    [Senate Hearing 112-196]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 112-196

     THE HOMELAND SECURITY DEPARTMENT'S BUDGET SUBMISSION FOR FISCAL YEAR
                                      2012

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

                                    HEARING

                                   before the

                                  COMMITTEE ON
                   HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                                     of the

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                               FEBRUARY 17, 2011

                                   __________

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

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

                      U.S. GOVERNMENT PRINTING OFFICE
    66-623                    WASHINGTON : 2012
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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   JOSEPH I. LIEBERMAN, Connecticut, Chairman
    CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
    DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
    THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
    MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
    MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
    CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
    JON TESTER, Montana                  ROB PORTMAN, Ohio
    MARK BEGICH, Alaska                  RAND PAUL, Kentucky

                      Michael L. Alexander, Staff Director
      Christian J. Beckner, Associate Staff Director for Homeland Security
                           Prevention and Protection
       Mary Beth Schultz, Associate Staff Director and Chief Counsel for
                                    Homeland
                       Security Preparedness and Response
         Brandon L. Milhorn, Minority Staff Director and Chief Counsel
       Brendan P. Shields, Minority Director of Homeland Security Policy
                      Luke P. Bellocchi, Minority Counsel
                      Trina Driessnack Tyrer, Chief Clerk
             Patricia R. Hogan, Publications Clerk and GPO Detailee
                        Laura W. Kilbride, Hearing Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Lieberman............................................     1
        Senator Collins..............................................     2
        Senator Landrieu.............................................    12
        Senator McCain...............................................    14
        Senator Johnson..............................................    17
        Senator Tester...............................................    19
        Senator Portman..............................................    22
        Senator Akaka................................................    24
        Senator McCaskill............................................    29
    Prepared statements:
        Senator Lieberman............................................    33
        Senator Collins..............................................    35

                                    WITNESS
                          Thursday, February 17, 2011

    Hon. Janet A. Napolitano, Secretary, U.S. Department of Homeland
      Security:
        Testimony....................................................     4
        Prepared statement...........................................    38
        Responses to post-hearing questions for the Record...........    49

                                    APPENDIX

    Department of Homeland Security Budget-in-Brief, Fiscal Year 2012   129

     THE HOMELAND SECURITY DEPARTMENT'S BUDGET SUBMISSION FOR FISCAL YEAR
                                      2012

                                  ----------

                          THURSDAY, FEBRUARY 17, 2011

                                         U.S. Senate,
                               Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:39 p.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Joseph I.
    Lieberman, Chairman of the Committee, presiding.
        Present: Senators Lieberman, Akaka, Landrieu, McCaskill,
    Tester, Collins, McCain, Johnson, and Portman.

                OPENING STATEMENT OF CHAIRMAN LIEBERMAN

        Chairman Lieberman. The hearing will come to order. Thank
    you all for being here, particularly thanks to Secretary
    Napolitano.
        This is our Committee's annual hearing on the Department of
    Homeland Security's budget request, in this case, of course,
    for fiscal year 2012.
        Before we begin, as you know, Madam Secretary, the
    Department of Homeland Security emerged as a legislative
    proposal from this Committee. We feel close to the Department
    and to everybody who works for the Department and in the
    Department. In that sense, we felt the loss this week of
    Immigration and Customs Enforcement (ICE) Agent Jaime Zapata,
    who was shot and killed Tuesday in an ambush on a Mexican
    highway, and his colleague Victor Avila, who was also shot and
    remains hospitalized. Perhaps you could give us a report, but
    he is in our prayers, and I gather that he is doing better.
        This savage attack--and, coincidentally, a suicide bombing
    that killed a retired Customs and Border Protection (CBP)
    officer in Afghanistan last week--reminds us of the risks
    assumed every day on our behalf by the men and women who work
    at the Department of Homeland Security (DHS). And so I wanted
    just at the beginning to express our thanks to all of them,
    each of them for their commitment, through you, their leader,
    and tell them how much we honor and appreciate their service.
        These attacks also remind us of the variety of threats our
    Nation faces and, therefore, the Department's equally varied
    set of responsibilities and missions to protect us from those
    threats. Clearly one of the most important missions DHS has is
    to prevent terrorism against our homeland. It was the
    motivating event for the creation of the Department. As you
    noted last week, the threat of terrorism today ``may be at its
    most heightened state'' since the attacks of September 11,
    2001, and I would like to talk to you during the question-and-
    answer period about that.
        But to get to the bottom line here, the President's budget
    request for fiscal year 2012 asks for $43.2 billion in net
    discretionary funding. That is an increase of 1.5 percent from
    the current level of funding, and it is a decrease of 0.8
    percent from the Department's request for fiscal year 2011.
        Given the enormous deficits and national debt that we are
    struggling with today, it seems to me, generally speaking, that
    the President's budget request for the Department of Homeland
    Security is responsible and it is fair. It does not include
    everything I would have wanted in the best of times, but I
    appreciate that we are not living in the best of times
    economically, and that the President and you have had to make
    some tough decisions in putting the budget together.
        I do want to say I was pleased that the budget request does
    put additional resources into critical mission areas, such as
    terrorist travel security and cybersecurity, and I think those
    are the right priorities.
        I also want to express my appreciation for the fact that
    the budget funds these increases and a few other programmatic
    increases by cutting administrative costs by $800 million,
    including a significant and, from my perspective, welcome
    reduction in personal services contracts. That is just about
    the best way to fund some of the critical needs for extra
    support in the budget, which is to say by finding economies
    within your own budget. And you have also identified selected
    programmatic decreases across the Department, as you must in
    tough times.
        There are some reductions which I am sure trouble other
    Members of the Committee, as they do me, and we will
    undoubtedly talk about them with you. The Federal Emergency
    Management Agency (FEMA) takes a hit in its operating budget.
    There are some cuts in the program of Federal grants for local
    fire departments, which have a lot of support here in Congress.
    But, overall, I repeat what I said at the beginning, in a tough
    time for our Federal Government with probably the major focus
    that all of us have, as you can see from the day-to-day
    developments around here: How do we bring Federal spending back
    into balance with revenues? I think this is a fair and
    responsible budget. I almost said ``fair and balanced,'' but I
    got worried that it would be confused with other activities in
    Washington.
        So I look forward to your testimony and, of course, to
    continuing to work with you in this session Congress, as we
    very productively in the last one, to ensure that the
    Department of Homeland Security has the resources and the
    authority it needs to carry out its critical mission on our
    behalf.
        Senator Collins.

                  OPENING STATEMENT OF SENATOR COLLINS

        Senator Collins. Thank you, Mr. Chairman.
        Mr. Chairman, in the interest of time, I am just going to
    make a few comments, and I would ask that my full statement be
    inserted in the record.
        Chairman Lieberman. Without objection.
        Senator Collins. First, Mr. Chairman, let me associate
    myself with your comments about the two ICE agents, one of whom
    was killed, and the other wounded. It does remind us of the
    tremendous risks that law enforcement officials at every level
    of government face--particularly since we are here today with
    the Department of Homeland Security, we want to recognize those
    efforts, law enforcement at every level makes on our behalf of
    us each and every day.
        When Congress and the Administration formulate the budget
    for this country, we are in essence establishing our national
    priorities. Controlling spending, reducing our ruinous level of
    debt, and funding highly effective programs to protect our
    Nation are among those priorities.
        Many of us are disappointed in the President's budget. We
    believe that it does far too little to rein in spending to
    bring the Federal debt under control. It spends and borrows too
    much. It will lead to a record $1.6 trillion deficit in the
    next fiscal year. It would double the publicly held debt by the
    year 2013 and triple it by 2020. That is simply not sustainable
    and puts our Nation on a ruinous fiscal course.
        Today we are gathered to review one component of that
    budget: The proposal for the Department of Homeland Security.
    Protecting our Nation and our citizens is not just a line item.
    It has to be a top priority. In fact, I think most people would
    agree that the number one responsibility of a government is the
    protection of its citizens. With tight budgets, we must work
    together to eliminate wasteful and unproductive programs and to
    increase the effectiveness and efficiency of government
    operations.
        The criteria used by the Administration in making these
    decisions for the Department of Homeland Security, however,
    seem to be opaque because some very important programs appear
    to have been cut while others remain unscathed.
        For example, the homeland security grants that help our
    local first responders improve their effectiveness and serve as
    a force multiplier for Federal resources have been reduced.
    That could undermine our State and local partners who are the
    first on the scene whenever disaster strikes, whether it is a
    natural disaster or a terrorist attack.
        In testimony before the House last week, Secretary
    Napolitano stated that ``in some ways, the [terrorist] threat
    facing us is at its most heightened state since September 11,
    2001,'' and that is why we have to take a close look at the
    funding levels.
        I am also disappointed that the Administration again has
    proposed to limit Operation Stonegarden to just the Southwest
    Border. This effective program, which relies on partnerships
    with State and local law enforcement, should be used to help
    secure both our Northern and Southern Borders.
        Senator Lieberman and I recently released a Government
    Accountability Office (GAO) report that found, shockingly, that
    the Border Patrol has effective control of only 32 miles of the
    4,000-mile Northern Border and has situational awareness of
    only about a quarter of that border. And while the Northern
    Border does not have as many problems as the Southern Border,
    it is vulnerable, nonetheless, to illegal crossers, including
    individuals seeking to illegally come to this country,
    criminals trafficking in humans and drugs, and, potentially,
    terrorists.
        I have mentioned before that the smuggling of
    methamphetamine is one example of the growing problem along our
    Northern Border, and it is a particular problem in the State of
    Maine.
        The Stonegarden funds have been extremely successful in my
    State in allowing local, county, and State law enforcement to
    work with the Border Patrol and other Federal officials.
        The Chairman has mentioned the fire grant program, a
    program that works with a minimum of bureaucracy to ensure that
    fire departments have the support they need.
        Let me just finally mention one area of great concern to
    me, and that is the budget for the Coast Guard. The Coast
    Guard's fleet is among the oldest in the world, yet the men and
    women of the Coast Guard continue to perform ever expanding
    missions with a high degree of success. They deserve a fleet
    worthy of their efforts, but the President's budget proposes a
    22-percent reduction in the Coast Guard's Deepwater program.
    That is a cut of $259 million. Much of this cut is due to the
    fact that no funding is proposed for the sixth National
    Security Cutter. This will push completion of the eighth, and
    final, cutter back to 2018. And as we know, the High Endurance
    Cutters, of which there are 12, are aging rapidly and causing a
    great number of problems for the Coast Guard.
        I am, like the Chairman, pleased to see the increases in
    the cybersecurity budget. I think this is an emerging threat
    that is getting worse with each passing day.
        Finally, I will be pursuing in my questions that I remain
    disturbed that FEMA has done so little to recoup the improper
    payments that occurred in the wake of Hurricane Katrina. The
    investigation we did showed that those improper payments
    approached $1 billion, and the inspector general (IG) has
    identified more than 160,000 applicants that have received
    improper payments totaling more than $643 million that have yet
    to be recouped.
        Again, I look forward to discussing these issues with the
    Secretary. I do want to acknowledge that I appreciate the
    efficiencies and business practices that the Secretary has
    worked very hard to achieve. Thank you.
        Chairman Lieberman. Thanks, Senator Collins.
        Secretary Napolitano, it is great to welcome you back. It
    has been a real pleasure to work with you the last couple
    years, and we look forward to the next two as well.

       TESTIMONY OF HON. JANET A. NAPOLITANO,\1\ SECRETARY, U.S.
                    DEPARTMENT OF HOMELAND SECURITY

        Secretary Napolitano. Well, thank you, Chairman Lieberman,
    Senator Collins, and Members of the Committee, for the
    opportunity to discuss President Obama's fiscal year 2012
    budget for the Department of Homeland Security.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Secretary Napolitano appears in the
    Appendix on page 38.
    ---------------------------------------------------------------------------
        The demands on DHS have never been greater. This is
    especially true as we remember those at the Department who have
    given their lives in service to our mission of securing
    America, including, as you have noted, most recently Border
    Patrol Agent Brian Terry, ICE Special Agent Jaime Zapata, and
    our retired CBP agent in Kandahar this past week.
        Now, Mexico is leading the criminal investigation into the
    death of Agent Zapata, and we are supporting them through a
    joint Department of Justice (DOJ)-DHS task force that the
    Attorney General and I announced yesterday. I can speak for the
    entire Administration when I say we are not only saddened by
    the loss of an agent, but we are outraged by this act of
    violence against an officer of the United States. And make no
    mistake, justice will be brought to those involved. We owe
    nothing less to the memory of Agent Zapata and to those who are
    still on the job in Mexico.
        We remain relentless in our efforts to keep our borders
    secure and to assist Mexico in breaking up the cartels that are
    plaguing that country. The loss of these brave agents is a
    stark reminder of the sacrifices made by the men and women of
    the Department of Homeland Security every day. It also
    strengthens our resolve to do everything we can in our power to
    protect against, mitigate, and respond to threats and to make
    our Nation more resilient for years to come.
        It is also a reminder of the solemn duty of the Congress
    and this Committee to support and oversee the Department. And I
    want to thank you, Mr. Chairman and Members of the Committee,
    for the support you have shown to the men and women who carry
    out our many missions.
        Today's threat picture features adversaries who evolve
    quickly and are determined to strike us here at home--from the
    aviation system and the global supply chain to surface
    transportation systems, critical infrastructure, and cyber
    networks. We are leading the Administration's unprecedented
    effort to strengthen Southwest Border security coupled with a
    smart and effective approach to enforcing immigration laws in
    the interior of our country. And we continue to prepare for,
    respond to, and recover from disasters of all types.
        President Obama's fiscal year 2012 budget for the
    Department allows us to continue to meet these evolving threats
    and challenges by prioritizing our essential operational
    requirements, while reflecting an unprecedented commitment to
    fiscal discipline that maximizes the effectiveness of every
    security dollar that we receive.
        Reflecting the current fiscal environment and building the
    fiscal year 2012 budget, all DHS components identified savings
    associated with the Department's 33 efficiency review
    initiatives, and we cut Administration and overhead, including
    my own office's budget, by over $800 million. Savings were
    realized through efficiencies in acquisition, asset and real
    property management, as well as employment vetting and
    credentialing, hiring and on-boarding of personnel, and
    information technology. And we cut professional services
    contracts, travel, and non-mission-critical training.
        We also delayed construction of FEMA at the new DHS
    headquarters at St. Elizabeths and deferred numerous office
    collocations as well as building maintenance and enhancements
    that would have furthered our mission.
        My written statement includes a comprehensive list of the
    operational priorities in our budget request, and today I would
    like to highlight a few of them for you here.
        As you mentioned, Mr. Chairman, our first priority is
    preventing terrorism and enhancing security. This was the
    founding mission of the Department and remains our top priority
    today.
        The budget safeguards transportation modes through a
    layered detection system, including the deployment of
    additional transportation security officers, behavioral
    detection officers, canine teams, and advanced imaging
    technology machines at domestic airports. While expanding
    watchlist vetting through the Secure Flight Program and
    enhancing screening and targeting of international travelers
    before they board U.S.-bound flights through the Immigration
    Advisory Program.
        The budget also strengthens surface transportation security
    by supporting 12 new multi-modal Visible Intermodal Prevention
    and Response (VIPR) teams which conduct operations throughout
    the transportation sector to prevent potential terrorist
    activity.
        The request also provides funding for the Securing the
    Cities Program to protect our highest risk cities from a
    radiological or nuclear attack, and it makes a significant
    investment in the National Bio and Agro Defense Facility
    (NBAF), which will provide enhanced diagnostic capabilities to
    protect our country from foreign animal and emerging diseases.
        The request expands support for the national network of
    State and local fusion centers to enhance baseline capabilities
    and provide local law enforcement with the tools to address
    threats in their own communities.
        Our second mission is to secure and manage our borders. The
    request continues the Administration's historic border security
    efforts by supporting 21,370 Border Patrol agents and 21,186
    U.S. Customs and Border Protection Officers, both all-time
    highs. The budget includes $242 million for the continued
    deployment of proven effective surveillance technology along
    the highest trafficked areas of the Southwest Border to better
    meet the operational requirements of our agents on the front
    lines.
        For the Northern Border, the budget request supports
    investments in technology tailored to the maritime and cold
    weather environment, including proven stand-alone technology to
    provide immediate operational benefits.
        And for our Nation's maritime borders, this budget includes
    funding to continue the essential National Security Cutter
    program and makes historic investments to recapitalize the
    Coast Guard's aging assets, including six fast response
    cutters, 40 response boats, as well as a sizable investment in
    the renovation and restoration of shore facilities. I look
    forward to talking about that part of the budget with you,
    Senator Collins.
        The budget request also continues the Department's focus on
    smart and effective enforcement of our country's immigration
    laws, while streamlining and facilitating the legal immigration
    process. Building on our record over the past 2 years, the
    Department will continue to prioritize the identification and
    removal of criminal aliens who pose a threat to public safety,
    and we will target employers who knowingly and repeatedly break
    the law. This request enables U.S. Customs and Immigration
    Enforcement to fund 33,400 detention beds, remove over 200,000
    criminal aliens, and deploy secure communities to 96 percent of
    all jurisdictions nationally in fiscal year 2012, while
    promoting compliance with worksite-related laws through
    criminal prosecution of egregious employers, Form I-9
    inspections, and continued expansion and enhancement of E-
    Verify.
        The request also funds immigrant integration efforts,
    including programs supporting English language and citizenship
    education and continues detention reform efforts currently
    underway.
        To safeguard and secure cyberspace, the budget increases
    resources to identify and reduce vulnerabilities in our
    Nation's key cyber networks. The request includes significant
    investments to expedite the deployment of EINSTEIN 3 to prevent
    and detect intrusions on government computer systems, increase
    Federal network security of large and small agencies, and
    continue to develop a robust cybersecurity workforce to protect
    against and respond to cybersecurity threats. The budget also
    focuses on combating cyber crime and preventing attacks against
    our critical infrastructure.
        To ensure resilience to disasters, our next mission area,
    the budget request focuses on moving resources out of
        Washington, DC, and into the hands of State and local
    responders who are often best positioned to detect and respond
    to terrorism, natural disasters, and other threats by
    sustaining Federal funding for State and local preparedness
    grants, providing over $3.8 billion in fiscal year 2012.
        The funding includes $670 million for assistance to
    firefighter grants, including $420 million to rehire an
    estimated 2,300 laid-off firefighters and retain veteran first
    responders. And to lead and support essential national and
    economic security efforts, the budget expands the Coast Guard's
    operational capacity by funding 50,682 military and civilian
    positions and establishing the Coast Guard's first Incident
    Management Assistance Team, which will be deployed rapidly to
    support incidents of national significance.
        The request also continues to support ICE and CBP's
    enforcement and investigative efforts to protect U.S.
    intellectual property rights as well as the Secret Service's
    state-of-the-art forensic support to several missions,
    including the National Center for Missing and Exploited
    Children.
        This budget is the culmination of a major first-of-its-kind
    effort by the Department through the Quadrennial Homeland
    Security Review and the Bottom-Up Review to align our resources
    with a comprehensive strategy to ensure a safe, secure, and
    resilient homeland, while making an unprecedented commitment to
    fiscal discipline.
        I would be remiss, however, if I did not note that all of
    this progress is at risk in the continuing resolution currently
    being debated in the House. It is somewhat of a moving target,
    as we know, but the current proposal cuts technology
    investments and security improvements on the Southwest and
    Northern Borders, aviation security measures including new
    technology, funding to sustain the progress that has been made
    in enforcing our immigration laws, critical cybersecurity tools
    and operations, intelligence personnel, and State and local
    fusion centers, Coast Guard funding to support the war efforts
    abroad, and grants that support counterterrorism and disaster
    response at the local level. I would be happy to answer some of
    those questions as well.
        Chairman Lieberman, Senator Collins, and Members of the
    Committee, thank you for this opportunity to testify. I ask
    that my full statement be included in your record, and I am
    happy to answer your questions.
        Chairman Lieberman. Thanks, Madam Secretary, and, of
    course, we will include the full statement in the record
    without objection.
        Let me ask you to begin by focusing on, in a sense, the
    catalyzing mission of the Department after September 11, 2001,
    which is the terrorist threat, and the statement you made last
    week that the terrorist threat may be at its most heightened
    state since the attacks nearly 10 years ago.
        Talk a little bit, if you would, about why you said that,
    what you had in mind.
        Secretary Napolitano. I said that because, in addition to
    core al-Qaeda, we now have spin-off groups of al-Qaeda,
    including, I think importantly, Al-Qaeda in the Arabian
    Peninsula (AQAP), who have demonstrated their intent to attack
    the West and to attack the United States. They continue to
    focus on transportation modes, particularly aviation security,
    which is why the aviation part of this budget is so important.
    But combined with that, we now are seeing the rise in the so-
    called homegrown terrorism, which is, I think, accelerated by a
    connection with the Internet. So we are dealing with more
    dissipated sources abroad, but also from within the country.
    That means that we have to be working both things at the same
    time. That is why the fusion centers are so important here in
    the country and our effort to push information and intelligence
    analysis out to States and to cities, but it is also why we are
    so focused on aviation security at domestic airports and
    internationally, as well as adding support to surface and other
    transportation. As we know from the Najibullah Zazi case, for
    example, just a very recent one with the attempt to attack
    surface transportation.
        Chairman Lieberman. Right. Let me ask you outcome about the
    threat of homegrown radicalization. As I am sure you know,
    Senator Collins and I recently released a bipartisan staff
    investigation into the murders at Fort Hood in November 2009,
    and in addition to specific recommendations to the Department
    of Defense, the Federal Bureau of Investigation (FBI), etc., we
    recommended that there be a review done, preferably under the
    auspices of the White House, probably by John Brennan, which
    would include DHS, to determine what we can do to better, with
    a whole-of-government approach, counter homegrown
    radicalization. We had a hearing on our report this week with a
    group of excellent witnesses. One of them, Phil Mudd, who as
    you know was with the Central Intelligence Agency (CIA) for a
    long time and was almost with DHS, was with the FBI, said this
    is a needle-in-the-haystack problem. And Charlie Allen, your
    former Director of Intelligence and Analysis, was here and he
    quoted--I do not remember exactly, but from September 11, 2001,
    to 2009, there was something like 46 or 48 cases of homegrown
    radicalization, 13 of them in 2009. So there was an increasing
    pace. Obviously, 46 or 48 over a 9-year period is a very small
    percentage of the Muslim-American population, though an
    individual, as we saw with Nidal Malik Hasan at Fort Hood, can
    do terrible damage: 13 people killed, 32 injured, some
    seriously.
        Do you have any ideas about what the Department can do,
    along with other Federal agencies, to better identify, counter,
    and prevent the existence, certainly the spread of homegrown
    radicalization of Muslim-Americans into Islamist terrorists?
        Secretary Napolitano. Well, first of all, I read your
    report even though it was about the Department of Defense
    (DOD), FBI, and the Hasan matter, but I thought it was a very
    important report to review. So I thank you for having that
    review done. It was very well written, well done. I do not know
    if the actual scripter was--you wrote it yourselves.
    [Laughter.]
        I thought you did a very nice job.
        Chairman Lieberman. Thank you.
        Secretary Napolitano. Here is where we have been focused.
    We looked at this, and we had the Homeland Security Advisory
    Committee, which is chaired by William Webster, the former head
    of the FBI, especially look at this whole issue of homegrown
    and countering violent extremism. And we decided that the most
    effective way from the homeland security perspective was to
    focus on local police departments and techniques that have been
    shown to work in the past, neighborhood and community policing,
    where you have police who are specially trained, but who really
    are located in a particular area all the time. They get to know
    the people. The people get to know them. You begin to build
    trust. That is how information can flow.
        So just this past week at the Federal Law Enforcement
    Training Center (FLETC), we test drove a training curriculum on
    this kind of homegrown violent extremism, and we had
    representatives there from a number of different police and
    sheriffs' organizations to give us their comments so that we
    can rule that out. But this homeland security architecture that
    we are building, I think one of the things we have to recognize
    is that the Federal Government alone is not going to be the
    only player here. The folks who are really front lines are
    State and local police, sheriffs, medical personnel, the people
    who are in the detention facilities who work as guards in our
    jails and our prisons, these are all people who need to be
    woven into what we are doing.
        We also met this past week with the FBI and have joined
    efforts with them on the detention populations and their
    potential when they are released for radicalization. So there
    are a whole number of efforts underway there, but our key
    focus, Mr. Chairman, is on what we can do to support State and
    local law enforcement from a community-oriented policing
    strategy to identify tactics and techniques and behaviors that
    could be a real tip-off to a terrorist.
        Chairman Lieberman. I think that is a very significant
    conclusion. It makes a lot of sense to me. We know in a couple
    of cases, as in the New York City Police Department (NYPD),
    they are operating something like that quite effectively. We
    also know, just from years of local law enforcement experience,
    that the cop-on-the-beat programs in previous years dealing
    with crime have a very positive effect. So I am actually
    heartened to hear that.
        I guess the final question, bottom line, is: Are there
    resources in this budget that will allow you to begin to move
    forward on assisting local police departments that do not have
    that kind of program going now?
        Secretary Napolitano. Mr. Chairman, a few things. One,
    there are resources in this budget for the fusion centers, and
    we have been, first of all, upgrading the quality of the fusion
    centers. It is a nascent kind of development. We looked at all
    72 of them this last year, and identified which ones were
    meeting certain baseline standards, which needed to come up. We
    are making sure that they all have access to classified
    information, networks, and we are moving intelligence analysts
    from Washington, DC, to the fusion centers in the country not
    only to help with intel analysis, but to train State and locals
    on intel analysis. So there is money in the budget for fusion
    centers.
        There is money in the budget to support grant programs that
    can be used by State and local police and first responders, and
    when I get to Senator Collins, I think we can have a colloquy
    perhaps about how the grant money is actually budgeted in the
    President's budget.
        The third part of this, however is the Community Oriented
    Policing Services (COPS) program. That, of course, is not in
    our budget. That is in DOJ's. And so that part I do not have.
        Chairman Lieberman. That is great. I take you to say you
    are going to be driving training, at least, of local police
    departments in a counter-homegrown radicalization program.
        Secretary Napolitano. That is true.
        Chairman Lieberman. That is great. Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        Before I get to the Coast Guard and the grant money, there
    are two other issues that I want to bring up with you. First is
    the improper payment problem at FEMA. Hurricane Katrina was
    back in 2005, and the American people were very generous in
    responding, as I know Senator Landrieu would attest. But they
    are also very frustrated when they see improper payments. It
    was disheartening to see the latest IG report which indicates--
    and here we are 6 years after Hurricane Katrina--that there is
    still outstanding at least $643 million in improper payments
    related to Hurricanes Katrina and Rita.
        Now, I know there were some court developments which slowed
    the recoupment process, but the fact is, according to the IG,
    FEMA has yet to implement a new process to recoup those
    payments.
        We just cannot afford to have $643 million in improper
    payments at a time when the budget is under such pressure. We
    cannot afford it at any time. It is unacceptable.
        Why aren't we recouping that money or prosecuting the cases
    of fraud that exist within those 160,000 cases?
        Secretary Napolitano. Well, Senator Collins, this is an
    area that I think we need to work with the Congress on, and you
    and I may have a respectful difference of opinion here. But,
    first of all, one of the problems is an IG report that comes
    out so many years after the fact, and there are, I must say,
    some disagreements with their conclusions on some of the
    payments.
        Second, it is not as if one, two, three, or four entities
    received that money. It is spread over literally thousands and
    thousands of beneficiaries, most of whom are spread across the
    country now. And I am informed by FEMA that the average
    overpayment, even accepting the IG's conclusions, would be
    about $2,500. So it is a lot of money when you add it all
    together, and believe me, I respect the value of a dollar. But
    this is now going back years and years after the fact to try to
    find people to recoup relatively small amounts of money.
        We may want to look at this whole recoupment process as it
    affects Hurricanes Katrina and Rita. It was such an unusual
    disaster with such unusual requirements that I do not think it
    should be the pattern. So I really would like the opportunity
    to meet and talk with you more about that as we move along in
    this budget process.
        Senator Collins. I would be glad to, but let me suggest
    that I have talked to the IG just within the past week about
    this, and he has told me that the discouraging part of his
    report is that the same problems and lack of internal controls
    that allowed these improper payments to occur have been evident
    for decades, literally, and they have just never been remedied.
        I think to most people who are struggling right now, $2,500
    is a lot of money.
        Secretary Napolitano. It is a lot of money.
        Senator Collins. And in the aggregate, it is a huge amount
    of money.
        Secretary Napolitano. Agreed.
        Senator Collins. I would be glad to work with you, but FEMA
    needs to actually start recovering this money and making sure
    that the controls are in place so that when the next disaster
    strikes--and inevitably it will--the same thing does not happen
    again. In talking to Inspector General Richard Skinner, he said
    he could go back to 1993 and show me the same kinds of
    problems. I held hearings prior to Hurricane Katrina that
    showed improper payments with Florida hurricanes.
        So this seems to be a systemic problem in FEMA, and it is
    one that we need to correct once and for all.
        Secretary Napolitano. And it may be--and, again, I do not
    know--that it merits a more substantial conversation,
    particularly with the Hurricanes Katrina and Rita victims or
    survivors are concerned. But there is a real tension between
    getting money out quickly to people who immediately need monies
    to get a home, to get re-established and so forth and the
    controls on that, versus 4 or 5 years after the fact going back
    and saying, well, it should have been this much, not this much,
    that sort of thing.
        That is different from actual cases of fraud. Fraud should
    be prosecuted.
        Senator Collins. Of which there were many. I remember in
    our investigation that we discovered prisoners who were
    applying for housing assistance after Hurricane Katrina and
    received checks in jail for housing assistance. I mean, there
    really were some blatant fraudulent schemes.
        Secretary Napolitano. Indeed.
        Senator Collins. Let me switch to another issue. I was
    surprised to see that the President's budget includes a
    proposal to begin imposing a $5.50 inspection fee on travelers
    entering the United States by air or sea from Canada, Mexico,
    and the Caribbean. Now, as you know, Canada is our biggest
    trading partner. There is $1.5 billion in commerce transacted
    between the two nations on a daily basis. People are flying and
    arriving by ferry back and forth all the time.
        What is the rationale for this fee? My concern, for
    example, is that it will discourage cruise ships from coming to
    the State of Maine from Canada. That is a popular route right
    now. But if there is going to be this additional inspection fee
    on the thousands of people who may be on a cruise ship, that
    may discourage the cruise ship from even stopping here. And I
    am also concerned about the impact on tourism and families
    going back and forth in general.
        What is the rationale? And did the Department look and
    assess what the impact would be on commerce and tourism?
        Secretary Napolitano. Yes, the rationale is fairness. We
    charge that fee for travelers from every other country except
    Canada, Mexico, and the Caribbean. It has always, in my
    understanding, been the intent to implement that fee. It is not
    for land. It is just for the air and sea. We thought and looked
    at potential impacts, but to give you an example, if you have a
    traveler coming from London to the United States, they fly
    direct, they pay that fee. But if their plane stops in Canada,
    so they are coming from Canada, they do not pay the fee. So you
    have some real discrepancies in the system.
        In terms of effects on tourism and travel, I think we can
    look at the Electronic System For Travel Authorization (ESTA)
    fee, which went into effect. These are things that get added to
    the ticket price, and so that the travelers from other parts of
    the world are not essentially underwriting travelers who are
    from Canada or Mexico.
        Senator Collins. Thank you, Mr. Chairman.
        Chairman Lieberman. Thanks, Senator Collins.
        In order of both arrival and seniority at the gavel,
    Senator Landrieu, Senator McCain, Senator Johnson, and Senator
    Tester. I asked about that, and I was reminded that when the
    gavel falls, it goes whoever is here by seniority on the
    Committee. It is the Armed Services rule.

                 OPENING STATEMENT OF SENATOR LANDRIEU

        Senator Landrieu. Thank you.
        Madam Secretary, thank you for being here today, and I look
    forward to having you before my new Appropriations Subcommittee
    very soon, March 2, as I am taking the chairmanship of that
    subcommittee. I have to say I want to commend you. This has
    been a very tough year for the Department. The Coast Guard has
    fought to contain the largest oil spill in American history.
    The Department has responded to terrorist attacks at Fort Hood
    and Times Square. ICE and Border Patrol agents mobilized to
    quell unprecedented violence along the Southwest Border. The
    Transportation Security Administration (TSA) learned of a
    terrorist plot to detonate air cargo. FEMA has responded to 106
    separate incidents this year. So I want to say I appreciate
    your leadership of this Department.
        I also appreciate your willingness to cut, reduce, and
    modify based on the challenges before us. But I do want to say
    that we have to be very careful about how we go about that
    exercise so that we can continue to provide the security that
    our Nation needs and has come to depend on under your
    leadership and with this Department.
        My first question has to do with disaster relief, and it is
    concerning because it is a big number. The Senator from Maine
    was just referring to a number associated with failure to
    recover in large measure $2,000 payments equaling about $640
    million. That is a lot of money, and I want to comment on that
    in a minute. But there is an issue over $1.6 billion in this
    year's budget, and I think you are aware that in the House
    continuing resolution that is being debated and in the
    President's proposal, they are both recommending that we
    basically fund disaster recovery out of the base budget of
    homeland security, which in my mind is a radical departure from
    the past and will absolutely, if left unchecked, undermine your
    Department's ability to respond to all the threats that I just
    mentioned and that have been pointed out.
        Could you comment? And what is your position on that? And
    are you prepared to work with us and the President to fund
    known recovery costs for previous disasters on an emergency
    basis?
        Secretary Napolitano. Thank you, Senator, and I do look
    forward to appearing before you at the Appropriations
    Subcommittee hearing.
        Yes, what is going on, this is the Disaster Relief Fund
    (DRF), and the way we budget the DRF is to take a 5-year
    rolling average of what is basically the emergency response
    cost. But added to that, then, you have so-called catastrophic
    disasters, and those are disasters that are over $500 million.
    And, it is difficult to predict when you are going to have
    those, how many you will have in a given year, or if you will
    have any. And so historically what the Congress has done is
    approve the 5-year rolling average, and then via supplemental
    when we know what we are looking at, then they appropriate the
    rest.
        By not proceeding in that fashion, you have two challenges.
    One is it requires us to have perfect crystal balls to tell how
    many disasters of a catastrophic type we will have in any given
    year. And our crystal balls are not that clear.
        Second, we have to pay for disaster response. It is really
    non-negotiable. So what that means is that if you do not have a
    mechanism to fund them, it is just a hidden cut to FEMA, and it
    is a substantial one, as you have noted.
        Senator Landrieu. Well, I just want to bring this to the
    Committee's attention. Of course, as the Appropriations
    subommittee chair, I will be focusing on it, but I really want
    the Members to fully appreciate the numbers here. It is $1.56
    billion in fiscal year 2011 that is missing from this year's
    budget. But for fiscal year 2012 through 2014, FEMA is
    estimating $6.7 billion. Those are outlying bills from
    Hurricanes Katrina, Rita, Gustav, Ike, and flooding in the
    Midwest, Rhode Island, and Tennessee. These costs are not
    accounted for in the President's budget request. And it most
    certainly cannot come out of the basic homeland security
    budget. We have to designate this funding as the emergency that
    it is so that this Department can adequately support its other
    components, including the Border Patrol, the Coast Guard, etc.
    So I just really wanted to bring that up.
        The National Disaster Recovery Framework is very important,
    Madam Secretary, and I understand that it is not yet fully
    operational. And it gets a little bit back to what Senator
    Collins was saying about we know Hurricane Katrina was an
    exception. It was not blanket fraud, but it was just
    mismanagement of distribution of monies, of $2,000 on average
    per family. We did not have the right software to verify
    addresses. We double-paid some families. It is going to be
    difficult. But we can find a better way, a more accurate way to
    make sure we are making appropriate payments. But for this
    National Recovery Framework, I understand that it is still not
    in place.
        So do you know what the status of that initiative is? Does
    this budget include sufficient funding to complete it? Because
    it is very important that we get it completed before we have an
    earthquake in Memphis or some other catastrophic event.
        Secretary Napolitano. Yes, Senator. But it also crosses
    many lines and many agencies, and it also crosses State and
    local. So there has been, as you might imagine, a lot of
    consultation that has gone into drafting recovery framework
    responses. The immediate stuff you do right away. Recovery is
    how you restore communities, housing, small businesses, and the
    like.
        In terms of the departments that are impacted, we have made
    a strong recommendation to the White House about how this
    should appear and be organized. We are waiting now for the
    White House to agree, concur, amend, or disagree. And my
    understanding is at that point we may need to make some
    adjustments. But under the current practice with what we have
    now, the budget request is adequate.
        Senator Landrieu. Thank you.
        Chairman Lieberman. Thank you, Senator Landrieu. Senator
    McCain.

                  OPENING STATEMENT OF SENATOR MCCAIN

        Senator McCain. Thank you, Mr. Chairman, and Madam
    Secretary, for being here. Thank you for your hard work. Thank
    you for the frank and very candid conversations we have
    concerning the issue of border security. And I also want to
    appreciate the time and effort you take to keep me and the
    other Members from the Border States informed as to the efforts
    you are making on border security. And I think it is important
    that we continue the conversation, and I appreciate the
    briefing that you gave me just the other day.
        As you know, there is a February 15, GAO report that
    contains some very interesting information, and in that report
    it says, ``As of February 2011, CBP did not have an estimate of
    the time and efforts that are needed to secure the Southwest
    Border as it transitions to a new methodology for measuring
    border security.''
        I think this is part of our problem and our dialogue,
    because you, I think very appropriately, point out that there
    has been an increase in assets, an increase in apprehensions,
    certainly increases in efficiencies. And yet at the same time,
    if you look at the same situation from another viewpoint, we
    have seen the violence in Mexico grow dramatically. As I
    predicted to you, an American was just killed and another one
    injured, and I am convinced, tragically, that if the status quo
    remains, that violence will continue to spill over onto our
    side of the border.
        Everyone knows that these drug cartels have become more
    aggressive, better armed, better equipped, more efficient, and
    the level of violence in Mexico continues to go up
    dramatically. Some 30,000 Mexican citizens or more, have been
    killed during President Felipe Calderon's presidency. So you
    can look at it from one viewpoint that we have made some
    significant improvements and investments. But I also find, when
    I go to the Southern part of my State, as you have on numerous
    occasions, one, they do not feel safe; two, they are still
    subject to home invasions; three, in the Tucson sector, 91,000
    illegal aliens were apprehended on Federal lands, and the
    estimates are by almost every objective observer that three
    times as many get through. Well, if you do the math on that,
    you still have over 200,000 people crossing through the Tucson
    sector illegally and not being apprehended. I do not think that
    is acceptable.
        And then last week I had a meeting with the High Intensity
    Drug Trafficking Areas (HIDTA) Program office, friends of
    yours, in fact--the great U.S. Attorney, a former assistant of
    yours, was there--and they said that there is anywhere from 100
    to 200 spotters positioned in mountain ranges of Arizona using
    two-way radios to communicate with marijuana load drivers or
    human smugglers.
        Now, it does not give my constituents a feeling of
    confidence if there are 200 spotters in Arizona living on
    mountaintops directing drug smugglers. And they maintain that
    Arizona has become the funnel from Nogales up through Pinal
    County into Maricopa County and then all over the country
    because the Sinaloa cartel is a major distributor to the entire
    country of these drugs.
        Again, I have had the privilege of visiting with your
    people and knowing them. They are outstanding, hard-working,
    and dedicated. Those that are working in the forward operating
    bases on our border, it is a hardship duty. And obviously we
    have seen cases where it is not without danger.
        I am sorry for the long opening comment. We have to agree
    on certain criteria on what is successful securing of our
    border. Senator Jon Kyl and I have a 10-point plan. We think
    that secures the border. I think it would be very helpful to
    all of us if you could lay out what assets need to be devoted
    and what statistics would show us that the border is being
    secured. And at that time, I think we could move forward with
    comprehensive immigration reform. Thank you.
        Secretary Napolitano. Well, thank you, and there is no one
    more committed to securing that border than I am. I have spent
    the greater part of my professional life on border-related
    issues. I used to chair the HIDTA to which you refer, and a
    number of the same members are there. And I know the men and
    women that we have working for us and that you have helped
    supply for us are so committed as well.
        We can talk about and arrive at some common metrics, and
    that also merits probably a different and longer conversation.
    But I think, of the metrics we do have, they are all going in
    the right direction. The problem is they are not going in the
    right direction fast enough in the Tucson sector, and that is
    the sector to which you refer.
        And so our plan is to increase and to be pouring even more
    resources into that sector from supplying monies for State and
    locals down there--this is the Operation Stonegarden issue to
    which Senator Collins referred--to radios, to other technology
    that they can actually work.
        When we get to discussing SBInet, as we might during
    another round of questions, I would be happy to explain how
    some of those monies have been redeployed on the ground for
    front-line detection.
        I will say that it is a system. You have to have troops or
    boots on the ground at or near the border, you have to have
    checkpoints, and you have to have interior enforcement. And, it
    is a three-legged stool. And so it is boots, it is technology,
    it is that infrastructure that gives us security. And at a
    certain point--and I do not know if it is subject to an actual
    absolute number, because these numbers jump around all the
    time. But at a certain point, we have to be able to agree that
    the Tucson sector has become akin to, say, El Paso, for
    example, and at that point proceed with the other discussion to
    which you refer.
        Senator McCain. Well, thank you. I would like for you to
    think about certain benchmarks and certain criteria that we
    could use to gauge success or failure that both of us could
    agree, all of us, and we could say we have achieved X amount of
    apprehensions, a certain amount of fencing, whatever it is,
    which obviously the results would be obvious from that.
        Mr. Chairman, I have overstayed my time. I just wanted to
    say one word about SBInet. It is a colossal failure, a waste of
    over $1 billion, and that cannot be fixed. I still think that
    the contractor ought to be held responsible, but maybe that is
    a subject for a conversation another day. But I would urge you
    to look at what the Armed Services Committee has passed
    legislation which helps us track better the progress or lack of
    progress of weapons systems that we purchase, such as the Nunn-
    McCurdy trigger that Congress has to be notified once there is
    a certain cost overrun. There are certain benchmarks and
    criteria which the Congress has to be informed of and
    participate in decisionmaking. So I would like for you to look
    at what we do as regards to weapons procurement in DOD because
    I think maybe it would be very useful and helpful to us in
    tracking these situations.
        I thank you, Mr. Chairman. I thank you, Madam Secretary,
    for your hard work.
        Chairman Lieberman. Thank you, Senator McCain.
        Madam Secretary, as we discussed the other day, we did
    announce at our organization meeting the other morning that
    border security is going to be one of our priorities this year,
    and we are going to start a series of hearings, hopefully in
    March--that is, we will start in March. And the point that
    Senator McCain raises is an important one, which is whether we
    can find a metric, a set of standards we can agree on where we
    can say we are doing as much as we all agree together we can do
    to secure our border. And that will not only achieve security,
    it may also here in a broader context enable us to deal with
    the possibility of comprehensive immigration reform, which I
    know you are also interested in.
        Secretary Napolitano. Very good.
        Chairman Lieberman. Thank you. Nest is Senator Johnson,
    then Senator Tester, and then Senator Portman.

                  OPENING STATEMENT OF SENATOR JOHNSON

        Senator Johnson. Thank you, Mr. Chairman. Madam Secretary,
    it was nice meeting you earlier and welcome to our hearing.
        Secretary Napolitano. Thank you, Senator.
        Senator Johnson. Are you aware or have you been watching
    what has been happening in my home State of Wisconsin in terms
    of public sector employees?
        Secretary Napolitano. Yes, I have seen a few clips.
        Senator Johnson. Does that give you any pause in terms of
    the announcement to allow the TSA employees to collectively
    bargain?
        Secretary Napolitano. No. I think this is a totally
    different situation. First of all, we were ordered by the
    Federal Labor Relations Authority (FLRA) to conduct such an
    election, and I think the way the administrator, who is the
    former Deputy Director of the FBI, has gone about it is the
    right way, which is to say we will have an election, but issues
    that affect security are off the table from a collective
    bargaining standpoint.
        As you know, a number of collective bargaining units are in
    law enforcement already, including some that are within the
    private airports that have been discussed. I want to say San
    Francisco and Kansas City have privatized the security, which
    have collective bargaining units in those companies. So I did
    not find that argument particularly persuasive, and I think the
    way we are going about it is legally mandated and the right
    way.
        Senator Johnson. I would hope it would never get to this
    point, but TSA Administrator Pistole was asked, I believe last
    week, if work stoppages or slowdowns occurred, would he be
    willing to fire TSA screeners en masse, and he answered yes.
        Secretary Napolitano. Yes.
        Senator Johnson. If it got to that point, would you support
    that decision?
        Secretary Napolitano. Yes. This is a security organization,
    and the bargaining will take place in that context. It will
    also take place in the context of the need to be able to move
    people around quickly when we need to to supplement particular
    areas of the country.
        Senator Johnson. Well, I appreciate that answer.
        Let us go back to border security. I am a new kid on the
    block here, so these may be some basic questions. But I am
    interested in metrics. What metrics are we currently using?
        Secretary Napolitano. Well, we the number of apprehensions
    of illegals. We use seizures of drugs. We use seizures of guns.
    We use seizures of what we call ``bulk cash,'' which is
    normally associated with drug smuggling. So those are four of
    the major metrics that are used.
        Senator Johnson. Do you estimate number of crossings? Do
    you use any type of----
        Secretary Napolitano. Well, it is hard. As Senator McCain
    said, for every one we pick up, there are two or three who get
    through. There is a difference of opinion in the law
    enforcement world. They actually think we are picking up a
    greater percentage than that now. The one-in-three metric is an
    outdated metric. But when we look at where the high point was
    in illegal immigration, particularly over the Southwest Border,
    we see now that apprehensions are at their lowest point in
    decades. And so as apprehensions go down, we extrapolate that
    illegal crossings have gone down as well.
        Senator Johnson. What would that number be then based on
    the current extrapolation? What is your estimate of current
    crossings?
        Secretary Napolitano. Well, I can give you those actual
    numbers, let me see if I have it right here. The apprehension
    number is around 196,000 in the Tucson sector of the Border
    Patrol, which is the most heavily trafficked. The others are
    much smaller.
        Senator Johnson. In your estimation----
        Secretary Napolitano. So you have to assume that the Tucson
    sector represents about 45 percent of the apprehensions. So
    take 195,000 and then do the math.
        Senator Johnson. Now, I will say at the onset I realize it
    is not an easy problem, but we have been talking about securing
    our borders for years. I would just like to ask your opinion.
    What is the number one problem preventing us from doing that?
        Secretary Napolitano. Well, you have to look at borders not
    just as the physical line on the map, but what needs to be done
    before people get to that border and then after they get into
    the interior of our country. So we absolutely need to be
    working with Mexico to prevent, detect illegal immigration,
    drug smuggling, human smuggling, and money laundering. A number
    of efforts are underway in that regard.
        At the border itself, you need manpower, you need
    technology, you need infrastructure. Some of the things in the
    President's budget will really assist in this regard because
    they will allow us to complete some interoperability projects
    in terms of communications along the border. And also we put
    more into technology and boots on the ground nearer the border
    than at sector stations, for example. So we have increased the
    number of forward-operating camps. We have an agreement from
    the Tohono O'odham Nation that we can put more camps on their
    lands, those sorts of things.
        And then you have to deal realistically and very firmly
    with creating a culture of immigration compliance among
    employers in the United States. That is why we support E-
    Verify. That is why we are doing more and more audits. That is
    why we are referring more companies for debarment and for
    prosecution because that is the incentive for much illegal
    immigration. It is narcotics, but the big numbers are people
    coming in search of work.
        Senator Johnson. So those are three different issues. One
    of those would be resources, correct?
        Secretary Napolitano. Sure, yes.
        Senator Johnson. How much do you think it would cost to
    secure the border?
        Secretary Napolitano. Well, I think the President's budget
    gives us the resources we need to fit into the plan we have for
    the Southwest Border. That is our part. The budget for the DOJ
    part in terms of what you do by way of prosecution, detention,
    and so forth, that is in the DOJ budget. But I think the
    President's budget is adequate to meet our plan. I would not go
    below that, that is for sure.
        Senator Johnson. Well, thank you.
        Chairman Lieberman. Thanks, Senator Johnson. Next is
    Senator Tester.

                  OPENING STATEMENT OF SENATOR TESTER

        Senator Tester. Thank you, Mr. Chairman.
        Madam Secretary, it is good to see you again. I think the
    last time I saw you, we were enjoying a steak in Great Falls,
    Montana.
        Secretary Napolitano. No; I was dropping you off in your
    pasture by helicopter.
        Senator Tester. That is true. I forgot about that. Yes,
    that is right. [Laughter.]
        And I appreciate that, too.
        Secretary Napolitano. I was giving you a ride.
        Senator Tester. That is right, you were. And I appreciate
    Commissioner Alan Bersin coming in. I know that his nomination
    is still hung up, and I would hope that gets through--
    yesterday, as a matter of fact, because I think he has done a
    great job, and I think a reappointment with a different person
    would not help you and your position at all. So hopefully we
    can get that moving.
        We recently had some issues--and this might seem parochial,
    but I do not think it is, actually--with the CBP policy that
    would prohibit airports from processing planes that had
    international flights with over 20 or more passengers. They
    have been doing it for years and years and years. I arrived in
    Great Falls last week, and they informed me that the airport
    there in Great Falls was not going to be able to process those
    international flights anymore. It saved a lot of time, a lot of
    headaches for folks to avoid some of the larger, busier
    airports. It generated revenue. And quite honestly, as I think
    about it, a plane flying and landing on a place further south
    does not make a lot of sense from my perspective. So it is not
    just parochial. I think it is a homeland security issue.
        I do not know if the decision was made locally or if it was
    made above the chain, but it was made somewhere in the chain
    where they found a rule that said we cannot do this anymore,
    and so they decided not to do it. I am a little upset with
    that. That is the bad part. The good part is that your staff
    helped clear a flight for us, but we need to work on a long-
    term solution.
        What further compounds the fact that I was a little upset
    with it--and it is the second time this has happened--the
    person in Customs declined to make a meeting with my staff in
    Great Falls. And, quite frankly, when they declined a meeting
    with one of my staff members, they have declined a meeting with
    me. So we will take it to a higher person, you being the one.
        Secretary Napolitano. That will not happen again.
        Senator Tester. That would be really good. Quite frankly, I
    have zero tolerance for that personally.
        Secretary Napolitano. I understand.
        Senator Tester. Could I get a commitment from you--I mean,
    this needs to be solved. I think from a homeland security
    standpoint there are a lot of small airports along the Northern
    tier that have done this in the past, and if this is just in
    the sector in Great Falls, that is not good. And if it is all
    the way across the Northern Border, I do not think it is good
    either. I think these stations that have been doing this work
    need to continue to do it, and all I am asking for is your
    ability to work with us to make sure that happens and
    continues. You got the drift on the whole thing?
        Secretary Napolitano. I will look into it, and we will
    respond to you directly.
        Senator Tester. Thank you.
        I recently sent a letter to Secretary of Defense Robert
    Gates and you on the increased rate of drug smuggling across
    the Northern Border by low-flying aircraft. Low-flying aircraft
    is a real problem. We have heard from folks on the ground that
    you can hear them but you cannot see them. And we have been
    working for low-level radar for some time now. It is something
    that I think that you need to work with the DOD. I think it is
    the same report that Senator McCain talked about. It talked
    about the Northern Border not being as secure as we wanted by a
    long shot. So we need technology as a comprehensive part of
    that.
        The National Guard in Montana has done a pilot project up
    there. I think they have done some good work. I really think
    that if a low level of radar was implemented, it may save some
    manpower and may make that border more secure. I do not know
    how you move forward on it, but I think we need to get started
    on it. Any thoughts on this at all, on the low-level radar?
        Secretary Napolitano. There is actually money in the
    President's budget for a low-level radar project, and we have
    that in mind for both borders.
        Senator Tester. Good. And I was going to ask you, you
    talked about the President's budget as applied to the Southern
    Border. What about the President's budget as it applies to the
    Northern Border and getting it secured?
        Secretary Napolitano. Yes, the President's budget actually
    has a lot of enhancements for the Northern Border, but it is a
    different border, so we need different types of equipment.
        Senator Tester. Absolutely.
        Secretary Napolitano. We need equipment that can survive
    extreme cold. We need more maritime equipment up there. And so
    that is where you will see the enhancements, is in that sort of
    thing. It does recognize and provide agents at the Northern
    Border but it meets all of Congress' requirements there. It is
    not just the agents. It is really the technology and the
    maritime assets that we need to augment that agent support.
        Senator Tester. I could not agree more. In fact, I think
    that if we were to get some more technology up there, in the
    long haul I think it is going to make the border more secure.
    And I think that it really would not have to cost us more
    money. In fact, it could save us more money in manpower. I
    really believe that. You are the professional in that area, and
    I respect your perspective. But I am just saying that from my
    perspective I think if we could get some of that technology
    implemented, it could really save us some money and make the
    border more secure in the process.
        The next question is one that you and I have visited about
    a number of times. No one is more firmly aware of our Nation's
    responsibility to protect animal agriculture and public health
    from biological threats and foreign animal diseases, but I
    still have some major concerns about the $150 million that is
    included in the President's budget for the National Bio and
    Agro-Defense Facility to be built in the middle of Tornado
    Alley, where I think about 10 percent of this Nation's cattle
    are within 200 miles of it. And I think food security is
    critically important. The economic harm that could happen if
    there were to be an exposure is incredible. We received a risk
    assessment, and one of the things it found was that there was a
    70-percent chance that a release of foot-and-mouth disease
    would result during this 50-year lifetime. That would be
    catastrophic. Whether it happened next year or 25 years from
    now, it would be catastrophic.
        It is a lot of money. I would ask you to reconsider the
    proposal. And I was just wondering if you have looked at the
    report, if there was any redesign that was done, or if you are
    going to move forward.
        Secretary Napolitano. Yes, I read the report. You are
    talking about the National Academy of Sciences (NAS) report?
        Senator Tester. Yes, I am.
        Secretary Napolitano. I reviewed it. Actually, we responded
    to it. I think you have to view it, Senator, as a preliminary
    report based on a preliminary design. And that allowed us or
    enables us to make adjustments or changes in the design to deal
    with some of the issues that were raised. It has not caused us,
    however, to revisit the basic decision of that, Tornado Alley
    aside. I do not make light of that except to say that was
    already taken into account when this project was peer reviewed
    up the wazoo when it was originally awarded. Then we have re-
    reviewed it and re-looked at it compared to the alternatives,
    and now we have the NAS report, which we will be very
    responsive to as this project moves forward.
        But we think overall this is the best place to host such a
    facility, these three and four labs, and so we do intend to
    proceed, and the President's budget has finances in there for
    that.
        Senator Tester. My time has run out. I have said this
    before. And I have to say it again. I very much respect the job
    you are doing. I think you have a very difficult job, and I
    think you have done a remarkable job. There is always room for
    improvement. You know that. And I think you are working hard on
    doing that. But as far as the animal defense, as a farmer I
    cannot figure it out. I would not want it at Bozeman, Montana.
    I think where it is at on Plum Island is right--and the New
    Yorkers might be unhappy with me, but it is off the shore of
    the mainland. And I know it is hard to get researchers out
    there, but there is a bigger issue than even that here. I mean,
    these are highly contagious diseases, and if they have an
    outbreak, it could--the economic and the food security issues
    that revolve around that are huge, and I cannot get that off of
    my front burner, to be honest with you. I cannot get the
    assurances, and then compound it by being someplace where they
    have some pretty doggone wicked weather patterns. Anyway, the
    decision has been made, but I really wish it would be
    revisited.
        With that, I want to thank you, Mr. Chairman, and thank
    you, Madam Secretary. I appreciate your work.
        Secretary Napolitano. Thank you, Senator.
        Chairman Lieberman. Thanks, Senator Tester.
        I want to share with both of you that I have a vision,
    after one of your exchanges, that your helicopter has picked up
    that recalcitrant Customs employee official, and he is now
    being dropped on the roof of the building in which Senator
    Tester has his office. The meeting is about to begin.
    [Laughter.]
        Secretary Napolitano. From a very high height. We will deal
    with that particular issue. You know what, Senator? That one I
    can deal with.
        Chairman Lieberman. I am going to stop myself from
    suggesting he may be dropped onto Plum Island. [Laughter.]
        Senator Portman.

                  OPENING STATEMENT OF SENATOR PORTMAN

        Senator Portman. That poor person.
        Madam Secretary, thank you for appearing before the
    Committee and for your willingness to go through some of the
    tough issues that you face every day. We talked a lot about
    border security, the Northern and Southern Borders, and I
    appreciate the fact that you have asked for an increase in
    funding for Border Patrol again. And I think there is a
    consensus that border protection is important here, not just
    for immigration but, of course, for drug smuggling, guns, and
    particularly with the violence that we have seen on the
    Southern Border.
        But having said that, I continue to believe that money is
    better spent on trying to avoid the magnet, which is getting at
    what I think is the fundamental cause, which is primarily jobs,
    and, therefore, employer sanctions and, therefore, some kind of
    verifiable identification. And I think the more effort and time
    we put against that, the more success we will have ultimately
    in dealing with our immigration problem.
        I think in a sense you have seen the proof of that with our
    economic downturn and the reduction in the number of people
    even attempting to cross. Much of it is, of course,
    economically driven.
        So my question to you is about E-Verify. It expires next
    year, and I am told that only 11 percent of the 7.7 million
    employers in the country participate in E-Verify. And I would
    ask you today two things: One, do you support a permanent
    reauthorization of E-Verify? And, second, how can we improve
    the participation rate? Do you think it is the right program?
        Secretary Napolitano. Yes, indeed, Senator. We are adding
    companies to E-Verify at approximately 1,300 per week. When I
    was Governor of Arizona, I think I was the first governor in
    the country to require our contractors to use E-Verify. And I
    think one of the things we want to be looking at is not only
    its permanent reauthorization but, as I said earlier, a culture
    of compliance in the employer community, that this is something
    that they need to do--they do not like it, but they have to pay
    their taxes. I mean, it is just part and parcel of being in
    this country. You have to make sure that your employees are
    legally residing in the United States.
        Senator Portman. Different than taxes, though, because
    having that verifiable identification is a challenge,
    particularly for smaller employers.
        Secretary Napolitano. Yes.
        Senator Portman. People are showing a Social Security card
    and showing a driver's license, and it is fraudulent, and they
    accept it on its face.
        Secretary Napolitano. Well, and so there are a couple of
    things to consider.
        First of all, E-Verify itself, the system is being improved
    to be less susceptible to identity theft, for example, if
    somebody is using a Social Security number that has also
    appeared somewhere else, it will be able to pick something like
    that up.
        Second, I think in its early iterations there were some
    false entries into the system or inaccurate entries. The
    accuracy of the system now is very high. We have also wanted to
    make it easy for small businesses to have and to operate, and I
    have seen it and used it myself. As people who work with me
    know, I am not exactly the world's best computer person, and it
    is pretty easy to operate. So that is part of it.
        And if and when--and we hope it is sooner rather than
    later--the Congress takes up immigration reform, one of the
    things we would like to work with Congress on are the actual
    charges that can be brought against employers and the elements
    of the burden of proof because the way the statutes are written
    now, even when we have somebody that everybody knows very well
    that has been hiring illegal labor, actually proving that under
    the elements of the current statute is very difficult.
    Therefore, it is difficult to get U.S. Attorneys to take those
    cases and so forth. So we look forward to working with the
    Congress on improving those statutes.
        Senator Portman. Likewise, and it takes resources and it
    takes focus in coming up with a system that is, as you say,
    easy to use and relatively low cost for the employer. Given our
    economy, we do not want to burden employers more, but we do
    need, I think, to get at the issue where it is most effective,
    and that is going to be through the employer and through the
    interior enforcement.
        I was involved in the Department of Homeland Security
    organization, consolidating 20 or so agencies and departments
    when you were still governor, and I cannot say that I am proud
    of everything that has happened in the interim period. There
    have been some management challenges, obviously, including with
    the way FEMA was brought in, including with just some of the
    different cultures--I will use that word again--that had to
    mesh together.
        Now I am in the position with Senator McCaskill to be on
    the Ad Hoc Subcommittee on Contracting Oversight which deals
    with acquisitions. I have noticed in the budget proposal we
    have before us that you have made a request to provide more
    funds, $24 million more, to strengthen your acquisition
    workforce, 150 new positions throughout the Department.
        First, I guess I would ask you, Why are you asking for
    those additional resources? And what can we do to ensure that
    those additions, should they be approved, actually promote
    efficiency, transparency, avoid some of the management
    breakdowns we have seen and, therefore, save taxpayer dollars?
    If you can talk a little about that.
        Secretary Napolitano. Yes, Senator. Actually, this is part
    of creating the department, having that internal management
    structure and the assets with which to do that. It is a big
    department. We do a lot of acquisitions, and we are often
    criticized for some of those acquisitions. There have been
    different standards used by different elements of the
    Department, different requirements employed, different
    oversight done. But what we want to do is create a
    professionalized acquisition workforce that knows the DHS
    missions, that understands how things fit together. So part of
    bringing the additional workforce in is also training into the
    department and consistency of training so that anybody who is
    working in the acquisitions area is--there is some consistency.
    It is a real part of the professional development of the
    department.
        I think you can tell by the money we have already saved
    through the efficiency review process, where part of that has
    been acquisitions reform and also some comments made in some
    recent--even I think the GAO has made some comments about
    improvements they have already seen in the way that we do
    acquisitions and acquisition oversight.
        Senator Portman. We look forward to working with you. Our
    job is to look at, of course, all agencies and departments, but
    because this is the Homeland Security Committee, DHS may get
    special attention, which I am sure you are looking forward to.
    But I look forward to having you or your representative before
    the Subcommittee at the appropriate time to talk more about
    that.
        Secretary Napolitano. Very good.
        Senator Portman. Thank you, Madam Secretary.
        Chairman Lieberman. Thanks, Senator Portman. It is great to
    have you and all the experience you have had on our Committee.
    Thank you very much.
        Senator Akaka.

                   OPENING STATEMENT OF SENATOR AKAKA

        Senator Akaka. Thank you very much, Mr. Chairman. I would
    like to welcome Secretary Napolitano to this hearing today.
        Before I begin, I want to express my deepest sympathy and
    condolences to the families of the ICE special agent who was
    tragically killed and his colleague who was wounded in the line
    of duty this past Tuesday. Our thoughts and prayers are with
    them.
        I am pleased that, despite budget constraints, DHS is
    making investments in the workers who are critical to
    protecting the Nation. DHS is taking positive steps to develop
    its acquisition workforce, recognize collective bargaining
    rights for Transportation Security officers, and create a
    wellness program.
        Madam Secretary, TSA proposes to remove the statutory cap
    on airline security fees so it can raise them without Congress
    acting. As an initial increase, TSA would lift airline security
    fees by 60 percent to raise more than $1 billion annually. I
    understand that TSA needs substantial funding to address very
    real air security threats, but that is quite a large increase.
        Has the Department analyzed what effect an airfare tax
    increase of $1 billion a year would have on the airline and
    tourism industries?
        Secretary Napolitano. Well, I think, Senator, the request
    is for $1.5 per enplanement. That fee has not been increased
    since 2002, and I think we all recognize that the security of
    aviation, international and domestic, is absolutely key. And
    given the kind of threats that we have seen just in the past 2
    years, we know it remains a concern, and it requires constant
    evolution of technology, manpower, and the like. So the fee is
    associated, the $1.50 per enplanement is associated directly
    with the threat we confront.
        With respect to impact on the industry, we already have, as
    I mentioned earlier, the ESTA fee, which has already migrated,
    and we did not see any impact that I could see on that.
        The way I looked at it, Senator, was when the airlines
    charge fees for checking a bag or for buying a Coke, we can
    certainly have a fee to protect the safety and security of the
    passengers. And that is what this is about. Or Pepsi. I did not
    mean to pick.
        Senator Akaka. Madam Secretary, the Department's budget
    requests $7.3 million for security costs for the Asia-Pacific
    Economic Cooperation (APEC) summit. This national security
    special event will take place in November in my home State of
    Hawaii and includes earlier events in Montana and California as
    well. The summit requires extensive coordination between
    Federal, State, and local officials to protect President Obama
    and other world leaders attending. Please discuss why these
    funds are necessary to enable the Secret Service to fulfill its
    responsibilities.
        Secretary Napolitano. Well, thank you, Senator Akaka. We
    requested those monies because of the importance of the summit,
    because of the protection issues that it entails. The money is
    based on estimates from other similar type events where you
    have groups of international leaders combining in one place. We
    want to make sure safety and security is taken care of and is
    done very smoothly, is done in cooperation with the State and
    local entities, and that everybody can rest assured that that
    part of the summit has been taken care of, as I said. So the
    actual money request is based in part on our experience with
    other similar events.
        Senator Akaka. Madam Secretary, in its budget submission,
    the Department proposed pay and retirement changes for certain
    CBP employees. However, draft language to make these changes
    has not been provided to this Committee. I have focused on pay
    and retirement issues as Chairman of the Federal Workforce
    Subcommittee. In the months ahead, will you pledge to work
    closely with your authorizing committees on your proposal?
        Secretary Napolitano. Absolutely, Senator, and part of this
    is our process, and it goes to something Senator Portman
    referenced, is from a management perspective, how you unit all
    these disparate pay systems that we have as well. And one of
    the big changes that the Congress approved last year was the
    conversion or the eligibility to journeyman pay in CBP. And so
    part of what you are seeing is that conversion over and now
    streamlining how we are organizing pay, whereas, before ICE and
    CBP were treated very differently, trying to harmonize all
    those systems. So we will look to working with your Committee
    on that. But that is the underlying purpose.
        Senator Akaka. Madam Secretary, our focus today is, of
    course, the fiscal year 2012 budget, but I want to ask you
    about the fiscal year 2011 continuing resolution (CR) the House
    is considering. While I support responsible and targeted
    reductions to address our budget deficit, I am troubled by
    draconian cuts that would harm job growth and may hamper the
    government's ability to keep this country safe.
        How would the proposed cuts in the continuing resolution
    put forth by House Republicans affect the Department's mission?
        Secretary Napolitano. Well, it is not good, and, of course,
    it is a moving target. So changes are being made even as we
    speak. But it cuts technology investments that we need for both
    borders, Southern and Northern. It cuts new technology for
    airports that we need to make sure that individuals who are
    trying to move explosives onto planes are not able to do that.
    It cuts cybersecurity, which is a very important area that we
    have large responsibilities for. It cuts the intelligence
    personnel for the fusion centers and for State and locals that
    I referenced earlier as part of the architecture that we need
    to have. And it cuts grants to state and locals. Now, one
    amendment restored some of those grants this morning, I
    understand, but not the bulk of them. So that is just a few of
    the things that the House CR would do.
        Senator Akaka. Thank you very much for your responses.
    Thank you, Mr. Chairman.
        Chairman Lieberman. Thanks, Senator Akaka.
        If your time allows, we will do one more round of a couple
    of questions each. We will do it with a maximum of 7 minutes.
        Let me ask you about two items relating to DHS that were on
    the GAO's high-risk list yesterday. One was what I would
    describe as cybersecurity, government's efforts to protect
    Federal systems and critical infrastructure. As you know,
    cybersecurity legislation is a top priority for this Committee.
    Senator Harry Reid has made it a top priority. Senator Collins
    and I are working on reintroducing the bill that we introduced
    last year.
        It is very important to note, as you have, that the
    President's budget before us now proposes increasing the
    Department's, your Department's cybersecurity funding by 17
    percent, a very sizable increase in these times, but in my
    opinion definitely a necessary increase. And to the extent that
    you can in open session, I wanted to ask you to spend a minute
    or two just describing what that increase in funding will
    enable the Department to do that you are not doing now to
    protect our cyber systems.
        Secretary Napolitano. Well, it will enable us to deploy
    EINSTEIN 3, which is the name for the new protection and
    prevention of intrusion technology across the Federal family,
    including the medium and smaller sized agencies. Without the
    money, we will not be able to do that. That is probably the
    most important thing.
        Chairman Lieberman. OK.
        Secretary Napolitano. I think the second thing is that it
    will enable us to continue to expand the cybersecurity
    workforce. We are pretty bare bones on that now. It is
    difficult to bring cyber experts into the Federal Government,
    much less into a new Department. But we have been given direct
    hiring authority by the Office of Personnel Management, and we
    are making some headway there. But we want to make sure we have
    the resources for that full time equivalent employee.
        Then the third thing is that it will enable us to
    strengthen the obligations we have undertaken pursuant to the
    memorandum of understanding we forged with the Department of
    Defense this summer on how we each can use the technological
    resources of the National Security Agency (NSA).
        Chairman Lieberman. Well, we will follow that. Obviously,
    this Committee, Senator Collins, and I are very focused on
    strengthening the Department's role as the lead agency for
    protecting Federal Government non-defense Web sites and the
    critical private infrastructure.
        I received a note that you have to leave at 4:30, so let me
    ask----
        Secretary Napolitano. I think I have a meeting at the White
    House with----
        Chairman Lieberman. Do you think that is more important?
        Secretary Napolitano. No, never.
        Senator Collins. The old White House excuse. [Laughter.]
        Secretary Napolitano. And I will be glad to come back.
        Chairman Lieberman. That is OK. So you have a number of
    programs focusing on assisting critical infrastructure owners
    in identifying and remediating cybersecurity risks. But they
    proportionally receive a lot less funding, those programs, than
    the ones focused on protecting the Federal Government Web sites
    in cyber space.
        Do you have enough to do what you need to do in that area
    since so much of our critical infrastructure is in private
    hands?
        Secretary Napolitano. It is, but it also is getting
    resources from the private sector. The operators, for example,
    of the grids know--the operators of our financial institutions,
    the big critical infrastructure institutions, as we all know,
    are so important to us and potentially subject to cyber attack.
    They are putting resources into this as well. We are working
    closely with them. But this is going to be a multi-year and it
    is probably going to be an ongoing type of expenditure that we
    have. And I think where we were prioritizing is where we think
    we need to start and where we have the greatest need, and that
    is, making sure that the Federal Government itself is
    protected.
        Chairman Lieberman. And the note has now been amended to
    say you have to be at the White House at 4:30. I am going to
    wrap up and give my colleagues----
        Secretary Napolitano. We have to leave at 4:30.
        Chairman Lieberman. Well, I am much relieved.
        Secretary Napolitano. I will try to keep my answers
    shorter.
        Chairman Lieberman Rather than ask you another question, I
    am going to end with an appeal. The second item on the GAO I
    was going to talk about, the high-risk report, is implementing
    and transforming the Department of Homeland Security. It has
    been on the high-risk list since the beginning, since 2003,
    remains there in this new report, although GAO says the
    Department has made progress in the last years toward an
    improvement in the management and integration of the
    Department. I want to set a joint goal with you that, as we
    approach the 10th anniversary of at least September 11, 2001,
    that we work together to see if we can get you off the list
    next year.
        Secretary Napolitano. I am with you.
        Chairman Lieberman. Thank you. Senator Collins.
        Senator Collins. Thank you, Mr. Chairman. I am mindful of
    the fact that Senator McCaskill is here and undoubtedly has
    very tough questions, so I am going to submit most of mine for
    the record, but I do want to ask you one question about the
    Coast Guard, which, as you know from our conversations, I am
    very concerned about whether the Coast Guard has the assets for
    its very important maritime security role which has been so
    critical since September 11, 2001. And the plan is to replace
    12 high endurance cutters with only eight National Security
    Cutters. And the problem is that, as I understand the budget
    request, it provides no funding for the sixth National Security
    Cutter and pushes the completion date for all eight from 2016
    to 2018.
        I am told that every 1-year delay in the acquisition
    program increases the cost per cutter by $45 to $60 million. So
    if this plan goes through, it is going to cost $180 million
    more than it would if you stayed on schedule. And we see this
    in navy shipbuilding all the time, that when you push off the
    acquisition, you end up paying more.
        It strikes me that this was a short-term decision that buys
    you some budget relief this year but ends up costing more in
    the long run.
        Secretary Napolitano. I would disagree, Senator, and I will
    tell you what we did. The budget does pay for some of the
    after-acquisition costs associated with number five, and so
    that is all paid for by 2012.
        What we did not do was set aside for 2012 what are called
    the long lead time expenses for number six, and the reason we
    did not do that is because, while we fully intend to build them
    and we fully intend to build them on the current schedule--and
    the schedule has been pushed back not by money as much as it is
    just taking longer to build these things than was originally
    predicted. But the reason we did not set aside the long lead
    material is that there was no way it was going to be spent in
    fiscal year 2012. So rather than spending it on long lead
    material and just parking it, we decided we would rather buy
    more response boats and smaller boats, as I described in my
    opening statement.
        So we put the money there. OMB has issued a letter saying
    that we intend to fund number six, so if there is any hesitancy
    by the contractor, they have us and OMB all saying we intend to
    fund number six, but we are not going to simply park that
    precious fiscal year 2012 dollar. So you have extra assurance
    that we are going to do that.
        Senator Collins. Well, I am glad to hear that. I still
    think a 2-year delay in the overall acquisition is going to end
    up costing us more, but that is a discussion we can continue.
        Secretary Napolitano. Yes, and if I might Senator?
        Senator Collins. Yes.
        Secretary Napolitano. It is not a delay caused by this. It
    is that the construction of these cutters has become--their
    missions have expanded, and so their actual construction is
    taking longer than was originally predicted.
        Senator Collins. Thank you. I am going to submit the rest
    of my questions.
        I regret we did not get into air cargo security given the
    Yemen package plot. There are so many issues. But I do want to
    allow time for questions.
        Chairman Lieberman. Thank you, Senator Collins. Senator
    McCaskill.

                 OPENING STATEMENT OF SENATOR MCCASKILL

        Senator McCaskill. Thank you both, Chairman Lieberman and
    Ranking Member Collins.
        Let me start with how excited I get when I see an Advanced
    Imaging Technology (AIT) machine.
        Secretary Napolitano. Or when it sees you?
        Senator McCaskill. Yes, because that means I get to go
    through fairly quickly because I have an artificial knee, and
    so I have to be patted down everywhere there is not an AIT
    machine. So I am always disappointed when I see it approaching
    in an airport--and I have been in four different major airports
    in the last 6 weeks, and then I see the little tape in front of
    it, and I realize it is not operable. And so I have now started
    asking every time as these machines are sitting idle, and
    without fail, Madam Secretary, I ask for the supervisor. I am
    always very polite and tell them what a great job they are
    doing and how friendly they are and how efficient they are. But
    why isn't the machine operating? And they always say, ``We do
    not have the personnel.''
        In fact, the supervisor in Miami actually said to me, ``Can
    you help us? We never have personnel to operate it because it
    takes too many people, and we just do not have enough people
    here.''
        One supervisor told me it took seven people to operate it.
    Another one said it took five. I am confused why we would be
    spending money on deploying these machines, and I look and
    there seems to be an inconsistency in the numbers, because at
    one point it says 6.25 people to operate one of them, and then
    in your budget request it looks like it is 2.5. So I am
    confused as to how many people it takes to operate the AITs,
    and we should not deploy them if we cannot run them, right?
        Secretary Napolitano. Well, first of all, it does not take
    two. It takes more than six because it is not just the machine.
    It is the people who are reviewing the screens. Sometimes they
    are not operable because the machines are installed while they
    are still building out the area for where the actual images are
    going to be screened, and a lot of this differs airport by
    airport.
        I will get for you the list because typically when they are
    installed, it comes with it, the training for the personnel in
    how to operate and screen via the AIT. And, quite frankly, you
    are the first person that has ever raised this with me. So I
    think overall the transition has been going very well. So we
    are going to have to follow up with you on the specifics.
        Senator McCaskill. That would be great. I assumed it was an
    isolated event because it happened to me a couple times in St.
    Louis in the Southwest terminal because we do not have them in
    the concourse. My typical concourse is American in the other
    terminal. And so a couple of times I went out of my way, and
    they said, ``No, it is not that they are not trained. They just
    do not have enough manpower on the floor at any given moment.''
    And none of these had a problem with operability in terms of
    buildout. They all just said, ``We do not have enough people on
    shifts to operate them.''
        Secretary Napolitano. Well, that may be a different issue,
    so let us look into that.
        Senator McCaskill. Yes. I think that is the theme I am
    hearing from people, that they are not able to manage the shift
    power to make them work. So we will stay with that and talk and
    figure that out.
        I know you have made a real effort about the contractors. I
    know you have. And I know that you identified 3,500 contractor
    positions last year that you are converting to Federal
    positions. Can you tell us if there has been cost savings from
    the conversions from contractor personnel to Federal personnel?
        Secretary Napolitano. Yes, and we can give you some
    numbers, but there have been cost savings, and we are this year
    accelerating that conversion because as contracts come up, we
    can review and not renew. So I will get you some actual
    numbers, but when this Department was established, just because
    of the various mission sets it had and just the business of
    standing up a department, it had to rely a lot on outsiders to
    help. But as we mature, then we can start reducing that, and we
    are being very aggressive about that effort.
        Senator McCaskill. Well, the cost savings is really
    important, frankly, I do not have anything against contractors.
    I just want to make sure that they are saving us money if we
    are using them.
        Secretary Napolitano. Right.
        Senator McCaskill. So if we are saving money by converting,
    I would be thrilled to hear about that. And I bet we are.
        Secretary Napolitano. Yes, we are, and in some--it is not
    just saving money. It is, ``Are they doing work that we can do
    with our own folks?''
        Senator McCaskill. Right. I know you also did an efficiency
    review that you initiated in March 2009. My staff has attended
    many if not all of the budget briefings that you presented this
    week about the various components. It is clear from those
    presentations that your 2012 budget request, that cuts were
    made. Can you identify the areas where the efficiency review
    has provided the savings to the Department? Because I would
    like to carry this message to other departments and tell them
    that there really is savings that can be realized by this kind
    of effort.
        Secretary Napolitano. Contracting, acquisition,
    procurement, on-boarding--i.e., vetting and identifying--also
    simple office expenses that when you extrapolate to a large
    department save a lot of money. There are several others. We
    have a whole briefing just on this that we can provide for you.
    The contractor conversion saves money and will save more money
    over time.
        Senator McCaskill. Right.
        Secretary Napolitano. So we have identified in this budget
    $800 million or so, and that is a lot.
        Senator McCaskill. That is a lot; $800 million is a lot.
        Finally, I know you have to go, but I wanted to ask you--
    last year, Senator Chuck Schumer and I were successful in
    getting some legislation passed that provided for additional
    Border Patrol personnel. It is my understanding that the House
    in its action yesterday on the CR, or the day before, has cut a
    lot of that money that we identified as additional resources to
    be brought to the border.
        I have to tell you, I get whiplash sometimes around here. I
    listen to sanctimonious speeches about more resources for
    border security that is the only thing that we must focus on,
    securing our border as it relates to all the immigration issues
    in our country. And then 5 minutes later, the same people that
    are giving the sanctimonious speeches are yanking out the money
    in the budget that we need to secure the border.
        I assume that what they did yesterday basically wiped out
    what we were able to add to this effort last year?
        Secretary Napolitano. Yes, it was an experience in
    whiplash.
        Senator McCaskill. Yes. I just think we have to call folks
    on this. I am sick of hearing lectures about border security
    and people not being willing to put the resources behind it.
    This is nobody's responsibility but the Federal Government's.
    We could probably afford to pull back a little bit of the big
    checks we are writing to the oil companies to secure our
    borders. And I would like someone to get that set of priorities
    straight and say, maybe we give a billion less to the oil
    companies this year. Maybe they will not be the most profitable
    corporations on the planet, but almost the most profitable
    corporations on the planet, and we actually put real resources
    into securing the border.
        But I for one am sick of hearing them talk about it if they
    are not going to put their money where their mouth is, and I
    wanted to get that out of my system, and I knew that you would
    let me. Thank you, as always, for the great work you are doing.
    I think you are a shining star in the Administration and doing
    very good work. And I want you to stay on those contractors.
        Secretary Napolitano. All right. Thank you.
        Senator McCaskill. Thank you, Madam Secretary.
        Chairman Lieberman. I cannot top ``shining star.''
    [Laughter.]
        I think you are good. Anyway, thanks, Secretary Napolitano.
    What we have tried to do after these hearings is to sit and
    reason ourselves, we will talk to you and your folks, and then
    make recommendations to the Budget Committee and the
    Appropriations Committee as we go through the process. But
    thanks for your time, and good luck on the trip to the White
    House.
        Secretary Napolitano. Well, thank you, and I think the
    Appropriations Subcommittee hearing is March 2, so we have some
    time to work together.
        Chairman Lieberman. Excellent. We will keep the record of
    the hearing open for 15 days for additional questions and
    statements.
        The hearing is adjourned.
        [Whereupon, at 4:30 p.m., the Committee was adjourned.]

                                A P P E N D I X

                                  ----------

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