business-supporting programs. We recognize that the needs of any given 
business do not stop within Commerce's organizational boundaries. We 
are working with other Federal, State and local governments, and 
nonprofit partners to build customer service infrastructure to connect 
businesses to the right resources. CommerceConnect is designed to break 
down silos and make Government and partner programs more effective in 
serving America's businesses and entrepreneurs.

                               CONCLUSION

    Ultimately, the fiscal year 2012 budget request for the Department 
of Commerce is a roadmap for winning the future by helping American 
companies be more innovative, export more, and create and sustain the 
jobs of the future. The budget strikes a balance between the necessity 
of responsible reductions that reduce spending with targeted, crucial 
investments in foundational R&D on technologies that will lead to 
private sector job creation and help America out-innovate and out-build 
its economic rivals.
    Thank you for the opportunity to appear before you today. I look 
forward to answering your questions.

    Senator Mikulski. Thank you, Secretary Locke.
    I have questions in the area of USPTO, NIST, their cyber 
role, and also the National Telecommunications and Information 
Administration. If I don't get it in the first round--I want to 
be sure that all members have a chance, that we will move this 
along, and others I will do in my own wrap-up.
    What I want to bring to the Members' attention because I 
know, look at the attendance here today, this is great, either 
we don't have a lot of hearings or we have a lot of interest, 
either way.
    Senator Hutchison. You better worry, Secretary. This looks 
like the war department to me.
    Senator Mikulski. So this is the A-team here. This is 
nothing compared to confirmation, though.

                             USPTO BACKLOG

    I would like to say this to my colleagues. You have heard 
me extend kudos to Secretary Locke's very keen management 
skills. However, I also want you to know that there is an 
excellent report put out by the Office of Inspector General on 
some of the significant flashing yellow lights that could eat 
our budget alive, whether it is satellite programs, information 
technology, and so on.
    And I would really bring this to the subcommittee's 
attention as we work on the budget. We have a lot of work to 
do. And let me get to my initial round of questions.
    You heard me, Mr. Secretary, talk about how the Commerce 
Department is one of our economic engines. I like the fact that 
you really paid attention to the management issues within 
Commerce. For too long, the Secretary of Commerce was viewed as 
America's salesman. Travel around the world, do those big 
business trips, try to get a deal or two, come and back and go 
``hoo-ha, hoo-ha'' with America's private sector.
    I think that is good, but I don't think the Secretary of 
Commerce is America's salesperson. I think America's private 
sector is its best salesperson, and we need to be able to 
facilitate trade. So you did the right thing.
    But let us go then to creating new ideas. Could you tell 
us, as you wrap this up, where are we on USPTO? What is it that 
we need to do to do two things--make sure we deal with the 
backlog, and then the other issue--and this is what I want my 
colleagues to be aware of--USPTO is one of the big targets of 
cyber intrusion, where they are actually coming and trying to 
steal our secrets. Why invent a cure for Alzheimer's when you 
can steal it from somebody standing in line to get their 
patent?
    So, could we lead off with job creation by protecting our 
intellectual property and how we best are able to do that? 
Could you address the backlog issue and as well as the cyber 
protection issue?
    Secretary Locke. Well, thank you, Madam Chairman.
    Senator Mikulski. And do you have the money and the 
resources and the policy to do it?
    Secretary Locke. Well, first of all, when the President 
took office, we had a backlog of some 800,000 applications. The 
average waiting time is more than 3 years to get a patent 
determination. Our goal is to get it down to what the industry 
believes is anywhere from 18 to 20 months.
    But we are also creating what we consider an express line 
service for those who really believe that they need a patent 
determination as quickly as possible for a very small extra 
fee. And under patent law legislation, if it is passed by the 
full Congress, we will have the ability to reduce that extra 
fee dramatically for small inventors and small businesses.
    But the idea is that for a very small extra fee, we will 
guarantee express service and patent determination within 1 
year. But we are dramatically reducing the backlog, working 
with organized labor, managers, and line staff. We are 
completely transforming USPTO to be much more efficient.
    And as I indicated, even though we have had a surge of 
applications by 7 percent, we have actually reduced the backlog 
by 10 percent. And----
    Senator Mikulski. So what does that add up to? So you have 
had 7 percent more where it shows that America is bursting with 
ideas. I mean, would you say we are bursting with ideas?
    Secretary Locke. You know, we are one of the most 
innovative and intellectually stimulating countries around the 
world, and that is why we are creating these jobs and new 
technologies. But we need to make sure that people can get the 
patent so that they can get the funding that they need to start 
that new business. It is like going to a bank. If you don't 
have a patent----
    Senator Mikulski. No, we got that. So how long is the 
backlog?
    Secretary Locke. The backlog is almost, I believe, below 
700,000.
    [The information follows:]

    The patent application backlog as of April 30, 2011, is 706,778 
applications.

    Senator Mikulski. So if I came now with--if a biotech 
entrepreneur out of Maryland came with an idea for, say, breast 
cancer, or cognitive stretch-out for an Alzheimer's disease, 
how long would they be in line?
    Secretary Locke. I believe if they were to file a patent 
application today, they could expect to have a patent 
determination probably between 2 to 3 years. And if they pay an 
extra fee of $2,000 under our proposal, which will commence in 
about 2 weeks, they will be able to get that patent within 1 
year.
    Under our proposal, if patent law legislation passes--and, 
of course, it passed overwhelmingly in the Senate; it needs to 
clear the House--but for a small inventor, our proposal is to 
charge only $1,000 extra, and they will be able to get their 
patent within 1 year.
    We are also saying that for a lower fee, you can actually 
delay your patent processing if you don't, let's say, need it 
within 5 or 6 years. Let us say you are seeking Food and Drug 
Administration (FDA)approval on something that is going to take 
a long time. You don't need that patent application. So we are 
actually creating three different lines.
    The regular line under our goal should be 18 to 20 months. 
That is what the industry believes is a reasonable period of 
time: A slower line for lower fees and for a slightly higher 
fee, express service in which you will get it within 1 year.
    Senator Mikulski. Okay. Well, thank you.
    As you can see, my time is actually up. So I am going to 
turn to Senator Hutchison.
    But my line of questioning will be, let us protect the 
ideas. Then I am going to ask you about NIST, which is to 
create the standards, so that your product meets American 
standards. We don't yield to a Chinese standard. And then how 
we sell our stuff around the world. So jobs today, jobs 
tomorrow.
    Secretary Hutchison, Secretary--oops.
    Senator Hutchison. Never. Thank you, Madam Chairman.
    Senator Mikulski. Senator Hutchison.

                       DEPARTMENT FUNDING LEVELS

    Senator Hutchison. Thank you very much.
    Let me just talk to you because, obviously, we are all 
looking for places to economize and prioritize our spending for 
efficiency. Your request is $5 billion below the fiscal year 
2010 enacted levels. However, with the $6 billion that was 
allocated on the once-every-decade census, it is actually an 
increase in your budget. Where are you trying to cut excess or 
outdated programs?
    Secretary Locke. Well, you are correct. We need to take out 
the one-time census activity. And if you look at the 
President's proposed 2012 budget compared to the 2010 enacted 
without the census, after you back out the census, it is 
roughly $1.3 billion--excuse me, it is $822 million----
    Senator Hutchison. Increase.
    Secretary Locke [continuing]. Above the 2010 enacted 
census. But we need to understand that almost $810 million of 
that increase or that differential is just for the satellite 
program alone. Almost $687 million just for JPSS, but $810 
million for all the satellite programs, and it is absolutely 
vital that as we move forward on the replacement for some of 
our polar satellites, which are degrading, whose useful life is 
coming to an end, that we have a replacement in mind or 
replacements in place.
    With respect to the savings, we have come up with savings 
on administration, especially acquisition reform--major savings 
on acquisition reform that is assumed in the budget. We are 
already making progress on that. We are trying to consolidate 
our acquisition programs and use the best practices throughout 
the agency instead of having each bureau have their own 
different types of acquisition programs, also in terms of 
consolidation of some of our IT programs and also our fleet 
management.
    But we have actually gone through a whole host of programs 
line by line to figure out what things really are not as high 
priority, because we know that we are in a period of limited 
resources. We cannot do everything. We need to really focus on 
our strengths, and that means cutting back on things that are 
not as important.

                  CONSOLIDATION OF U.S. TRADE AGENCIES

    Senator Hutchison. Well, following up on that, in the 
President's State of the Union Address, he mentioned the fact 
that multiple agencies have responsibility over trade. And I 
think he is right. You have got the United States Trade 
Representative (USTR), Export-Import, International Trade 
Commission, and the ITA.
    Can that be consolidated under Commerce, and are there any 
ongoing plans to try to put all of the different trade-related 
agencies under the Commerce Department?
    Secretary Locke. Well, the President has directed such an 
effort and issued an order, and those results, those 
recommendations are to be presented to the President within 
about 60 days.
    [The information follows:]

    The review on consolidating U.S. trade agencies is scheduled for 
June 9, 2011.

    Senator Hutchison. But are you in an effort right now where 
you have the beginnings of a proposal for the President?
    Secretary Locke. Well, actually, that effort is being led 
by Deputy Director of the Office of Management and Budget 
(OMB), Jeff Zients. And he has been meeting with both 
stakeholders--using all the different trade agencies that take 
advantage of the various functions of the various trade 
activities within the Federal Government, interviewing our 
folks, looking at all of our programs--and meeting with all of 
the other agencies that are involved in trade, whether Export-
Import Bank, Small Business Administration, U.S. Trade 
Development Agency, the USTR's office, and so forth.
    Senator Hutchison. Okay. Let me just ask you this. Do you 
think that--do you support putting everything in the Department 
of Commerce that is trade related? And do you think it all 
works, the different factors? Obviously, they are all doing a 
little bit different things, but with the same goal.
    Secretary Locke. Well, I am not sure that all the different 
trade activities belong in the Department of Commerce. Some of 
them are more State Department oriented and related to 
improving our image around the world using trade and 
incorporating U.S. businesses in some of those development 
projects.
    But clearly, there needs to be better coordination and 
elimination of overlap and duplication. So we look forward to 
the recommendations that would be presented to the President. 
But however these agencies and activities are coordinated or 
eventually configured, we are very proud of what we have been 
able to do and the benefits that we are bringing, especially to 
small- and medium-size companies, helping them sell around the 
world, where 95 percent of the world's consumers live outside 
the borders of the United States.
    And yes, American companies need to increase their market 
share and their growth within America. But if they want to 
diversify, if they really want to sell, if they want to create 
more employees here at home, we need to help them sell around 
the world.

               REORGANIZATION OF EXPORT-RELATED AGENCIES

    Senator Hutchison. Well, thank you. Thank you, Madam 
Chairman.
    Senator Mikulski. Senator Brown.
    Senator Brown. Thank you, Madam Chair.
    I want to follow up on some of the comments of Senator 
Hutchison about reorganization. But first, brief comments about 
your discussion of innovation, how we can out-compete and out-
innovate anyone in the world. We do that, and this, the article 
a year ago that Andrew Grove wrote that I am sure you saw about 
how we have fallen short as a Nation in scaling up after we 
out-compete and out-innovate. And over time, as we move 
manufacturing jobs overseas, the innovation that takes place on 
the shop floor is taking place in other countries instead of 
taking place here. And ultimately, we don't out-compete and 
out-innovate. So my question--or first, Senator Kirk and I, 
Mark Kirk and I introduced a bill, the National Manufacturing 
Strategy Act, which I think plays into some of this.
    The administration, I understand, is right now examining a 
reorganization of export-related agencies. Some suggestions for 
reorganization include only consolidating export promotion with 
other reorganization options, including both export promotion 
and all trade functions, including the USTR. How do you see 
this happening?
    Is this more likely--is this going to lead to a 
manufacturing strategy, per se? The legislation Senator Kirk 
and I introduced would pretty much say to the Commerce 
Department, come up with a manufacturing strategy, report to 
the Congress how you are doing it on a regular basis, because 
we really are the only major industrial power in the world that 
doesn't have a manufacturing strategy.
    It is as Chairwoman Mikulski said; it is not picking 
winners and losers. If we have picked winners and losers in 
this country, 20 years ago, we picked finance as the winner and 
manufacturing as the loser. And I am not saying pick any part 
of any industry.
    But manufacturing is such a key component of exports, such 
a key component of creating a middle class. So talk to me about 
how you see that organization in terms of manufacturing.
    Secretary Locke. Well, obviously, as we look at 
reorganization and greater effectiveness of our trade agencies, 
manufacturing plays a key role in our exports, in our trade 
promotion, because so much of what we, in fact, make is 
exported. And in fact, virtually half of the economic recovery 
in the last 2 years has been driven by exports, and we know 
that exports of manufactured goods are primarily what we in 
fact ship around the world.
    And we need to have that policy to promote manufactured 
goods. And that is why Ron Bloom, who works in the White House, 
is helping direct that effort. And both the Commerce Department 
and, I am sure, Mr. Ron Bloom are more than happy to work with 
you on the legislation that you and Senator Kirk have proposed.
    But clearly, to create more jobs in manufacturing and to 
support our manufacturing base, we need to create the 
environment for that economic recovery. We need to invest in 
innovation and especially work with those manufacturers who may 
not on their own be able to engage in the research and 
development (R&D) with respect to new technologies and new 
manufacturing items.
    And we need to focus on helping those companies sell those 
``made in USA'' goods around the world. I am pleased to report 
that under the President's National Export Initiative, which 
seeks to double exports by the year 2015, we are on track to do 
that, despite some of the predictions by experts that that was 
an impossible task when the President announced that.
    In 2010, the first year of the National Export Initiative, 
we have increased exports by 17 percent. Goods exports were up 
23 percent more than 2009. And in the first few months of 2011, 
exports are up, of which manufactured goods make up the bulk of 
those exports. In fact, I think January 2011 was the biggest 
exporting month in the history of the United States. And our 
exports of goods even to China were up 32 percent in 2010 over 
2009.
    But we also have to enforce our trade laws. We need to make 
sure that American companies have a level playing field, and we 
are talking about not just tariff, but nontariff barriers, 
whether it is customs rules in Russia to discriminatory 
policies that might favor products from another country versus 
American products. So we have to really focus on that whole 
panoply of strategies to support manufacturing, because 
manufacturing is the bulk of the things that we export.
    Senator Brown. Thank you.
    Mr. Secretary, one other question. I sit on the President's 
Export Council and appreciate the work that you are doing on 
the export initiative. I have set up a sort of similar advisory 
committee in Ohio, as you and I have discussed, to give me 
input on what we should be doing with the President's National 
Export Initiative.
    I think this is more than anecdotal. We are seeing an 
increasing amount of in-sourcing, foreign investment in the 
United States. Foreign companies in the United States have a 
significantly higher unionization rate than other companies in 
the United States overall. They tend to invest in 
manufacturing, as you suggest. They spend on R&D. They account 
for about 20 percent of U.S. exports.
    So tell me what you are doing, as specifically as you can, 
to attract foreign investment here, especially foreign 
investment in manufacturing.
    Secretary Locke. We actually have a program called Invest 
in America, and we have plans and proposals to enhance that. We 
are developing, for instance, a Web site that would feature all 
the various tax incentives and economic development proposals 
or incentives that each State offers. That will be online, so 
that companies around the world, and investors, entrepreneurs 
around the world can look at the opportunities and understand 
what is available in America.
    So many people who want to come to the United States or 
think about coming to the United States think of the United 
States as a monolithic structure, not realizing that the 
incentives in Ohio may differ from the incentives of California 
or Georgia, all the way from tax issues to economic development 
assistance to education programs. So we are trying to make that 
all available online.
    And so, those are just some of the strategies. But clearly, 
we do not do enough as a country to attract foreign direct 
investment into the United States, creating jobs. I mean, for 
instance, the BMW plant that opened up in South Carolina 
manufactures their 300 series automobile there, and yet 25 
percent of those automobiles being built in that plant are for 
export.
    And we are now beginning to see many other U.S. companies 
and foreign companies trying to establish their operations here 
for manufacturing, bringing some of that back to America. And I 
have come across so many companies that used to make their 
stuff, produce very heavy machinery, equipment, dredging 
equipment overseas, and they actually find it cheaper now to 
build it in the United States with all the efficiencies, the 
R&D that they are able to incorporate together.
    And of course, that ``made in USA'' brand is highly valued 
and in great demand all around the world. We need to help those 
small- and medium-size companies sell more of that around the 
world, take advantage of the great cache that ``made in USA'' 
brand has.
    Senator Brown. Thank you, Mr. Secretary.
    Thank you, Madam Chair.
    Senator Mikulski. Senator Murkowski, I know we normally 
would turn over here. But Senator Lautenberg came first, and I 
know you were getting caught up on the hearing. May I go to him 
and then come back to you?
    Senator Lautenberg.
    Senator Lautenberg. Thanks, Madam Chairman, and thanks, 
Senator Murkowski.
    That may have been, Madam Chairman, a slip of the lip 
because we know that Mr. Locke is likely buying a long-term 
ticket to go elsewhere, and therefore, Senator Hutchison might 
be an eligible person for that position. So----
    Senator Mikulski. If we had a Democratic Governor in Texas, 
it might be a good idea, but----
    Senator Lautenberg. Ah, conversion.
    Mr. Secretary, you have done a great job there at Commerce, 
and we are pleased to hear about some of the good things that 
are happening. One place that we know that competition is so 
keen is in the area of research and science engineering, and 
the fact that we have roughly 700,000 applications waiting for 
review at USPTO while China proceeds, and they have opened up, 
apparently, a series of satellite offices. It is something that 
I think we have to take a look at.
    I am going to be in China next week, and we are going to 
discuss that as one of the issues. And has there been any 
thought here to making services available--easier, 
geographically, by the opening of satellite offices?
    Secretary Locke. Yes, very much so. In fact, we have 
already announced the intent to open up the first satellite 
office in the history of USPTO, and that would be the first one 
in Detroit. We are working under the Senate bill that passed. 
It calls for three additional satellite offices. That is 
something we very much support.
    We believe that it is very difficult to attract workers to 
USPTO if they only can work in Washington, DC. We also believe 
that one of the ways in which we can reduce significantly the 
backlog of USPTO is to allow interaction between the applicant 
and the examiner, whether face-to-face, especially if we are 
able to have satellite offices, or by teleconference and 
videoconferencing. But especially face-to-face instead of 
passing paperwork back and forth or emails, but actually 
discussing the application itself and going over----
    Senator Lautenberg. Well, New Jersey, and Mr. Secretary, I 
remind you, is a place where a lot of patents are created. And 
it is right in the middle of the New York/New Jersey 
marketplace. So as you think about it, I hope that you will 
come back from China and visit with me when we open that 
office. So thanks for your thoughts there.
    China's undervalued currency reduces American exports, 
increases our imports and contributes to a $273 billion trade 
deficit with China last year. We pushed for China to revalue 
its currency, but our trade deficit remains stubbornly high. 
What are we doing to fix this problem?
    Secretary Locke. Well, first of all, Secretary Geithner has 
spoken at length about it and clearly outlined United States 
policy and our goals with respect to the Chinese currency. In 
the meantime, the Commerce Department has reinforced those 
messages in all of our meetings with top Chinese Government 
leaders, and I know that President Obama has raised that in his 
meetings with the Chinese leaders.
    But we, at the Department of Commerce, can address that 
trade imbalance by helping American companies export more of 
their goods and services. We have had reverse trade missions, 
bringing several hundred trade shows in the United States, 
bringing foreign buyers to those trade shows. And just last 
year alone, we were able to help American companies through 
those trade shows with foreign buyers accumulate or log almost 
$750 million worth of sales.
    We have had numerous trade missions to China, and just last 
year alone, I had one focusing on clean energy. And immediate 
sales were around $50 million just from a host of companies 
that we took, focusing on clean energy. Exports of goods to 
China in 2010 were up 32 percent more than the previous year. 
That compares with increase of exports of 23 percent for goods 
to all countries around the world.
    So we are focusing on China. There is a great demand in 
China for ``made in USA'' goods and services because there is a 
huge need for medical devices, for education, for engineering, 
to address clean water systems, and also for our food. And so, 
we are targeting China very aggressively to help American 
companies.
    Senator Lautenberg. But Mr. Secretary, the problem of their 
valuation of their currency does place us at a distinct 
disadvantage. And obviously, it produces a different kind of 
living standard there than we have here. So I think that this 
pursuit has to be picked up, and hopefully, we will begin to 
see a change there.
    And I would just finish my questions by making a suggestion 
here, that when I hear about express patent review, it says 
that the big guys, those with a lot of money, can continue to 
be in the first-class seats. Whereas the smaller business, the 
startup company, is looking for ways to get into the 
marketplace, and I don't think it is quite fair on balance to 
say if you have got the money, you go to the head of the line. 
If you don't, you are back further.
    Secretary Locke. Well, that is why, Sir, we are focusing on 
overall reduction of the patent pendency period from the 
unacceptable 38 months on average now to what the industry 
believes is a proper timeframe of 18 to 20 months, to ensure 
that there is an opportunity to publish the proposals, to make 
sure that others who feel that they should not be granted have 
an opportunity to weigh in and offer their views.
    But right now, the cost, all fees, the combination of fees 
that a small entrepreneur or small businessperson would pay for 
a patent application is $1,000. And under our proposal, for an 
extra $1,000, that would be the fee to the small innovator/
inventor to go through and use the express line. The big 
companies pay substantially more than that.
    But when you really look at the cost, for instance, of 
lawyers' fees to prepare that patent application, oftentimes, 
those legal fees are $20,000, $30,000. So all we are talking 
about is an extra $1,000 for the small innovator/inventor.
    Senator Lautenberg. Thank you very much, Madam Chairman.
    Senator Mikulski. Senator Murkowski.

                          CATCH SHARE PROGRAMS

    Senator Murkowski. Thank you.
    Mr. Secretary, welcome and thank you for your leadership.
    I want to talk fish a little bit this morning. Coming----
    Senator Mikulski. I knew we would get to fish.
    Senator Murkowski. Yes, you have got to do fish. But coming 
from the Pacific Northwest, I have got an ally here. He knows 
and understands fish, and we appreciate that. But coming from a 
State where we have got about one-half the coastline, more than 
one-half the coastline in the United States, we pay attention 
to what goes on within the NOAA budget, and National Marine 
Fisheries.
    So I want to just bring up the issue this morning. As you 
know, we have the most abundant fisheries in the Nation. We 
have the most sustainably managed fisheries in the Nation. We 
have averaged nearly 5 billion pounds a year for the past 20 
years, account for nearly 60 percent of the fish that are 
harvested within this country.
    We employ, well, I guess it is more than 60,000 Americans 
that are directly or indirectly employed in the industry. And I 
think, as we look to the contribution of the fisheries, 
certainly from Alaska's perspective, we recognize that the 
single most common trait seen among the fisheries and the 
communities is their dependence on well-managed marine 
resources, and our fisheries rely very heavily on good science 
and proper guidance from the resource managers.
    We know that the better job that we can do, the more we are 
able to benefit those within the industry. And we are able to 
have sustainable fisheries. We have the largest fishery 
observer program in the Nation. It is the only one where the 
industry pays all of the direct cost.
    Now, North Pacific Fisheries Council is restructuring the 
program to support the existing catch share programs and the 
stock assessment needs, and industry is eventually going to pay 
for the increased observer coverage. But what is needed is that 
startup funding.
    So the question to you this morning is whether or not you 
anticipate that NOAA will fund the startup implementation costs 
that are needed for the program. Where are we on that?
    Secretary Locke. We have requested in the--the President 
has requested in the 2012 budget additional funds for the catch 
share programs. And we are trying to figure out how we can use 
those dollars, knowing that the initial transition to catch 
shares is difficult, sometimes difficult. Although I want to 
emphasize that catch shares is a voluntary program. It is not 
imposed by NOAA. It is a decision of the Regional Fishery 
Management Councils if they want to go to a catch share 
program.
    [The information follows:]

    In regard to the plan for implementation of the requested funds for 
the National Catch Share Program, the requested increase of $36.6 
million, for a total of $54 million, in fiscal year 2012 will enhance 
the implementation of catch shares nationwide. The requested increase 
supports analysis and development of catch share programs, improved 
program management and infrastructure on a national level, and 
implementation and operation of specific programs such as by supporting 
observing and monitoring at-sea and on shore and enforcement 
activities. The following table shows the catch shares breakdown in the 
fiscal year 2012 President's request:

                  NATIONAL CATCH SHARE PROGRAM BREAKOUT
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                            Fiscal year
                                                           2012 request
------------------------------------------------------------------------
Activities and capabilities that support catch share          \1\ 10,550
 programs...............................................
Support requests from Regional Fishery Management              \1\ 2,000
 Councils for analysis and development of new catch
 share programs.........................................
                                                         ===============
Implementation and operations of specific catch share
 programs:
    Continue support for existing Limited Access                   6,000
     Privilege programs.................................
    NE multispecies sectors.............................           5,400
    Cooperative research................................           6,002
                                                         ---------------
      Subtotal, base funds moved into the National Catch          17,402
       Share Program line...............................
                                                         ===============
    NE multispecies sectors.............................           4,350
    Pacific trawl ITQ...................................          11,847
    Gulf of Mexico Grouper/Tilefish IFQ.................           6,850
    Alaska Halibut Sportfish IFQ........................           1,003
                                                         ---------------
      Subtotal, fiscal year 2012 funds specific to each       \1\ 24,050
       fishery..........................................
                                                         ---------------
      Total, Implementation and Operations of specific            41,452
       catch share programs.............................
                                                         ===============
      Total.............................................          54,002
------------------------------------------------------------------------
\1\ These funds equal the requested program change of $36.6 million for
  the National Catch Share Program.

     ACTIVITIES AND CAPABILITIES THAT SUPPORT CATCH SHARE PROGRAMS

    Funding under this line item will support activities and 
capabilities common to many catch share programs that are more 
efficient to implement at a regional or national level, rather than 
managing each specific catch share program individually. Examples of 
such activities include overall program management, improvements in 
fishery dependent data collection systems to support future catch share 
programs, quality control on historic catch data to support individual 
or group allocations, fishery data management, social and economic data 
collection or analysis, and adjudication of administrative appeals by 
program participants. In addition, funding requested under this line 
item would also support electronic reporting and quota accounting. Some 
regions have implemented catch share programs, and therefore have a 
base of expertise and capability to add additional programs. Other 
regions need capacity building to begin development of, and will likely 
eventually implement and operate, catch share programs.

SUPPORT REQUESTS FROM REGIONAL FISHERY MANAGEMENT COUNCILS FOR ANALYSIS 
              AND DEVELOPMENT OF NEW CATCH SHARE PROGRAMS.

    The National Atmospheric and Oceanic Administration's (NOAA) fiscal 
year 2012 budget request includes $2 million for analysis and 
development of new catch share programs through the Regional Fishery 
Management Council (Council) process. Catch share programs typically 
take several years of analysis, stakeholder participation, and Regional 
Council deliberation before being adopted. Catch Share programs are 
typically more complicated than other fishery management plan 
amendments, and thus carry increased costs for analysis of alternatives 
and their impacts. Special stakeholder committees and workgroups, 
requiring funds for staff support and meetings, are often established 
to advise the Regional Council on appropriate alternatives.
     implementation and operation of specific catch share programs
    NOAA's fiscal year 2012 budget request includes support for 
implementation and operation of four new catch share programs:
  --Gulf of Mexico grouper;
  --Northeast groundfish;
  --Alaska Halibut Sportfish; and
  --Pacific groundfish.
    Following Regional Council adoption and Secretarial approval of a 
catch share program, an implementation period of 1 to 2 years is 
common. Key implementation activities include hiring management and 
enforcement staff, establishment of program specific share accounting 
databases and reporting systems, identifying eligible participants, 
issuing catch shares, and computing annual quota for each participant. 
The operational costs include program administration, monitoring, 
enforcement, cooperative research, and science evaluation for new 
programs as well as potentially for existing programs.
    In regard to the restructuring of the Alaska Observer Program, the 
North Pacific Council (Council) and industry groups in the region have 
been at the forefront of fisheries management, including the use of 
catch share programs, for a long time. The current North Pacific 
Observer program supports the North Pacific and Bering Sea Groundfish, 
Trawl, and Fixed Gear Fishery. A restructured program will expand 
observer coverage, including smaller vessels in the groundfish fishery 
and the halibut/sablefish fishery. Under this restructured program the 
Council and National Marine Fisheries Service are planning for the 
collection of fees to arrange contracts to support more observers and 
reduce conflict of interest. National Oceanic and Atmospheric 
Administration recognizes the value of startup funds as these fisheries 
transition to this restructured observer program and the importance of 
the restructured observer program to overall fisheries management in 
the region. NOAA is working closely with the Council to identify ways 
to support this need, however all fiscal year 2012 funding is 
contingent upon final congressional appropriations.
    Funding requested in the fiscal year 2012 President's budget for 
catch shares supports activities specific to catch share programs such 
as share accounting databases, electronic reporting systems and other 
infrastructure and operational needs and may be used to support both 
new and existing catch share programs. NMFS is encouraged by the 
efforts of the North Pacific Council and the fishing industry to 
provide industry funding to support the observer program in the out 
years, thus requiring a one-time Federal funding initiative only to 
transition from the status quo to the restructured observer program.
    Catch share programs are not mandated by NOAA and are not 
appropriate for all fisheries. Under NOAA's catch share policy, NOAA's 
role in catch shares program development is a commitment to supporting 
Councils, fishing communities and all stakeholders in evaluating catch 
shares as an option for sustainable fisheries management. The 
discretion for determining whether to develop a catch share program 
rests with the Councils. If a Council decides to pursue a catch share 
program, NOAA will provide technical expertise and support to the 
Council, fishing communities and stakeholders in design and 
implementation of the catch share program. Once the program is 
implemented, an individual fisherman usually must participate in the 
catch share in order to participate in the fishery, unless the 
Fisheries Management Plan retains a common pool (e.g., as was done in 
the Northeast groundfish fishery). For more information about the catch 
share policy please see here: http://www.nmfs.noaa.gov/sfa/domes_fish/
catchshare/index.htm.

    Secretary Locke. But we have requested additional funds for 
the catch share programs because we have seen their tremendous 
benefits, especially in the Pacific Northwest and along the 
west coast, and it is very much embraced by the fishing 
community there.

                           STOCK ASSESSMENTS

    Senator Murkowski. Well, we would like to be kept abreast 
on that because the concern, of course, is that if the startup 
funds aren't in place, then program implementation may be 
delayed. I don't think that anyone gains from that.
    I am concerned about the strength of the fisheries 
assessments out there, what will happen with the programs. And 
we are looking at the budget very, very critically.
    There is an increase in the fiscal year 2012 funding 
request for the stock assessments, but I am concerned that we 
won't be able to perform all of the fish surveys in Alaska this 
summer. Can you give me kind of--well, I guess what I am 
looking for is some assurance that, in fact, NOAA will be able 
to perform the fish surveys that we have on the schedule at 
this point.
    Secretary Locke. We know how important these assessments 
are to update the scientific information so that we can make 
good decisions and so that the councils are able to have the 
information they need by which they can set annual catch 
limits, or the limits on fisheries. Because first and foremost, 
we know how important the fisheries are, how many jobs they 
provide, and the value of that food to the American public and 
to, indeed, people around the world.
    We have got to make sure that we end overfishing and that 
we are on a course to rebuild the stocks, because we know that 
if we have robust stocks, we will have even more fishing and 
that will create the jobs for the people who depend on it, as 
well as the seafood for American consumers. And that is why we 
have to have that up-to-date information, and that is why the 
President has requested a significant enhancement in the funds 
for those assessments.
    And we will focus on the priority stocks that will make a 
big difference. And so, it all depends on the level of funding 
that we will have, quite frankly.

                        MARINE SPATIAL PLANNING

    Senator Murkowski. Well, I understand that. But I 
appreciate your assurance and just the recognition of the 
significance of making sure that we have got that good, sound 
science upon which to base these fisheries decisions.
    I have several more questions that I will submit for the 
record. But just as my time is expiring here, I want to bring 
up the National Ocean Policy and the framework for the coastal 
and marine spatial planning. As you know, Alaska is not one of 
those regions where there are user conflicts. We are our own 
region up there. We don't necessarily want this as a planning 
tool.
    What we really need is environmental data collection, 
mapping, integration, and all of that, and I hope that as you 
are looking to how you make priorities within the Department, 
within the agency, that you would work to implement marine 
spatial planning in those areas where they are seeking that. 
And in those areas where they are not seeking that, save your 
dollars and allow States like Alaska, whole regions like Alaska 
to proceed. Give us the environmental data, but don't include 
us in that marine spatial planning at this point in time.
    Secretary Locke. We are very aware of the concerns of your 
constituents and your stakeholders about this issue.
    Thank you.
    Senator Murkowski. I appreciate that. Thank you, Mr. 
Secretary.
    Thank you, Chairman.
    Senator Mikulski. Senator Reed.

                         NEW ENGLAND FISHERIES

    Senator Reed. Thank you very much, Madam Chairman.
    Let me change the locale, but not the topic. You have heard 
a lot of issues about fishing from New England. First, let me 
thank you, Mr. Secretary, because you are sending up EDA 
assessment teams to our ports, and that is deeply appreciated.
    But as you know, there is a great deal of concern not only 
in Alaska, but in New England, on fishing policy. The Rhode 
Island fishery is much more diverse. It is not simply 
groundfish. And one of the key elements of our fishery is the 
American lobster, and there have been some proposals that would 
cause basically a 50 percent reduction in catch, which would 
put us out of business.
    And I would ask if you would work with NOAA to start 
thinking in terms of more creative management of the species, 
working with the industry. It is going to require some 
resources to do that, rather than adopting this arbitrary and 
significant cut. Could you do that?
    Secretary Locke. Well, thank you very much, Senator Reed.
    Of course, the management of the lobster industry in your 
area is under the province of State commissions because we are 
talking about a fishery that is in State waters where NOAA has 
no jurisdiction, and these are very tough decisions that the 
State commissions have to embark upon.
    Nonetheless, we pledge our full support and all the 
scientific information at the disposal of NOAA to help the 
State decisionmakers do the right thing and develop the 
policies that will, hopefully, bring the lobster industry back 
and to have a very strong lobster fishery.
    Senator Reed. I mean you are absolutely right about the 
initial regulatory authority. But NOAA routinely adopts these 
regulations for Federal waters, and we do have some activity, 
not as pronounced, but some activity in Federal waters. But 
also NOAA, because of its leadership on a lot of these issues 
through marine fisheries, has the ability, I think, to be very 
influential in trying to develop alternatives in terms of 
managing catches.
    So it is those alternatives, together with their, if not 
official, their unofficial authority that I would like to see 
invoked. Could you do that?
    Secretary Locke. We would love to work--bring all of our 
experts at NOAA to help the States develop good policies that 
can bring this fishery back and reverse this decline in the 
lobster.

                          COOPERATIVE RESEARCH

    Senator Reed. And there is a proposal in the President's 
budget to cut, and I echo some of the comments of my colleague, 
cooperative research and fisheries. And again, it is vital 
across the country.
    And the other issue here is sort of the very limited, or 
concentration of institutions that get this money, and I would 
ask you to not only comment on the cooperative research effort, 
but how you engage in a broader representation from the fishing 
community and from affected interests?
    Secretary Locke. Well, cooperative research we think is 
very, very valuable and should have a very significant place as 
we update our stock--our assessments involving the fishing 
community in determining how much fish is out there. If they 
are part of the process, then I think they have greater 
confidence in the results. And so, I think cooperative research 
is something that we need to--that I personally have favored 
and am trying to enhance within the limited dollars that we 
have.
    Senator Reed. Well, I think one of the issues is the 
limited dollars. I mean, that is an area that not only 
provides, as you well point out, Mr. Secretary, the accurate 
science, but also the legitimacy within the fishing 
communities. But it also puts boats out at sea----
    Secretary Locke. That is right.

                          CATCH SHARE PROGRAM

    Senator Reed [continuing]. In a time at which they have to 
pay the rent and the mortgage and the gasoline, et cetera. So I 
would urge you to relook at those numbers.
    A final point here is that I note in this year's continuing 
resolution that there is language preventing any new catch 
share programs. And catch share management is a controversial 
issue, but can you give us, sort of, the logic, together with 
those steps you are taking to improve the existing catch share 
programs?
    Secretary Locke. I am sorry. I didn't quite understand that 
last part of the question.
    Senator Reed. There are existing catch share programs, and 
there is some controversy involved with them. Are you looking 
in any way to try to improve the efficiency of these programs, 
their acceptance, and their legitimacy in the eyes of the 
fishing community?
    Secretary Locke. Yes, we are. We know that we have problems 
in some areas of the country with respect to the existing catch 
share program. We need to make sure that as we, for instance, 
determine that there are more stock available through these 
assessments, that we are able to make sure that there is a 
sharing of that additional stock that can be fished by, 
perhaps, those who are not part of the catch share program.
    And so, we need more information. We need more frequent 
assessments because we know how the transition has been 
difficult and that not all are getting the benefits of the 
catch share program. But again, the catch share program is 
voluntary. It is not imposed by NOAA. That is made at the 
direction--or, at least, decisions to embark on catch shares 
are made by the Regional Fisheries Management Councils.
    But I can tell you that we think that catch shares is a 
better way of approaching fishing in many parts of the country 
because instead of a race for fish, which oftentimes puts 
fishermen at risk-- their safety--it allows for a more 
methodical, planned way in which fishermen can reach their 
limits and go after the very best stock and perhaps the most 
economically prized or valuable stock.

               MID-ATLANTIC FISHERIES MANAGEMENT COUNCIL

    Senator Reed. Let me make a final quick point, and that is 
you raise the issue of the fishery councils, the management 
councils, the Mid-Atlantic Fisheries Management Council. Rhode 
Island lands more fish than any other State except New Jersey, 
and we don't have representation on there. So you might read 
about this in Beijing. We are going to try to get that amended 
so we can put someone on the council.
    Secretary Locke. And of course, I understand the concern 
that you and the fishing industry from your State have about 
that representation. That is set by legislation, set by the 
Congress and not by NOAA.
    Senator Reed. Thank you.
    Senator Mikulski. Senator Reed, is that membership a 
legislative initiative?
    Senator Reed. It is, Madam Chairman. And we have tried in 
several different years to alter the composition, and we will 
try again. And your support would be deeply appreciated.
    Senator Mikulski. Well, you know, we are a part of that, 
too. No, no, it has literally like been the zoning commission 
for fish.
    Senator Reed. Indeed, as the Secretary points out, it sets 
catch limits. It does lots of very critical things, and one-
half the landings are--we are one of the most significant 
participants in that area, but we don't have representation.
    Senator Mikulski. Well, I want to hear more about that.
    Senator Reed. Thank you.
    Senator Mikulski. Senator Feinstein.
    Senator Feinstein. Thank you very much.
    And Mr. Secretary, congratulations on your nomination. We 
look forward to that confirmation and see you going on to great 
new heights.
    Secretary Locke. Thank you.

                       CALFED BIOLOGICAL OPINION

    Senator Feinstein. You are welcome.
    I wanted to take you into the heart of California water 
versus fish. And of course, that is the Sacramento delta area. 
We are 38 million people. We are the largest agricultural State 
in the Union. And we also have fish, and we prize that.
    I have come to have considerable question about the 
biologic science, two cases in Interior and one in yours. So I 
would like to go to the salmon opinion, if I might, for a 
moment. This opinion has been criticized by the National 
Academy of Sciences (NAS). It is the subject of ongoing 
litigation. United States District Court Judge Wanger has been 
critical of parts of the biological opinion, but has yet to 
issue a final ruling. He did enjoin the smelt opinion.
    This year, we have had a bumper crop of water. So water is 
likely not going to be the problem with respect to operation of 
the pumps this year. Given that it appears likely that Judge 
Wanger will overturn at least portions of NOAA's biological 
opinion on the salmon, what is NOAA doing to proactively come 
up with a science that is more sustainable, more credible, and 
more protective of both the salmon and the livelihood of south 
of delta farmers?
    Secretary Locke. Thank you, Senator Feinstein.
    And I have always appreciated the opportunity to work with 
you and the other members of the California delegation on this 
very, very important, very contentious, and very complicated 
issue.
    We have taken some of the recommendations of NAS to heart. 
We are working with, in fact, Interior on how we can 
collaborate more, and they regulate and preside over the smelt, 
and we are presiding over the issues dealing with salmon. We 
have got to bring all of our scientists together.
    Senator Feinstein. That doesn't make sense to me.
    Secretary Locke. We need to really bring our scientists 
together and come up with a comprehensive strategy and 
biological opinion. We want flexibility, and we are prepared to 
exercise greater flexibility if we can, working with the 
stakeholders, come up with different ideas by which we can 
achieve the same objective.
    We all have that objective. How do we protect the salmon, 
which are so important to commercial and recreational fishermen 
and a very important part of the economy of California? But we 
have got to do it in a way that we are not also harming the 
agricultural community, because so much of America depends on 
the agricultural output of California and certainly the delta 
there.
    And of course, you need water for the other parts of 
California, southern California for their growing communities 
as well. So it is water for fish. It is water for agriculture. 
It is water for people. And we have got to strike that balance.
    And so, we are having our scientists go back, look at all 
the different ideas, and I know that, for instance, there is a 
proposal of a solid barrier in part of the delta. We are very 
excited about that. We want to engage with the stakeholders, 
local folks on research, demonstration projects as quickly as 
possible to see if we can use that to solve some of the water 
problems and provide sufficient water for people, fish, and 
agriculture.
    Senator Feinstein. You see, the problem I am having, and I 
really appreciate what you have said, is with the smelt 
opinion. Seven smelt could stop the pumps. Smelts are smaller 
than the size of a finger. Nobody knows how many smelt there 
are. Nobody knows how many predator fish there are, and no one 
knows the impact of ammonia releases from inadequate sewage 
treatment plants into the delta. And we have now asked NAS to 
take a look at other stressors, which would include those that 
I have just mentioned.
    In the salmon opinion, which concerns me greatly, it is not 
only the delta where the problem is. It is the rivers up north. 
It is the ocean. It is the coast. And I somehow wonder how 
biologists come up with these opinions that really don't stand 
the test of scrutiny, which NAS--which I believe to be the 
premier body with respect to this.
    So I happen to believe that we need a new relook at how we 
do this science. And I hope that comes out of this effort.
    Secretary Locke. Well, I think that we have to understand 
that there are many factors affecting the survival of salmon 
and the return of salmon. It is not just the practices in the 
delta, operation of the pumps, but the use of pesticides and 
septic tanks and just sewage treatment.
    But then, what is happening with the oceans as well? And 
are some of the things happening in the oceans, whether it is 
the increasing salinity, to the rising temperatures of the 
oceans, are they also having an impact? And so, how much burden 
are we putting on other practices that are occurring, and 
conditions within the delta if, in fact, they are not 
contributing to the mortality or to the lack of returning 
salmon?
    So we need to really look at all of those factors and 
understand how much are really manmade.
    Senator Feinstein. Thank you very much. Just know there is 
very deep concern about this. I thank you for your work----
    Secretary Locke. But ultimately, I think we need to work 
with the local and State governments in terms of, how do we 
move that water, and how do we capture the water that is 
abundant during parts of the year, to have that available for 
movement whether in the spring or in the summer so that, 
ultimately, the challenge is, we need more water.
    We need more water, and we know that oftentimes there is 
water flowing at abundant levels at various times of the year 
that are flowing out to the ocean that will not--and the 
diversion of that, storage of that will not impact the salmon. 
And what type of devices, storage, and/or transfer mechanisms 
are available to take advantage of that abundance of water?
    Senator Feinstein. Exactly. Thank you. Thank you for your 
reasonableness, and I wish you well.
    Secretary Locke. Thank you.
    Senator Feinstein. Thank you.
    Senator Mikulski. We now turn to Senator Pryor from 
Arkansas.
    Senator Pryor. Thank you.
    Senator Mikulski. Now you don't have a coast?
    Senator Pryor. We don't have a coast.
    Senator Mikulski. You do have catfish?
    Senator Pryor. We do have catfish.
    Senator Mikulski. So my staff advises me that NOAA doesn't 
regulate catfish.
    Senator Pryor. That is correct.
    Senator Mikulski. It is classified as ``livestock''.
    Senator Pryor. That is correct.
    Senator Mikulski. Is that correct?
    Senator Pryor. That is correct.
    Senator Mikulski. And therefore, regulated by FDA and the 
Department of Agriculture?
    Senator Pryor. That is correct. That is right.
    Senator Mikulski. Okay. Well----
    Senator Pryor. We will have no catfish questions today.
    Senator Mikulski. But we could have a catfish lunch 
sometime.
    Senator Pryor. We can do that. We can certainly arrange 
that.
    Senator Mikulski. Well, I turn now to Senator Pryor.

           ADMINISTRATIVE SAVINGS--DEPARTMENTAL EFFICIENCIES

    Senator Pryor. Thank you, Madam Chair. Thank you very much, 
and Secretary Locke, always great to see you, thank you for 
being here today.
    I do want to focus--since I can't talk about catfish, let 
me focus on the President's budget request. And I know that in 
his proposal, he and you do things like trim spending here and 
there and try to eliminate programs that you may not need. One 
of those, apparently, is the Emergency Steel Loan Guarantee 
program.
    And I think you have come out and talked about how some of 
your administrative costs you are going to try to cut by maybe 
as much as $140 million through efficiencies in human capital, 
logistics, acquisitions, IT, and just general good business 
practices, and your administration of that. So could you just 
walk the subcommittee through what your vision is for trying to 
achieve those efficiencies within your Department?
    Secretary Locke. Well, it is my belief that we will never 
have enough money to do it all, and the more that we can focus 
on efficiencies, we are able then to free up people to focus on 
other aspects of the mission that are of a high priority, but 
not yet being addressed.
    And that includes the President's call for reorganization 
and efficiency among the exporting agencies, our trade-related 
agencies. That is what we are doing within the Department of 
Commerce in terms of looking at acquisition reform, motor pool 
operations and the use of technology to improve and speed up 
our processes.
    But if you are asking about the philosophy of all of these 
programs, it is that we need to take advantage of the 
technology that we are, for instance, issuing patents for and 
that the private sector is developing to improve our own 
operations. We have got to set very high-performance goals, but 
really trust the employees and the line staff, the career 
people that are here to really flesh out the details and to 
devise these--to provide the details for how we get from here 
to there.

             GOVERNMENT ACCOUNTABILITY OFFICE (GAO) REPORT

    Senator Pryor. In March--I am not certain that you have 
seen this. But in March, GAO issued a report that many of us in 
the Senate had requested about finding redundancies, waste, and 
inefficiencies in Government that we're missing right now. And 
they came up with a long list of items that basically touched 
on every department.
    And I am wondering if you have seen that GAO report and if 
you are already trying to implement some of those suggestions?
    Secretary Locke. I very much look forward to all the GAO 
reports and inspector general reports that comment on the 
Department of Commerce. And, for instance, we have taken to 
heart all of the inspector general reports, whether it is on 
NOAA, whether it is on our ITA, to acquisition reform, to the 
Census Bureau, and we have always tried to incorporate those as 
our metrics and as our priority action plans for improving the 
functions and the efficiencies and the operations within the 
Department of Commerce.
    And I am very pleased that the inspector general has 
commented on the incredible management reforms and efficiencies 
that have been carried out by each of our bureaus. Not that 
there isn't more work to be done, but we take to heart those 
reports and make those very much part of our performance 
measurements.
    Senator Pryor. Well, if you haven't had a chance to see 
this one, I hope that you and your staff will look at it, 
because this is more of a Government wide report. It is not 
just focused on your Department. But there are many very solid 
and thoughtful recommendations that GAO has made.
    Secretary Locke. Right.

                       NATIONAL EXPORT INITIATIVE

    Senator Pryor. The last question I think I will have time 
for is about your National Export Initiative. And I think 
exports are very important to this country. It concerns me when 
I see our trade deficit numbers, and I am not trying to blame 
other countries. I think some countries do put up barriers, and 
one of those could be currency barriers, but they could do lots 
of things that create barriers.
    I think that we should do everything we can on our end of 
the equation to try to maximize the number of exports to get 
this country working again, and those manufacturing jobs are 
very important to our national economy. So how can we 
strengthen our exports? And I know that you have that 
initiative in the Department, and I would like to hear your 
thoughts on what we can really achieve when it comes to 
exports.
    Secretary Locke. As I stated at the very beginning, exports 
have accounted for almost one-half of the economic recovery and 
the growth of the economy since the start of this great 
recession. And exports are up 17 percent in 2010 versus 2009. 
Exports of goods overall is up 23 percent in 2010 versus 2009. 
Agricultural exports are their second highest in U.S. history, 
and 2011 may actually set the record.
    And exports of goods to China were up 32 percent in 2010 
versus 2009. And the first couple months of 2011 shows 
impressive gains as well. So we believe we are on track to meet 
the President's goal of doubling exports by 2015, despite the 
earlier predictions to the contrary by a lot of experts.
    But we are focusing especially on the medium- and small-
size companies, because the big companies of the world have 
hundreds, if not thousands of marketing staff all around the 
world to help them sell. We help the big companies with respect 
to making sure that they have a level playing field, that they 
are not facing discriminatory or nontariff barriers, whether it 
is on procurement--we help advocate on their behalf if they are 
seeking Government contracts all around the world, and we have 
been successful in helping them.
    But we really need to help the small- and medium-size 
companies who don't have their own marketing staffs.
    Senator Pryor. I agree with that.
    Secretary Locke. And so our programs with export assistance 
center personnel through the commercial service. We have 
personnel in almost 100 cities throughout the United States and 
hundreds of people stationed in almost 80 countries around the 
world, and their sole job is to find buyers and customers for 
``made in USA'' goods and services.
    And that is why--and we are partnering with companies like 
UPS, FedEx, the National Association of Manufacturers, to 
identify some of their companies that export, let us say, to 
only one or two countries, to say we really can help them 
export to four or five more countries.
    The reality is that 58 percent of all United States 
companies that export, export to one country--typically, Mexico 
or Canada. Fifty-eight percent of all U.S. companies that 
export, export to only one country. Our goal is to help them, 
who already know about customs, logistics, borders, currency, 
and international contracts.
    I mean, if they understand this, they are really willing 
and able to export to additional countries, as opposed to 
companies that have never exported before and may never get 
over that hurdle. And that is why, under the National Export 
Initiative, we are bringing all of the Federal agencies 
together, and to inform small- and medium-size companies of the 
services that we offer, from financing to finding those buyers 
and customers for them, to even guaranteeing that they will be 
paid by that foreign buyer.
    It is one thing if you sell to Massachusetts from Arkansas 
and you don't get paid. You know how to go after that buyer or 
customer. But what happens if you sell to Poland or Hungary and 
you don't get paid? The Export-Import Bank actually offers a 
service, a product that is an insurance policy that guarantees 
that you will be paid by that foreign customer or buyer so that 
this small business owner can really sleep at night.
    And so, those are some of the services we offer.

                         INTELLECTUAL PROPERTY

    Senator Pryor. I appreciate that. I think that is good.
    Madam Chairman, I am out of time. But I would like to add 
one more to your list that I think the United States should be 
very, very firm on with our trading partners, and that is the 
protection of intellectual property.
    I think that it really harms our ability long term to 
export goods and even things like music, DVDs, et cetera, from 
this country when they can just reverse engineer those things 
or pirate those things overseas. And really, it seems the 
United States does not take any recourse against that. So I 
hope that this will be another front that you and others can 
work on.
    Thank you.
    Secretary Locke. I can tell you that this is a major 
concern of the entire administration. Vice President Biden is 
overseeing a multiagency effort focusing on intellectual 
property rights. As the Vice President has indicated, American 
companies are losing hundreds of millions of dollars, hundreds 
of billions of dollars every year in lost revenues, and that is 
tantamount to theft.
    He calls it outright theft, and it is----
    Senator Mikulski. Oh, it is.
    Secretary Locke [continuing]. Depriving us of jobs.

                       INSPECTOR GENERAL CONCERNS

    Senator Mikulski. I would just like to have one more. I 
have many questions, but one more in the interest of 
accountability. And you spoke about the inspector general 
report and the GAO reports.
    Mr. Secretary, I want to go to the issues around 
acquisition contracts and acquisitions, and I know you are in 
transition. But I want to know what Commerce has put in place. 
So here is my point.
    If you go to the inspector general report, the top 
management challenges facing the Department of Commerce, on 
page 7, they talk about how in fiscal year 2009, the Department 
of Commerce spent $3 billion to acquire a wide range of 
products. They range from the census, and quite frankly, a lot 
of this was before you. The census was a boondoggle. Secretary 
Gutierrez and I had many heartburn meetings over that as we 
both worked together to rescue the census and its funding.
    There is the satellite acquisition issue, which is a 
significant issue affecting NOAA, and I want to drill down on 
that. I know the gentlelady from Alaska is concerned about the 
ability to forecast weather in Alaska, which, as you know, 
without it can be quite dangerous, the info-tech security, and 
so on.
    And according to the inspector general, it says that the 
Department does not have a robust oversight process for major 
system acquisitions. They cite the so-called NPOESS, now JPSS, 
as a way to do that, that we need to have a highly qualified 
acquisition workforce. And then they go into specific agencies.
    Now I know Commerce is almost like a holding company. You 
are an agency of agencies--NOAA, NIST, USPTO, all related to 
jobs. Then there is the Commerce Department.
    And my question is, particularly with these high-expense, 
high-value acquisitions, what is it that the Commerce Secretary 
and that the leadership--should there be a--and I am not into 
rearranging the chairs here, but I don't know how we get a 
handle on each individual agency through the role of the 
Secretary of Commerce. And I know this is your kind of thing. 
And I know you take the inspector general report seriously.
    So where are we in terms of addressing these concerns 
raised by the inspector general?
    Secretary Locke. Well, I found some of the reports of the 
inspector general detailing some of the past practices and so-
called problems within the Commerce Department most alarming. 
When we, for instance, on the handheld computers for the Census 
Bureau, spent hundreds of millions of dollars for things that 
we actually could not use, and we actually paid out the vendors 
almost all the money and got almost nothing in return and then 
had to go to a very expensive paper and pencil program.
    Then, of course, the problems detailing our satellite 
programs, NPOESS, which is now JPSS, we took those 
recommendations to heart and have restructured that program 
along the lines recommended by the inspector general and 
various other select committees, task forces that the Congress 
set up to look at it.
    And now the acquisition program for the satellites is very 
much along the lines of the Geostationary Operational 
Environmental Satellite-R program, which the inspector general 
has set out as the model and one that we should emulate. I 
think the problem that we have had with acquisitions in the 
Department of Commerce really breaks down to two fundamental 
things, or at least one fundamental thing. There has always 
been a disconnect, too much of a disconnect between those who 
set the program objectives and those who actually are in charge 
of procurement, the actual oversight and the management or the 
letting of these contracts.
    There is not enough back and forth between them, 
questioning and saying, do we really need this? Is this really 
desirable? Can you really achieve your program objectives by 
using things off the shelf instead of customizing things?
    Senator Mikulski. So where are we?
    Secretary Locke. So we have, in fact, hired consultants, 
and we have embarked on a massive overhaul of our complete 
acquisition programs. And that is why we are already seeing 
that we will be able to make a lot of these savings assumed in 
the budget from the transformation of our acquisition program, 
in which many things will now be brought in-house or 
centralized, in which the program managers will have much more 
interaction and ownership with the procurement officers and 
vice versa.
    So we are very, very pleased with the progress we are 
making, and it is an interagency or interbureau collaborative 
effort. And I would be more than happy to share with you the 
actual findings, details, the timeline, and the actual reforms 
that are underway right now, as we speak, with respect to 
acquisition reforms.
    [The information follows:]

    The Department of Commerce has taken substantial, concrete steps 
over the past 7 months to improve the effectiveness and efficiency of 
its acquisition operations, including important steps to respond to 
long-standing issues that led to several high-profile, problematic 
acquisitions.
    Last June, I directed an immediate and comprehensive review of 
Commerce acquisition operations. The Department of Commerce hired LMI, 
an independent, highly regarded consulting firm with significant 
expertise in acquisitions, to review its acquisition operations.
    The study examined the entire range of activity from simplified 
acquisition to major systems acquisition. It included an analysis of 
publicly available and internally generated data, and interviews with 
nearly 100 key personnel in the Department of Commerce.
    The study resulted in eight significant findings depicted in the 
following table. The preliminary findings were presented to two expert 
panels to gain their insight and commentary. One panel was composed of 
current senior managers from other Federal agencies, including Steve 
Kempf, Commissioner, Federal Acquisition Service, General Services 
Administration; Dan Gordon, Administrator, Office of Federal 
Procurement Policy, Office of Management and Budget; and Scott Gould, 
Deputy Secretary, Department of Veterans Affairs. A second panel was 
composed of former Federal leaders with relevant experience and 
expertise.

           EIGHT FINDINGS OF THE ACQUISTION IMPROVEMENT STUDY
------------------------------------------------------------------------
  Primary issues relating to high-profile      Additional acquisition
                 programs                              issues
------------------------------------------------------------------------
The requirements management process is      Department lacks a reliable,
 insufficient; as a result, requirements     automated information
 are not rigorously validated, refined,      system for all acquisition
 and managed.                                functions.
Acquisition planning, including analyses    Department lacks strong
 of alternatives and strategy development,   standardized acquisition
 is weak.                                    performance metrics and
                                             monitoring.
Bureaus initiate programs and manage        There is no standard quality
 acquisitions relatively autonomously,       assurance for the
 without Department-level governance,        acquisition process.
 oversight, or insight.
                                            There is little leveraging
                                             of spend across the
                                             Department.
                                            OS and Bureau customers are
                                             frustrated with the
                                             contracting process.
------------------------------------------------------------------------


                                             
                                             

     deg.As part of its Acquisition Improvement Project (AIP), the 
Department assigned a team of Bureau acquisition and Department 
personnel, as well as senior management from the Office of the 
Secretary and the Commerce Office of Inspector General, to conduct 
weekly reviews and discussions of the Project.
    The project is led by a formal governance structure to provide 
strategic direction and guidance. The Deputy Secretary and General 
Counsel serve on my behalf as the Secretarial leadership, and the Chief 
Financial Officer and Assistant Secretary of Administration serves as 
the executive chairman. The governance structure also includes senior 
Bureau management co-sponsors.




        Figure 1. Governance of Acquisition Improvement Project.

    The Department also recently hired a new Director of Acquisition 
Management with extensive experience in risk management, acquisitions 
and project management. The new Director has more than 30 years Federal 
experience and will ensure that acquisition headquarters plays a 
stronger, more strategic role in acquisitions planning, risk 
assessment, and program/project management.

                           SPECIFIC PROJECTS

    Through the AIP, the Department has assembled a team of program 
managers and contracting officials from the Bureaus to tackle the issue 
of how to better integrate program managers and acquisition staff from 
the very beginning of the process, when we first ask: ``Do we need to 
buy this? If so, what do we need to buy?''
    As shown in Figure 2, AIP is being conducted through six project 
teams, each with considerable Department Bureau leadership or 
membership comprised of program/project management, information 
technology, and procurement professionals. The acquisition program/
project management framework (a comprehensive and executable process by 
which acquisition projects will be managed) is being jointly developed 
by three teams--those responsible for the requirements definition, 
validation, and control; the program/project management process and 
procedures; and the roles and responsibilities. The teams are working 
in an integrated fashion to ensure alignment.
    A draft framework has been developed and will be finalized in July, 
followed by a draft Department-level implementing guidance manual 
delivered in October 2011. This framework is being selectively tested 
in NOAA, where program managers and acquisition staff are working 
collaboratively to develop requirements from the very start. We will 
soon implement elements of the framework into a new, department-wide IT 
buy for ``end point security,'' which will provide laptop and desktop 
security. We are also conducting an analysis of how this proposed 
framework would have impacted several high-profile acquisitions that 
were over-budget, over-schedule or performing poorly.
    As part of the framework development we are creating a 
communication, training, and outreach plan to help with the roll out, 
acceptance, and adherence to the processes and procedures being 
developed. We started that communication with a presentation at the 
Department of Commerce Acquisition Conference held during May 2011. We 
are planning a focused mini conference as a follow-up this coming 
October to continue with the communication and outreach.




               Figure 2. Acqusition Improvement Projects.

    The Department is on target to meet an ambitious set of goals 
surrounding each initiative. By the end of fiscal year 2012, the 
Department will have contracts and other strategies in place to begin 
saving $17 million annually through strategic sourcing. These savings 
are part of the Department's overall administrative cost savings plan 
as part of its fiscal year 2012 budget request.
    Other goals are to strengthen acquisition requirements through a 
new integrated, enterprisewide approach, implement a new acquisition 
program/project planning and risk assessment process, launch a new 
Center of Excellence to service small bureaus, and strengthen 
Department management of acquisition through comprehensive performance 
metrics, clearly defined roles, and full integration of acquisition 
into other critical department-wide reform effort in risk, IT, and 
facilities.
    See Figure 3 for timeline and deliverables.

       THREE PROJECTS FOCUSED ON IMPROVING ACQUISITION PROCESSES

    Three of the projects--requirements, acquisition planning and risk, 
and a better defined role for acquisition headquarters and the 
Bureaus--are designed to ensure appropriate insight, oversight, and 
management of departmental acquisitions. It will guide specific bureau 
leadership and workforce activities including executive oversight 
councils, bureau program management offices (PMO), acquisition project 
managers, Contracting Officer's Technical Representatives (COTR), and 
contracting/procurement offices.
    The requirements project team is focused on fixing the problem that 
project requirements are often not well-defined, validated or managed, 
and developed too late in the project lifecycle, resulting in cost 
over-runs, delays, and poor performance. The acquisition planning and 
risk assessment team is aimed at increasing the likelihood of 
successful acquisitions by minimizing risk and strengthening planning. 
The roles and responsibilities project team is focused on better 
defining the role of acquisition headquarters and the bureaus; 
redesigning acquisition headquarters to reduce risk, measure and 
enhance performance, and drive common standards and policies; and 
leading workforce development to include training of, support to and 
interaction among project managers, COTRs, and contracting/procurement 
offices.
    After study and analysis of their individual mandates, the three 
teams determined their focus areas overlapped and they needed to 
integrate their efforts. They are now working together to develop an 
acquisition project management framework that will provide a 
structured, systematic foundation for project management of all 
departmental acquisitions throughout their lifecycle. The framework is 
designed to educate and guide the activities of executive oversight 
councils, bureau PMOs and project managers, and to be scalable, with 
different required elements depending on the size and criticality of a 
project.
    The end result of the integrated efforts of these teams will be an 
acquisition framework that includes details on milestone reviews, 
interfaces with stakeholders, oversight mechanisms, roles and 
responsibilities, metrics, and risk management. It will identify 
required capabilities to implement and sustain the process including 
organizational leadership, stakeholder engagement, life-cycle cost 
analysis, program/project management, and requirements development 
functions. Further, this acquisition framework will specifically inform 
acquisition project managers on the processes they are to undertake, 
the deliverables required and the necessary organizational interactions 
with process participants for successful acquisition project 
accomplishment.
    To validate the effectiveness of the new approach, the teams will 
identify pilot projects that will be used to evaluate individual steps 
in the process, as well as longer-term pilots that will follow projects 
through their lifecycle.

             THREE PROJECTS FOCUSED ON SPECIFIC CHALLENGES

    The Department's acquisition improvement efforts include three 
projects that address specific challenges identified in the study--a 
lack of a reliable acquisition automated information system, 
insufficient leveraging of spending across the Department, and customer 
frustration with acquisition services.
    The automated information system project team is developing the 
system requirements and budget for an automated procurement system 
linking to other Department systems to allow full accountability and 
transparency into acquisition operations. Current efforts include 
market research for the new system as well as the development of an 
interim solution to provide greater granularity and reporting of 
spending patterns.
    The strategic sourcing and savings project team is focused on 
finding opportunities for leveraging spending across the Department, 
improving sourcing standardization and visibility into spending, and 
increasing the efficiency of acquisition operations. They have 
completed their analysis of current spending and have launched five 
strategic sourcing projects on selected commodities. Strategies and 
contracts in place by the end of fiscal year 2012 are projected to 
achieve annual savings of $17 million.
    The customer service and workforce project team is focused on 
improving customer service, particularly for smaller bureaus without 
in-house acquisition capability, and enhancing the acquisition 
workforce to meet the acquisition needs of the entire Department. The 
team's efforts will result in the launching of an Acquisition Center of 
Excellence to provide contracting services to the small bureaus. 
Additionally, it is developing an action plan to address departmental 
acquisition workforce development issues.
                               conclusion
    Real reform takes vigilance, commitment and a great deal of work by 
many people. However the lasting results of those efforts--a stronger 
agency focused on mission success--is critically important. The 
Department of Commerce looks forward to continuing to work with the 
Congress on this important initiative.




                  Figure 3. Deliverables and Timeline.

                                  JPSS

    Senator Mikulski. Well, we need to. And I intend to work 
very closely with your successor so that the fact that when we 
do the census, even though our population is increasing only by 
10 percent, the census for 2010 cost double--double--what it 
did to do the census in 2000.
    So I don't want to wait until 10 years from now. And I 
don't want to wait an hour-and-a-half before people are 
supposed to hit the streets and we have another boondoggle. 
That is the census.
    But when we get into these big satellite issues--and I must 
say, this is an issue throughout the Government--I don't know 
if we know how to buy satellites and, in other words, the 
design, the acquisition, the procurement, and the deployment. I 
know Dr. Carter at the Department of Defense has embarked upon 
this, and you and NASA are the big satellite agencies.
    Now I am glad we could get the NPOESS matter straightened 
up, and we have had this velvet divorce with the Air Force. 
That, in and of itself--all divorces are messy, but now that we 
have gone to JPSS, which goes directly to weather when it is 
deployed and so on, where are we now in making sure that this 
satellite is on track, both in terms of its deployment and then 
within the parameters of the appropriations request?
    I am concerned about delays. I am also concerned that if we 
shortchange what we need to do now, we will pay later, either 
in late deployment of very important weather information, or we 
will pay more in terms of our contracts. Can you share this?
    And while NOAA is working and doing their work, at the 
Secretariat level, is this at your level and as you transit 
out, is this one of the red flashing lights that you have for 
your successor in transition documents? And my question is, are 
we really on track with JPSS? And then, in transition, I don't 
want this just kind of lost out there.
    Secretary Locke. Let me just say that from my very first 
day as Commerce Secretary, this was the number one priority for 
me because I read the reports, the inspector general reports, 
and I went to the White House and spoke with Dr. Holden and 
others about how we had to pursue this, as you call it, velvet 
divorce. And that took quite some time, but we ultimately 
succeeded.
    We now have, I think, in place, a very good system by which 
we are working with NASA, in which we are, of course, the 
primary customer. They are helping us execute, but we are 
helping set the framework and overseeing this project because 
it is ultimately affecting us and our ability to deliver 
weather information to the American people, but also to all the 
businesses that depend on weather, whether it is shippers, 
whether it is farmers, and public safety officials who are 
charged with ensuring the safety of their communities in times 
of earthquakes, hurricanes--or, excuse me, hurricanes and 
storms.
    Let me just say that we are concerned about the funding of 
the JPSS program. We had asked for about $1 billion for fiscal 
year 2011. Under the continuing resolution, we received only 
about $382 million.
    The request for 2012 is $687 million for JPSS. We have to 
have this money. Otherwise, we are going to have to look at 
other ways of receiving that weather information, whether it is 
possibly contracting out with other governments around the 
world to get that information. We are already behind schedule, 
years and years and years behind schedule with respect to these 
satellites.
    [The information follows:]

    National Oceanic and Atmospheric Administration's (NOAA) Joint 
Polar Satellite System Program (JPSS) is working toward completing the 
assessment of what can be achieved with the fiscal year 2011 
appropriations. NOAA estimates that the level of funding of $382 
million in fiscal year 2011, nearly $700 million below the fiscal year 
2011 budget request, will result in at least an 18-month delay in 
launching the first JPSS satellite. Specifically, at this funding level 
NOAA estimates that the first JPSS spacecraft would launch sometime in 
late fiscal year 2017. This will result in a near certainty of a gap in 
polar-orbiting satellite coverage. Any gap in satellite coverage would 
lead to an inability to provide early warnings for severe storms and 
less accurate forecasts later this decade.

    Secretary Locke. And we very much run the risk of a gap of 
weather information coverage, and we run the risk of--if we are 
not able to figure out how to get that information from other 
sources, we run the risk of an information gap, which will then 
degrade the accuracy of our weather forecasts, and we will not 
be able to give as accurate a forecast many more days out in 
the future that we are able to do today.
    Senator Mikulski. I want to come back to the specific 
project, with the indulgence of Senator Murkowski. But as you 
transition--I know they are preparing transition documents now. 
Is this one of the top flashing lights for the next Secretary 
of Commerce to stand sentry over, working with NOAA and us to 
make sure this is as on track as we can possibly make it?
    Secretary Locke. It has to be, and it certainly----
    Senator Mikulski. No, is it? Do you have this in your 
transition documents? And when you say ``Hi'' to the next 
person who takes over, that you alert them to this being a top 
priority?
    Secretary Locke. Yes, it is, because it is such a big 
driver of the budget.
    Senator Mikulski. Yes.
    Secretary Locke. It consumes so much money that any 
problems, any hiccup, any cost overruns will affect the rest of 
NOAA to carry out its mission. So it is such a cost, such a 
huge part of our budget, and for 2012 makes up almost 7 percent 
of the entire Commerce Department budget.
    Senator Mikulski. Yes, and that is what we are worried 
about, and that is why we raised so much hell and pounded the 
table. Now under JPSS, under the continuing resolution, we give 
JPSS $380 million. We understand that the need could be as much 
as $900 million. What really is the need to keep this on track?
    Secretary Locke. Well, we believe that it was close to $1 
billion, $900 some-odd million just to keep on track. We are 
going to have to know that we know what the dollar amount is, 
we are going to have to really go back and see what we can do, 
what we are able to do with the contractor to see how we can 
continue to do some work on it at that level. And then, of 
course, it will depend on how much money we receive in the 2012 
appropriation.
    [The information follows:]

    The Joint Polar Satellite System (JPSS) program requires $1.07 
billion in fiscal year 2012 appropriations to meet the development 
schedule for a late fiscal year 2017 launch date of JPSS-1. With these 
funds, the National Oceanic and Atmospheric Administration (NOAA) will 
resume full development of the instruments that will fly on JPSS-1, 
initiate development of the JPSS-1 spacecraft, and augment system 
robustness.
    The NOAA Climate Sensor Program has also been impacted due to the 
funding limitations of the fiscal year 2011 continuing resolution. In 
the President's fiscal year 2012 budget request, $30.4 million was 
requested to continue the development of climate sensors to be 
incorporated into the JPSS program. The NOAA Climate Sensor Program has 
received limited funding increasing the risk that the earth radiation 
budget instrument (CERES) will miss the JPSS-1 flight opportunity. The 
program continues development of Total and Spectral Solar Irradiance 
Sensor.

    Senator Mikulski. Well, I would like very much to talk with 
you about it. I don't mean to interrupt, Sir. But I am really 
apprehensive about this, and I don't want a boondoggle in terms 
of the lack of weather coverage, and I don't want a fiscal 
boondoggle where, because we are not smart now, we pay huge 
amounts, either, in a delay in the deployment of a satellite. 
It is not about the satellite. It is about the product of the 
satellite could be very significant for our communities.
    And then also--so what we want, that, given the continuing 
resolution and now that you know the number, for there to be 
this scrub or a meet-up or whatever with the contractor, but 
then what is it that we really need to do in 2012 to make sure 
that we keep this on track as much as we can? And follow 
through, and I really want to follow through on this. And it 
goes to the delay in weather.
    You know, I am really proud of NOAA. I mean, we have our 
fishing problems. I mean, wherever there is NOAA and fish, 
there is controversy. But it is like--again, I don't mean to be 
dismissive when I said the zoning commission. But there is a 
tension, and the gentlelady from Alaska knows it, over her 
great Pacific Northwest fisheries. I have got my crabs and my 
oysters and all the stuff we do. When NOAA says no, like to 
rockfish, there is grouchiness and economic hardship.
    But my point is that while we look at fish, and we can take 
that up, NOAA and what NOAA has done on weather, both in our 
own country and the alerts it does around the world, and the 
training around the world, particularly of small Pacific 
islands and so on, I think it is phenomenal. It is truly, truly 
phenomenal, and we are proud of them.
    And as we conclude this hearing, I really want to express 
both to you and through you during this time of tension around 
shutdowns how much we value the people who work at the 
Department of Commerce not only here in Washington, but all 
over. I am really proud of them. Many are headquartered in 
Maryland.
    When we look at NIST, which we didn't even have a chance to 
talk about today--there are three Nobel Prize winners who work 
at NIST.
    Senator Murkowski, there are three Nobel Prize winners who 
are civil servants at NIST. One at NIST headquarters, Dr. 
Phillips, and two at NIST Colorado. And they are there, working 
every day to create the standards so that our intellectual 
property can be turned into products that can be marketed 
around the world, whether it is the weather or the tsunami 
alerts and so on.
    So we have our ups and downs, and sometimes congressional 
hearings focus on the dark side. But I want you to know that I 
certainly appreciate them. And no matter what they said and no 
matter what the OMB directive is, I think they are essential.
    So did you want to wrap up?
    Senator Murkowski. I will just make a final comment here, 
and Madam Chairman, thank you for bringing up the issue of 
where we are with the satellite JPSS.
    We are very concerned about it, having sat down with Jane 
Lubchenco and talked about this and the timing and the critical 
aspect to how you ensure that the funding tracks with the 
deployment so that there is no gap. And from Alaska's 
perspective, we are a little bit concerned about this because 
it is my understanding that it will be that weather tracking 
that is available to us in Alaska that will likely be impacted 
the most if there is any aspect of the gap because of where 
that satellite sits.
    And I think we all recognize that weather affects all of 
us, and we pay attention to it here. But when you are a 
fisherman and your livelihood is out on the water, you need to 
know about those storms, and what NOAA provides to us in terms 
of this tracking is critically important.
    So I appreciate what you are trying to do. How you thread 
the needle on this one is going to be difficult. It is going to 
be a challenge for us. So I would like to work with you, Madam 
Chairman, and those within the Department in offering up 
suggestions. But we are paying very close attention to this.
    I thank you for the hearing, Madam Chairman.
    Secretary, I too wish you well as you go on to, I am 
assuming, bigger and better things. Again, a great many issues 
within the Department affect us back home, and we appreciate 
the leadership that you have provided over these past couple of 
years.
    Thank you.
    Secretary Locke. Madam Chairman, if I could, I would just 
like to say that we are very concerned about these satellites 
because we know that virtually one-third of the U.S. economy is 
dependent on weather and climate information coming out of the 
Department of Commerce, specifically NOAA.
    We are very concerned that right now we have the capability 
of predicting weather to fairly accurate levels 5 to 7 days in 
advance. And without these satellites being in place at the 
right time, we could have a data gap. We are going to do 
everything we can to avoid any such data gap.
    But our ability to accurately forecast the weather that 
many days out could be seriously compromised. It could only end 
up being 3 to 5 days.
    Let me just end by saying that I am very, very proud of all 
the men and women who work at the Department of Commerce. We 
have only a very small number of political appointees, and an 
overwhelming 99 percent are career folks, people who are very 
proud of their work at the Department of Commerce among all the 
different bureaus.
    I am really proud of what they have been able to do, to be 
as efficient and effective in their processes, to shorten 
processing times--EDA grants, which are the lifeblood for many 
communities, as they try to reinvigorate their economies, to be 
able to give out those grants, make those decisions in, instead 
of 6 to 7 months, now 18 business days.
    What we are doing to try to increase job creation by giving 
out patents within a year, and everything we are doing through 
NIST in developing the standards by which smart grid 
technologies, the products that will help us use electricity 
and have more electricity and just determine when we turn on 
our electric clothes dryer, using home computers.
    All of these activities are absolutely phenomenal, and we 
very much thank the support of you, Madam Chair, and the 
members of the subcommittee for all that we do at the 
Department of Commerce. And it has been one of the best jobs I 
have had.
    And Senate willing, I may be moving on to another position, 
but let me just say how proud I am of the great men and women 
at the Department of Commerce and all the services we provide.
    Senator Mikulski. We feel the same way. And we wish you 
Godspeed. I look forward to voting for you.

                     ADDITIONAL COMMITTEE QUESTIONS

    And if there are no further questions this morning, 
Senators may submit additional questions for the subcommittee's 
official record. We ask the Commerce Department to respond 
within 30 days.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

           Questions Submitted by Senator Barbara A. Mikulski

                             CENSUS BUREAU

    Question. The 2010 decennial census cost a total of $13 billion, 
which is 20 percent more expensive than the original estimate of $11 
billion and double the cost of 2000 census of $6.5 billion. For 2012, 
the Census Bureau requests $67 million to start planning the 2020 
decennial census. The Census Bureau has already suggested the 2020 
census could cost as much as $22 billion--double the original estimate 
of the 2010 decennial census ``because of population growth and 
inflation'' even though the U.S. population has only increased an 
average of 11 percent between decennial censuses. If the population of 
the United States only increases about 11 percent every 10 years, why 
does each decennial census cost taxpayers almost twice as much money as 
the last?
    Answer. The rising costs of the 2010 census were largely driven by 
five factors:
  --the increasing diversity and geographic distribution of the 
        population;
  --the demand for the Census Bureau to strive for improving accuracy 
        over previous censuses;
  --the lack of full public participation in the self-response phase of 
        the census, requiring the hiring of a large field staff for 
        nonresponse followup;
  --significant challenges with linking major acquisitions, the 
        schedule, and the budget; and
  --substantial investments in major, national updating of the address 
        frame just prior to enumeration (2009).
    The first two factors--increased diversity and the demand for a 
very high level of accuracy--are beyond the Census Bureau's control. As 
a result, the 2020 census research program is focusing on the other key 
cost drivers.
    Question. What lessons did the Census Bureau learn from the 2010 
census to ensure the 2020 census is more frugal? Based on your 
experience, do you think the 2020 census could cost less than the 2010 
decennial census?
    Answer. The Census Bureau is committed to designing and conducting 
a 2020 census that costs less per housing unit than the 2010 census 
while maintaining high-quality results. The Census Bureau has 
identified four strategic goals for the 2020 census:
  --a complete and accurate census;
  --embraced and valued results;
  --an efficient census; and
  --a well-managed census.
    To achieve its cost and quality targets and meet its strategic 
goals, the Census Bureau must make fundamental changes to the design, 
implementation, and management of the decennial census. Substantial 
innovation and improvements are necessary to prevent another large 
increase in costs, while still maintaining high quality. Research on 
new methods likely to affect costs must be accomplished early enough in 
the decade to confirm their likely impact on both cost and quality 
(coverage) to inform timely design decisions. Without early investment 
in research and innovation, the strategic goals and the ability to stem 
cost growth will be jeopardized.
    At the same time, the 2020 census must incorporate strong risk and 
program management to avoid the problems encountered during the years 
leading up to the 2010 census. The final design also must be robust, 
resilient, and flexible enough to respond to social and technological 
changes that will undoubtedly occur throughout the decade.

   NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA) SATELLITES

    Question. It has been more than a year since NOAA proposed the new 
organizational plan for polar satellites which includes a separation 
from the Air Force on National Polar-orbiting Operational Environmental 
Satellite System (NPOESS). What positive outcomes and new challenges 
have come from the NPOESS/Joint Polar Satellite System (JPSS) 
reorganization?
    Answer. NOAA, in partnership with the National Aeronautics and 
Space Administration (NASA), has made considerable progress on the 
transition to the JPSS program since the February 2010 decision was 
announced. In the past year, 4 of the 5 instrument and ground contracts 
have transitioned. The spacecraft and associated instruments are being 
developed to NASA's stringent mission assurance standards. NOAA and 
NASA have established program oversight and procedures that will guide 
continued development of the JPSS program.
    However, budget uncertainty continues to challenge the JPSS 
program. With the decision to restructure NPOESS into JPSS, the 
President's fiscal year 2011 budget request for JPSS included increased 
funding for NOAA since the program would no longer be shared with the 
Department of Defense (DOD). The reduced amount for the fiscal year 
2011 enacted appropriation has caused additional delays to the planned 
JPSS-1 launch date. Unfortunately, this date will be after the expected 
lifetime of NPOESS Preparatory Project instruments, and may result in a 
loss of satellite data coverage.
    Question. NOAA requested a $678 million increase in 2011, for a 
total of $1 billion for the JPSS satellite. The full year continuing 
resolution does not fund JPSS's 2011 request. NOAA expects this will 
result in launch delays that will likely cause a gap in weather 
forecasting in 2017. Can you please explain what a ``gap'' in weather 
coverage means? How is NOAA planning to deal with the satellite gap, if 
it does occur?
    Answer. The ``gap'' means the data is not available because the 
existing operational polar satellite in the afternoon orbit has failed 
before a new polar satellite has launched, completed calibration, and 
started to provide data for operational use. Any gap will cause the 
degradation of all weather forecasts that are made for 24 hours and 
longer. The result is a much higher likelihood of forecasts that under 
or over predict the impact of the strength of severe weather systems by 
as much as 50 percent in the 2- to 5-day range compared to the weather 
forecasts that are available today. Ninety-three percent of the data 
the National Weather Service (NWS) uses in weather forecast models come 
from polar-orbiting satellites like JPSS.
    For example, we have confirmed that if there had been a gap (the 
equivalent of having no afternoon polar-orbiting data) at the time of 
the 2010 east coast ``Snowmageddon'' storm, the weather models would 
have under-forecast the snowfall accumulation in the Mid-Atlantic by 10 
inches, and the 5-7 day forecast for the event would have been 
displaced by 200-300 miles or not even predicted. The resulting 
prediction errors (up to 50 percent) would have had enormous impacts. 
Also, the early heads-up provided days in advance of the recent central 
U.S. severe storm and flood events would not have been possible without 
this critical data.
    Data from the DOD Defense Meteorological Satellite Program (DMSP) 
are not of sufficient quality to replace JPSS observations. NOAA has 
traditionally flown its polar-orbiting satellite in the afternoon orbit 
and no other nation has flown a satellite that provides the type of 
data required in that orbit. If NOAA did not have a polar satellite 
data source, such as the current NOAA-19, which will be replaced by the 
NPOESS Preparatory Project, and then the JPSS-1 satellite in the 
afternoon orbit, and since NWS cannot rely on DMSP data, the NWS 
modeling effort would be based solely on the European Metop data that 
is only available in the mid-morning orbit. Reliance on this mid-
morning orbit would result in a degradation of forecast accuracy by 1 
to 2 days. Higher confidence forecasts would only extend out 5 days 
instead of 7 days as they do currently.
    Question. NOAA eliminated the hyper-spectral sounder from the 
Geostationary Operational Environmental Satellite (GOES)-R program due 
to the fiscal constraints of the revised GOES-R program. However, NOAA 
has maintained the requirement for sounder data. How does NOAA intend 
to meet the data requirement over the next decade?
    Answer. Although the GOES-R and GOES-S satellites will not fly a 
sounder, the Advanced Baseline Imager will be used to produce most of 
the sounding products that are currently being produced by legacy 
sounders on the GOES-N series.
    NOAA will work with NASA to continue to explore flying a 
geostationary sounder on a future GOES platform. GOES-R will provide 
advancements in imager, space weather, and lightning detection; 
however, to continue to partially mitigate the lack of soundings from 
geostationary orbit, NOAA will continue to rely on ground-based 
radiosonde, profiler, and radar data, aircraft data, as well as polar-
orbiting satellite sounding data and lower-resolution geostationary 
sounder products, as available. With these sources of data, today's 
weather forecast and warning accuracy will be maintained, but not 
improved.

                U.S. PATENT AND TRADEMARK OFFICE (USPTO)

    Question. Positive management reforms continue at USPTO and the 
patent backlog is decreasing but it still takes more than 30 months for 
USPTO to clear a patent. USPTO's budget is based on the amount of fees 
collected each year and the estimated 2012 fees will provide $690 
million more in revenue than 2010. How will USPTO use these increased 
revenues to further decrease the backlog?
    Answer. USPTO has a multi-year requirements-based budget and plan 
designed to meet the needs of fee-paying applicants and reduce the 
backlog to a sustainable level. The operating requirements laid out for 
fiscal year 2012 will continue to implement this multi-year plan by 
hiring and training 1,500 patent examiners, authorizing the maximum 
amount of overtime, and paying for awards and contractual services 
needed for additional production. These levels were analyzed and 
modeled to identify the appropriate level of hiring to ensure the 
desired ramp down of staffing once the application inventory reaches 
optimal levels.
    Question. What is USPTO's long-term strategy for better patent 
planning so that a backlog situation can be avoided in the future?
    Answer. The backlog has grown due to a number of factors, including 
significant increases in the number and complexity of patent 
applications and challenges with sustainable funding. USPTO continues 
to balance the need to address the growth of the backlog, while 
improving quality. To address this challenge, USPTO is re-engineering 
its processes and has implemented significant efficiencies and 
improvements. In addition, USPTO must continue to hire, train, and 
retain a highly skilled, diverse examiner workforce. Initiatives in 
place include:
  --Hiring additional patent examiners in fiscal year 2011 and fiscal 
        year 2012.
  --Use of the hiring model that focuses on experienced intellectual 
        property professionals.
  --Targeting overtime to high-backlog technology areas.
  --Developing and implementing a nationwide workforce.
  --Improving retention by developing mentoring, best practices, and 
        retention strategies.
  --Continue the outsourcing of Patent Cooperation Treaty searching.
    USPTO must also continue to increase efficiencies through the 
implementation of major process improvements in the patent examination 
workflow, and in optimizing examination capacity. Initiatives in place 
include:
  --A re-engineered patent examiner production count system;
  --Prioritization of incoming work;
    --Green technology acceleration;
    --Project exchange; and
    --Multi-track customized examination; and
  --Focusing on compact prosecution initiatives;
  --Re-engineering efforts;
    --Patent classification system; and
    --Patent examination process.

                         NATIONAL CYBERSECURITY

    Question. I proposed $10 million for a Cybersecurity Center of 
Excellence at National Institute of Standards and Technology (NIST) in 
the 2011 omnibus. The center would help the private-sector and larger 
corporations tackle the issue of cyber attacks. How important would a 
NIST Cybersecurity Center of Excellence be for helping to protect 
American businesses?
    Answer. Cybersecurity is recognized and understood as a critical 
business enabler as American businesses across all industries are 
dependent on information technology (IT) in order to be more innovative 
and more competitive. The President's budget reflects the importance of 
cybersecurity by proposing an increase of $43 million for cybersecurity 
initiatives at NIST.
    As proposed, the NIST Cybersecurity Center of Excellence could have 
an important role in the protection, facilitation and growth of 
American businesses. The Cybersecurity Center of Excellence would 
provide a partnership between American businesses and Government to 
enhance this capability, foster innovation, create commercial 
opportunities and protect those essential IT and information assets 
which are critical to our Nation.
    Question. What do you think the early top priorities should be for 
such a Center?
    Answer. Ideally, the Cyber Center of Excellence would be designed 
to focus on real world cybersecurity problems and solutions for 
industry, so would work with the private sector to identify early top 
priorities. A potential model for this public-private design is for 
NIST to use collaborative and interactive workshops to work with 
businesses such as manufacturers and cybersecurity experts to identity 
security requirements, gaps and solution sets for real applications. 
The Center could also facilitate pilot projects with industry sectors 
to show how security technologies could be incorporated into business 
processes. This would help all partners to understand how to address 
security risks and identity product gaps for security technology 
providers.

              CYBERSECURITY AT THE DEPARTMENT OF COMMERCE

    Question. The Department of Commerce inspector general has rated 
the Department's IT security as the top management concern this year. 
For fiscal year 2012, the Department requests $23 million for internal 
cybersecurity. How does your request better prepare the Department and 
its agencies against cyber attacks?
    Answer. The $5 million cyber security budget request focuses on 
enhancing enterprise-level forensics support, cyber security for 
national security systems, and funding to effectively utilize services 
available through the Office of Management and Budget's (OMB) Trusted 
Internet Connections (TIC) initiative. This forensics capability 
enhancement is designed to reduce the Department's vulnerability to 
cyber attacks by quickly and effectively isolating and correcting IT 
security incidents and providing real-time, enhanced monitoring of 
critical network segments. Funds are requested to acquire experienced 
and capable IT Security expertise to develop improved IT forensics and 
investigative capabilities. The investment in cyber security for 
national security systems will improve identity management, implement 
operational security enhancements, and provide additional network 
defense capabilities for those systems.
    Due to classification issues, additional information on this 
portion of the request can be provided upon request via a (possibly 
classified) briefing to subcommittee staff. The investment relating to 
the TIC initiative is aimed at services enhancements as well as 
supporting centralized department-level monitoring of cyber security-
related data generated through the use of TIC telecommunications 
services.
    The $23 million budget request was the result of a cross-department 
cyber security strategic planning effort that identifies cyber security 
priorities for Department of Commerce. This budget request will fund 
cyber security improvements in enterprise-wide security capabilities 
and functions. One portion of this request will fund a department-wide 
continuous monitoring infrastructure to implement and monitor key IT 
security controls on IT assets across the Department. Security 
functions provided by this infrastructure include software patch 
management, security vulnerability identification and remediation, 
asset management, configuration management, host based intrusion 
prevention and improved malware protection. A second portion of this 
request will fund an enterprise cybersecurity operations center that 
will provide support for Department-level security operations, 
situational awareness, and response. Together, these critical 
capabilities will better enable the Department to effectively detect, 
analyze, respond to, remediate, and manage IT risks.
    Question. What is the Department doing right now to address the 
inspector general's concerns ahead of a 2012 budget?
    Answer. The Department has been strongly focused on addressing IT 
security weaknesses identified by the Office of the Inspector General 
(OIG). The Department developed a Cyber Security Development Program in 
response to an OIG audit of IT security workforce which was 
acknowledged in its December 2010 ``Top Management Challenges'' report. 
The report not only highlighted the Department's plans for establishing 
an enterprise-wide continuous monitoring and security operations center 
capabilities but further acknowledged that these steps should enhance 
the Department's ability to secure its IT systems. In response to 
improvements that have been made in the past couple of years, at the 
recommendation of the inspector general, the Secretary of Commerce 
lifted the finding of a material weakness in IT security at the 
beginning of fiscal year 2011 (this finding had been in place since 
2001).
    The Department is currently working to implement an initial 
operating capability that will provide automated data feeds to the 
Department of Homeland Security CyberScope tool as part of our Federal 
Information Security Management Act reporting requirements. The fiscal 
year 2012 request will leverage this initial capability.
    In addition to the above enhancements, security improvements have 
been made in the Department's financial systems. Whereas in fiscal year 
2009 OIG found that the Department had significant deficiencies in five 
classes of IT security controls, in 2010 these deficiencies were 
narrowed to only two classes of IT security controls. The Department's 
Chief Financial and Information Officers are jointly taking ownership 
of a commitment to eliminate the significant deficiency findings from 
those remaining classes of controls, have been consistently monitoring 
bureau progress toward this goal, and have been providing regular 
updates to the Department's Deputy Secretary.
    Last, the Department has identified several key cyber security 
metrics based on chronic weaknesses identified by the OIG and has 
integrated these into bureau-level balanced scorecards, which is the 
performance management tool used by the Department's Secretary and 
Deputy Secretary for monitoring and managing bureau performance. Senior 
bureau leaders are responsible for providing quarterly updates to the 
Office of the Secretary against these (and other) balanced scorecard 
performance measures.

                            CLIMATE SERVICE

    Question. In 2010, the subcommittee requested an independent study 
from the National Academy of Public Administration to look at what a 
climate service could look like in NOAA. NOAA has included many of 
their recommendations in its 2012 proposal. The report focused mainly 
on the inner-structure of NOAA--what would make the most sense and be 
the most cost effective. But the report also looked outside NOAA 
stating: ``Strong partner relationships between NOAA and other agencies 
will be a critical factor in determining the success of the climate 
service. The Federal Government has existing relationships to build 
upon to meet climate needs.'' In NOAA's 2012 climate service proposal, 
how does NOAA continue the development of interagency relationships, 
particularly other climate research agencies such as NASA?
    Answer. NOAA recognizes that no single agency is capable of 
providing all of the information and services needed to inform 
decisionmaking. To be successful, this effort will require sustained 
Federal agency partnerships and collaboration with climate service 
providers and end users. The proposed climate service will work to 
integrate NOAA's existing capabilities and experience with climate-
relevant science and services across the agency. By consolidating 
management of climate activities, NOAA will be better organized to 
develop the necessary synergies with other agencies and climate service 
providers, and better able to meet the climate challenges facing the 
Nation. If the proposed climate service is authorized by the Congress, 
it would strongly support interagency coordination.
    NOAA is committed to continuing and strengthening interagency 
partnerships and engagement. For example, NOAA will continue to provide 
leadership for the Subcommittee on Global Change Research and its 
working groups to facilitate cooperation and collaboration among the 
climate services activities of the agencies of the U.S. Global Change 
Research Program (USGCRP). NOAA will also participate in other 
interagency climate activities, such as the Interagency Climate Change 
Adaptation Task Force, and the Executive Office of the President's 
Climate and Information Service Roundtable.
    NOAA currently participates in USGCRP, which coordinates and 
integrates Federal research on changes in the global environment and 
their implications for society. USGCRP was mandated by the Congress in 
the Global Change Research Act of 1990 (Public Law 101-606), which 
called for ``a comprehensive and integrated U.S. research program which 
will assist the Nation and the world to understand, assess, predict, 
and respond to human-induced and natural processes of global change.''
    The 13 participating agencies closely coordinate their activities 
through interagency working groups on a wide variety of topics such as 
observations, modeling, adaptation research, carbon cycle science, and 
education and outreach. USGCRP, with oversight from the White House OMB 
and the Office of Science and Technology Policy, works diligently to 
coordinate activities and enhance efficiency among Federal climate 
research portfolios.
    The carefully planned scientific strategies formulated by the 
USGCRP are often implemented in the form of agreements between one or 
more agencies. For example, NOAA works in collaboration with 15 
Government agencies on drought-related issues through the National 
Integrated Drought Information System (NIDIS). Additionally, the 
Department of Commerce and NOAA have Memoranda of Understanding with 
the Department of the Interior, Department of Agriculture, and 
Department of Energy's (DOE) Office of Science. NOAA maintains close 
collaborations with NSF and NASA through quarterly meetings of senior 
management, as well as numerous coordinated scientific activities.
    The NOAA-NASA partnership provides an excellent example of 
interagency cooperation. NOAA and NASA provide complementary services 
to the Nation and cooperate closely through both formal agreements and 
informal collaboration. Though both agencies observe climate-relevant 
variables from space, they have unique missions and roles. NOAA is 
committed to the continuation and strengthening of this relationship 
under the proposed climate service. Some key ways in which NOAA and 
NASA currently work together are outlined below.
    NOAA and NASA collaborated on the development of Climate Data 
Records, and plan to continue this productive relationship. Climate 
Data Records enable scientists and users to make use of information 
from satellites and other observing systems for climate understanding 
and applications. NASA efforts emphasize the development of fundamental 
climate data records, while NOAA emphasizes the transition of these 
fundamental climate data records to informational records that can be 
used in a variety of applications.
    NOAA and NASA extensively share both observational and derived data 
products, especially climate data sets developed across satellite and 
in situ observing platforms. Both NOAA and NASA develop and run climate 
models that contribute to national and international predictions and 
projections for the overall climate system. NASA focuses its efforts on 
the utilization of space-based observations to better understand and 
represent earth system processes in models, including clouds and 
radiation, land-use/land change and polar processes. NOAA develops 
earth system models with a focus on applications, utilizing the 
advances from other science agencies, including NASA, National Science 
Foundation, and DOE. NOAA models provide operational prediction at 
seasonal-to-interannual time scales, and alert the Nation to impending 
natural events, such as El Nino. These predictions are initialized with 
both space and in situ observations. NOAA models provide long-term 
projections of climate change, which have always been part of the U.S. 
contribution to the Intergovernmental Panel on Climate Change 
assessments. NOAA utilizes the output from these models to provide 
valuable products and services for the country's decisionmakers through 
a variety of directed engagements, such as the NIDIS.
    NASA and NOAA plan and implement joint field campaigns using 
suborbital assets and aircraft instruments from both agencies. These 
campaigns aim to better understand key physical processes and provide 
means for satellite data validation and calibration. The work on 
stratospheric ozone by NASA and NOAA laboratories and academic partners 
in the 1980s is a well-known example of the benefits of this 
partnership. Currently, there is collaboration on the Mid-latitude 
Airborne Cirrus Properties Experiment--an airborne field campaign to 
investigate cirrus cloud properties and the processes that affect their 
impact on radiation.

                           DEEPWATER HORIZON

    Question. NOAA provided significant expertise and operational 
support during the Deepwater Horizon spill to help gulf coast 
communities. NOAA's 2012 request increases oil spill research $2 
million more than 2010, and the concern of response to two major spills 
at any one time still exists. How does Commerce's 2012 request 
incorporate lessons learned from the Deepwater Horizon spill?
    Answer. The Deepwater Horizon oil spill was a grave reminder that 
major oil spills do occur. NOAA has the underlying programming and 
scientific expertise to coordinate and deliver essential science-based 
oceanographic, meteorological, biological, and geospatial services 
efficiently and effectively response. The fiscal year 2012 President's 
budget request includes an increase of $2.9 million to develop an oil 
spill research and development program. The requested funds for 
research and development will focus on national priority areas, 
including oil fate and behavior effects from deep water releases, 
response and mitigation techniques in extreme and remote environments 
(e.g., outer continental shelf or arctic regions), long-term effects on 
species and habitats, tools for natural resource damage assessment and 
restoration, and human dimensions of oil spills. Research in these 
areas will help address questions and concerns.
    Question. What NOAA offices receive an increase-to-base in 2012 to 
allow them to better respond to future oil or chemical spills?
    Answer. NOAA is a natural resource trustee and NOAA's Office of 
Response and Restoration (OR&R) is an international scientific leader 
for oil spill response, assessment, and restoration. The fiscal year 
2012 President's budget request includes an increase of $2.9 million 
for the OR&R to develop an oil spill research and development (R&D) 
program. This will be NOAA's first comprehensive oil spill R&D program. 
As the scientific lead for coastal and marine spills, NOAA's OR&R 
brings the best available science and tools to improve decisionmaking 
during responses. Research and development will focus on national 
priority areas, including oil fate and behavior effects from deep water 
releases, response and mitigation techniques in extreme and remote 
environments (e.g., outer continental shelf or arctic regions), long-
term effects on species and habitats, tools for natural resource damage 
assessment and restoration, and human dimensions of oil spills.
    NOAA is also requesting an increase of $5 million for enhanced 
observations to implement the U.S. Integrated Ocean Observing Systems 
(IOOS) Surface Current Mapping plan to monitor near-shore currents 
using High Frequency (HF) Radar. This program will be implemented by 
the IOOS Regional Coastal Ocean Observing Systems (RCOOS) to deliver 
real-time surface current data to the national HF Radar surface current 
monitoring network. The requested resources will support Regional IOOS 
HF Radar stations with an emphasis on those stations currently 
operating and delivering data to the national network in regions of 
offshore oil production and in the vicinity of major ports and harbors. 
The U.S. IOOS program will award funding via an established merit-based 
competitive process with RCOOS, and through contracts with Federal 
partners.
    The 2010 Deepwater Horizon oil spill highlighted the utility of HF 
Radar. NOAA's Office of Response and Restoration relied on real-time 
data collected from the national HF Radar surface current monitoring 
network to provide new data for inclusion in trajectory predictions of 
oil dispersal and to verify models used to assess the likelihood of the 
oil moving into the Loop Current. HF Radar data was also used daily by 
NOAA's OR&R during the Deepwater Horizon oil spill response to create 
trajectory forecasts (which were used by Federal responders to deploy 
spill response assets and identify fishery closures). In 2007, HF Radar 
was used to verify that trajectories of oil from the M/V Cosco Busan 
spill would not flow into the federally protected National Marine 
Sanctuaries near the San Francisco Bay, and resources were able to be 
deployed to other areas under greater threat. With sustained, long-term 
surface current data sets, NOAA's OR&R will now be able to provide 
Trajectory Analysis Planner products for threat assessments.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

                  JOINT POLAR SATELLITE SYSTEM (JPSS)

    Question. In your testimony, you suggested that we face the 
``risk'' of a gap in adequate weather satellite coverage due to the 
level of funding provided for JPSS in the fiscal year 2011 continuing 
resolution. My understanding is that a gap in adequate coverage is 
almost assured under current funding levels. Please describe precisely 
what the level of risk is for a gap and how long any such gap would 
last.
    Answer. At the time the gap occurs, there would be an immediate 
degradation of all weather forecasts for 24 hours and longer, resulting 
in forecasts that likely will incorrectly predict the magnitude of 
storms by as much as 50 percent in the 2- to 5-day range compared to 
current capability.
    If no polar-orbiting data had been available for the 2010 east 
coast ``Snowmageddon'' storm, the weather models would have under-
forecasted the snowfall accumulation in the Mid-Atlantic by 10 inches, 
and the 5-7 day maximum snow forecast would have been displaced by 200-
300 miles or not have even been predicted. The resulting prediction 
errors (up to 50 percent) would have had enormous economic and human 
safety consequences. In the recent Midwest severe storm, tornado and 
flood events, the early heads up provided days in advance would not 
have been possible without this critical data from the polar orbiting 
satellites.
    It should be also noted that degradation in forecast accuracy may 
have an impact on the U.S. economy. Studies have shown that the U.S. 
economic output varies by up to $485 billion a year of 2008 gross 
domestic product--about 3.4 percent--owing to weather variability.\1\ A 
portion of this $485 billion may be mitigated by improved weather 
forecasts.
---------------------------------------------------------------------------
    \1\ Lazo et al. 2011. U.S. Economic Sensitivity to Weather 
Variability. Bulletin of the American Meteorological Society http://
journals.ametsoc.org/doi/pdf/10.1175/2011BAMS2928.1.
---------------------------------------------------------------------------
    Question. What alternatives, if any, are there to data from a NOAA-
operated polar satellite for our weather forecasts?
    Answer. Neither the Department of Defense's (DOD) Meteorological 
Satellite Program (DMSP) nor the European's MetOp Program flies weather 
satellites in the afternoon orbit. National Oceanic and Atmospheric 
Administration's (NOAA) has traditionally flown its polar-orbiting 
satellite in the afternoon orbit and no other nation has flown a 
satellite that provides the type of data required in that orbit.
    There are other potential sources of data, but of lesser quality 
and information content. For example, the Chinese may fly an afternoon 
satellite in the latter part of this decade, but the quality of their 
newer instruments is uncertain and bilateral agreements would have to 
be in place that don't currently exist. Their current instruments, 
which are only in the morning orbit, do not provide appreciable 
improvements in forecast accuracy.
    Question. How would forecast accuracy from these alternate data 
sources differ from forecasts developed under a fully functional JPSS?
    Answer. Unfortunately, there are no other viable sources of high-
quality satellite observations in the afternoon orbit. If NOAA did not 
have a polar satellite data source (Polar Operational Environmental 
Satellite [POES], NPOESS Preparatory Project, or JPSS) in the afternoon 
orbit, the National Weather Service (NWS) modeling effort would be 
based solely on the European data that is available in the mid-morning 
orbit and would result in a degradation of forecast accuracy by 1 to 2 
days. NWS assessments have found forecast improvements from the early 
morning DOD satellite as marginal, and currently DOD data are not used 
operationally. Higher confidence forecasts would only extend out 5 days 
instead of 7 days as they do currently. This degradation would cause 
NWS to suffer a loss of a decade's worth of continual improvements in 
forecast ability until a replacement operational satellite can be 
launched in the afternoon orbit with the requisite instruments which 
have been subjected to the necessary calibration and validation.
    NWS operational models are run four times per day on a 6-hour 
cycle. Data from the MetOp satellite in the mid-morning orbit and the 
POES satellite in the afternoon orbit are critical to the consistency 
of these model runs. Decisionmakers and users of this data depend on 
all of these models throughout the day, not just in the morning. These 
model runs have skill scores nearly at days 5 through 7 that match days 
3-5 from 20 to 25 years ago. Furthermore, the models are now capable of 
predicting the development and evolution of extreme events (winter 
storms, severe weather outbreaks including tornadoes and hurricanes) 3, 
5, and sometimes 7 to 8 days in advance with remarkable skill and 
consistency.

                       GOVERNMENT REORGANIZATION

    Question. I understand that the President intends to release his 
initial proposal for a reorganization of Government capabilities this 
summer and that the Department of Commerce may be significantly 
altered. Can you provide more details as to when this proposal may be 
released?
    Answer. The President issued a Memorandum tasking the Chief 
Performance Officer (CPO), Jeff Zients, with reviewing ways in which 
the administration can streamline Government, cut waste and increase 
effectiveness so that we can help American businesses better compete 
globally. This initiative included reviewing the departments, agencies 
and programs in the trade, exports and competitiveness spheres. Mr. 
Zients and his team submitted their analysis and potential options for 
reorganization to the President on June 9. The President will review 
the options over the summer and discuss them with his team. When he 
completes his review, we would be happy to discuss the results of this 
work in more detail.
    Question. I believe that NOAA continues to play an important role 
in the Department of Commerce by serving as an operational science 
agency that generates unique products critical to the day-to-day 
functioning of our Government and economy. Do you feel that the NOAA 
should remain a part of the Department of Commerce and, if not, do you 
have an opinion as to where it should reside?
    Answer. The Department of Commerce has a long history as a center 
for housing and managing science and technological programs that 
provide industry and Government decisionmakers with a reliable base of 
scientific information from which to spur U.S. competitiveness and 
future economic growth. NOAA fits uniquely well within this tradition 
in that its science based information and regulatory activities impact 
almost every sector of the economy.
    NOAA manages the Nation's multi-billion dollar commercial and 
recreational fishing industries, not just to conserve our Nation's 
fishery resources, but to ensure the long term economic sustainability 
of the recreational and commercial fishermen and the communities that 
depend upon them. NOAA also promotes the advantages of U.S. fishery 
products to our trading partners in concert with the International 
Trade Administration.
    NOAA's weather prediction and forecasting activities are crucial to 
the economic efficiency of key U.S. industries. For example, the 
aviation and marine transportation sectors rely on NOAA's weather 
information to ensure efficient and safe day-to-day operations. NOAA is 
working with the Federal Aviation Administration on the next generation 
of weather radar to improve forecasts and save billions.
    NOAA houses the Nation's nautical charting capability, which 
directly advances marine trade by making our ports and harbors safer 
and port communities more competitive.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

                                 SALMON

    Question. Mr. Secretary, the Department of Commerce's National 
Oceanic and Atmospheric Administration (NOAA) issued a biological 
opinion on the salmon in 2009 which requires the State of California to 
restrict water flows in California's Sacramento River Delta in order to 
protect the salmon. Since then, the biological opinion has been 
criticized by the National Academy of Science (NAS) and is the subject 
of on-going litigation. U.S. District Court Judge Wanger has also been 
critical of parts of the biological opinion, but has yet to issue a 
final ruling.
    While heavy snow and rainfall in California have prevented pumping 
restrictions from being implemented this year, that will not always be 
the case in the future. Consequently, it is imperative that NOAA work 
with the Bureau of Reclamation (BOR), U.S. Fish and Wildlife Service 
(FWS), and State and local water agencies to devise a workable system 
that provides essential water to farmers and communities south of the 
delta.
    Given that it appears likely that Judge Wanger will overturn at 
least portions of NOAA's biological opinion on the salmon, what is NOAA 
doing to proactively come up with both better that is protective of 
both the salmon and the livelihood of south-of-delta farmers?
    Answer. NOAA remains committed to a science-based approach to 
implementation of the current opinion, which allows for adaptive 
management as new science becomes available, and to finding ways to 
minimize impacts on water supply while still ensuring the required 
protections for the listed species and their critical habitats. NOAA 
has been and remains open to exploring adjustments in the specific 
parameters in its opinion that may be warranted to provide equal or 
better protections to listed fish while bolstering the reliability of 
water supplies. Reflecting this approach, the NOAA opinion itself calls 
for a formal adaptive management approach whereby through an annual 
review of operations it and the other parties may explore adjustments 
in operations on a routine basis and in response to new information. As 
a result of NOAA's adaptive management approach, it prepared a joint 
Federal response to the integrated annual review in November 2010 that 
included detailed adjustments to the opinion. Following that effort are 
the 2011 amendments to the opinion that allow more flexibility in 
implementing the opinion. Please see ``Attachment 1 to Questions 
Submitted by Feinstein'' for reference. For example, adjustments 
included changes to the flow schedule based on different water year 
types, drought exception procedures, and changes to real-time 
operations. The Department of Commerce will continue implementation of 
the adaptive management provisions of the current opinion to protect 
salmon and the livelihood of both south delta farmers and west coast 
fishermen who depend on salmon resources.
    NOAA is aware of the findings and recommendations of the NAS study. 
While NAS review was largely supportive of the scientific underpinnings 
and framework of the biological opinion, it did note uncertainties 
associated with 2 of the 72 measures within the opinion--both of which 
pertain to operations in the south delta--and recommended further 
explanation of the specific metrics utilized in those 2 measures. NOAA 
has communicated its willingness to explore adjustments or refinements 
in these parameters if other approaches would provide equivalent or 
better protections--especially with regard to the so-called ``export-
inflow ratio''--but thus far none has been identified. While the 
California Department of Water Resources explored the possibility of 
resolving these differences, its proposed solution--to drop the 
measures altogether--is not sufficiently protective of vulnerable, out-
migrating juvenile steelhead. In addition, both the California 
Department of Fish and Game and the California Water Resources Control 
Board issued reports containing analyses and recommendations similar to 
the export to inflow ratio in the NOAA opinion. NOAA nevertheless 
remains actively and genuinely open to exploring the options, and has 
encouraged those with good ideas to come forward with them.
    Question. When NOAA comes up with a new biological opinion, what 
new and hopefully better science will you be relying on to justify your 
new proposal?
    Answer. NOAA continues to incorporate new science through the 
adaptive management provisions in the current opinion. In addition, the 
Department of the Interior and the Department of Commerce announced a 
joint initiative in response to the NAS review and its subsequent March 
2010 report. This initiative is an inter-agency study plan for 
developing a single integrated biological opinion for the Bay-Delta 
Conservation Plan. The initiative has a two-fold strategy. First, it 
calls for the development and analysis of additional science that will 
address issues raised by NAS with regard to the current Department of 
the Interior's FWS and NOAA biological opinions on water project 
operations. The goal of this strategy is to incorporate the new science 
in implementing the biological opinions starting in water year 2011, 
and beyond. Second, the agencies will develop a single, integrated 
biological opinion based on a joint science program that encompasses 
FWS, U.S. Geological Survey, BOR, NOAA, and State scientists to address 
the Bay-Delta Conservation Plan and water project operations.
    The integrated biological opinion will include:
  --an outline of analytical tools to assess management of the delta 
        ecosystem and water supply;
  --a strategy to obtain new information where uncertainty exists; and
  --a general approach to completing the new biological opinion.
    Some of the unresolved scientific issues that will be further 
examined include fish mortality at the export facilities, delta 
contaminants, food web dynamics, predation, benefits of habitat 
restoration, and anadromous fish migration studies.
    Question. Is NOAA open to settling the case with the State of 
California, and if so, what do you believe would be necessary to 
achieve such a settlement?
    Answer. The short answer is yes. NOAA remains very open and willing 
to explore settlement of the claims in the current litigation. What 
terms might be necessary to achieve settlement are dependent on 
changing factual circumstances and the views of other litigants. We 
note, however, that the scope of the contested issues associated with 
the NOAA opinion are in fact quite narrow, limited to 1 of the 72 
measures in its ``reasonable and prudent alternative'', and therefore 
the task should prove correspondingly narrow--although still 
challenging, given the strength of differing views about the merits of 
the measure. In this context, NOAA continues to solicit and welcome 
ideas on adjustments from the parties.
    Question. I understand NOAA is exploring one option to protect the 
salmon by putting in a hard barrier along the confluence of the San 
Joaquin and Old Rivers to prevent the salmon from being diverted into 
the Old River in the direction of the State pumps.
    Please describe the necessary physical infrastructure, its costs, 
any necessary permitting, and your timeline for completion?
    Answer. Your question correctly identifies one option of active and 
substantial interest to NOAA and the other parties. A rock barrier or a 
``nonphysical barrier'' (e.g. ``bubble curtain'') has been installed at 
the head of Old River in most years in accordance with the State-led 
Vernalis Adaptive Management Program. In conformance with the current 
opinion, a ``nonphysical barrier'' has been tested in this location by 
the California Department of Water Resources and has yielded mixed 
results in its capacity to reduce juvenile straying into the south 
delta or juvenile predation. NOAA will discuss the pros and cons of 
continuing the nonphysical barrier versus the rock barrier with BOR and 
the California Department of Water Resources as we prepare for water 
operations next year. Also, within the context of the Bay Delta 
Conservation Plan, a technical team with representatives from NOAA, 
BOR, California Department of Water Resources, FWS and the California 
Department of Fish and Game, has proposed further evaluation of a new 
option of installing a fully operable gate in this location as part of 
the longer-term program. Furthermore, just last fall the independent 
science panel convened under the Vernalis Adaptive Management Program 
specifically and strongly recommended the targeted pursuit of a 
physical barrier to reduce straying into the south delta, reinforcing 
the merits of the concept.
    As to the detailed engineering, financial and permitting 
requirements to execute such a project, NOAA does not have this 
information and would have to defer to the expertise of both the BOR 
and the California Department of Water Resources for the information.
    Question. What results do you expect this to produce in terms of 
reduced pumping restrictions and benefits to the salmon?
    Answer. Survival of emigrating San Joaquin River steelhead smolts 
is extremely low through the lower San Joaquin River and south delta. 
We estimate survival at between 1 and 9 percent. The Vernalis Adaptive 
Management Program 2010 science review panel found that mortality in 
this reach is increasing, and is of significant concern, and for good 
reason: continuing mortality of more than 90 percent of the juveniles 
in any population on a year-to-year basis does not bode well for 
rebuilding that population.
    The fundamental objective of a rock barrier or an operable barrier 
is to reduce significantly the straying of migrating juveniles into Old 
and Middle Rivers and toward the pumps, where survivals are extremely 
low. The objective, to state it in the reverse, is to keep the 
emigrating juveniles in the mainstem of the San Juaquin, and to 
maintain and improve conditions in the mainstem, in order to boost 
survivals. There are interactive effects between the rock barrier and 
the continued San Joaquin Inflow to Export ratio, which provides 
necessary hydrologic conditions for these smolts to migrate through the 
delta. Effects on exports could be positive, neutral or negative and 
would need to be fully evaluated prior to installing a rock barrier.
    Question. If NOAA believes this would be beneficial to the salmon 
and the delivery of water to south-of-delta water users, why not move 
forward with the project immediately rather than waiting for either 
Judge Wanger to rule or a new biological opinion to be developed?
    Answer. We concur with the proposition that the parties should 
proceed to evaluate the project and its implications for both salmon 
and water supplies, and we share your interest in it. We are currently 
evaluating installation of a rock barrier in later 2011, coupled with 
necessary Vernalis inflow and export curtailment relationships, and 
hope to have the information in order to evaluate the merits and 
demerits of such an approach on both fish survivals and water supplies. 
We will keep you apprised of this project as it moves along.
    Question. Are there any other additional projects or administrative 
steps NOAA believes could be taken in the near term which could provide 
additional benefits to the salmon and increase water deliveries south 
of the delta?
    Answer. Yes. NOAA thinks it is critically important to fill near-
term science gaps to assist in refining and adaptively managing under 
the opinion and enabling all of the parties to evaluate trade-offs and 
make better decisions. We have several studies underway right now with 
acoustically tagged fish to quantify the relationship between exports 
and survivals under a variety of hydraulic conditions. This work is 
vital to improving the understanding of how fish move through the south 
delta and under what flow and pumping conditions. Further, NOAA is 
committed to developing a life-cycle model of Central Valley salmon 
populations, using the results of these acoustic studies and other 
available information. The need for such a life-cycle model was 
recently highlighted by the NAS in its report on the scientific 
foundations of the Bay Delta Conservation Plan. NOAA concurs 
wholeheartedly with that recommendation. Work is underway, and we 
anticipate draft life-cycle model products in mid-2012. In addition, 
while our agency's expertise is limited in this area, we generally 
support long-term water transfer agreements, conjunctive use programs, 
and similar mechanisms.

         NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY (NIST)

    Question. There is a 0.2 percent across the board rescission of 
funds from all non-Defense accounts that is part of this long-term 
continuing resolution. By my calculations that totals about $1.5 
million for NIST.
    Do you know what programs will be affected as a result of this cut?
    Answer. The rescission was distributed across-the-board uniformly 
throughout all NIST Programs in an effort to minimize adverse 
programmatic effects to our mission.
    Question. How will this reduction affect these programs?
    Answer. The rescission was distributed across-the-board uniformly 
throughout all NIST Programs in an effort to minimize adverse 
programmatic effects to our mission.
    Question. The Manufacturing Extension Partnership operated by NIST 
is receiving approximately $128 million, an increase of $4 million more 
than the fiscal year 2010 funding level.
    What types of new activities will this program offer to small 
manufacturers?
    Answer. This additional funding received in fiscal year 2011 will 
allow MEP to build upon a strong foundation and further deploy new 
services with a specific focus on--
  --providing manufacturers with the tools and services that allow for 
        the identification and connection to new technologies that 
        match the manufacturer's capabilities and create opportunities 
        for growth through the development of new products and new 
        markets;
  --increasing manufacturers' adoption and application of advanced and 
        clean technologies; and
  --reducing manufacturers' environmental impact and the related costs 
        by promoting the development of new, environmentally focused 
        materials, products and processes to gain entry into new 
        markets.
    In addition, a portion of the additional funds will support the 
National Innovation Marketplace (NIM) by accelerating activities such 
as populating the NIM with product and technology ideas through 
sessions held with Universities, Federal laboratories, companies, and 
technology sources and supporting efforts focused on developing the 
Innovation Engineering Skills of the MEP network and partner 
organizations.
    Question. Do you have a sense for the economic impact that these 
additional funds will have?
    Answer. The additional funds will result in higher levels in the 
measures of economic impacts the NIST MEP collects annually from the 
manufacturing clients receiving services. These measures include 
increased and retained sales, new investments in plant, equipment and 
technology, cost savings, and new and retained jobs. Specifically, the 
increased funds are being used to support and expand efforts to assist 
manufacturers exporting activities, expansion into new supply chains, 
and development of new products. The results of these activities are 
also measured through the economic impacts reported annually.

                              CATCH SHARES

    Question. I understand that the catch shares program instituted on 
the west coast is enjoying growing support with fishermen, and that 
we're beginning to see some positive environmental and economic 
results.
    Could you please share with us the latest details?
    Answer. NOAA 's National Marine Fisheries Service (NMFS) worked 
with the Pacific Fishery Management Council (Council) and stakeholders 
for several years to develop the Pacific Coast Trawl Rationalization 
program (Rationalization program). Development of the Rationalization 
program has involved many complicated issues and decisions but we 
believe it will rebuild overfished groundfish stocks, increase the 
profitability of this fishery, provide sustainable and high-quality 
jobs, and benefit coastal communities.
    The shore-based part of the program now allows fishermen the 
flexibility to choose when to fish during the year, rather than 
prescribing a level of fishing early in the season with 2-month trip 
limit periods. Given this flexibility, it appears that fishermen are 
choosing to fish at a slower rate in the early months of the year. At 
the April council meeting, the Council's Groundfish Management Team 
provided an April status report on the shore-based part of the program 
that indicates that while the total number of vessels, landings, and 
dealers receiving landings are lower than during comparable months in 
2010, average landings and revenues per vessel are actually higher than 
in 2010. In early 2011, average total landings per vessel were 137,152 
pounds, compared with a range of 77,818-109,578 pounds during the same 
period in 2006-2010 (average = 97,133 pounds). Average total revenue 
per vessel for early 2011 was $88,149, whereas the average total 
revenue per vessel ranged from $47,029-$63,388 for early 2006 through 
2010 (average = $56,391). Although these preliminary data appear 
positive, NOAA is cautious about drawing any conclusions at this early 
stage. We will continue tracking the fishery throughout the summer and 
fall.
    With respect to positive environmental results, this catch share 
program was designed to address bycatch of constraining species, such 
as yelloweye rockfish, by allowing for flexibility in fishing 
operations. Yelloweye rockfish is currently overfished and the subject 
of an 80-year rebuilding plan. It is one of the most constraining 
overfished species on the Pacific coast and is encountered in 
commercial groundfish and nongroundfish fisheries, recreational 
fisheries, tribal fisheries, and in groundfish research activities.
    The coastwide bycatch limits in the commercial groundfish fisheries 
are extremely small and intended to prevent overfishing on this 
vulnerable stock. Fishermen in the shore-based part of the catch shares 
program are able to collectively ``pool'' and manage their risk of 
having their fishing operations constrained by overfished species, such 
as yelloweye rockfish, by forming ``risk pools''. ``Risk pools'' allow 
fishermen to combine their allocations of overfished species quota, 
exchange information to avoid ``hot spots'' of overfished species, and 
adopt best fishing practices to reduce bycatch. In addition, if a 
fisherman were to catch an amount of an overfished species that was 
higher than his individual quota, the risk pool would cover the amount 
and allow him to continue fishing. These ``risk pools'' have proved 
beneficial to the fishing industry and overfished species such as 
yelloweye rockfish by keeping catches low and providing a safety valve 
for fishermen. NMFS is currently working with the fishing industry 
through the Council to further refine ``risk pool'' provisions and to 
evaluate their use to protect overfished species while potentially 
providing additional stability to fishermen.
    In addition, reducing discards is a fisheries issue of economic and 
biological importance. Under the catch shares program, retention is 
higher for many species, including arrowtooth flounder, bocaccio 
rockfish, canary rockfish, darkblotched rockfish, lingcod Pacific Ocean 
perch, petrale sole, sablefish, starry flounder, and widow rockfish. 
These higher retention rates (i.e., lower discard rates) indicate 
decreased waste, and increased efficiency, potentially leading to both 
healthier fish stocks and fishing communities.
    Question. Providing adequate funding for catch shares programs to 
help fishermen make the transition is critical to the long-term 
recovery of the economic and environmental sustainability of these 
critically important fisheries. I look forward to working with you to 
support such funding in fiscal year 2012.
    Could you share with us the ways in which these funds help 
fishermen, and why that is so important?
    Answer. Thank you for the question and for your offer of 
assistance. The fiscal year 2012 President's budget includes a request 
for $54 million to support the development and implementation of catch 
share programs. Catch shares can be an effective tool for preventing 
overfishing and reducing the negative biological and economic impacts 
of the race for fish, resulting in safer, more profitable and 
sustainable fisheries that benefit all Americans. Catch share programs 
often require increased and improved monitoring, including fisheries 
observers, which will lead to improved quality and timeliness of the 
catch data in these fisheries. This improved data collection effort not 
only ensures the integrity of catch share accounting by individual 
fishermen, it also increases the quality and quantity of scientific 
information used to conduct stock assessments thus improving the 
science supporting management decisions including by potentially 
reducing scientific uncertainty. The bulk of the $54 million requested 
in the President's budget will support specific catch share programs 
that have recently been implemented, including the sector program in 
the Northeast, the Pacific Coast Groundfish Trawl Rationalization 
Program, and the Gulf of Mexico grouper and tilefish program; thus 
assisting fishermen and coastal communities in the transition to 
sustainability.
    Funds will also be used to support establishment and administration 
of program-specific share requirements such as accounting databases and 
electronic reporting systems, computation of annual quota for each 
participant, adjudicating administrative appeals of eligibility and 
catch share decisions, collection of socio-economic data, and other 
projects such as the development of performance measures. Support for 
this infrastructure and additional data collection will improve the 
efficiency of the programs, thereby reducing the cost to fishermen and 
NMFS, and provide important information to the Regional Fishery 
Management Councils (Councils) as they monitor their catch share 
programs and make modifications as needed.
    In addition, since it is the Councils who decide in which fisheries 
they want to consider and implement catch share programs, the fiscal 
year 2012 President's budget request includes funding for the Councils 
in support of catch share-related activities they have identified as 
important.
    The long-term economic and ecological benefit of these investments 
has been seen in other fisheries that have moved to catch share 
programs, such as red snapper where the value of the fishery (based on 
quota prices) has increased by 82 percent and the ex-vessel price of 
red snapper has increased by 17 percent.
    To help ensure fairness and equity for new entrants and small 
vessel owners, NOAA is also seeking to increase loan authority in 
fiscal year 2012 from $16 million to $24 million under NOAA's Fisheries 
Finance Program to provide quota share loans in support of existing 
catch shares programs. The Magnuson-Stevens Fishery Conservation and 
Management Act (MSA) allows Councils to request NOAA Fisheries Finance 
Program loans to assist small operators and first time buyers of catch 
share privileges. These programs, as authorized under the MSA, are 
limited to entry-level fishermen and fishermen who fish from small 
boats. These programs provide a mechanism for new entrants to finance 
acquisition of quota share, part of their start-up needs, thus lowering 
the threshold for entry. For example, by providing financing to acquire 
quota share, a new entrant then may have sufficient cash flow to 
finance acquisition of a boat and permit in that fishery. Currently, 
only two Councils have taken advantage of these MSA provisions, the 
North Pacific Council and the Gulf of Mexico Council. The North Pacific 
Council requested the NOAA Fisheries Finance Program develop loan 
programs for the Halibut/Sablefish Individual Quota Share and the Crab 
Individual Fishing Quota programs, which were authorized in 1993 and 
2011, respectively. In addition, NOAA has received a request from the 
Gulf of Mexico Council to initiate an Individual Fishing Quota loan 
program for Grouper/Tilefish and for Red Snapper, which is planned for 
implementation in fiscal year 2012. Until 2011 this loan authority has 
only been used to support loans for quota in the halibut/sablefish 
fishery. As additional loan programs are coming on line through the 
Councils, we are seeking additional loan authority to support the new 
programs.
    The additional loan authority in fiscal year 2012 will initially 
support loans in the Bering Sea and Aleutian Islands King and Tanner 
Crab fisheries. Once the Grouper/Tilefish and Red Snapper programs are 
implemented, we would anticipate that these would be accommodated under 
the additional lending authority as well. Given that roughly 80 percent 
of the current participants in the Gulf of Mexico fisheries are smaller 
operators, we expect the loan program would largely be used by these 
smaller operators. This type of loan program has proven helpful to the 
industry and coastal communities as they transition to sustainable 
fisheries.
    These loans are and will be usable to purchase or refinance 
Individual Fishing Quota in these fisheries; the loans may not be used 
to acquire quota share beyond specific percentages within each fishery 
(i.e., consistent with existing excessive share caps to limit 
consolidation). By providing the financing, NOAA supports a more 
competitive, market-oriented fishery that also helps to preserve 
sustainable yields in those fisheries over time.

               MANUFACTURING EXTENSION PARTNERSHIP (MEP)

    Question. Thank you Mr. Secretary for your focus on domestic 
manufacturing capabilities, specifically, your request for full funding 
of the MEP program to continue assisting small- and medium-sized 
manufacturers. A vibrant manufacturing sector is critical to the 
economic future of our country. California maintains the largest 
manufacturing sector of any State and the MEP program has done a 
tremendous job in assisting our State's manufacturers by increasing 
productivity and job creation.
    However, it is my understanding that many MEPs are now providing 
not only their private share of the program's cost-sharing agreement, 
but also the State's share as well. Many States, including California, 
face significant budget shortfalls, and as a result are not able to 
meet their contribution expectations to fund MEP.
    Does the Department currently have plans to alter the cost-share 
requirement in a way that would relieve some of the burden on MEPs?
    Answer. As part of the America COMPETES Reauthorization Act of 
2010, the Government Accountability Office (GAO) was directed to study 
the MEP Cost Share structure and to develop recommendations for 
implementation by the Secretary of Commerce. GAO published its report 
on April 4, 2011 and the report made no recommendations concerning any 
adjustment to the current cost share structure. NIST is assessing the 
report and is evaluating its options going forward.

                           BROADBAND FUNDING

    Question. In your testimony you talk about the Broadband Technology 
Opportunity Program (BTOP). The Congress appropriated $7.2 billion in 
broadband grant and loan programs under the American Recovery and 
Reinvestment Act, $4.2 billion of which was allocated through BTOP. It 
is my understanding that, as of March 31, 2011, only 7.6 percent has 
been distributed nationwide.
    Can you explain why there is such a lag time in dispersing this 
funding?
    Answer. The vast majority of BTOP funding (approximately $3.5 
billion) is being used for broadband infrastructure projects. These 
projects typically cannot begin to spend the bulk of their funding 
immediately due to the legal requirements associated with environmental 
clearances, historical impact assessments, and other permitting 
processes associated with construction projects. Further, many BTOP 
projects require procurement of equipment and services, which take time 
in terms of both procurement processes and delivery. We have been doing 
everything we can to facilitate and expedite these processes for our 
awardees and ensure that BTOP projects are completed on time and within 
budget.
    We expect a significant increase in BTOP fund disbursement as 
infrastructure projects obtain all of their clearances and heavy 
construction occurs through this fall. Sixty percent of the 
infrastructure projects have already been cleared for construction, and 
we are expecting more than 90 percent of the infrastructure projects to 
be cleared for construction by the end of June 2011.
    Recent first quarter 2011 recipient reporting validates our 
expectations of significant increases in BTOP fund disbursements. For 
example, BTOP public computer center project spending increased 77 
percent from the last quarter of 2010, sustainable broadband adoption 
spending increased 80 percent, and infrastructure project spending 
increased 88 percent. We expect similar increases this quarter.
                                 ______
                                 
               Questions Submitted by Senator Ben Nelson

       CURRENT INDUSTRIAL REPORTS (CIR) PROGRAM AND ALTERNATIVES

    Question. The fiscal year 2012 budget submission for the Department 
of Commerce proposes to discontinue the economic statistical series, 
the CIR program.
    I have heard from many industries who are concerned about the 
discontinuance of this program and the impact it would have on their 
ability to forecast economic climates and make operational decisions, 
which in turn would limit their production and growth possibilities.
    The Department's budget submission indicated that this program is 
being discontinued to fund higher-priority programs. In light of these 
concerns and the signs of economic recovery our country continues to 
show, is discontinuing the CIR program a prudent decision at this time?
    Answer. This decision was not taken without consultation with key 
data users on relative program priorities and specifically about the 
consequences of the elimination of the CIR program. While few data 
users wanted to eliminate an existing data source, the availability of 
manufacturing product class data from the Annual Survey of 
Manufactures, and the continued collection of detailed product 
information in the economic census and in our monthly trade statistics 
program, helps mitigate the loss. Even if the CIR elimination were 
effected, the Census Bureau continues to measure the manufacturing 
sector (e.g., new orders, capital and IT investments, research and 
development, corporate profits, etc.) in far more detail than any other 
economic sector.
    Question. In your budget submission, you indicate that instead of 
using the CIR program, you intend to measure the manufacturing sector 
through other current program data collection efforts such as the 
Annual Survey of Manufactures (ASM), the Monthly Manufacturers' 
Shipments, Inventories, & Orders (M3), the Quarterly Financial Report, 
the Annual Capital Expenditures Survey, and other products.
    I have had manufacturers and producers raise concerns that these 
listed programs generally only provide a single data point (value of 
industry-wide sales or shipments) and don't collect key data on such 
things as unit (quantity) production and shipment information. They do 
not provide data on sub-segments or product categories of an industry. 
To give one example, the ASM covering the paint and coatings industry 
provides only an industry-wide annual shipments number (value only), 
while the CIR provides details such as volume (gallons) and value 
(dollars) on categories as diverse and specific as automobile, light 
truck, van, and sport utility vehicle finishes.
    Given these concerns, how do you intend to obtain and disseminate 
information on such things as product mixes and unit costs that 
manufacturers and producers need in order to understand market trends 
and encourage competitiveness, particularly against foreign 
competition?
    Answer. The CIR program provides product mixes and unit-cost data 
for only selected manufacturing industries but not the entire 
manufacturing sector. The Census Bureau will continue to collect and 
publish information on detailed manufacturing products on an annual 
basis at the product class level (rather than the product level) for 
these 121 categories through ASM. The data in the CIR are consistent 
with the data in ASM. The consistency of this relationship allows data 
users to continue to monitor, evaluate, and understand the market. 
Because ASM does not collect data on quantity, unit-cost data will not 
be available on an annual basis. However, the economic census for the 
manufacturing sector collects comparable data (value and quantity) that 
will allow users to derive unit cost.
    The Census Bureau continues to measure the manufacturing sectors in 
far more detail than any other economic sector. For example, M3, a 
principle economic indicator, provides monthly trends on economic 
conditions through measurement of current industrial activity while 
providing indication of business trends. The Quarterly Plant Capacity 
Utilization survey provides statistics on the rates of capacity 
utilization for the manufacturing sector. The Census Bureau produces a 
``Profile of U.S. Exporting Companies'' that provides aggregated data 
on the U.S. exporting community (i.e., number of exporters, known value 
of the export trade, employment size, type of company [manufacturers, 
wholesalers, and others] and major foreign markets). These data, in 
combination with other surveys covering capital and IT investments, 
research and development, corporate profits, etc., provide a host of 
information to examine, evaluate, and monitor the performance of the 
manufacturing sector against foreign competition.
    Question. In previous year's budget requests, the Department of 
Commerce has provided an explanation of the benefits and importance of 
the CIR program. For example, in past years it has indicated that the 
Bureau of Economic Analysis (BEA) uses CIR data to prepare the 
quarterly estimates of Gross National Product (GNP). The Federal 
Reserve Board prepares the monthly index of industrial production and 
the Bureau of Labor Statistics (BLS) develops price indexes using this 
data. The International Trade Administration (ITA) and the 
International Trade Commission uses this data to monitor the effects of 
international trade on domestic production.
    If this program is discontinued, how will those agencies be able to 
produce the information currently supported by the CIR program? Has the 
Department consulted directly with these agencies regarding its plan to 
terminate the CIR program? If so, was concern expressed regarding the 
potential impact the loss of this data will have on these agencies 
abilities to adequately perform their missions?
    Answer. In deliberations on fiscal year 2012 submission, the Census 
Bureau did consult with the key data users on relative program 
priorities and specifically about the consequences of the elimination 
of the CIR program. Users weighed the loss of the CIR against proposed 
cuts of other programs and key stakeholders considered the CIR program 
given the amount of detail statistics the Census Bureau currently 
provides for the manufacturing sector. While few data users wanted to 
eliminate an existing data source, the availability of manufacturing 
product class data from ASM, and the continued collection of detailed 
product information in the economic census and in our monthly trade 
statistics program, helped mitigate the loss. Moreover, on balance the 
Census Bureau continues to measure the manufacturing sector (e.g., new 
orders, capital and IT investments, research and development, corporate 
profits, etc.) in far more detail than any other economic sector.
    Question. The 2011 Census Bureau budget submission indicated that 
the CIR program covers the Census Bureau's responsibilities under the 
Trade Act of 1974, including section 608 requirements to collect data 
on imports, exports and domestic production on a comparable basis.
    In light of this, how does the Department propose to meet these 
requirements if the CIR program is discontinued?
    Answer. The Census Bureau continues to show on a monthly basis 
exports of domestic merchandise and imports for consumption based on 
manufacturers' production. Data in economic census years will show 
manufacturing production data of these products along with the import 
and export data. In addition, we are exploring the possibility of 
publishing annual import and export data at a product class level 
(i.e., 1,700 product categories) on the ASM.
    Question. According to the Department's fiscal year 2012 budget 
submission, eliminating the CIR program will save approximately $4.012 
million. In proposing to discontinue this program has the Department 
considered off-setting expenses that will be required to develop 
alternate systems to collect and analyze these data in order to meet 
the statutory requirements noted above.
    Answer. Given the plan to leverage existing data sets from other 
programs as cited above to meet the statutory requirements of the Trade 
Act of 1974, we did not consider off-setting expenses.
    Question. Has the Department identified the costs that will be 
imposed on other agencies of Government, such as BEA and BLS, should 
they be required to develop other means of obtaining these data?
    Answer. We did not explore the cost of agencies such as BEA or BLS 
developing other means of obtaining these data. We did provide the 
National Agriculture Statistics Service (NASS) of the United States 
Department of Agriculture a reimbursable cost estimate for nine CIR 
agricultural-related surveys. In addition, a meeting is scheduled in 
June to discuss these reimbursable cost estimates with NASS and several 
trade associations to discuss the feasibility to conduct these surveys 
on a reimbursable basis.
    Question. Finally, has the Department conducted a formal or 
informal cost benefit analysis to consider the costs to U.S. 
manufacturing and agricultural competitiveness as a result of the 
discontinuation of the CIR and whether it exceeds the $4 million that 
will be used for other objectives within the Department?
    Answer. We did not conduct a cost-benefit analysis to consider the 
costs to U.S. manufacturing and agricultural competitiveness resulting 
from the termination of the CIR program. As stated earlier, the 
availability of manufacturing product class data from ASM, the 
continued collection of detailed product information in the economic 
census and our monthly trade statistics program helps mitigate the 
loss. Even if the CIR elimination were effected, the Census Bureau 
continues to measure the manufacturing sector (e.g., new orders, 
capital and IT investments, research and development, corporate 
profits, etc.) in far more detail than any other economic sector.
    Question. Is the Department conducting or implementing at this time 
any plans to discontinue the CIR program in the absence of action or 
approval by the relevant appropriations committees, to include 
reassigning, or planning for the reassignment of, personnel or other 
resources currently dedicated to this program, discontinuing the 
development or fielding of surveys to collect data required under this 
program, or reprogramming any funding currently fenced to or otherwise 
allocated to the CIR program?
    Answer. Within the CIR program, there are 4 monthly, 11 quarterly, 
and 26 annual surveys. The Census Bureau will continue production of 
these surveys until the end of fiscal year 2011. However, to complete 
an orderly shutdown of this program by the end of this fiscal year, the 
Bureau determined that the last release for 2011 monthly reports will 
be the July 2011 report, scheduled to be released September 9, 2011. 
The last release for 2011 quarterly reports will be the second quarter 
report, scheduled for release September 22, 2011. All 2010 annual 
reports will be released by July 29, 2011.
    Question. The Department of Commerce's Strategic Plan for fiscal 
year 2011-2016 includes as one of its objectives to ``Improve 
understanding of the U.S. economy, society, and environment by 
providing timely, relevant, trusted and accurate data, standards and 
services enabling entities to make informed decisions.'' Additionally, 
it states, ``. . . the Census Bureau assists in fostering economic 
growth by providing timely, accurate, accessible, and current measures 
of the population, economy, and governments, which help entrepreneurs 
and businesses to identify and exploit market opportunities that 
generate jobs. This information also helps to provide early signals of 
impending problems in key sectors throughout the economy and effective 
information to enable communities to build their capacity to attract 
businesses and sustain economic growth. Data collected from many 
monthly, quarterly, and annual surveys support effective 
decisionmaking, in both the public and private sectors, with the 
information assets needed to understand social, economic, and 
demographic trends.''
    In light of this, can you explain why you are recommending the 
elimination of a report that supports this objective identified by your 
strategic planning?
    Answer. While the CIR program collects and publishes information on 
detailed manufacturing products, slightly more aggregated information 
on more than 1,700 product class categories are available on an annual 
basis from ASM. In addition, detail manufacturing product data will 
continue collection in the quinquennial economic census. Furthermore, 
the Census Bureau's monthly, quarterly, and annual survey programs on 
manufacturing new orders, capital and IT investments, plant capacity, 
research and development, corporate profits, and trade statistics will 
continue to provide key measures in the performance of the 
manufacturing sector.
                                 ______
                                 
               Questions Submitted by Senator Mark Pryor

                             MANUFACTURING

    Question. Manufacturing directly employs 12 million Americans. 
Companies operating in the United States have steadily outsourced 
manufacturing work to specialists abroad and cut their spending on 
basic research. Sophisticated engineering and manufacturing 
capabilities that underpin innovation in a wide range of products have 
been rapidly leaving too. As a result, the United States has lost or is 
in the process of losing the knowledge, skilled people, and supplier 
infrastructure needed to manufacture many of the cutting-edge products 
it invented.
    What are the emerging opportunities in advanced manufacturing and 
how can the Federal Government accelerate their entry and success?
    Answer. There are many emerging technologies that can play a role 
in advanced manufacturing, ranging from vastly improved ways of making 
products more efficiently and sustainably to entirely new processes 
that can create previously impossible materials and products. Examples 
include:
      Smart Manufacturing.--The dramatically intensified application of 
        intelligent equipment, modeling, and simulation throughout the 
        manufacturing and supply chain enterprise--will increase 
        productivity and efficiency.
  --Additive manufacturing (sometimes referred to as 3-D printing) that 
        can build highly complex custom components.
  --Next-generation robotics and automation that are rapidly 
        retaskable, adaptive, and flexible.
  --Nanomanufacturing that enables the creation of radically new 
        products, such as flexible electronics.
  --Biomanufacturing advancements that produce higher-quality biologic 
        products (such as pharmaceuticals) and next-generation products 
        such as stem cells and personalized biotherapeutics.
    The Federal Government can accelerate their entry and success by:
  --Providing the foundational technology infrastructure that lowers 
        the risk of adoption of new technologies involving the 
        development of standards and performance measures.
  --Targeting investments in transformational research and development 
        in critical technologies that will advance manufacturing.
  --Providing mechanisms to help accelerate the adoption of these 
        technologies by small and medium manufacturers.
    National Institute of Standards and Technology's (NIST) Laboratory 
research programs, Technology Innovation Program, Advanced 
Manufacturing Technology Consortia (AMTech) program, and the Hollings 
Manufacturing Extension Partnership provide a coordinated set of 
programs to holistically address these challenges.
    Question. How can Department of Commerce activities best support 
U.S. leadership in clean-energy technology?
    Answer. Clean energy is key to revitalizing and sustaining 
America's industrial and manufacturing base. And it can create exactly 
the types of high-skill, high-wage jobs that we need more of in 
America.
    The Commerce Department has put its resources behind growing clean-
energy businesses at every step in the business development process.
    In December 2010, I announced the Renewable Energy and Energy 
Efficiency Initiative, a multi-agency effort to significantly increase 
renewable energy and energy efficiency exports. This initiative 
includes 23 commitments from eight separate Government agencies to 
better tailor financing options, enhance market access, increase trade 
promotion, and amplify the efficiency of existing export promotion 
programs for Renewable Energy Efficient companies.
    In May 2010, I led a clean-energy trade mission to China--the first 
Cabinet-level trade mission of the Obama administration. I was joined 
by representatives from 24 U.S. businesses looking to take advantage of 
opportunities in the clean-energy market. Overall, exports to China 
increased 32 percent in 2010 compared to 2009.
    Further, USPTO has announced a pilot program that allows inventors 
who have already submitted patent applications for green technologies 
to have their submissions receive an expedited review.
    Additionally, NIST is playing a significant role in supporting U.S. 
leadership in clean-energy technologies. In the area of energy 
efficiency NIST's efforts in developing measurement technologies, 
standards, and test methods that can support the next generation of 
higher-efficiency photo-voltaic panels will support an industry that 
employed 93,000 solar-related positions in the United States in 2010. 
NIST's research in developing measurement tools and standards for 
energy efficient buildings will help reduce U.S. energy consumption and 
will have significant impact, as buildings consume 40 percent of all 
U.S. electricity production. Furthermore, NIST work on development of 
standards for the Smart Grid is critical to the actual deployment of 
the Smart Grid--which will rely on the adoption and production of 
several new technologies--creating opportunities for U.S. 
manufacturers, and the potential for new U.S. jobs.
    Question. How can NIST be more effective at each stage of the 
innovation chain? What are useful metrics to guide NIST technology 
activities?
    Answer. NIST's core mission is to promote U.S. innovation and 
industrial competitiveness by advancing measurement science, standards, 
and technology in ways that enhance economic security and improve our 
quality of life. To be effective at each stage of the innovation 
process, NIST must maintain a wide portfolio of programs, from the 
laboratories to the extramural programs in order to addresses unique 
needs and gaps spanning the entire innovation and technology 
development cycle. From incentivizing and supporting long-term 
industry-led directed basic research to accelerating technology 
deployment and adoption by America's manufacturers, the NIST extramural 
programs along with the NIST laboratories, provide a critical 
infrastructure that supports the type of high-tech innovation, 
development, and manufacturing that is critical for our Nation's long-
term sustainable economic growth and job creation.
  --NIST laboratories provide measurement solutions to innovators and 
        manufacturers that increase efficiency and facilitate the use 
        and adoption of advanced technology. For example, NIST work in 
        advanced sensors, robotics, and modeling and simulation will 
        provide the infrastructure that facilitates the adoption of new 
        technology systems that will help manufacturers:
    --transform a new idea into production easily;
    --reconfigure a factory to produce multiple types of products using 
            the same facility;
    --adapt to changes in production while maintaining high quality and 
            minimizing waste; and
    --organize subcontractors, Original Equipment Manufacturers (OEMs), 
            and customers into efficient and dynamic supply chains; and
  --The new AMTech will collapse the timescale of technological 
        innovation by including partners that span the innovation life 
        cycle from idea to discovery, from invention to 
        commercialization. Through cost-sharing and a common research 
        agenda, these consortia will support the development of 
        innovative new technologies directed at creating high-wage jobs 
        and economic growth across the industry sector. These consortia 
        will develop road-maps of critical, long-term industrial 
        research needs and provide support for research and equipment 
        at leading universities and Government laboratories directed at 
        meeting these needs. This approach deepens industrial 
        involvement in determining how to best leverage Government 
        resources to promote technological innovation.
  --Technology Innovation Program (TIP) funds small companies and 
        consortia of small companies and universities to support high-
        risk transformational R&D. TIP funding helps small companies 
        develop and demonstrate new high-risk, cutting-edge 
        technologies, when no other sources of funding are available.
  --Manufacturing Extension Partnership (MEP) helps small and medium 
        manufacturers strengthen their competitive positions by 
        accelerating the adoption of technological innovations, 
        facilitating the adoption of environmentally sustainable 
        business practices, promoting renewable energy initiatives, 
        fostering market diversification, and connecting domestic 
        suppliers to manufacturers to assist manufacturers in 
        successfully competing over the long term in today's complex 
        global manufacturing environment.
    Developing effective metrics for science and technology 
organizations is a challenge, as the metrics change with each stage of 
the innovation cycle, and much of the impact can often lag by several 
years. As such NIST uses a number of metrics to evaluate its programs, 
measuring everything from indicators of scientific productivity, like 
publications and their impact, to tracking measures of technology 
transfer such as numbers of patents and licenses. Rigorous independent 
peer-review is also a cornerstone of the NIST evaluation system, with 
expert panels appointed by the National Research Council reviewing 
elements of the laboratory programs on an annual basis.
    Question. What changes do we need to make to trade policies so that 
more manufacturing can be done in the United States?
    Answer. The Department of Commerce continues to work, along with 
other agencies, to enhance the competitiveness of U.S. products and 
increase U.S. manufacturing exports. The National Export Initiative 
(NEI), announced by President Obama in his 2010 State of the Union 
Address, sets the ambitious goal of doubling U.S. exports by the end of 
2014 to support millions of jobs here at home. NEI is focused on:
  --improving trade advocacy and export promotion efforts;
  --increasing access to credit, especially for small and midsize 
        businesses;
  --removing barriers to the sale of U.S. goods and services abroad;
  --robustly enforcing trade rules; and
  --pursuing policies at the global level to promote strong, 
        sustainable and balanced growth.
    Through these efforts to empower U.S. businesses and achieve a 
level playing field, we can provide increased opportunity for U.S. 
manufacturing.
    One of the most powerful ways to encourage more manufacturing in 
the United States is through the preferential market access which Free 
Trade Agreements offer to U.S.-origin manufactured products. The Obama 
administration has been working closely with the Congress to approve 
pending trade agreements with South Korea, Colombia, and Panama. By 
expanding access to South Korea, the agreement will eliminate tariffs 
on 95 percent of United States exports of industrial and consumer goods 
within 5 years, and could boost annual United States exports to Korea 
by more than $10 billion while supporting more than 70,000 American 
jobs.
    Question. How do we balance international competitiveness against 
international cooperation?
    Answer. There is no question that U.S. companies welcome the 
opportunity to compete vigorously for sales in the world market. But no 
matter how competitive U.S. companies are, they may still encounter 
problems accessing global markets unless the terms of global 
competition are fair. That is why the United States cooperates with our 
trading partners to establish a rules-based international trading 
system in which companies from all countries can compete on a more 
level playing field. U.S. trade agencies, including the Commerce 
Department's ITA, work together with counterparts in other countries to 
do just that. This work ranges from negotiating new trade disciplines 
and enforcing existing ones in the World Trade Organization and 
bilateral/regional trade agreements, to focused discussions of regional 
and bilateral trade issues in such venues as the Asia Pacific Economic 
Cooperation Forum, the U.S.-China Joint Commission on Commerce and 
Trade, and the Transatlantic Economic Council.
    We also cooperate with key trading partners to exchange views on 
best practices and help improve the overall business environment 
through the Organization for Economic Cooperation and Development.
    We understand, however, that strict enforcement of trade 
obligations is key. Accordingly, a priority of the Commerce Department 
is to ensure foreign country compliance with both U.S. fair trade laws 
and with these countries' international trade obligations. Ensuring 
U.S. companies have effective recourse against unfair trade practices 
such as dumping and subsidization helps companies compete fairly in our 
own market, as well as markets in third countries.
    Monitoring foreign country compliance with trade obligations and 
actively knocking down foreign government barriers that impede U.S. 
exports or investments helps American firms and workers take advantage 
of the trade agreements we have negotiated. All of these activities 
have proven effective for working to head off market access problems 
and helping achieve that balance between international competitiveness 
and international cooperation.
    Question. How can the incentive to move manufacturing offshore be 
reduced and the incentive to rebuild our industrial base be increased?
    Answer. Over time, it has become apparent that many companies moved 
offshore without a complete understanding of the total costs of such a 
change. Beyond simply product, wage and transportation costs, there are 
many more issues to be considered, such as the cost to achieve 
comparable product quality, to carry higher inventories and to protect 
intellectual property. The Obama administration and the Commerce 
Department are working to ensure America remains an attractive place to 
do business.
    Earlier this year, the President created the Council on Jobs and 
Competitiveness (Jobs Council) to provide nonpartisan advice on 
continuing to strengthen the Nation's economy, ensure the 
competitiveness of the United States and the creation of jobs, 
opportunity, and prosperity for the American people.
    The Jobs Council is comprised of distinguished citizens from 
outside the Federal Government, including citizens chosen to serve as 
representatives of the various sectors of the economy to offer the 
diverse perspectives of the private sector, employers, and workers on 
how the Federal Government can best foster growth, competitiveness, 
innovation, and job creation.
    Members of the Jobs Council are currently soliciting ideas from 
across the country about how to bolster the economy and the prosperity 
of the American people. They will report directly to the President on 
the design, implementation, and evaluation of policies to promote the 
growth of the American economy, enhance the skills and education of 
Americans, maintain a stable and sound financial and banking system, 
create stable jobs for American workers, and improve the long-term 
prosperity and competitiveness of the American people.
    The Manufacturing Council, which I lead, is another group of 
manufacturers from across the country who will be working hand-in-hand 
with the Jobs Council to develop ideas about how to increase U.S. 
manufacturing competitiveness and bring more jobs back home. The Jobs 
Council along with the Manufacturing Council will work collaboratively 
with all agencies and all offices within the Executive Office of the 
President toward the fulfillment of these goals.
    The Commerce Department is also actively implementing the National 
Export Initiative. NEI aims to double U.S. exports by the end of 2014 
to support several million jobs. It enhances the U.S. Government's 
trade promotion efforts, increases credit to businesses--especially 
small- and medium-sized businesses--looking to export, and continues to 
improve efforts to remove trade barriers for U.S. companies in foreign 
markets. For America to win the future, more small- and medium-sized 
businesses must export, because the more small businesses export, the 
more they produce, the more workers they need, and that means good-
paying jobs here at home.
    U.S. commercial competitiveness can also be thwarted by market 
distorting unfair trade practices of foreign governments and firms. 
Ensuring that U.S. companies and workers have the opportunity to 
compete on a level playing field is thus critical to advancing business 
competitiveness in the United States and abroad, and is a key component 
of NEI. Accordingly, a key focus of our efforts in the Department of 
Commerce is strong enforcement of our unfair trade laws. Foreign 
government subsidies can also have a debilitating effect on U.S. 
exporters' competitiveness abroad, including in both the subsidizer's 
and third-country markets. Our subsidies enforcement activities help by 
preventing or remedying the harm that foreign government subsidies can 
cause to U.S. businesses and workers. Commerce also regularly advocates 
on behalf of U.S. exporters that are subject to foreign trade remedy 
(antidumping, countervailing duty, or safeguard) actions, in part by 
ensuring that the nations that pursue these actions do so in accordance 
with their World trade Organization commitments.
    Another way to encourage U.S. manufacturing is through our Foreign-
Trade Zones (FTZ) program, which allows companies to use special 
customs procedures that provide duty and logistical savings to help to 
level the playing field with offshore alternatives. Recently simplified 
procedures and pending regulatory revisions should make the FTZ program 
an even better tool to help U.S. companies compete and create or retain 
jobs in the United States in support of the NEI.
    Question. Speaking more broadly, what other programs at the 
Department of Commerce are effective at spurring domestic 
manufacturers' competitiveness, which would you select and why?
    Answer. The Commerce Department has focused the work of its bureaus 
on supporting the needs of manufacturing firms at crucial points in 
their lifecycle where Government activity can provide added value--
helping support innovation, commercialization, and access to global 
markets.
    Innovation.--A competitive manufacturing capacity requires creating 
and deploying new ideas in the form of new products, new business 
models, and improved production processes. Our USPTO enables these 
developments through an improved environment for intellectual property 
creation--driving a more efficient patent system and better protection 
at home and abroad. Commerce, through investments in NIST, further 
supports the creation of new ideas directly through critical 
investments in basic science, measurement capacity, and technical 
assistance for the establishment of industry standards that enable the 
development of entire markets for manufactured goods. Without a strong 
foundation for advanced manufacturing, benefits for the economy, 
including long-term job growth, cannot be maximized. This is why our 
Economic Development Administration's (EDA) leadership on regional 
innovation clusters is critically important to building the capacity 
for global competitiveness.
    Commercialization.--Transforming new ideas into manufactured 
outputs is a challenge that often confounds entrepreneurs--both start-
up and large-businesses alike--in their attempts to take new ideas to 
market and ensure profitable, sustainable manufacturing businesses. 
Commerce supports these efforts in multiple ways. EDA's Office of 
Innovation and Entrepreneurship focuses specifically on the challenges 
of commercialization. Additionally, the Hollings MEP at NIST is a 
program that works directly with companies to help them improve 
production efficiency and identify and enter new markets. This is an 
effective program with demonstrated success.
    Commerce is also able to support commercialization by providing 
direct information and support to manufacturers in understanding the 
domestic and global marketplace, areas of growth and opportunity in key 
sectors through the work of the Economics and Statistics Administration 
and ITA.
    Global Competitiveness.--The future of manufacturing will be 
fundamentally reliant on the ability of U.S. businesses to access and 
thrive in overseas markets, and the Commerce Department is working to 
help position these businesses for success through its efforts to drive 
the NEI. At the heart of the NEI is the basic premise that domestic 
production is critical: we need to make it here, in order to export it 
from here. The NEI was established by President Obama in 2010 with a 
goal of doubling U.S. exports over 5 years. The Department is 
profoundly focused on ensuring export competitiveness for U.S. 
manufacturers primarily through the work of the ITA in partnership with 
other agencies both within and outside the Department.
                                 ______
                                 
              Questions Submitted by Senator Sherrod Brown

                    NATIONAL EXPORT INITIATIVE (NEI)

    Question. Mr. Secretary, the Government Accountability Office (GAO) 
is presently completing two reports I requested.
    One examines the foreign commercial service, and the other examines 
the manufacturing and services division.
    In the commercial service (CS) report, one of the conclusions I'm 
interested in GAO finding is whether our current resources are aligned 
with the NEI, and whether we are focusing on getting the biggest export 
bang for each dollar.
    Are our U.S. Foreign Commercial Service (FCS) offices properly 
aligned with the NEI? What questions and issues need to be considered 
in re-organizing FCS in order to meet goals of the NEI?
    Answer. As a result of the August 2010 GAO report, ``Increases in 
Commercial Service Workforce Should be Better Planned'', the CS has 
developed methodology to properly align its worldwide footprint with 
NEI-priority markets and sectors. CS leveraged a resource allocation 
model to rank export potential of overseas markets, and it incorporated 
GAO workforce planning ``best practices,'' and input from International 
Trade Administration and Commerce, to conduct a strategic review of its 
staffing and worldwide footprint.
    As a result of this analysis, in fiscal year 2012, the CS will 
begin a strategic repositioning of its global footprint to allow it to 
more effectively serve U.S. exporters, protect U.S. commercial 
interests in priority markets, and help achieve NEI goals. Over the 
next several fiscal years, CS will gradually shift its overseas 
presence by reallocating staff and program resources from low-priority 
to higher-priority markets and sectors.

            STATISTICAL AGENCIES AND MEASURING GLOBALIZATION

    Question. Mr. Secretary, there has been a series of reports 
concerning how the Government's statistical agencies have adjusted for 
the price of imported products that are used in manufacturing supply 
chains. These reports suggest that we may not be truly capturing what 
is going on in the global economy.
    For example, there has been substantial growth in U.S. 
manufacturers' use of foreign intermediate components, but because 
price declines of these components are not picked up in Government 
price indexes, offshoring results in an overstatement of output and 
productivity growth.
    We also do not know how to account for all imports, and whether 
they are for consumption or whether they go into other manufactured 
goods and are re-exported.
    There's also an issue with Harmonized Tariff System (HTS) not 
lining up with the North American Industrial Classification System 
(NAICS), which creates a gap between trade data and employment.
    How are the statistical agencies in your Department--the Census 
Bureau and the Bureau of Economic Analysis (BEA)--addressing these 
issues? Are resources adequate to truly capture the true effects of 
globalization on our economy?
    Answer. The continued globalization of economic activity has raised 
significant measurement challenges for statistical agencies around the 
world, including BEA and the Census Bureau. Shifts in the sourcing of 
products from domestic to foreign suppliers have raised concerns about 
the adequacy of the import price and value data used to calculate gross 
domestic product (GDP) and other key economic measures. These issues 
were addressed at a conference in November 2009 in Washington, DC, 
``Measurement Issues Arising from the Growth of Globalization'', 
conducted by the W.E. Upjohn Institute and the National Academy of 
Public Administration. Because of their interest in learning more about 
these challenges, BEA contributed funding to this conference.
    The findings from this conference will prove valuable for BEA in 
developing priorities for improving the U.S. economic accounts. 
Conference-sponsored research concluded that widespread substitution of 
low-cost imports for domestic products in recent years may have 
imparted a bias to import and input price indexes and to measures of 
real value added and productivity growth in certain industries, 
although the magnitude of the bias is relatively small. In addition, 
conference research identified new methods that would improve the 
identification of imported intermediate inputs used directly by 
industries in their production process.
    A proposal by the Bureau of Labor Statistics (BLS) to develop an 
input cost index would be useful for BEA to evaluate the current 
methods for calculating real GDP. BEA will work closely with BLS to 
develop new and improved import and input price indexes. In addition, 
BEA is conducting research into developing better measures of the use 
of imported intermediate inputs and will also evaluate the findings of 
academic researchers who are conducting similar studies.
    The HTS is a product-based classification system while the NAICS is 
an industry-based classification. The Census Bureau maintains a 
concordance between the HTS and the NAICS system so that each HTS 
commodity code is correlated to a corresponding NAICS-based 
classification code. However, in reality, more than one NAICS industry 
could produce a given HTS code. As a result, products that are produced 
by establishments in another industry or where there are two similar 
NAICS classifications within different industries, the NAICS-based data 
produced by the Census Bureau will not completely align with production 
data. The Census Bureau continues to explore what would be required to 
better align trade data with production data.

                            COMMERCE CONNECT

    Question. Mr. Secretary, you and I have discussed Commerce Connect 
and the ``one-stop-shopping'' model for assisting small- and medium-
sized businesses.
    One of the issues I've heard over the years is that we have 
regional economic development districts and layers of bureaucracy. I've 
seen this in Wilmington, Ohio, which has been enduring the loss of DHL.
    The biggest issue I see, particularly in rural communities, is 
navigating the Federal bureaucracy and the need for someone to broker 
between agencies.
    BRAC is a great model, but that is for base closings and not 
massive private sector job loss.
    How is the Commerce Department currently suited to ensure 
distressed communities have the technical assistance to develop a 
redevelopment plan, before they even apply for an EDA grant?
    Answer. EDA supports a variety of capacity-building programs for 
rural and economically distressed communities. These include the 
Partnership Planning program which supports a network of multi-county 
economic development districts and the University Center program, both 
of which can assist communities with economic development planning and 
analysis prior to submission of a more targeted situation specific 
grant application. In addition, communities can contact the economic 
development representative assigned to their State, who will work with 
EDA regional offices and provide network contacts with other Federal 
agencies to provide planning assistance.
    Question. In what ways can EDA's role be enhanced in the re-
organization of the export agencies? Does this re-organization go 
beyond trade and exports?
    Answer. As part of the administration's overall effort to 
streamline Government, cut waste and increase effectiveness, the 
President directed Jeff Zients and his team to lead an effort to 
explore how we can reorganize Government to best meet the needs of the 
21st century. This initiative includes reviewing the departments, 
agencies and programs in the trade and exports sphere as well as those 
impacting business competitiveness more broadly. Mr. Zients and his 
team reached out broadly to hear what's working, what's not and what we 
might do better. They submitted their analysis and potential options to 
the President on June 9 and the administration is currently reviewing 
the options. We would be happy to discuss the results of this work in 
more detail once they are finalized.
    Question. How is CommerceConnect distinct from EDA's role as the 
``front door'' to communities and companies in need of Federal economic 
development assistance?
    Answer. CommerceConnect complements EDA's role and the role of 
other Commerce bureaus and partners. CommerceConnect is focused on 
streamlining Government bureaucracy to bring services and solutions 
directly to businesses and entrepreneurs. Most EDA assistance, is 
focused on creating economic conditions that are conducive to economic 
growth and expansion through strategic grant investments at the State, 
regional and local level. CommerceConnect currently focuses on helping 
businesses, whereas EDA's investments are targeted to private/public 
partnerships, units of government and nonprofit organizations in order 
to strengthen an ecosystem in which economic development can occur.
    A primary goal of the CommerceConnect initiative is to provide a 
``no wrong door'' consultative approach for information, counseling, 
and access to the breadth of overall Department of Commerce programs, 
services and resources that help businesses transform themselves into 
viable and competitive enterprises. Entrepreneurs and existing 
businesses can initiate access to Commerce's 70 plus enterprise 
assistance programs through a toll free number (888-728-4190) or 
through www.CommerceConnect.gov. CommerceConnect listens to business 
owners and puts them in touch with Commerce bureau resources, as well 
as other Federal, State, and local resource providers for enhanced 
assistance.
    While CommerceConnect is a liaison to resources the initiative is 
not a direct service provider, unlike EDA and the Department's other 
bureaus, which service eligible recipients directly through their 
respective programs. In the coming fiscal year, CommerceConnect will 
endeavor to build stronger linkages to the Small Business 
Administration (SBA) and other enterprise assistance providers. The 
President's fiscal year 2012 budget includes $3.24 million for 
CommerceConnect including $500,000 for customer service integration 
activities with SBA. SBA's 2012 budget includes $1 million for these 
activities. Department Chief Information Officer and staff level 
meetings are already underway to explore IT system integration 
opportunities.
                                 ______
                                 
          Questions Submitted by Senator Kay Bailey Hutchison

                        GULF OF MEXICO RESOURCES

    Question. The Deepwater Horizon has cost an estimated $10 billion. 
Out of $8.8 billion, the only budget highlight related to the gulf oil 
spill is a $2.9 million increase in the National Oceanic and 
Atmospheric Administration (NOAA) budget to develop an oil spill 
research and development program. Tell us about this program.
    Answer. The fiscal year 2012 President's budget request includes an 
increase of $2.9 million to develop an oil spill research and 
development (R&D) program in NOAA. This will be NOAA's first 
comprehensive oil spill R&D program. As the scientific lead for coastal 
and marine spills, NOAA brings the best-available science and tools to 
improve decisionmaking during oil spill responses. The requested 
resources will be used to develop strong leadership in oil spill 
research, response, assessment, and restoration research. The goal of 
this program will be to conduct research to provide useful information, 
methods and tools for planners, oil spill responders, and assessment 
practitioners. The funds would support external grants that are 
coordinated with the Interagency Coordinating Committee for Oil 
Pollution Research as well as the National Oceanographic Partnership 
Program. The grants will be focused on priority oil spill research 
areas, including:
      Oil Fate and Behavior From Deepwater Releases.--As the Deepwater 
        Horizon oil spill demonstrated, there is a need to study how 
        oil behaves and disperses within the water column when released 
        at great depths, and to understand the effects of oil on mid-
        water and deep-water benthic habitat.
      Long-term Effects on Species and Habitats.--Research is needed to 
        improve our understanding of the long-term effects of oil on 
        sensitive and economically important species and habitats. 
        Continued research is also needed to determine the effects of 
        oil and dispersants that are suspended in the water column on 
        mid-water and pelagic species, and the effects of oil on deep 
        water corals.
      Research to Improve Tools for Assessment and Restoration.--As our 
        understanding of complex ecosystems evolves, so should our 
        modeling tools and restoration techniques. Research and tools 
        to better assess and quantify natural resource services--such 
        as water filtration/capture, flood protection, carbon 
        sequestration, recreation, and education--across a range of 
        habitat types can help ensure the public is fully compensated 
        and the environment fully restored.
      Oil in Arctic Environments.--Research is needed to better 
        understand environmental conditions in the Arctic, which is 
        important for conducting injury assessments and developing 
        restoration strategies. Research is also needed to better 
        understand the challenges of spill response in arctic waters 
        and the most effective tools and techniques to utilize in such 
        environments.
      Human Dimensions.--Research is needed on how to incorporate 
        impacted communities into the preparedness and response 
        processes to help to address the human dimensions of spills, 
        including social issues, community effects, risk-communication 
        methods, and valuation of natural resources.
    Question. Can you please tell us about any new initiatives other 
than this $2.9 million for the oil spill study?
    Answer. The fiscal year 2012 President's budget request increase 
for $2.9 million for oil spill research and development is the key 
increase in the NOAA budget for oil spill research. NOAA is requesting 
an increase of $5 million for enhanced observations to implement the 
U.S. Integrated Ocean Observing Systems (IOOS) Surface Current Mapping 
plan to monitor near-shore currents using High Frequency (HF) Radar. 
This program will be implemented by the IOOS Regional Coastal Ocean 
Observing Systems (RCOOS) to deliver real-time surface current data to 
the national HF Radar surface current monitoring network. The requested 
resources will support Regional IOOS HF Radar stations with an 
emphasis on those stations currently operating and delivering data to 
the national network in regions of offshore oil production and in the 
vicinity of major ports and harbors. The U.S. IOOS program will award 
funding via an established merit-based competitive process with RCOOS, 
and through contracts with Federal partners.
    The 2010 Deepwater Horizon oil spill highlighted the utility of HF 
Radar. NOAA's Office of Response and Restoration relied on real-time 
data collected from the national HF Radar surface current monitoring 
network to provide new data for inclusion in trajectory predictions of 
oil dispersal and to verify models used to assess the likelihood of the 
oil moving into the Loop Current. HF Radar data was also used daily by 
NOAA's Office of Response and Restoration (OR&R) during the Deepwater 
Horizon oil spill response to create trajectory forecasts (which were 
used by Federal responders to deploy spill response assets and identify 
fishery closures). In 2007, HF Radar was used to verify that 
trajectories of oil from the M/V Cosco Busan spill would not flow into 
the federally protected National Marine Sanctuaries near the San 
Francisco Bay, and resources were able to be deployed to other areas 
under greater threat. With sustained, long-term surface current data 
sets, NOAA's OR&R will now be able to provide Trajectory Analysis 
Planner products for threat assessments.
    Question. Did the Department request additional funding that was 
denied by Office of Management and Budget (OMB)?
    Answer. The fiscal year 2012 President's budget request is the 
result of a rigorous review and prioritization of the Department's 
programs and activities within the broader context of the Federal 
community. As a result of this discussion, it was determined that the 
$2.9 million request for additional funds to develop an oil spill 
research and development program was both a suitable funding level and 
a high-priority initiative.
    Question. If there are none, why not?
    Answer. The requested increases plus the base funds in ongoing oil 
spill activities in NOAA's programs will allow for the continued 
development of research on oil spills. Increases were requested for 
only the most critical programs, projects, or activities necessary to 
meet the growing demand for NOAA's services.
    Question. Are the Department of Commerce (DOC) and NOAA satisfied 
that the oil spill has not had, nor will, have any effect on fisheries?
    Answer. Initially NOAA closed areas in the Gulf of Mexico to 
fishing due to the oil spill and the impacts to the fisheries in those 
areas. Testing of seafood taken from this area has not shown elevated 
levels of polycyclic aromatic hydrocarbons or dioctyl sodium 
sulfosuccinate in samples taken from the Gulf of Mexico. All Federal 
waters in the Gulf of Mexico that were closed due to the BP Deepwater 
Horizon oil spill are now open to all fishing. NOAA has not yet 
determined the comprehensive effects of the oil spill and will continue 
the Natural Resource Damage Assessment process to determine those 
impacts.
    Like the fishing industry, NOAA remains concerned with the public 
perception issues surrounding seafood from the Gulf of Mexico. NOAA 
continues to sample seafood from the Gulf of Mexico through the summer 
and is posting the results publicly so that consumers can make fully 
informed purchasing decisions. NOAA is also using $15 million in 
supplemental funding received for fishery disaster assistance to work 
with the Gulf States Marine Fisheries Commission --along with their 
State representatives from Louisiana, Mississippi, Alabama, and 
Florida--on plans that are intended to help the local seafood industry 
and the sport fishing community restore national confidence in gulf 
fishery products.

                          NOAA STEM EDUCATION

    Question. The America COMPETES Reauthorization of 2010 directs NOAA 
to strengthen its efforts to provide curriculum support to teachers. 
What has been done to improve NOAA's curriculum support activities and 
increase the use of NOAA curriculum support activities by schools 
across the country?
    Answer. The America COMPETES Reauthorization Act of 2010 gives NOAA 
broad authority for educational activities. Based on this statute and 
other program-specific education mandates, the NOAA education community 
works collaboratively to advance priorities outlined in NOAA's 
Education Strategic Plan and meet NOAA's Education Mission: ``To 
advance environmental literacy and promote a diverse workforce in 
ocean, coastal, Great Lakes, weather, and climate sciences, encouraging 
stewardship and increasing informed decisionmaking for the Nation.'' To 
that end, NOAA sees the importance of supporting teacher professional 
development and curriculum development by bringing NOAA-based sciences 
into the classroom. Although America COMPETES Reauthorization was 
signed into law on January 4, 2011, NOAA did not fund any grants while 
the fiscal year 2011 appropriation was being determined by the 
Congress. Grants will be awarded from the Competitive Educational 
Grants and Programs line in the last quarter of fiscal year 2011.
    As part of the Competitive Educational Grants line, NOAA provides 
Environmental Literacy Grants (ELGs). The ELG Program provides support 
to improve environmental literacy among our Nation's citizens and 
promotes a diverse workforce in ocean, coastal, Great Lakes, weather, 
and climate sciences, with the goal of encouraging stewardship and 
increasing informed decisionmaking for the Nation. These broad 
competitive education grants fund a wide range of projects and 
activities, which include supporting the development of curricula and 
teacher professional development materials connected to NOAA sciences. 
Specific examples include:
  --The Earth System Science Education Alliance (ESSEA), funded through 
        a 2008 ELG award and implemented by the Institute for Global 
        Environmental Strategies, is designed to improve the quality of 
        geosciences instruction for pre-service and in-service K-12 
        teachers. Participating institutions offer a series of inquiry-
        based courses that provide teachers with the content knowledge 
        and tools they need to incorporate Earth systems science into 
        their curricula.
  --The Ocean Science Curriculum Sequence, funded through 2007 and 2009 
        ELG awards and implemented by the Lawrence Hall of Science, is 
        designed to develop ocean science curricula for grades 3-5 and 
        6-8, respectively. The curriculum provides a major step toward 
        achieving coherent, comprehensive, nationally disseminated K-12 
        ocean science curriculum. An evaluation study of Ocean Science 
        Curriculum Sequence grades 3-5 from 70 classrooms shows that 
        students using this curriculum made significant gains in 
        understanding key ocean sciences concepts addressed in the 
        curriculum.

                             CENSUS LESSONS

    Question. As late as 2009, there was a real fear that the costs of 
the 2010 census would continue to grow. The increased costs of going 
back to a paper census instead of using hand-held devices raised 
concern about if the census would even be accomplished. However, the 
2010 census was completed and, as you highlight in your testimony, $1.8 
billion was returned because it was not needed.
    What lessons is the Department of Commerce taking away from the 
entire experience of executing the 2010 census--and can they be used in 
current surveys and in planning for the 2020 census?
    Answer. The Census Bureau is committed to designing and conducting 
a 2020 census that costs less per housing unit than the 2010 census 
while maintaining high-quality results. The Census Bureau has 
identified four strategic goals for the 2020 census:
  --a complete and accurate census;
  --embraced and valued results;
  --an efficient census; and
  --a well-managed census.
    To achieve its cost and quality targets and meet its strategic 
goals, the Census Bureau must make fundamental changes to the design, 
implementation, and management of the decennial census. Substantial 
innovation and improvements are necessary to prevent another large 
increase in costs, while still maintaining high quality. Research on 
new methods likely to affect costs must be accomplished early enough in 
the decade to confirm their likely impact on both cost and quality 
(coverage) to inform timely design decisions. Without early investment 
in research, and innovation, the strategic goals and the ability to 
stem cost growth will be jeopardized.
    At the same time, the 2020 census must incorporate strong risk and 
program management to avoid the problems encountered during the years 
leading up to the 2010 census. The final design also must be robust, 
resilient, and flexible enough to respond to social and technological 
changes that will undoubtedly occur throughout the decade.

                            NOAA SATELLITES

    Question. As I mentioned in my statement, understand that the Joint 
Polar Satellite System (JPSS) program is at least 14 months behind 
schedule. We are risking gaps in weather coverage for important 
observations to inform short- and long-term weather and hurricane 
forecasts.
    What do you see as the biggest challenges facing NOAA's satellite 
program, and how do you propose NOAA can move forward in spite of those 
obstacles?
    Answer. The biggest challenge the JPSS program faces is lack of 
adequate and stable funding at a critical juncture in the development 
of the satellite. As a consequence, the JPSS program is behind 
schedule. Based on an independent analysis conducted by the Aerospace 
Corporation, there is a high likelihood of a gap in satellite coverage 
between the end of the NPOESS Preparatory Project (NPP) mission and the 
date when the JPSS-1 satellite begins providing operational data after 
the postlaunch calibration and conclusion of validation testing. At the 
time the gap occurs, there would be an immediate degradation of all 
weather forecasts that are made for 24 hours and longer, and likely 
result in forecasts that incorrectly predict the magnitude of storms by 
as much as 50 percent in the 2- to 5-day range compared to current 
capability.
    NOAA has traditionally flown its polar-orbiting satellite in the 
afternoon orbit and no other nation has flown a satellite that provides 
the type of data required in that orbit. If NOAA does not have a polar 
satellite data source (POES, NPP, or JPSS) in the afternoon orbit, then 
the NWS modeling effort would be based solely on the European data that 
is available in the mid-morning orbit. Reliance on this mid-morning 
orbit would result in a degradation of forecast accuracy by 1 to 2 
days. Higher confidence forecasts would only extend out 5 days instead 
of 7 days as they do currently.
    Adequate funding of the JPSS Program remains one of Department's 
highest priorities. As such, although the NOAA did not receive the 
$1.06 billion requested in the President's fiscal year 2011 budget 
which was needed to launch JPSS-1 in 2015 and given the vital 
importance of JPSS in maintaining the Nation's weather prediction 
capabilities, the Department of Commerce has chosen to move funds to 
JPSS in the fiscal year 2011 spend plan, pursuant to Public Law 112-10. 
The Department's spend plans submitted on June 15, 2011 provides 
additional details. These additional funds will provide for a launch of 
the first JPSS satellite in the first quarter of fiscal year 2017 which 
will minimize the duration of a gap in afternoon polar satellite 
coverage should one occur. The first quarter of fiscal year 2017 launch 
date is predicated on receiving the full President's budget of $1.07 
billion in fiscal year 2012. NOAA estimates that JPSS-1 will begin 
providing operational data in fiscal year 2017.
    Question. How would a gap in JPSS or other satellite coverage 
impact our ability to forecast hurricanes?
    Answer. We expect that a gap in JPSS data coverage would result in 
a degradation in forecasting the path and landfall location of 
hurricanes. Over the past decade there has been a remarkable 
improvement in predicting the tracks of hurricanes 2-3 days in advance 
due to having at least two satellites in polar orbit, one in the mid-
morning orbit and the other in the afternoon orbit. Currently, the 
EUMETSAT Metop satellite provides and will continue to provide data in 
the mid-morning orbit. It is the afternoon orbit that NOAA-19 currently 
flies in and that NPP and the JPSS satellites will fly in that is in 
jeopardy. These improvements that we have realized by having this 
coverage in the two orbits, allow the public and private sectors to 
better prepare for the impact of a hurricane. With a gap in the 
afternoon orbit (i.e., lack of JPSS data), forecast information to the 
public will be degraded and hurricane warning areas will have to be 
expanded resulting in larger evacuation areas and their associated 
costs.
    NOAA's National Weather Service (NWS) operational models are run 
four times per day on a 6-hour cycle to support its weather forecasting 
mission. Data from the Metop satellite and the NOAA POES satellite are 
critical to the consistency of these model runs. Decisionmakers/users 
depend on all these models every day and throughout the day to provide 
the latest information to the public. These model runs have greatly 
increased accuracy at days 5 through 7 compared to 25 years ago. 
Forecast models are now capable of predicting the development and 
evolution of extreme events (winter storms, severe weather outbreaks 
and hurricanes) 3, 5, and sometimes 7 to 8 days in advance with 
remarkable skill and consistency.

                          WEATHER MODIFICATION

    Question. Previous versions of my legislation on weather 
modification directed NOAA to conduct this research. The National 
Academy of Sciences recommended in 2003 that this country needs a 
coordinated, national program to study weather modification. Many 
States have weather modification programs, and private firms are 
providing weather modification services, but we lack basic science to 
explain whether these activities work, or how modification activities 
in one region may impact another region. For example, how does cloud 
seeding to increase snowfall over a ski resort in the Rockies impact 
precipitation in the Great Plains?
    Answer. Before the efficacy of weather mitigation or modification 
can be understood, more research into the underlying physical processes 
of weather phenomena needs to be done. Our current state of 
understanding of the physics of hurricane, cloud, and precipitation 
formation makes it almost impossible to separate the effects of 
proposed mitigation or modification strategies from natural changes.
    Question. Do you think that it is worthwhile to collect data on the 
impacts of weather modification technologies?
    Answer. As mentioned above, before the efficacy of weather 
mitigation or modification can be understood, more research into the 
underlying physical processes of weather phenomena needs to be done. 
Our current state of understanding of the physics of hurricane, cloud, 
and precipitation formation makes it almost impossible to separate the 
effects of proposed mitigation or modification strategies from natural 
changes. In addition, weather modification applications involving 
artificially modified precipitation patterns must be evaluated in the 
context of potential political and legal issues including local and/or 
regional liability, foreign policy, and national security.
    Question. Are there existing programs within NWS that study the 
physical processes that create clouds and precipitation, and which 
could help us better understand weather modification technologies?
    Answer. A number of research efforts are currently underway at NOAA 
to better understand the fundamental physical aspects of weather 
phenomena such as cloud and precipitation formation, including:
      NOAA's Hurricane Forecast Improvement Program (HFIP).--HFIP is a 
        joint program focused on aligning NOAA's research and 
        operations to improve hurricane forecasts. HFIP also provides 
        the basis for NOAA and other agencies to coordinate hurricane 
        research needed to significantly improve hurricane track, 
        intensity, and storm surge forecasts. It also engages and 
        aligns the inter-agency and larger scientific community efforts 
        toward addressing the challenges posed to improve hurricane 
        forecasts. The goals of the HFIP are to improve the accuracy 
        and reliability of hurricane forecasts; to extend lead time for 
        hurricane forecasts with increased certainty; and to increase 
        confidence in hurricane forecasts. Preliminary results are 
        showing greater than 10 percent improvement in track and 
        intensity forecast accuracy. Increased track and intensity 
        accuracy is critical to evaluating any hurricane modification 
        approach.
      Warn-on-Forecast (WoF).--NOAA's WoF research project aims to 
        create computer forecasts that accurately predict when and 
        where severe weather will occur in the next hour. Today, NOAA's 
        NWS forecasters rely heavily on observation tools such as radar 
        to detect severe weather so they can issue warnings. WoF has a 
        modeling component to it that will require NOAA to investigate 
        cloud processes in detail.
      VORTEX-2 Field Research.--To help gain better knowledge of cloud 
        processes, NOAA partnered with the National Science Foundation 
        (NSF) to execute the Verification of the Origins of Rotation in 
        Tornadoes Experiment (VORTEX-2) in the springs of 2009 and 
        2010. The experiment used multiple sensors (e.g., mobile 
        radars) to get a high-resolution data set of developing and 
        decaying storms. After the analysis phase of these storms is 
        completed over the coming months and years, it will give clues 
        on how to refine the cloud physics parameters needed for WoF 
        models.
      Dual-polarized Radars.--The NWS is currently upgrading all of 
        their 122 radars to dual polarization capabilities. Next 
        generation radar technology options such as phased array radar 
        are several years away from being used operationally, but NOAA 
        has a working prototype that scans the storms more quickly 
        giving researchers a better picture of the structure of storms 
        in greater detail than available from conventional radar.
      Improvement in Monitoring Meteorological Conditions.--Why some 
        conditions thought to be favorable to precipitation turn out to 
        yield little or no rain, and others considered generally 
        unfavorable do the opposite can be partially attributed to 
        poorly observed atmospheric conditions. NOAA researchers helped 
        pioneer the use of advanced atmospheric moisture sensing 
        systems such as Global Positioning System (GPS) Meteorology and 
        weather radar to monitor the moisture of the atmosphere and 
        assimilate the information into numerical weather prediction 
        models, and continue to develop higher resolution 
        meteorological tools and techniques to improve local area 
        weather analysis and prediction.

                     COMMERCE--TRADE REORGANIZATION

    Question. In the President's State of the Union Address he 
mentioned the fact that multiple agencies have responsibilities over 
trade (U.S. Trade Representative [USTR], Export/Import Bank, 
International Trade Commission, International Trade Administration, 
etc). I understand one of the proposals includes moving the USTR into 
the Department of Commerce, which has concerns about doing this. OMB is 
currently conducting a high-level review of programs at the Department 
of Commerce, specifically examining its trade policy responsibilities. 
This effort is being lead by Jeffrey Zients, OMB Deputy Director.
    Mr. Secretary, it is our understanding that OMB is currently 
conducting a review of Commerce programs. What is the purpose of this 
review?
    Answer. As the President said in his State of the Union Address, 
winning the future will require taking steps now to prepare America to 
compete in a global economy for decades to come. That means out-
educating, out-innovating, and out-building our competition; restoring 
fiscal responsibility to remove the burden of deficits and debt; and 
reforming our Government so that it is more effective, efficient, and 
open to the American people. As the President put it, ``We cannot win 
the future with a Government of the past.''
    The President believes that we need to reform our Government in 
order to make it better organized and better equipped to support 
American competitiveness. Particularly during these challenging 
economic times, we want to ensure that we put all of our resources to 
best use in order to negotiate the best agreements, enforce our trade 
rights, support U.S. businesses and promote their products and exports.
    That is why the President has asked our Nation's first Chief 
Performance Officer (CPO), Jeff Zients, to lead a review of the 
departments, agencies, and programs in the trade, exports, and 
competitiveness spheres to explore how we can cut waste and increase 
effectiveness so that we can help American businesses better compete 
globally and organize our Government to meet the needs of the 21st 
century.
     Over the last few months, the team at OMB has been hard at work 
gathering ideas, input, and advice from owners of small and large 
businesses, Federal employees, outside experts, current and former 
agency heads, and Members of Congress and their staffs on ways to make 
Government more efficient, streamline key functions, and make 
Government work better for the American people and the economy.
    Question. When will the review be completed and will a set of 
recommendations be forthcoming?
    Answer. The President issued a memorandum tasking the CPO, Jeff 
Zients, with developing recommendations. Mr. Zients and his team 
submitted their analysis and potential options to the President on June 
9. The President will review the options over the summer and discuss 
them with his team. When he completes his review, we would be happy to 
discuss the results of this work in more detail.

               ECONOMIC DEVELOPMENT ADMINISTRATION (EDA)

    Question. The Commerce Department's EDA and its Office of 
Innovation and Entrepreneurship announced on March 12, the availability 
of $12 million in i6 Green Challenge. This grant solicitation is in 
partnership with the Departments of Agriculture, Energy (DOE), 
Environmental Protection Agency, NSF, and Commerce's National Institute 
of Standards and Technology (NIST), and U.S. Patent and Trademark 
Office.
    EDA will award up to $1 million to each of six teams around the 
country with the most innovative ideas to drive technology 
commercialization and entrepreneurship in support of a green innovation 
economy, increased U.S. competitiveness and new jobs. Its partner 
agencies will award more than $6 million in additional funding to i6 
Green winners.
    The i6 Green is a follow on to last year's inaugural i6 Challenge 
and is designed to encourage and reward innovative approaches to 
accelerating technology commercialization, new venture formation, job. 
This year's $12 million challenge rewards communities that utilize a 
Proof of Concept Center model, to accelerate technology led economic 
development.
    A Proof of Concept Center supports all aspects of the 
entrepreneurship process, from supporting technology demonstration and 
business plan development, to providing early stage access to capital 
and other resources to help innovators bring their ideas to the 
marketplace. Centers allow emerging technologies to mature and 
demonstrate their market potential, making them more attractive to 
investors and helping entrepreneurs turn their idea or technology into 
a business.
    Since the fiscal year 2011 continuing resolution reduces EDA's 
budget by $9 million below fiscal year 2010 level, does it make sense 
to continue with the new i6 initiative?
    Answer. Yes. The i6 Challenge Series helps communities build the 
essential 21st century innovation infrastructure that supports 
entrepreneurs and high-growth business start ups.
    In the inaugural i6 Challenge Series, EDA working with NSF and the 
National Institutes of Health in a new collaborative capacity-building 
effort, furthered the process of maximizing the effectiveness of 
Federal dollars by leveraging the resources, talent, and expertise of 
other Federal agencies.
    Examples of i6 winners:
  --The Austen BioInnovation Institute in Akron and the University of 
        Akron Research Foundation, Akron, Ohio, supporting the 
        Innovative Solutions for Invention Xceleration which will 
        increase innovation and minimize the time from ideation to 
        commercialization of new technologies by bringing together 
        world-class scientists, physicians, engineers, researchers, and 
        entrepreneurs in the biomedical device/product and polymer 
        science industries of northeast Ohio. EDA's $1 million 
        investment is part of a $2.2 million project that the grantees 
        estimate will create 2,400 jobs and generate $800 million in 
        private investment.
  --The Technology Ventures Corporation, Albuquerque, New Mexico, 
        supporting the work of the New Mexico Technology Ventures 
        Corporation, which will create an infrastructure for the 
        successful maturation of technologies developed under the Small 
        Business Innovation Research program into commercially viable 
        enterprises. EDA's $1 million investment is part of a $1.5 
        million project.
    EDA's ability to coordinate investments across multiple Federal 
agencies is particularly important in today's fiscal environment.
    Question. Given the tight budgets next year and the need to 
prioritize within the programs, the i6 initiative seems to be beyond 
the scope of EDA's core mission. If the EDA goes forward with this new 
program how will the other programs within EDA be impacted?
    Answer. The i6 Challenge Series is well within the scope of EDA's 
core mission, ``To lead the Federal economic development agenda by 
promoting innovation and competitiveness, preparing American regions 
for growth and success in the worldwide economy.'' Both the inaugural 
i6 and the i6 Green highlight the tremendous economic growth potential 
that exists in our communities across the country by leveraging 
research to create new companies and high-wage, high-skill, sustainable 
jobs.
    Since the i6 initiative is a multiagency competition with each 
agency contributing funds to the successful applicants the financial 
burden on each agency is reduced. Additionally, it is not anticipated 
that current or future i6 Challenges will have any significant impact 
on other EDA programs.

                          NIST--MANUFACTURING

    Question. Over the past few years, numerous reports have 
underscored the importance of a robust Federal presence in the sciences 
to advance technological innovation. The ``Rising Above the Gathering 
Storm'' report and its follow-on, ``The Gathering Storm, Revisited'', 
were a call to action that helped to shape the America COMPETES 
Reauthorization Act that pushed for Innovation in the United States.
    In addition, in February of this year, the White House Office of 
Science and Technology Policy, National Economic Council, and Council 
of Economic Advisers jointly released an update to the 2009 ``Strategy 
for American Innovation'' that ``focuses on critical areas where 
sensible, balanced government policies can lay the foundation for 
innovation that leads to quality jobs and shared prosperity.''
    NIST's mission is to promote U.S. innovation and industrial 
competitiveness through measurement science, standards, and technology 
focuses this year on a number of manufacturing initiatives. In its 
request NIST has proposed $85.3 million in fiscal year 2012 supporting 
manufacturing related research.
    With programs administered by the International Trade 
Administration, NIST, and EDA the Department of Commerce has several 
programmatic tools at its disposal to help address the needs of 
manufacturers. As the Secretary of Commerce what are you doing to 
provide assistance to U.S. manufacturers?
    Answer. NIST has a long-standing and multi-faceted role in 
providing technological assistance to manufacturers in the United 
States:
  --NIST is responsible for producing measurements and standards that 
        manufacturers rely on. NIST laboratories develop new 
        measurements and standards that are essential for adoption of 
        advanced technologies that make U.S. manufacturers able to more 
        effectively compete globally in technology-intensive product 
        markets.
  --Through targeted programs aimed at addressing critical national 
        needs, NIST's Technology Innovation Program (TIP) and the 
        proposed Advanced Manufacturing Technology Consortia (AMTech) 
        program support research by industry in high-risk innovations 
        in manufacturing.
  --NIST's Hollings Manufacturing Extension Partnership (MEP) is a 
        program that works directly with companies to help them improve 
        production efficiency and identify and enter new markets. This 
        is an effective program with demonstrated success, including 
        helping firms increase and retain sales by more than $8.4 
        billion, generate cost savings of more than $1.3 billion, and 
        create and retain more than 72,000 jobs in fiscal year 2009 
        alone.
    Question. The needs of U.S. manufacturer companies is immediate, 
they cannot wait for a research program to produce benefits that are 10 
to 15 years down the road. When do you expect to see the manufacturing 
research programs proposed at NIST in this budget to actually yield 
results? In other words, when and how will we know that the taxpayer's 
money has been well-spent?
    Answer. NIST's role as the national laboratory for promoting 
industrial competitiveness enables the development and dissemination of 
measurement technologies and standards to help U.S. industry compete 
effectively in an increasingly global market. These measurement 
technologies and standards address both immediate tactical needs, and 
also long-term needs that reflect strategic investments for U.S. 
industry.
    There are various components of the manufacturing research programs 
proposed in the NIST fiscal year 2012 budget that will have almost 
immediate impacts. These components include measurement and standards--
focused deliverables that are readily accessible to, and are developed 
in close collaboration with, U.S. industry.
    NIST is responding to near-term industry needs by developing 
standards for measuring the performance of nontraditional manufacturing 
processes so that manufacturers can deploy these new tools with 
confidence. Performance test methods are entering the standards process 
for additive manufacturing equipment (also referred to as 3D printing), 
advanced robots that can operate safely in the vicinity of humans, and 
five-axis machine tools. Through validated performance measures, users 
can dramatically improve their manufacturing capabilities, quality, and 
flexibility in producing a dynamic variety of products and make 
entirely new types of products possible.
    NIST staff participation in development of documentary standards 
codifies the knowledge developed through NIST programs into practices 
that are internationally recognized and used. Using these technical 
standards, U.S. exporters are able to streamline compliance with 
regulations around the world with the immediate impact that U.S. 
exports can be competitive in other parts of the world. Another example 
of the impact of NIST research includes standardizing ways of 
representing models of entire products in computer files with 
sufficient detail for approvals and certifications, a development that 
allows manufacturers to increase efficiency and reduce costs. A U.S. 
aircraft manufacturer successfully used these new standards not only to 
improve their manufacturing processes but also to obtain airworthiness 
approval without needing to build a physical model.

       NIST--ADVANCED MANUFACTURING TECHNOLOGY CONSORTIA (AMTECH)

    Question. NIST is requesting $12.3 million for the AMTECH program 
in fiscal year 2012. AMTECH is a new public-private partnership that 
will broadly benefit the Nation's industrial base by providing grants 
to form and fund industrial consortia to address industrial driven 
technological challenges that no one company can address alone. AMTECH 
is modeled upon NIST's partnership, the Nanoelectronics Research 
Initiative, which in collaboration with industry, funds research 
consortia targeting the nanoelectronics technology sector.
    AMTECH is designed to decrease the timescale of technological 
innovation by including partners that span the innovation life-cycle 
from idea to discovery, from invention to commercialization. Through 
cost-sharing and a common research agenda, these consortia would 
support the development of innovative new technologies directed at 
creating high-wage jobs and economic growth across the industry sector. 
These consortia will develop road-maps of critical long-term industrial 
research needs and provide support for research and equipment at 
leading universities and government laboratories directed at meeting 
these needs.
    What is AMTech and why do you believe this is a good model to fund 
research?
    Answer. The Advanced Manufacturing Technology Consortia (AMTech) 
program will establish and support industry-led consortia to pursue 
research needs in support of a long-term, industry-wide vision. The 
AMTech program will issue two types of awards. Small planning awards 
are intended for the establishment of multi-partner consortia and 
development of a shared vision of industry's critical long-term 
research needs via a technology roadmap. Implementation awards are 
intended for consortia with defined partnerships and a developed 
roadmap. The consortia will award implementation grants for directed 
basic research at universities in pursuit of roadmap targets. The 
partnership model to identify needs, develop roadmaps, and generate 
knowledge creates an incentive for private and non-Federal funding 
agencies to fully develop and commercialize the innovations developed 
through AMTech.
    NIST developed AMTech based on its own experience with technology 
consortia and a thorough review of evaluation of past Federal consortia 
efforts. AMTech is designed to avoid features that have limited the 
impact of past public/private partnerships and build upon those 
features that have proven beneficial. Further, the Federal role within 
AMTech--funding of university-based directed basic research--is widely 
recognized as appropriate. Further, NIST began testing this public/
private partnership model in 2007 and has seen promising results. In 
the pilot program (the Nanoelectronics Research Initiative), NIST has 
been able to leverage Federal investment with key technology 
stakeholders in order to help address long-term research challenges 
aligned with the needs of industry. These challenges, articulated in 
the form of an industry roadmap, present untenable resource and 
intellectual demands for any single industry player. Targeting combined 
resources against these challenges is a concrete economic benefit to 
all participants in the consortia: the leveraged resources that come 
together under this kind of model are a substantial benefit to the 
commercial sector, both in terms of minimizing their individual 
investments and providing an opportunity for new technological 
discoveries, as well as to the Federal research enterprise, in terms of 
providing a basis for use-inspired research. By convening the key 
players across the innovation life cycle, the AMTech consortia 
eliminates critical barriers to innovation, increases the efficiency of 
domestic innovation efforts, alleviates barriers to private capital 
investment, and collapses the timescale to deliver new products and 
services based on scientific and technological advance. This strategy 
will ultimately drive economic growth, enhance competitiveness and spur 
the creation of jobs in high value-added sectors.
    Question. Isn't the AMTech proposal just a reinvention of the 
Advanced Technology Program, or TIP?
    Answer. No, the proposed AMTech is not a reinvention of the 
Advanced Technology Program or TIP. While AMTech does aim at meeting 
industry's critical long-term research needs, it seeks to do so in a 
manner that is different from TIP. In particular, all Federal money in 
the AMTech consortia funds precompetitive research to support an 
industry-directed roadmap of research needs. TIP funding, in contrast, 
supports early-stage, use-directed R&D performed by businesses or 
business/university partnerships, on a short-term project basis. By 
forming an industry-led consortia, AMTech is able to develop a 
consensus regarding industry's long-term needs, attract industry funds 
to leverage Federal investment, ensure that all investments in 
university-performed research are directed at meeting industry's long-
term needs, and attract other private and State investments to support 
commercialization and deployment.
    Question. If funded, this program will only have minimal impact 
since it is only $12.5 million? Please provide the rational for 
creating another new grant program versus putting the funding in an 
existing program like TIP or the NIST labs.
    Answer. The AMTech program is designed so that a minimal investment 
is heavily leveraged by concurrent investment of industry and State 
resources directed at a common set of technological challenges. The 
NIST interaction with the Nanoelectronics Research Initiative (NRI), 
upon which AMTech is based, is illustrative of the significant impact 
that even a small investment can have. Currently NIST funding of 
research in the NRI ($2.75 million per year) has been leveraged by $5 
million per year from industry partners and $15 million/year from 
States to support projects at 30 universities to work in four regional 
centers. The NIST/NRI partnership has attracted $110 million over 5 
years in State and private funding to support business development and 
commercialization. Furthermore, George Scalise, former president of the 
Semiconductor Industry Association highlighted the importance of this 
effort:

    ``The Nanoelectronics Research Initiative and the regional research 
centers exemplify what can be done when industry, government and 
academia work together. This investment is likely to pay substantial 
dividends in the future. Leading-edge university research centers have 
proved to be powerful magnets for investment by technology companies 
and will help build the high-tech ecosystem for high-value jobs in the 
future.''

    NIST has modeled the proposed AMTech initiative on the successful 
NRI. By bringing together multiple components of the innovation cycle, 
under a single consortium, to accelerate the pace of innovation in a 
particular industry sector, AMTech will serve as a mechanism to 
accelerate the development, transition, adoption, and manufacture of 
new technologies. This in turn will create the opportunity for job 
creation and economic growth, as illustrated by the NRI example. The 
AMTech program compliments but is not the same as TIP's focus on small 
and medium-sized businesses and the role of the labs in addressing the 
measurement and standards challenges that stand in the way of 
technological advancement.

                          NIST--CYBERSECURITY

    Question. NIST's overall cybersecurity portfolio is responsible for 
cybersecurity research, development of Federal cybersecurity standards, 
establishment of methods and metrics for determining the effectiveness 
of security controls, and providing technical support to public and 
private sector implementation of security standards and controls. The 
fiscal year 2012 budget request contains $43.4 million in new funding 
for cybersecurity-related programs and activities that will strengthen 
NIST's contribution to the development and promulgation of effective 
and usable cybersecurity standards.
    NIST's budget request includes an increase of $43 million (a total 
of $72 million) for an initiative to improve the security and 
interoperability of the Nation's cyberinfrastructure. Can you elaborate 
on the efforts occurring under this initiative and how NIST's 
coordinates its activities with the Department of Homeland Security 
(DHS), the National Security Agency (NSA), and other agencies?
    Answer. A secure cyber infrastructure is vital to the economic 
vitality and national security interests of the United States. In 
addition to enabling more than $200 billion in annual e-commerce, 
interconnected networks of computers are essential for critical 
functions such as air traffic control, electric power distribution and 
the GPS in our cars. The Nation's cyber infrastructure is central to 
maintaining the timely delivery and quality of public services that are 
part of everyday life. Our Nation's computers face ever-increasing 
threats from malicious individuals, organizations, and nation states. 
Currently, our computer security tools are manually implemented, too 
complex to be effectively used, and too static to respond to rapid 
changes in the threat environment. This allows many attacks to succeed, 
causing significant damage and undermining confidence in vital 
commercial and public information systems. The result is a large, 
direct economic impact--estimates show that Americans lose billions of 
dollars each year to cyber crime.
    NIST is responsible for cybersecurity research, development of 
Federal cybersecurity standards, establishment of methods and metrics 
for determining the effectiveness of security controls, and providing 
technical support to public and private sector implementation of 
security standards and controls. The fiscal year 2012 budget request 
contains $43.4 million for cybersecurity-related programs and 
activities that will strengthen NIST's contribution to the development 
and promulgation of effective and usable cybersecurity standards. The 
cybersecurity infrastructure request has three initiatives.
    Scalable Cybersecurity for Emerging Technologies and Threats ($14.9 
million).--The request would provide improvements to NIST's core 
cybersecurity work in support of the Comprehensive National 
Cybersecurity Initiative, the Federal Information Security Management 
Act, and other national priorities. NIST will develop improved security 
techniques, support the creation of consensus security standards, 
increase the interoperability and usability of security technologies, 
and expedite the secure adoption of emerging information technologies.
    National Program Office (NPO) for the National Strategy for Trusted 
Identities in Cyberspace (NSTIC) and NSTIC Grant Program ($24.5 
million).--The request for NSTIC would support the development of a 
vibrant Identity Ecosystem where individuals, businesses, and other 
organizations enjoy greater trust, privacy, and security as they 
conduct sensitive transactions online. This initiative is in direct 
response to the recommendations of the White House Cyberspace Policy 
Review and will raise the level of trust associated with the identities 
of individuals, organizations, services, and devices involved in online 
transactions. The request would support an NPO to coordinate Federal 
activities needed to implement NSTIC. NIST will be responsible for day-
to-day and overall operation of the NPO. NIST will work with the 
private sector to identify potential funding opportunities for the 
delivery of NSTIC solutions. Of the $24.5 million for NSTIC, $7 million 
will support the NPO and $17.5 million will fund the pilot grants.
    National Initiative for Cybersecurity Education (NICE) ($4 
million).--NICE has evolved from the Comprehensive National 
Cybersecurity Initiative, and extends its scope beyond the Federal 
workplace to include civilians and students in kindergarten through 
postgraduate school. The goal of NICE is to establish an operational, 
sustainable, and continually improving cybersecurity education program 
for the Nation to use sound cyber practices that will enhance the 
Nation's security. NIST is leading the NICE initiative to ensure 
coordination, cooperation, focus, public engagement, technology 
transfer and sustainability. The $4 million request for NICE will 
support development of a cybersecurity education framework that 
addresses:
  --national cybersecurity awareness;
  --formal cybersecurity education;
  --Federal cybersecurity workforce structure; and
  --cybersecurity workforce training and professional development.
    Collaborations with both government and industry are essential for 
the success of our mission. We work closely with partners across the 
government, industry and the world. NIST is an active member in the 
interagency groups that coordinate the cybersecurity research and 
development agenda for Federal agencies:
  --The Networking and Information Technology Research and Development 
        Cyber Security and Information Assurance Interagency Working 
        Group (CSIA IWG), co-chaired by NIST, coordinates research and 
        development to prevent, resist, detect, respond to, and/or 
        recover from actions that compromise or threaten to compromise 
        the availability, integrity, or confidentiality of computer- 
        and network-based systems.
  --The Special Cyber Operations Research and Engineering Interagency 
        Working Group works in parallel to the CSIA IWG to coordinate 
        classified cybersecurity R&D.
  --Representatives from both of these groups participate together in 
        the Senior Steering Group for CSIA R&D, to actively share 
        cybersecurity R&D information across the policy, fiscal, and 
        research levels of the Government.
    Active participation in these groups ensures coordination of NIST 
efforts with other agencies, including NSA and DHS.
    Question. The administration has promised to send to the Congress a 
draft legislative proposal as input into a comprehensive rewrite of 
governmentwide cybersecurity authorization. What is the status of that 
draft proposal? Will this proposal impact your responsibilities as 
Secretary of Commerce to establish Federal Information Processing 
Standards (FIPS)?
    Answer. OMB sent the administration's cybersecurity legislative 
proposal to the Congress on May 12, 2011. Under the administration's 
proposal, the Secretary of Commerce will maintain the responsibility 
for promulgating cybersecurity standards and guidelines including FIPS, 
which will continue to be developed by NIST.
    Question. The NPO for NSTIC is a new administration initiative 
announced in January that will be lead by NIST. How will NIST fund this 
effort in fiscal year 2011?
    Answer. The request for NSTIC would support the development of a 
vibrant Identity Ecosystem where individuals, businesses, and other 
organizations enjoy greater trust, privacy and security as they conduct 
sensitive transactions online.
    For fiscal year 2011, NIST is utilizing $1.5 million in staff and 
resources to lay the ground work for the establishment of a NPO for 
NSTIC. The NPO, to be established within the Department of Commerce, 
will be responsible for bringing the public and private sectors 
together to meet this challenge. Specific responsibilities will 
include:
  --Building consensus on legal, technical, and policy frameworks 
        necessary to achieve the NSTIC vision, including ways to 
        enhance privacy, free expression and open markets;
  --Working with industry to identify where new standards or 
        collaborative efforts may be needed to enable Americans to 
        use--and businesses and other entities to accept--stronger, 
        more secure online authentication technologies;
  --Coordinating collaboration across Government stakeholders, 
        including agencies such as the General Services Administration 
        and Department of Homeland Security, as well as State and local 
        governments; and
  --Guiding NSTIC pilot projects and other NSTIC-related 
        implementations.
    This initiative was established in direct response to the 
recommendations of the White House Cyberspace Policy Review to raise 
the level of trust associated with the identities of individuals, 
organizations, services, and devices involved in online transactions.

                         NIST--BUDGET INCREASE

    Question. The NIST increase is part of the administration's 
commitment to maintain a doubling path for three science agencies for 
future competitiveness--NSF, DOE's Office of Science, and NIST 
laboratories, providing a total of $13.9 billion, up $1.5 billion or 
12.2 percent.
    The fiscal year 2012 budget request for NIST reflects the 
administration's recognition of the important role that NIST plays in 
innovation and the impact that the research and services NIST provides 
can have on moving the Nation forward by laying the foundation for 
long-term job creation and prosperity.
    The administration believes that by sustaining investments in 
fundamental research, we can ensure that America remains at the 
forefront of scientific capability, thereby enhancing the ability to 
shape and improve our Nation's future and that of the world around us.
    The NIST fiscal year 2012 budget request assumed that the fiscal 
year 2011 request would be fully funded. At present the NIST request is 
33 percent above the fiscal year 2011 continuing resolution level. 
Given that this amount of increase is not realistic, and couldn't be 
absorbed into the agency, could you offer an opinion on what a 
realistic funding request for NIST should be?
    Answer. The increase requested for NIST in the fiscal year 2012 
President's budget recognizes the importance of science and innovation 
for the Nation's long-term economic growth and competitiveness. The 
administration's request level for NIST is executable. When the fiscal 
year 2012 President's budget was formulated, it already assumed that a 
full-year fiscal year 2011 continuing resolution would be enacted, and 
we used a fiscal year 2011 continuing resolution level as a baseline to 
develop the NIST budget. Thus, the request already reflects program 
adjustments, such as milestones and deliverables, so that the budget is 
executable. Moreover, NIST's fiscal year 2012 request is spread out 
among multiple programs, two of which contain large grant components. 
Roughly one-half of the $43.4 million requested for cybersecurity-
related activities is for grants. More importantly, a large portion of 
the 33 percent increase cited includes the $100 million in mandatory 
appropriations for the Public Safety Innovation Fund, of which about 
$84 million would be for grants.
    Question. Since we will not be able to fund this request in its 
entirety, what are the top budget priorities at NIST?
    Answer. The fiscal year 2012 President's budget request is the 
result of a rigorous review and prioritization of the agency's programs 
and activities. Core functions and services are sustained, and 
increases are requested to support critical national needs, including 
the areas of advanced manufacturing and cybersecurity, and to build and 
maintain state-of-the-art laboratory facilities essential to delivering 
quality standards research.

                           NIST--HOLLINGS MEP

    Question. The President's 2012 budget requests $142.6 million for 
the MEP program. This request is a $17.9 million increase more than the 
fiscal year 2010 enacted level. The MEP is a Federal-State partnership 
which requires a two-thirds financial match from non-Federal sources. 
Through its national network of MEP Centers located in every State, 
1,400 technical experts help small- and medium-sized manufacturers 
navigate economic and business challenges and connect to public and 
private resources essential for increased competitiveness and 
profitability.
    Through competitively awarded cooperative agreements, NIST MEP will 
expand the capabilities of its nationwide network of centers to 
accelerate commercialization of technological innovations, adopt 
environmentally sustainable business practices, promote renewable 
energy initiatives, foster market diversification, and connect domestic 
suppliers to manufacturers to assist manufacturers in successfully 
competing over the long term in today's complex global manufacturing 
environment.
    ExporTech helps companies enter or expand in global markets. The 
program assists your company in developing an international growth 
plan, provides experts who will vet your plan, and connects you with 
organizations that will help you move quickly beyond planning to actual 
export sales.
    Can you explain how the additional resources included in the fiscal 
year 2012 request for the MEP will be used to increase the 
competitiveness of small- and medium-sized manufacturers in the United 
States?
    Answer. Building on competitions started in fiscal year 2010, 
additional funding will be competitively awarded to MEP Centers and 
other not-for-profit organizations to focus on the development and 
expansion of next generation services to respond to manufacturers' 
challenges and position them to respond to new business opportunities. 
These services include technology innovation and commercialization, 
market diversification, supplier development, export opportunities for 
domestic manufacturers, and environmentally sustainable business 
practices.
    Question. The MEP is a partnership that requires the States to 
match Federal funding. Is this funding increase realistic when you 
consider all the belt tightening that is taking place at the State 
level? In other words, will the State be able to provide additional 
cost matching associated with the requested increase?
    Answer. NIST MEP is planning to use the authority under the 2007 
America COMPETES Act to run a competition within the MEP system of 
centers for new services and tools to respond to manufacturers needs. 
Under this competitive grant program, NIST MEP has the authority to 
issue up to $4 million without a cost-share requirement. Any 
competitive awards made above this amount would require a 50-percent 
cost share.
    Question. The MEP program and the EDA's Trade Adjustment Centers 
seem to have similar missions, i.e., to assist small manufacturers and 
improve their global competitiveness. As part of OMB's review of the 
Department, has there been any discussion on combining these two 
programs which would generate administrative savings?
    Answer. Earlier this year, the President directed Jeff Zients, CPO 
at OMB, to conduct a review of the Federal agencies and programs 
involved in trade, exports and competitiveness, including analyzing 
their scope and effectiveness, areas of overlap and duplication, unmet 
needs, and possible cost savings. When this review process is complete, 
the administration will share its findings and recommendations with the 
Congress.
    I agree with the President that we should examine options to 
reorganize the Federal Government to make it more efficient and 
responsive to support American competitiveness. I would look forward to 
working with you to address any questions or concerns you may have 
regarding this matter.

                               FISHERIES

    Question. I remain concerned that the Department's priorities in 
the fisheries area remain out of line with the actual needs of the 
fisheries and the billions of dollars in economic impact it represents. 
The fiscal year 2012 budget as did the fiscal year 2011 place a focus 
on implementing new management programs, specifically catch shares, 
while failing to take the steps needed in data collection to ensure we 
actually know how many fish there are to manage. I appreciate that your 
budget increases stock assessment and data collection lines to $91.5 
million, but I am confident this is merely a drop in the bucket toward 
addressing the problem. I am also concerned that Texas and the gulf as 
a whole have historically been low on the Departments priority list 
when dedicating funds to fisheries. The recreational fishery in the 
gulf alone represents $41 billion in commerce each year and 300,000 
jobs, yet year after year the gulf fisheries are largely ignored by 
your Department.
    Can I get your assurance that the Department will make data 
collection and updating stock assessments a top priority in fiscal year 
2012?
    Answer. NOAA's National Marine Fisheries Service (NMFS) considers 
data collection, for the purpose of updating stock assessments, a top 
priority in fiscal year 2012. The $15 million requested increase to the 
Expand Annual Stock Assessment line is slated to be used to:
  --improve assessments for high-priority stocks;
  --update assessments for stocks more frequently; and
  --conduct fishery-independent surveys to enable assessment of more 
        stocks, including data poor stocks, 3-5 years from now.
    NMFS also proposes to use a portion of these funds, $3 million, to 
invest in advanced technologies for fishery-independent surveys. Among 
the projects that will be supported with these funds will be near real-
time processing of survey data as it is collected at sea and more rapid 
delivery of these data to shore-based analysts conducting the stock 
assessments. Therefore, both data collection and completion of adequate 
stock assessments for fishery management will remain a priority in 
fiscal year 2012.
    Question. Can you also assure me that the fisheries in the gulf 
will be given the attention their economic impact demands of the 
Department of Commerce?
    Answer. The economic importance of the fisheries in the gulf is 
recognized at a national level and needs are addressed at a regional 
level in order to promote sustainable fisheries throughout the region. 
NOAA's NMFS is well aware of the economic value and impact of the Gulf 
of Mexico fisheries and is giving significant and focused attention to 
improve data collection and to more regularly update stock assessments. 
The following are steps in progress for addressing these issues:
  --NMFS Southeast Fisheries Science Center (SEFSC) added six FTE stock 
        assessment scientists in fiscal year 2011. They will contribute 
        to increasing the number of assessments conducted on Gulf of 
        Mexico, south Atlantic, and Caribbean stocks in future years.
  --The SEFSC dedicated the $10 million of supplemental funds received 
        from the Congress in August 2010 to support of stock 
        assessments for Gulf of Mexico stocks.
  --NMFS is testing a new dockside intercept survey design for the 
        recreational fishery that will provide a more statistically 
        sound sampling method. If the field testing is successful, 
        implementation of the design will replace current Marine 
        Recreational Fishing Statistics Survey methodology in the Gulf 
        of Mexico in fiscal year 2012.
  --A pilot of an electronic logbook and dockside validation for the 
        for-hire sector in the Gulf of Mexico is underway. The success 
        of this pilot program will result in improved timeliness of the 
        data.
  --The fiscal year 2012 President's budget includes a $15 million 
        increase to expand annual stock assessments, some of which is 
        intended for stocks in the Gulf of Mexico.
                                 ______
                                 
             Questions Submitted by Senator Lisa Murkowski

                              CATCH LIMITS

    Question. The President's fiscal year 2012 funding request of $67 
million for enhanced stock assessments is an increase over the fiscal 
year 2010 and 2011 requests to ensure that annual catch limits are 
based on the best available science. I am concerned, however, that 
because of budget limitations in 2011 we won't be able to perform all 
the crucial fishery surveys in Alaska this summer.
    What assurance can you give me that the National Oceanographic and 
Atmospheric Administration (NOAA) will perform all of the fishery stock 
assessment surveys this summer? NOAA recently cancelled a Gulf of 
Alaska seismic survey and we absolutely can't lose the two other Gulf 
of Alaska ground fish surveys planned for this summer.
    Answer. As a result of the fiscal year 2011 continuing resolution, 
there were delays in the scheduled repairs to the NOAA Ship Oscar 
Dyson, which forced the Alaska Fisheries Science Center (AFSC) to 
cancel acoustic surveys for Pollock in areas off the Shumagin/Sanak and 
Bogoslof Island, and in Shelikof Strait. However, the AFSC will conduct 
the summer surveys in the Gulf of Alaska and Bering Sea as scheduled. 
Surveys include an acoustic Pollock stock assessment survey in the Gulf 
of Alaska and groundfish surveys aboard chartered vessels in both the 
Gulf of Alaska and eastern Bering Sea. These activities are funded from 
the Expand Annual Stock Assessments budget line.

                     PACIFIC SALMON TREATY FUNDING

    Question. When the Pacific Salmon Treaty was signed in 1985, the 
Congress provided the States of Alaska, Washington, Oregon, and Idaho, 
as well as the NOAA Fisheries, a combined total of $5.2 million to 
carry out the increased salmon management, research, evaluation, and 
fishery monitoring required to implement the provisions of the Treaty. 
This annual funding has barely increased over the intervening 25 years. 
Thus, the purchasing power of the original Federal appropriation made 
in 1985 has declined significantly by fiscal year 2010. This has 
required the agencies and the States to find other funding sources to 
backfill the costs of implementing the provisions of this international 
Treaty.
    With flat funding for 25 years, combined with recent losses of 
other State and Federal funding sources, it raises a serious question 
whether the United States is meeting its international obligations 
under the Treaty. Is NOAA aware of the crisis in Treaty funding? Can 
you help to make sure the United States does meet its Treaty 
obligations?
    Answer. The fiscal year 2012 President's request includes $5.7 
million for the base programs necessary to continue implementation of 
the Pacific Salmon Treaty and $3 million to implement specific 
provisions of the 2008 Chinook agreement for a total of $8.7 million to 
satisfy the mandates agreed to with Canada. The funds for the 2008 
Chinook agreement include $1.5 million for the Puget Sound Critical 
Stocks program and $1.5 million for improvements to the Coded Wire 
Tagging Program. Funding for base programs supports research projects 
conducted by NMFS and the States of Alaska, Washington, Oregon, and 
Idaho including personnel support to the Pacific Salmon Commission's 
panels and technical committees to conduct a broad range of salmon 
stock assessment and fishery monitoring programs to implement 
provisions of the Pacific Salmon Treaty.
    The requested decrease of $13.5 million for the Pacific Salmon 
Treaty is a result of fulfilling many of the commitments under the 2008 
Chinook agreement. The fiscal year 2010 and fiscal year 2011 budgets 
each included $7.5 million to partially mitigate the economic 
consequences for Alaska of reductions in allowable salmon catch, for a 
total of $15 million. As planned, the fiscal year 2012 request does not 
continue this $7.5 million for Alaska mitigation. The 2012 request also 
includes a planned reduction of $6 million in the Puget Sound Critical 
Stocks Augmentation program. That funding was utilized for the start up 
costs of hatchery and habitat projects. The Augmentation program will 
continue to support projects to assist in recovery of critical stocks 
in a manner that complements the harvest reductions provided by the 
Treaty.

               STELLER SEA LIONS IN THE ALEUTIAN ISLANDS

    Question. NOAA recently issued a final interim rule to reduce 
commercial fishing for ground fish in the Aleutian Islands in order to 
decrease competition with the endangered western Steller sea lion. This 
action, which is now the subject of multiple lawsuits, will likely 
result in a loss of up to $66 million in revenues annually. One of the 
major issues is lack of conclusive scientific evidence showing that 
fisheries are affecting the recovery of this population.
    Given the substantial economic impacts of this action, do you 
believe that NOAA should prioritize research on the Western Population 
of Steller Sea Lions? How will the agency allocate funds to make sure 
the research is focused in the Western Aleutian Islands, which is the 
only area where the population is still declining?
    Answer. Steller Sea Lion research in the western Aleutian Islands 
will be a NOAA priority in 2011 and 2012. Several research efforts will 
further our understanding of the population dynamics of the Steller sea 
lions and the effects of interactions with fisheries. Direct fishing 
impacts are largely due to the incidental take of sea lions in fishing 
gear (drift and set gillnets, longlines, trawls, etc.). Steller sea 
lions are also indirectly threatened by fisheries because they have to 
compete for food resources and critical habitat that may be modified by 
fishing activities. Additional research on where the western population 
of Steller sea lions (SSL) breed and forage will allow NOAA to make 
more informed decisions about protective zones, catch/harvest limits, 
and other measures to ensure survival.
    Specifically in 2011, NOAA will conduct the following research that 
will support the following activities:
  --Branding pups at Agatu, western Aleutians;
  --Scouting western Aleutian sites for potential field camps to be 
        used in the 2012 breeding season;
  --Capture and satellite tagging of adult females (with pups) in 
        western Aleutians for foraging ecology;
  --Aerial surveys of SSL sites in all areas of the western SSL stock 
        (including the western Aleutians);
  --SSL brand resighting cruise between Seward and Dutch Harbor;
  --NOAA will assist Alaska Department of Fish and Game in conducting 
        extensive brand resighting at Sugarloaf Island; and
  --Brand resights from field camps at Marmot Island and Ugamak Island.
    In addition, NOAA is expecting that the North Pacific Research 
Board will likely fund our proposed food habitats study in the western 
Aleutians; and two scat collections would be compared to samples taken 
at two additional times of the year from the same area:
  --June-July 2011 samples from Agatu and western Aleutians during the 
        Tiglax cruise; and
  --October-November 2011 samples from the western Aleutian adult 
        female capture and tagging. This research will further our 
        understanding of the dynamics of the western Steller Sea Lion 
        population.

               COASTAL AND MARINE SPATIAL PLANNING (CMSP)

    Question. One of the administration's priorities is the 
implementation of the National Ocean Policy and framework for CMSP. 
While I recognize that there are regions of the country that have user 
conflicts and want this planning tool, Alaska is not one of those 
regions and there is minimal support for this in the State. What we do 
need is environmental data collection, mapping, and integration.
    Given the small amount of funding providing for CMSP nationally, do 
you believe the agency should prioritize data collection first and only 
implement planning when there is sufficient data? Given the existing 
political opposition to this initiative, doesn't it make sense for NOAA 
to implement CMSP in regions where there is an identified need and 
support from the States, elected officials, and stakeholders?
    Answer. The CMSP Framework was designed to provide great 
flexibility with respect to implementation and allows for States, 
tribes, and stakeholders at a local level to focus on those issues that 
are highest priority in their regions.
    The foundation of CMSP is science and data. By working with 
stakeholders in the States and regions we will be able to consolidate 
data from numerous sources and present it in a geospatial context that 
is useful to decisionmakers. These new tools and data will be designed 
to inform a range of uses (including CMSP). Better access to data and 
an inclusive planning process can create transparency and 
predictability for all involved--developers, industry, coastal 
communities, and citizens.
    NOAA is committed to working with States--including the State of 
Alaska--to provide the maps, data, and science that the States and 
stakeholders need most.

                  MILLER FREEMAN FISHERY SURVEY VESSEL

    Question. The NOAA Fishery Survey vessel Miller Freeman is 44 years 
old and has suffered numerous mechanical failures and loss of sea time 
in recent years. Although the agency has planned to refurbish the 
vessel and extend its life, NOAA has not received adequate funds to do 
so.
    Is NOAA planning on decommissioning the Miller Freeman? Why hasn't 
the Miller Freeman received the funding to repair it? What is the plan 
to replace the Miller Freeman and the John Cobb, another research 
vessel that was primarily used in Alaska and recently decommissioned?
    Answer. NOAA is not ready to decide on decommissioning the Miller 
Freeman until the Material Condition Assessment (MCA) is conducted.
    NOAA has requested funding in both the fiscal year 2011 and fiscal 
year 2012 President's budget to fund high-priority repairs for Miller 
Freeman. The amount requested in the fiscal year 2012 President's 
budget is $11.6 million for repairs to the Miller Freeman and 
Ka'imimoana.
    The fiscal year 2010-fiscal year 2024 NOAA Ship Recapitalization 
Plan approved in fiscal year 2008 includes plans to replace the current 
capacity of Miller Freeman with the FSV 7. Per the Recapitalization 
Plan, FSV 7 would be delivered in fiscal year 2017, with full 
operations in fiscal year 2018. This would support Alaska Fisheries 
Science Center protected species surveys (45 days/year) and enable 
expanded ``adequate'' stock assessments for four stocks by fiscal year 
2025 and an additional four stocks by fiscal year 2030. The loss of the 
Miller Freeman days at sea in fiscal year 2011 has necessitated 
reallocation of $1.74 million from the Expand Annual Stock Assessment 
Budget Line for 118 charter vessel days at sea (50 percent of lost 
Freeman support) to meet the minimum survey requirement of the 
Southwest and Northwest Fisheries Science Centers on the west coast. 
NOAA currently has no other available assets capable of extending 
surveys into high latitude waters. FSV 7 will have higher endurance 
that will maximize time in the areas of interest and enhance multi-
mission capabilities to better understand climate change, loss of sea 
ice, and the resulting impact on the regional ecosystem.
    The NOAA Ship John Cobb, which was decommissioned in 2008, served 
NOAA for more than 35 years and provided a valued service to the Nation 
and our fishery and living marine resource research in southeast Alaska 
and in U.S. Pacific coastal waters. In lieu of a replacement vessel, 
NOAA opted to provide funding for charter vessels to meet at-sea data 
collection requirements. The fiscal year 2010 budget provided $1.6 
million for the Alaska Fisheries Science Center to charter commercial 
vessels to support research needs in southeast Alaska. With the 
addition of the advanced, acoustically quiet NOAA ship Bell M. Shimada 
in 2010, and our other west coast assets and chartering, NOAA is able 
to meet the primary mission that the Cobb did in the past. Therefore, 
NOAA does not intend to replace the John Cobb with a vessel of similar 
capabilities.

                            ARCTIC RESEARCH

    Question. The Arctic is a priority for me and Alaska, and 
obviously, for the administration, as you identified the region one of 
the nine priority objectives in the national ocean policy. It is 
critical as we move forward with energy production in the Arctic that 
we have adequate baseline information to understand the Arctic 
environment, inform management, and minimize the impacts of development 
and human activity.
    Do you feel the fiscal year 2012 budget adequately funds research 
in the Arctic? Does the Department of Commerce support the outside 
funding to fill in gaps and shortfalls in Federal funding?
    Answer. The Arctic is seeing rapid and dramatic changes that have 
national and global implications. Understanding and effectively 
managing the changing ecosystems, expectations, and opportunities in 
the Arctic requires a solid foundation of physical, atmospheric, 
ecological and socioeconomic, and other information. Yet despite the 
wealth of traditional ecological knowledge, exploration, and research 
to date, even the most basic data are lacking.
    In fiscal year 2012 and beyond, NOAA aims to strengthen its arctic 
science and stewardship, by collecting critical data to better inform 
policy options and management responses to the unique challenges in 
this fragile region. NOAA's Arctic Vision and Strategy aligns our 
capabilities in support of the efforts of our international, Federal, 
State and local partners, and within the broader context of our 
Nation's arctic policies and research goals. The strategy recognizes 
that NOAA can make the highest positive impact to arctic communities 
and sustainable economic growth by providing products and services for 
safe navigation and maritime security, oil spill response readiness, 
and environmental protection, among other things.
    The fiscal year 2012 President's budget builds upon and complements 
NOAA's existing arctic-related activities, and represents an investment 
needed to work toward implementing the framework and six strategic 
goals identified in the strategy. For example, NOAA requests an 
increase of $2.5 million to conduct 15 protected species stock 
assessments in the Arctic (harbor porpoise, and minke, beaked, and 
northern Pacific right whales) and the western Pacific (marine turtles, 
sperm, blue, false killer, and sei whales) as a way to improve NOAA's 
stewardship and management of Arctic Ocean and coastal resources. This 
information will be used to determine the impact of human activities, 
including oil and gas exploration in the Arctic, defense readiness 
training and operations in the Arctic and western Pacific, and 
commercial fishing activities in Alaska and western Pacific, on 
protected species and provide baseline data to inform management, and 
minimize the impacts of development and human activity.
    Across arctic-related activities proposed in fiscal year 2012, NOAA 
would leverage existing resources and partnerships to protect and 
understand this fragile and economically important region. Coordinating 
the myriad of international, Federal, State, and local efforts to 
understand environmental change in the Arctic, improve the stewardship 
of Arctic resources, and advance resilient Arctic communities and 
ecosystems will allow NOAA resources and capabilities to be used across 
multiple efforts. By strategically investing in its Arctic presence in 
fiscal year 2012, NOAA would improve its ability to assess and 
effectively respond to emerging changes in the Arctic environment and 
to continue efforts to identify information and data gaps requiring 
attention to further our Nation's Arctic policies and research goals.
    To access NOAA's Arctic and Vision Strategy visit: http://
www.arctic.noaa.gov/docs/NOAAArctic_V_S_2011.pdf.

                              CATCH SHARES

    Question. Another of the administration's priorities is catch 
shares. Alaska has the majority of catch share programs in the United 
States and they have been very successful in maintaining healthy stocks 
and increasing the economics of our fisheries. Because Alaska has most 
of the catch share programs, we will not receive much of the new catch 
share funding that is increased in the fiscal year 2012 budget.
    Since Alaska has most of the existing catch share programs, how can 
NOAA make sure Alaska still benefits from the new catch share funds?
    Answer. The North Pacific Regional Fishery Management Council has 
been on the cutting edge for a long time with respect to catch share 
programs. One of the recent actions the Council has approved and NMFS 
is in the process of implementing is a catch sharing plan between 
commercial and charter halibut fishermen, the Alaska Halibut Guided 
Sportfish Individual Fishing Quota (IFQ). This program would allow 
charter operators, on an annual basis, to lease halibut quota from the 
commercial sector. The fiscal year 2012 President's budget request 
includes funding to support this new program. Funding to support 
program-specific share accounting databases, electronic reporting 
systems and other infrastructure and operational needs are also part of 
the fiscal year 2012 President's budget request and will be used to 
support both the development of new and existing catch share programs 
in Alaska. Further, since the Councils decide in which fisheries they 
want to consider and implement catch share programs, the fiscal year 
2012 President's budget request includes funding for the Councils in 
support of catch share-related activities they have identified as 
important.
    In addition to the National Catch Share program, NOAA is also 
seeking to increase loan authority in fiscal year 2012 from $16 million 
to $24 million under NOAA's Fisheries Finance Program to provide quota 
share loans in support of existing catch shares program, some of which 
are in Alaska. The Magnuson-Stevens Fishery Conservation and Management 
Act (MSA) allows Councils to specify NOAA Fisheries Finance Program 
loans to assist small operators and first time buyers of catch share 
privileges. The North Pacific Council requested that the NOAA Fisheries 
Finance Program develop loan programs for the Halibut/Sablefish 
Individual Quota Share and the Crab IFQ programs, which were authorized 
in 1993 and 2011, respectively. Until 2011, this loan authority has 
only been used to support loans for quota in the halibut/sablefish 
fishery. The additional loan authority in fiscal year 2012 will 
initially support loans in the Bering Sea and Aleutian Islands King and 
Tanner Crab fisheries. These programs, as authorized under the MSA, are 
limited to entry-level fishermen and fishermen who fish from small 
boats. These programs provide a mechanism for new entrants to finance 
acquisition of quota share, part of their start-up needs, thus lowering 
the threshold for entry. For example, by providing financing to acquire 
quota share, a new entrant then may have sufficient cash flow to 
finance acquisition of a boat and permit in that fishery.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran

    Question. Please explain what actions the agency has taken to 
involve research institutions in Mississippi in research projects 
regarding the health of the marine ecosystem in Mississippi Sound and 
the northern Gulf of Mexico?
    Answer. The National Oceanographic and Atmospheric Administration's 
(NOAA) National Centers for Coastal Ocean Science (NCCOS), funds 
Mississippi State University to provide a suite of methods that will 
predict the path and fate of sediment and mercury in Grand Bay (a 
National Estuarine Research Reserve), from entry points to fish stocks. 
The models and data resulting from this project will enable managers 
and environmental regulators to better address mercury problems in the 
northern Gulf of Mexico by providing tools to simulate and evaluate 
alternate mitigation and mercury source reduction scenarios at sites 
throughout the gulf.
    As part of the NOAA Sea Grant, the Mississippi-Alabama Sea Grant 
Consortium (MASGC) members include the following Mississippi research 
institutions: Dauphin Island Sea Lab, Jackson State University, 
Mississippi State University, The University of Mississippi, and The 
University of Southern Mississippi. Current research projects include a 
Mississippi State University project focused on decreasing nitrate-N 
loads to coastal ecosystems in agricultural landscapes; a University of 
Southern Mississippi project focused on characterizing stormwater 
nitrogen inputs to Mississippi's coastal waters; and, a Jackson State 
University project focused on developing a habitat suitability index 
for submerged aquatic vegetation of the Mississippi coast.
    The Mississippi-Alabama Sea Grant Legal Program and the National 
Sea Grant Law Center both operate out of the University of Mississippi. 
They contribute to the field of ocean and coastal law and policy 
through research on marine laws and policies, coordinating ocean and 
coastal law researchers, and disseminating information to coastal and 
ocean policy-makers.
    In addition, NOAA provided funds to the University of Southern 
Mississippi (USM) to develop the next generation of molecular 
indicators that detect environmental stress responses in fish, 
determine population differences in stress responses, and link these 
indicators in individuals to responses at the population level. By the 
time such effects are observed, conditions may have deteriorated to 
levels that are difficult or expensive to remedy.
    In a related project, NOAA provided funds to USM to characterize 
species- and life stage-specific responses of fish to natural and 
human-caused stressors at the molecular, physiological, and organism 
levels. This information will be integrated with results from the 
previous phases of this project (such as the one above) to estimate 
possible higher-level (i.e., population and ecosystem) effects of 
exposure to common environmental stressors.
    Question. The Institute for Marine Mammal Studies (IMMS) in 
Gulfport, Mississippi, our region's leading marine mammal research, 
rescue, and public display facility, applied for a permit to take 
stranded sea lions that was published in the Federal Register 11 months 
ago. The permit has not yet been issued even though the law requires a 
decision 60 days after Federal Register publication. What is the status 
of the permit?
    Answer. Under the National Environmental Policy Act, NOAA's NMFS 
determined that the appropriate level of analysis for this application 
for take of marine mammals in accordance with the Endangered Species 
Act was an Environmental Assessment. An Environmental Assessment was 
drafted and the availability of the document was published in the 
Federal Register on April 11, 2011. The public comment period ended on 
May 11, 2011 during which 37 comments were submitted on the draft 
Environmental Assessment. These comments were complied and posted 
online at http://www.nmfs.noaa.gov/pr/permits/review.htm. The comments 
are being reviewed and analyzed for incorporation into the final 
Environmental Assessment and a decision will be made on the application 
after thorough NOAA legal review. Members of the animal welfare 
community have already notified NOAA of their opposition to issuance of 
the permit and have indicated that litigation may be pursued against 
the agency; therefore the final processing of the application will 
require additional scrutiny, therefore timing is unknown.
    Question. Additionally, IMMS has a stranding agreement with NMFS to 
assist in the rescue and rehabilitation of stranded marine mammals and 
has been an active participant in stranding response and rescue 
operations, at its own expense, for more than 25 years. This agreement 
allows IMMS to send animal tissues to other facilities for diagnostic 
work. In October 2010, IMMS filed a full report on these activities 
with NMFS. On April 7, 2011, NMFS advised IMMS that they had no idea 
the Institute was sending samples despite the October report and that 
they could no longer send samples to other research institutions for 
diagnostic analysis. Can you explain this change in policy?
    Answer. NMFS has a Stranding Agreement in place with IMMS. The 
policies under that Agreement have not changed. Articles 2 and 3 of the 
Stranding Agreement that NMFS issued to the IMMS allows for marine 
mammal parts to be sent to laboratories for medical diagnostic work 
(e.g., disease screening) without additional authorization. However, 
transferring marine mammal parts for research projects (e.g., genetics 
for stock assessments) requires by law:
  --prior notification to NMFS; and
  --assurance the researcher is authorized to receive those parts (see 
        50 CFR 216.22 and 216.37).
    In addition, the Department of Justice is pursuing civil and 
criminal cases related to the Deepwater Horizon BP oil spill, so 
samples and all records/data collected from marine mammal strandings 
that occurred in the northern Gulf of Mexico are considered potential 
evidence in these cases. NMFS is currently reviewing the IMMS' numerous 
sample transfers to determine the type of samples and purpose of the 
transfers to understand if they are categorized within the agreement or 
require prior notification. NMFS will follow up with the IMMS with 
additional information after the review is complete. Due to review by 
multiple NOAA policy and legal offices, timing is currently unknown.

                         CONCLUSION OF HEARINGS

    Senator Mikulski. The subcommittee stands in recess, 
subject to the call of the Chair.
    [Whereupon, at 11:38 a.m., Thursday, April 14, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


              MATERIAL SUBMITTED SUBSEQUENT TO THE HEARING

    [Clerk's Note.--The following testimony was received 
subsequent to the hearing for inclusion in the record.]
 Prepared Statement of David Krebs, Commercial Fisherman From Destin, 
   Florida, President of the Gulf of Mexico Reef Fish Shareholders' 
                                Alliance

    My name is David Krebs. I am honored to testify on the National 
Oceanic and Atmospheric Administration's budget, specifically in 
support of the $54 million in funding for the National Catch Share 
Program in fiscal year 2012 and in opposition to any provision that 
would prohibit funding for catch shares programs in the United States.
    I started fishing in 1969 as a teenage boy on Florida's gulf coast. 
Boats were mostly constructed of wood and commercial captains had an 
extraordinary ability to follow the contours of the sea floor with a 
paper bottom machine. The snapper boats were scattered along the gulf 
coast, mostly owned by the bigger fish houses that could afford them. 
Things started changing in the late 1970s with fiberglass boats 
starting to replace the aging wooden boats, with even a few carrying a 
Loran-A machine to navigate back to rich fishing grounds. By 1980, 
Loran-C arrived, with a much more user-friendly display that could be 
coupled to video plotters and digital fish finders. In 1981, I 
captained my first fiberglass longline vessel fishing for deepwater 
grouper and golden tilefish out of Destin, Florida. Fishing was easy in 
this new frontier of setting a longline across the bottom in 600-1,200 
feet of water; so easy that I remarked to an elder captain how easy it 
would be to capture all the fish to which he replied, ``That's right. 
That's why we must fish harder to get our share.''

               AND SO GOES THE SAGA OF MODERN-DAY FISHING

    Catch up one species and move on to the next, an endless cycle of 
boom and bust. When the grouper and tile fish played out in my area I 
switched to surface longline for tuna and swordfish, eventually leaving 
the gulf to fish in South and Central America looking for the next rich 
area.
    An early strategy by the Government was to issue permits, yet there 
was no restriction on how many or what size boat the permit was on. In 
fact, it was well into the 1990s before any permit moratorium started 
to go into place to try to govern a fiberglass fleet that wasn't 
wearing out, and that had even better technology such as GPS. So then 
came overall catch limits for the entire fleet of fishing vessels to 
try to protect the stocks. However, the fleet had been growing for 
nearly 20 years. So even with catch limits in place there was still a 
race to get your share of the resource. To address the fact that there 
were too many vessels and too few fish, there were calls for Government 
buyouts to reduce this oversized fleet. But that didn't happen, and the 
fleet just kept fishing. Today, fishermen in the Gulf of Mexico, like 
those in the Gulf of Mexico Reef Fish Shareholders' Alliance, are 
working diligently to correct this situation and improve the economics 
of the fishery and the conservation of the resource using catch shares.

                       THE GULF RED SNAPPER STORY

    To explain the benefits of catch shares, let me tell you the story 
about gulf red snapper, a fishery that has historically been 
overfished.
    The management plan for red snapper in the Gulf of Mexico began in 
1991. It started as a pure derby fishery with an overall catch limit 
and a season that opened and closed when that quota was met. Under this 
system, each individual fisherman would race to catch as many fish as 
possible during the season. This was similar to the old halibut and 
salmon derbies in the Northwest and had about the same outcome--short 
season (less than 3 months), low prices, and a market void of domestic 
red snapper the remainder of the year. It was an unsafe, inefficient, 
and uneconomic way to manage the fishery. It also did little to improve 
the conservation of the resource.
    The next attempt was a 14-day mini-season with a 2,000-pound trip 
limit that began at the beginning of each month. This method extended 
the season to around 5 months, and was later abandoned to a 10-day 
mini-season, which included size limits. The boats would try to make a 
trip every day, regardless of weather, to get their share. The result 
was always the same: too much fish at the beginning of the month and 
none in the last 2 weeks. Fishermen were increasingly discarding 
smaller fish that did not meet the size limits and had died. When 
coupled with closed-season discards that also did not survive, the 
resource was being depleted. Again, it was an unsafe, inefficient, and 
uneconomic way to manage the fishery, and it did little to improve the 
conservation of the resource.
    As early as 2001, the increasing number of discarded fish 
associated with the size limits and closed seasons from both the 
recreational and commercial fleets began to take its toll on the 
fishery. This was due to the fact that discards that were assumed to 
have lived had not. We had to have a better system.
    The stakeholders in the fishery, at the Council level, began the 
process of developing a red snapper individual fishing quota (IFQ)--a 
form of catch share or limited access privilege program. The 
stakeholders voted on the program by referendum, and it was implemented 
in January 2007.
    The red snapper fishery is better now than I have seen in my 
lifetime. It has a longer season. It is better economically. And we are 
seeing a resurgence of red snappers. The difference was that by, 
assigning an individual his own quota, the collateral damage was 
reduced since he could now keep fish that he was discarding while he 
was fishing for other reef fish species during the other 20-day 
closures. It is my belief that an IFQ designed by the stakeholders is a 
very important tool in the fishery management strategy. It is the only 
tool that allows fishermen the individual flexibility to meet their 
needs. And since individual fishing quotas are considered a form of 
catch share, I feel that it is imperative that this tool remain in the 
budget for future consideration.
 importance of funding catch share programs such as the red snapper ifq
    The Red Snapper IFQ and other catch share programs have been proven 
to improve the management and conservation of the fishery, which was 
the intended result of such programs when the Congress authorized them 
in 2007. Both the Bush administration and the Obama administration have 
recognized the value of catch share programs, and have increasingly 
provided funding to NOAA so that the stakeholders in the fishery can 
develop and implement such programs. In fiscal years 2011 and 2012, $54 
million in funding has been requested for the National Catch Share 
Program. That funding is not only crucial to programs that are already 
on the water, such as the red snapper IFQ, but also to the development 
of new programs to further improve the management of our Nation's 
fisheries.
    Well-designed catch share programs feature improved monitoring 
systems and improved and collaborative science, so that catch shares 
quickly outperform traditional approaches, both scientifically and in 
terms of access to fish for fishermen. As discussed in the President's 
budget request, an investment in the National Catch Share Program 
represents an investment in ``improvements in fishery-dependent data 
collection systems, fishery data management, social and economic data 
collection or analysis . . . [and] stock assessments.'' These help 
improve the scientific data necessary to analyze and better manage 
fisheries.
    I urge the subcommittee to oppose provisions that would limit the 
ability of the regional fishery management councils to consider the use 
of catch share programs, and to support funding for the National Catch 
Share Program.
    Thank you again for the opportunity to testify on this important 
issue.
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