[Senate Hearing 112-545]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-545

 
 THE HOMELAND SECURITY DEPARTMENT'S BUDGET SUBMISSION FOR FISCAL YEAR 
                                  2013

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS


                             SECOND SESSION

                               __________

                             MARCH 21, 2012

                               __________

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

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



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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

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

                  Michael L. Alexander, Staff Director
  Christian J. Beckner, Associate Staff Director for Homeland Security
                       Prevention and Protection
               Nicholas A. Rossi, Minority Staff Director
   Brendan P. Shields, Minority Director for Homeland Security Policy
                  Trina Driessnack Tyrer, Chief Clerk
                    Laura W. Kilbride, Hearing Clerk
                 Patricia R. Hogan, Publications Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     3
    Senator Brown................................................    11
    Senator Coburn...............................................    14
    Senator Johnson..............................................    16
    Senator Pryor................................................    18
    Senator McCain...............................................    20
    Senator Akaka................................................    22
    Senator Moran................................................    25
    Senator Carper...............................................    30
Prepared statements:
    Senator Lieberman............................................    35
    Senator Collins..............................................    37
    Senator Carper...............................................    39

                                WITNESS
                       Wednesday, March 21, 2012

Hon. Janet A. Napolitano, Secretary, U.S. Department of Homeland 
  Security:
    Testimony....................................................     5
    Prepared statement...........................................    44
    Response to post-hearing questions for the Record with 
      attachments................................................    62

                                APPENDIX

Letter from the National Association of Counties et al., dated 
  March 20, 2012.................................................    41


 THE HOMELAND SECURITY DEPARTMENT'S BUDGET SUBMISSION FOR FISCAL YEAR 
                                  2013

                              ----------                              


                       WEDNESDAY, MARCH 21, 2012

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:38 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Akaka, Carper, Pryor, Collins, 
Coburn, Brown, McCain, Johnson, and Moran.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. The hearing will come to order. Good 
afternoon and thanks, Madam Secretary, for being here, and 
thanks to everyone else who is here. In the face of record 
deficits and a national debt now heading toward $16 trillion, 
it is obviously imperative that the Federal Government get its 
spending under control.
    Budgets have to carefully balance our Nation's needs with 
what we can afford. Even something as important as securing our 
homeland from terrorists and cyber criminals, or being prepared 
for natural disasters like the devastating tornadoes that 
recently swept through the South and Midwest, requires a cold-
eyed look at our national ledger.
    With this combination of realities in mind, I want to 
commend President Obama and Secretary Napolitano for presenting 
us with what I believe is a responsible budget request in these 
times. It holds spending at essentially last year's budget 
level. Adjusted for inflation, this budget for fiscal year 2013 
is lower than it was for the Department of Homeland Security 
(DHS) in fiscal year 2009.
    But the budget also increases investments in some key areas 
where I believe we need to strengthen our ability to meet 
emerging threats. In other words, it makes some priority 
judgments, tough judgments. It pays for these increases by 
finding efficiencies and administrative savings throughout the 
Department.
    Most notable to me is the significant increase of $325.8 
million in cybersecurity funding, for a total request of $770 
million for cybersecurity.
    I could not agree more with this strong commitment to 
improving our cyber defenses and, of course, as is evidenced in 
the bill that this Committee has reported out, for placing much 
of that responsibility within the Department of Homeland 
Security as our lead civilian agency.
    The Department simply cannot carry out the responsibilities 
we need it to in defense of the homeland without the kind of 
funding that this budget requests.
    I am also pleased to see that the budget restores $212 
million to the Science and Technology Directorate, for a total 
request of about $830 million. This is one of those parts of a 
department that probably does not have a vast constituency 
supporting it. And yet the work done by the Directorate is 
vital to our capacity to develop countermeasures and detection 
techniques against, for instance, conventional explosives and 
nuclear material or to improve our defenses to cyber attack and 
bioterrorism attack.
    So this additional money, in my opinion, that goes to the 
Science and Technology Directorate is money that is spent 
wisely because it really is an investment in a safer future. 
And as has been the case with the money that has been invested 
in similar parts of the Department of Defense, it can--and I am 
confident will--spin off new technologies, products, and 
services in the private sector, which will help our economy and 
create jobs.
    On the other hand, I am concerned that the budget includes 
a number of attempts to circumvent congressional authorizing 
committees by making legislative and organizational changes to 
the Department through the appropriations process.
    For example, the Administration's budget proposal would 
fundamentally change the nature of core homeland security 
grants that this Committee created by eliminating programs such 
as the State Homeland Security Grant Program, the Urban Areas 
Security Initiative (UASI), and port and transit security 
grants, and replacing them with a new program that adds natural 
disasters as a primary focus.
    We created these programs specifically to help State and 
local governments prepare for terrorist attacks, even though 
when properly implemented they also help localities prepare for 
and respond to natural disasters.
    I have questions about whether the new grant program as 
proposed would be duplicative of the existing all-hazards 
programs, such as the Emergency Management Performance Grant 
Program.
    But I must say that I am really perplexed that the 
Administration is proposing to make such changes to statutory 
programs without submitting legislation to the committees, such 
as ours, with jurisdiction over these programs.
    This Committee also needs to take a closer look at the 
Administration's plans to reorganize some components and 
programs, including the proposal to take U.S. Visitor and 
Immigrant Status Indicator Technology (US-VISIT) out of the 
National Protection and Programs Directorate (NPPD) and 
transfer its screening duties to Customs and Border Protection 
(CBP) and its visa overstay duties to Immigration and Customs 
Enforcement (ICE). I will have questions about this and some of 
the other parts of the proposal that trouble me.
    But, in summary--I go back to what I said earlier--I 
believe that Secretary Napolitano and the Administration have 
put forth a responsible budget request, and I look forward to 
your testimony and the questions that follow. Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman.
    This afternoon, the Committee will review the $39.5 billion 
budget proposal for the Department of Homeland Security.
    I, like the Chairman, am pleased that the budget recognizes 
the seriousness of the cyber threat by including a 74-percent 
increase in the Department's cybersecurity budget. This level 
would help to reduce vulnerabilities in the Federal cyber 
domain by hastening deployment of intrusion-prevention tools on 
government computer systems. The funds would also strengthen 
the Department's information-sharing capabilities and increase 
support to the United States Computer Emergency Readiness Team 
(US-CERT), which responds to more than 100,000 cyber incidents 
and helps the government and the private sector mitigate cyber 
risks.
    Of course, in this time of severe financial constraints, we 
must also continue to find savings within the Department's 
budget.
    Our Committee outlined many cost savings and efficiencies 
in its reauthorization bill reported last fall. For example, 
our bill would mandate a 5-percent cut over 2 years from the 
budget for field components, to be achieved through field 
office consolidation, administrative and logistical cost 
savings, and operational efficiencies. Our plan also eliminates 
two offices and five programs, consolidates three offices 
dealing with travel security, and allows DHS labs to collect 
fees from outside users.
    For the most part, the Administration's budget proposal 
ignores our specific cost savings and efficiencies, which is 
perplexing to me.
    The President does propose to eliminate or combine several 
homeland security grant programs. While some consolidation may 
be desirable, the Department must ensure that it does not 
jeopardize the progress that has been made in achieving such 
goals as interoperability of communications equipment used by 
first responders.
    It is also unclear how the baseline State allocations for 
the newly proposed National Preparedness Grant Program would 
work. I share the Chairman's concern that this proposal appears 
to negate the current State minimum grant formula that this 
Committee wrote in the 2007 Homeland Security law to ensure 
that all States achieve the capability to prevent, respond to, 
and recover from a terrorist attack or other catastrophic 
event.
    We must remember that two of the September 11, 2001, 
hijackers, including the ringleader, started their trail of 
death and destruction from Portland, Maine. Others trained and 
plotted far outside the major urban areas that were their 
target. More recently, the arrest of two al-Qaeda in Iraq 
affiliates in Bowling Green, Kentucky, has served to remind us 
that homeland security challenges are not confined to large 
cities.
    For the State of Maine, with its long, rural border with 
Canada, it is particularly important that DHS continue to 
employ the right mix of resources, ensuring an effective use of 
personnel, technology, and international, State, and local 
agency partnerships to keep the border open to our friends but 
closed to those who would do us harm.
    And, of course, any State can experience catastrophic 
weather or another natural disaster that tests its capacity to 
save lives.
    The budget request does include $10 million for 
technologies to help secure the Northern border. Operation 
Stonegarden funding, however, remains critical to this goal by 
putting boots on the ground in the form of local law 
enforcement serving as force multipliers in partnership with 
Customs and Border Protection. I am concerned that the 
President's budget would simply collapse this successful 
program and other key programs such as the Port Security Grants 
into a single new program.
    I would mention that I recently met with Border Patrol 
agents from the State of Maine as well as sheriffs who told me 
of case after case where Operation Stonegarden had helped both 
the State and local agencies plus their Federal counterparts to 
do a better job.
    During last year's budget hearing, I expressed my concern 
about whether the budget provided the Coast Guard with the 
necessary assets for its very important maritime security role, 
which has grown enormously since September 11, 2001, as well as 
to respond effectively to emergencies such as Hurricane 
Katrina, where the Coast Guard was the one shining star among 
Federal agencies, and the Gulf oil spill. The plan last year 
was to replace 12 High Endurance Cutters (HECs), whose average 
age is 44 years old, with eight National Security Cutters 
(NSCs).
    I am appalled that the Administration's new request for the 
Coast Guard is even worse. It proposes only six National 
Security Cutters and delays the acquisition of the first 
Offshore Patrol Cutter by another year.
    The need for recapitalizing the Coast Guard's fleet is more 
and more evident. The Coast Guard has reported that it lost 528 
operational cutter days last year due to engineering failures 
in the service's aging High Endurance Cutters. That is the 
equivalent of losing three of these cutters from the Coast 
Guard fleet. In comparison, the Coast Guard lost 228 HEC 
operational days in fiscal year 2007. That trend is 
unacceptable and highlights the importance of investing in the 
Coast Guard modernization effort.
    Last month's tragic crash of a Coast Guard helicopter on a 
training mission is a reminder of the significant personal risk 
that the brave men and women of the Department face every day.
    At a time when budgets are tight, difficult decisions must 
be made, but we must ensure that the priorities set by the 
Administration and by Congress do not result in a Department 
that is unable to respond to catastrophic incidents, whether 
created by man or nature. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Collins.
    Secretary Napolitano, thanks very much for your leadership 
of this Department and for being here today. Please proceed.

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

    Secretary Napolitano. Thank you, Mr. Chairman, Senator 
Collins, and Members of the Committee, for the opportunity to 
discuss President Obama's fiscal year 2013 budget for the 
Department of Homeland Security.
---------------------------------------------------------------------------
    \1\ The prepared statement of Secretary Napolitano appears in the 
Appendix on page 44.
---------------------------------------------------------------------------
    Ten years after the September 11th attacks, America is 
stronger and more secure today thanks to the strong support of 
the President and the Congress, the work of the men and women 
of the Department of Homeland Security, and local, State, and 
Federal partners across the homeland security enterprise.
    And while we have made significant progress, threats from 
terrorism--including, but not limited to al-Qaeda and al-Qaeda 
related groups--persist and continue to evolve, and the demands 
on DHS continue to grow. Today's threats are not limited to any 
one individual, group, or ideology and are neither defined nor 
contained by international borders. Terrorist tactics can be as 
simple as a homemade bomb or as sophisticated as a biological 
threat or a coordinated cyber attack. We have had success in 
thwarting numerous terrorist plots, including the attempted 
bombings of the New York City subway and Times Square, foiled 
attacks against air cargo, and other attempts across the 
country. Nonetheless, continued threats from abroad and at home 
demonstrate how we must constantly remain vigilant and 
prepared.
    The President's fiscal year 2013 budget for DHS allows us 
to continue to meet these evolving threats and challenges by 
preserving core front-line operational priorities through the 
redirection of over $850 million in base resources from 
administrative and mission support areas. This continues our 
unprecedented commitment to fiscal discipline, which has led to 
over $3 billion in cost avoidances and reductions over the past 
3 years through our efficiency review and other initiatives.
    Given the fiscal challenges to the Department's State and 
local partners, DHS is also approaching these partnerships in 
new and innovative ways. For 9 years, DHS has been supporting 
State and local efforts across the homeland security enterprise 
to build capabilities, awarding more than $35 billion in 
funding. As we look ahead, in order to address evolving threats 
and make the most of limited resources, the Administration has 
proposed a new vision for homeland security grants through the 
National Preparedness Grant Program to create a robust national 
preparedness capacity based on cross-jurisdictional and readily 
deployable State and local assets. Using a competitive risk-
based model, this grants program will use a comprehensive 
process to assess gaps, identify and prioritize deployable 
capabilities, put funding to work quickly, and require grantees 
to regularly report their progress.
    My written testimony includes a comprehensive list of the 
operational priorities in our budget. Today I would like to 
highlight a few of them.
    First, preventing terrorism and enhancing security. This 
was the founding mission of DHS. It remains our top priority 
today. The fiscal year 2013 budget safeguards the Nation's 
transportation systems through a layered detection system 
focused on risk-based screening, enhanced targeting, and 
information sharing to interdict threats and dangerous people 
at the earliest point possible.
    The budget supports the Administration's Global Supply 
Chain Security Strategy across air, land, and sea modes of 
transportation by strengthening efforts to pre-screen and 
evaluate high-risk containers before they are shipped to the 
United States. We also continue our strong support for State 
and local partners through training, fusion centers, and 
intelligence analysis and information sharing on a wide range 
of critical homeland security issues.
    To secure and manage our borders, the budget continues the 
Administration's unprecedented focus on border security, 
travel, and trade by supporting our Border Patrol agents and 
CBP officers on the front lines, as well as the continued 
deployment of proven, effective surveillance technology along 
the highest-trafficked areas of the Southwest border and 
continued security improvements along the Northern border.
    To secure our Nation's maritime borders, the budget invests 
in recapitalization of Coast Guard assets, including the sixth 
National Security Cutter, Fast Response Cutters, as well as the 
renovation and restoration of shore facilities.
    With respect to the enforcement of the U.S. immigration 
laws, we will complete nationwide implementation of Secure 
Communities in 2013. Through this initiative and our continued 
collaboration with the Department of Justice, we expect to 
continue to increase the number of criminal aliens and other 
priority individuals who are identified and removed. The budget 
provides the resources needed to address this changing 
population while continuing to support Alternatives to 
Detention, detention reform, and immigrant integration efforts.
    The budget also focuses on monitoring and compliance, 
promoting adherence to worksite-related laws through criminal 
prosecutions of egregious employers and expansion of E-Verify.
    To safeguard and secure cyberspace, the budget makes 
significant investments to strengthen cybersecurity, including 
funds to expedite the deployment of EINSTEIN 3 to prevent and 
detect intrusions on government computer systems, increase 
Federal network security across the Federal Government, and 
develop a robust cybersecurity workforce to protect against and 
respond to national cybersecurity threats.
    Finally, with respect to disasters, in 2011 the Department 
responded to a record number of disasters. The President's 
budget focuses on a whole-of-community approach to emergency 
management. It includes resources for the Disaster Relief Fund, 
which provides a significant portion of the Federal response to 
victims in presidentially declared disasters or emergencies, 
and is funded largely through authority provided under the 
Budget Control Act (BCA).
    The budget also continues to provide essential support to 
national and economic security by supporting the Coast Guard's 
operations in the polar regions and by continuing to support 
ICE and CBP's efforts to protect U.S. intellectual property 
rights and collection of customs revenue.
    In closing, the fiscal year 2013 budget proposal reflects 
this Administration's strong commitment to protecting the 
homeland and the American people through the effective and 
efficient use of DHS resources. And while we have taken many 
steps to sustain front-line operations in the face of declining 
budgets, additional cuts of the magnitude outlined in BCA 
sequestration would directly impact our front-line operations. 
They would entail rolling back significant progress in securing 
our Nation's borders, increasing wait times at our Nation's 
land ports of entry and our airports, impacting aviation and 
maritime safety and security, hampering disaster response time, 
and eliminating the cybersecurity infrastructure that has been 
developed in recent years. An 8-percent cut, as prescribed by 
sequestration, translates to over $3 billion in reduction to 
DHS operations. This cut would equate to all of CBP's trade and 
customs operations at our land ports of entry or ICE's 
enforcement and removal operations in their entirety or nearly 
half of our Nation's critical disaster relief funding.
    Mr. Chairman, Senator Collins, Members of the Committee, 
thank you for the opportunity to testify, and thank you for 
your continued support of the work of the Department. I am 
happy to answer your questions and to address some of the 
issues you have raised.
    Chairman Lieberman. Thanks very much, Secretary Napolitano.
    We will do 7-minute rounds of questions for each Senator 
here.
    I focused in my opening statement on the increase in 
budgetary request for cybersecurity, and you touched on that 
some in your statement, and I am supportive of it. I wonder if 
you could give a little more detail about what the additional 
funding will enable the Department to do to protect our cyber 
systems because, as you and I agree, this is the most 
significant vulnerability we have in terms of homeland security 
today.
    Secretary Napolitano. Yes, Mr. Chairman, and I would say it 
is the cloud on the horizon, but it is really the cloud that is 
here.
    Chairman Lieberman. I agree.
    Secretary Napolitano. We are seeing an increasing number of 
cyber attacks of various forms, both in the private sector and 
on our government systems. The increase in the budget allows us 
to do several things. It will allow us to speed up the 
deployment of EINSTEIN 3. It will allow us to create a Federal 
cybersecurity pool for all of the Federal Government. It will 
allow us to increase the size of US-CERT, which is our key 
response asset, by about 31 percent. In short, it will give us 
the tools we need to meet the responsibilities we already have 
in the cybersecurity arena.
    Chairman Lieberman. Good. Let me ask you to go a little 
deeper on US-CERT. Just take a minute because this is a program 
that I am very supportive of. Describe what US-CERT does and 
what the additional funding will enable it to do that it cannot 
do now.
    Secretary Napolitano. In the last full year for which we 
have numbers, as Senator Collins mentioned, the US-CERT team, 
which is basically an incident response team, responded to 
106,000-plus cyber incidents. We did a number of field 
assessments. We did a number of control system interventions 
and assessments across the country. So it is a wide variety, a 
wide menu of protective, preventive, and mitigative activities, 
and it is really kind of a key part of how we intersect with 
not only the rest of the Federal Government, but the private 
sector, writ large, in terms of the cybersecurity network.
    Chairman Lieberman. So if somebody has reason to believe 
that there has been a cyber attack, they find their way to US-
CERT.
    Secretary Napolitano. Actually, there is a center in 
Northern Virginia called the National Cybersecurity and 
Communications Integration Center (NCCIC), to which we invite 
you or your staffs, and it is staffed not only by folks from 
US-CERT but by other cyber professionals, private sector 
representatives, and State and local representatives. Those 
calls come in there, and then depending on what they are, they 
get deployed out.
    Chairman Lieberman. Let us talk about the shift from 
terrorism to all hazards in the homeland security grants and 
what the rationale for it is. It raises concerns in me and 
others that there is a statement being made that terrorism is 
less of a priority now than it was when the Department was 
created, although, obviously, as you said earlier, this is the 
reason why the Department was created.
    Secretary Napolitano. Yes, and let me explain, if I might, 
Mr. Chairman. State and local grants have been cut by the 
Congress in major ways over the last several years. In fact, in 
the 2013 request, we actually ask for restoration of $500 
million of the $1.5 billion they were cut last year because 
they were cut too deeply. But it seems to me that those cuts 
are kind of the way of the world, and so the question for us 
is: How do we make sure the grant dollars that we receive go to 
their highest and best use?
    We have the grant programs that were established under the 
original construct, as you mentioned. But we have put $35 
billion out there now. We have by that been able to raise the 
overall national capacity both for response and recovery. The 
kinds of response you saw in a multiple of States just 2 weeks 
ago to tornadoes--they had training, they had personnel, and 
they had equipment. They did not need to call on the Federal 
Government first. That is all a product of the grants that, in 
part because of the work of this Committee, they have received 
over the last 9 years or so.
    But now we have to say, all right, in this fiscal 
environment, what makes sense for grants phase II? And what we 
have recommended is consolidating grants so that beyond a State 
minimum--not many, but one State minimum, which would be 
derived from a population-driven formula--we evaluate all grant 
requests according to risk, according to gaps, both locally and 
regionally, and in terms of overall capability so that we can 
sustain an overall security safety net across the country.
    We thought that consolidating grants, streamlining the 
process, and putting out guidance that requires the grantees to 
get the money out into the field more quickly would make the 
grant program more viable in a fiscally restricted environment.
    That being said, we know that this requires changes in 
authorizing language, and we are respectful of that. We in our 
congressional budget justification documents provided an 
initial stab at what that would look like, but we would hope 
that working over the next months, we would work with you and 
others on the actual authorizing language and how the program 
would actually go into statute.
    Chairman Lieberman. I appreciate that. That was my next 
question, and I look forward to working with you because we do 
think it is not right to do it without authorization changes.
    Let me ask you one additional question, and it goes to the 
whole challenge of countering violent homegrown Islamist 
extremism. As you know, the White House promulgated last 
December the Strategic Implementation Plan for countering 
violent extremism with a number of important responsibilities 
given to DHS, including areas such as community engagement, 
strengthening partnerships with local law enforcement, etc.
    However, I do not see those responsibilities on the face of 
the budget reflected in the details of the budget request for 
fiscal year 2013. So I wanted to ask you if you could describe 
the amount of money contained in the budget request that will 
assist in the implementation of the Strategic Implementation 
Plan, which I support.
    Secretary Napolitano. I think, Mr. Chairman, we do not 
break out in a separate budget line what goes for what we call 
countering violent extremism (CVE). But you will find it in 
several places:
    Support for fusion centers across the country. We have 72. 
Almost all of them are now on the classified network.
    You will find it in the Suspicious Activity Reporting 
Initiative. You will find it in the funding for the See 
Something, Say Something Initiative. And you will find it in 
training. The Federal Law Enforcement Training Center (FLETC) 
now has developed a curriculum for State and local law 
enforcement, and we field-tested it in San Diego a couple of 
weeks ago. We are getting ready to deploy it over the summer.
    We are also developing a law enforcement curriculum on CVE 
to be used in law enforcement training academies. That is also 
just about ready to go. And we have a one-week course for 
Federal law enforcement also that will be done at FLETC.
    So there are areas in the budget that have a particular 
emphasis on CVE, but it is just not broken out by name.
    Chairman Lieberman. That, as you know, has been an interest 
of the Committee. I think--and I know you agree--that the 
threat of homegrown extremism continues. In some sense, the 
tragic events in France over the last couple of weeks may 
reflect there a kind of homegrown Islamist extremism as well. 
So I would like to continue to provide oversight and have 
dialogue with you about how the Department is doing in 
implementing the plan.
    My time is up. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman. First, let me 
echo your praise of DHS efforts under the leadership of 
Secretary Napolitano in the area of cybersecurity. I think a 
lot of our colleagues are unaware of just how developed those 
efforts are, and maybe we should organize a field trip for the 
Committee to go to the 24/7 National Cybersecurity and 
Communications Integration Center in Virginia that responds to 
incidents. I think we could learn a lot from that trip.
    Now, that is the good news. That is the first part of the 
questioning. Mr. Chairman, I would ask unanimous consent that a 
letter from 12 different State, local, county, and first 
responder groups be put into the record. It is a March 20 
letter to both of us expressing concerns about the Department's 
proposal to consolidate homeland security grant programs.\1\
---------------------------------------------------------------------------
    \1\ The letter submitted by Senator Collins appears in the Appendix 
on page 41.
---------------------------------------------------------------------------
    Chairman Lieberman. Without objection. And that same 
request I can see is being made by hand motions from Senator 
Brown. So ordered.
    Senator Collins. Thank you.
    Secretary Napolitano. I have the same letter.
    Senator Collins. That is why I felt confident I could 
question you about it.
    Secretary Napolitano, as a former governor, you are well 
aware of the fact that Federal law enforcement officials and 
DHS agents cannot be everywhere. They truly have to depend on a 
partnership with State, county, local, and tribal law 
enforcement officials, as well as an alert public, which is at 
times our best defense. And that is why I am very concerned to 
receive this letter from such a wide range of groups that says 
that the Department did not consult with them in coming up with 
what are indeed substantial changes in the homeland security 
grant programs. If these are your partners and if we are all in 
this together, why was there no consultation with these 
organizations on the changes?
    Secretary Napolitano. Well, there was consultation, but if 
I might explain, the grant proposal that we make in the 2013 
budget request is really an outgrowth of a series of 
engagements we had with our partners in response to what was 
called Presidential Policy Directive 8 (PPD-8). And in the 
process, we consulted with 100 partners, including the 
associations on the letter, about how they would look at the 
grant program, seeing, reasonably foreseeable, that monies 
would only continue to go down, what they would suggest, and 
what they would recommend. We incorporated many of those 
suggestions in the proposal for the National Preparedness Grant 
Program.
    However, it is just like the authorizing language. We 
realized--this is a process. Somebody had to start it in terms 
of getting it to closure. So we have put forward a proposal, 
but we are meeting with those groups now. In fact, I had a 
conference call with the leadership of the Conference of Mayors 
just 2 days ago going through it. So we will be engaging with 
them over the course of the next months with respect to the 
specifics. But the basic ideas and a lot of the themes that go 
into the National Preparedness Grant Program were part of 
really the findings we had in doing the consultations on PPD-8.
    Senator Collins. Well, as you know, this letter would take 
issue with that and says, ``We must ask why such major changes 
are being proposed without advance consultation with local 
governments and the full range of first responders charged with 
preventing, protecting against, and responding when incidents, 
man-made or natural, occur and why they are being proposed 
without consulting with--in fact, in a way that would bypass--
the authorizing committees.'' A concern that we have already 
expressed.
    I would encourage you to work with them. They are the 
partners, and we need them, and that is another reason that I 
am so concerned about the fate of Operation Stonegarden, which 
has been such a force multiplier.
    I want to turn, since my time is rapidly expiring, to a 
couple of other questions. One has to do with improper payments 
by the Federal Emergency Management Agency (FEMA). We have 
talked a great deal about this in the past and the fact that 
FEMA has lacked the kinds of basic safeguards in order to 
prevent improper payments. But the most recent report, which is 
from December of last year, indicates that FEMA has been aware 
of issues regarding lack of enforcement on several insurance 
requirements within FEMA's Public Assistance Program for more 
than 10 years. That is just extraordinary, and these 
requirements are designed to prevent public money from being 
used to pay for an insured property, either at the time or in 
the future after an insurance requirement is put on the 
property.
    What are you doing, given that this is such a longstanding 
problem, to ensure that FEMA is addressing improper payments in 
general? This was an Office of Inspector General December 2011 
report, but also this latest one about the lack of enforcement 
of several insurance requirements for the Public Assistance 
Program.
    Secretary Napolitano. Well, FEMA has done a number of 
things. When we came in, I think the so-called error rate on 
FEMA payments was running between 7 and 8 percent. A large part 
of that, in fact, the overwhelming bulk of it, was with respect 
to payments for Hurricanes Katrina and Rita. And as you know, 
there has been legislation now about recoupment and limiting 
recoupment of those. But FEMA has put into place a number of 
protections. Now the error rate is running less than 1 percent, 
and we are trying to drive it down even further. So it is 
supervision, it is training, and it is really being cognizant 
of those requirements.
    Senator Collins. Well, I would note that this is a very 
recent report. It is December of last year, which indicates 
that there is still a problem in the insurance requirements 
area that is costing taxpayers a considerable amount of money 
where we are ending up paying twice. So I know that we are 
doing better on the private payments, but this is the Public 
Assistance Program that the Inspector General has put a 
spotlight on. So I would ask for a more detailed response to 
that for the record.
    Secretary Napolitano. Sure, absolutely.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks, Senator Collins.
    For the information of colleagues, in order of arrival, 
Senators Brown, Coburn, Johnson, Pryor, and McCain. Senator 
Brown.

               OPENING STATEMENT OF SENATOR BROWN

    Senator Brown. Thank you, Mr. Chairman. Madam Secretary, 
thank you for coming. It is always a pleasure to see you back 
in Boston.
    This question is an extension of what Senator Collins was 
saying. The Urban Areas Security Initiative program has worked 
very well in Boston and the surrounding areas to improve 
emergency response and other homeland security efforts. It has 
broken down barriers among agencies in Massachusetts and in 
Boston in particular, and it made more efficient use of those 
very valuable Federal dollars. And it has kept, as I said, 
Boston safe while preventing a duplication and waste of Federal 
money.
    In your recent budget, you eliminate the UASI program, and 
it makes a major city like Boston go through a lot of 
bureaucratic red tape and another layer of bureaucracy at the 
State level in order to get its security needs funded, and I am 
hearing from Mayor Thomas Menino of Boston and other mayors 
that they are deeply concerned about this fact.
    Are you willing to meet with any of those stakeholders 
about their concerns?
    Secretary Napolitano. I am willing to and do, but if I 
might, Senator, I think our goal is to eliminate some of the 
red tape and streamline multiple grant programs into one 
National Preparedness Grant Program.
    I think one of the questions that Mayor Menino might be 
raising is the fact that cities typically do not get the check. 
It goes through the States and then the States give the check 
to the cities, and there sometimes is friction in that process.
    Senator Brown. Well, there is not only friction; the States 
keep a little of the juice on top, 20 percent sometimes, and it 
is obviously very frustrating to the States that have X amount 
and certain needs and then the State is going to get the check, 
keep a piece, and then give it out to the cities, and that is a 
deep concern of theirs.
    Secretary Napolitano. The statute sets out who gets the 
money.
    Senator Brown. I will follow up on that.
    I am also hearing that, for example, with that grant 
program, it unfairly favors the purchase of equipment over 
spending on planning. In other words, DHS makes it easier for 
local governments to get a vehicle funded than to get an 
evacuation plan for millions of residents funded. Will there be 
provisions of flexibility that will allow communities more time 
to get their planning right rather than rushing them to spend 
their funding on something that they may or may not need?
    Secretary Napolitano. Well, let me take it in two bites. We 
have added a lot of flexibility in the grant process over the 
last 2 years in response to comments that we have received from 
some local and State officials, like, for example, money to 
maintain, as opposed to having to buy, new equipment, money for 
training, and money for personnel, which previously had not 
been allowed within the ambit of the grants. We have expanded 
the flexibility to permit that.
    With respect to planning, I would have to know the 
specifics about feeling rushed to do planning, but important 
evacuation planning, exercising, and training are all part of 
that security safety net that we want to have.
    Senator Brown. If there are some specific issues, maybe I 
could get that information, and we can draw that connection. 
That would be great.
    I want to commend you and the President on the leadership 
you have shown on the Secure Communities program. It is a 
common-sense program, and I think it would enjoy unqualified 
support here in a less politicized environment. And all you are 
doing is sharing information among law enforcement agencies to 
remove dangerous criminal aliens from this country. I know when 
you last testified, I commended you on it, and I want to 
continue to do that. And for those who are listening, let us be 
clear how it works. It is not about randomly tracking down 
immigration violators. It is about giving local law enforcement 
officials factual and accurate information about someone they 
have arrested for a crime. They might have just arrested a 
violent criminal who is in the country illegally or has an 
outstanding warrant, and sometimes the system you set up 
detects fugitives in our country who are evading justice back 
in their home country and then lets your agency know that they 
have these bad guys in custody, and you make the call on 
whether to pick them up. And it makes a lot of sense.
    I know nationwide, 79 percent of the jurisdictions are 
actually activated, when in Massachusetts, one of 15 
jurisdictions has been activated. And there is, for whatever 
reason, a reluctance to fully implement this program, and I can 
think of many cases, especially most recently, that people's 
lives potentially could have been saved in Massachusetts if 
this program had been implemented.
    Could you please update us on that effort to bring the 
program to all jurisdictions? And do you have a sense of when 
Secure Communities will be fully implemented in Massachusetts?
    Secretary Napolitano. Well, we intend to be fully 
implemented by the end of fiscal year 2013. The President's 
budget request provides the funding for that, and we have, I 
want to say, 320-some-odd counties left, basically. So the big 
bulk of them have already been done.
    In Massachusetts, I know we have it turned on in Suffolk 
County. With respect to the other counties, we have ICE agents 
under what is called the Criminal Alien Program who are 
actually in the jails helping provide the same information, but 
in the end, we really need Secure Communities. That is the 
system that links the fingerprint check that you do for 
criminal history with the immigration check.
    Senator Brown. I agree with you, and there are many 
sheriffs in Massachusetts who also agree with you and the 
President. Some critics would say that implementation would 
mean communities are less secure, i.e., they would deter other 
illegal immigrants from reporting crimes. But there are 
safeguards that are in place for that type of thing. Is that 
right?
    Secretary Napolitano. There are, including U and V visas 
that are given to those. Many communities have had Secure 
Communities in place now for a couple of years, and their 
police departments have good community outreach into 
communities that might feel particularly threatened, if I could 
use that word.
    Senator Brown. Vulnerable.
    Secretary Napolitano. Yes.
    Senator Brown. Now, have you been in contact with Governor 
Deval Patrick's office in Massachusetts on Secure Communities 
and why it has not been implemented?
    Secretary Napolitano. I have been in touch with a number of 
officials about Secure Communities over the years. I cannot 
think of anything recent with Governor Patrick.
    Senator Brown. But there has been communication in the past 
about this issue?
    Secretary Napolitano. Let me not answer that. We will check 
and see.
    Senator Brown. If you could. I would like to know what the 
status is and if you can provide any of that correspondence to 
us because I am trying to find out what the reasoning is. 
Because as I have said, people are dying, and this is another 
tool in the toolbox for law enforcement. I agree with you, I 
agree with the President, and I want to see it implemented, as 
many citizens do in Massachusetts. So I want to thank you for 
that effort, and I look forward to working through the 
budgetary process with you. Thank you.
    Chairman Lieberman. Thanks, Senator Brown. Next is Senator 
Coburn.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. Thank you, Mr. Chairman, and thank you, 
Secretary, for being here. Also, thank you for your service. It 
is a very tough job.
    You will find that I am going to be your favorite person on 
your consolidation of grants. I think you have it just right. 
And what you are hearing already is blowback of a parochial 
nature because when we did the grant program, we did not do it 
based on risk. We did it some based on risk, and we improved 
that with the last authorization. But basically we threw it out 
there, and so what we have is a little bit of a creaking door, 
and screeching, because the fast money that really is a State 
responsibility is not going to be paid by the Federal 
Government, and true terrorism prevention based on risk is 
liable to be the outcome of what you are recommending. So I 
heartily endorse your recommendations on consolidating it.
    I want to talk just a minute about fusion centers because I 
have a lot of doubts about them, and we are doing a lot of 
looking at that now. You say we now have 72?
    Secretary Napolitano. Yes.
    Senator Coburn. Do you think they are fulfilling their 
mission on terrorism prevention?
    Secretary Napolitano. Their mission is terrorism 
prevention, but it is also much broader than that. And as 
governor, I started one of the first fusion centers in the 
country. It is an ideal place to collocate, to share 
information. We use them in a variety of ways. They are also 
the portal of entry we now use to get classified information 
out to the country quickly because the vast majority are now 
linked up and have people who have the right clearances to get 
that information. That was a common complaint a few years ago.
    So are there things that can always be done to improve? You 
know, it was a relatively new concept when we started it, but I 
think they are going in the right direction. And, yes, I think 
they are an essential part ultimately of the framework we need.
    Senator Coburn. Do you think they are cost-effective?
    Secretary Napolitano. Yes.
    Senator Coburn. Let me talk with you a minute, and all I 
would like for you to do is just respond. We have talked with 
your legislative representatives here on the Hill about the 
request to spend down this $8.3 billion in unspent grant money.
    Secretary Napolitano. Yes.
    Senator Coburn. We could not get an answer, so I would hope 
that you would make sure we get an answer on it.
    Secretary Napolitano. I can tell you what the guidance that 
went out in February is with respect to the $8.3 billion----
    Senator Coburn. Well, I have read that. I have read your 
stuff, but I cannot get an explanation. Here is basically the 
explanation--those grants are for terrorism prevention, 
correct?
    I mean, that is what the statute says. That is what they 
are for.
    Secretary Napolitano. They are for a number of things, but 
yes.
    Senator Coburn. But if you look at that specific UASI 
grant, that is what they are for.
    Secretary Napolitano. But the $8.3 billion is not just 
UASI, but go ahead.
    Senator Coburn. Well, that is some of the stuff that we are 
asking that we have not been able to get through your 
legislative office.
    Secretary Napolitano. All right.
    Senator Coburn. The idea to tell them to spend it out 
faster, can you talk to me about that? Because the fact is, if 
it is for equipment and they are not spending it, either the 
equipment is not available or they do not see it as a priority 
for equipment, and now we have loosened the grant up to say we 
are going to actually with this grant money be paying for 
things that are truly State and city obligations, not Federal 
obligations. Talk to me about the philosophy behind that.
    Secretary Napolitano. Sure. The guidance is, with the 
unspent grant monies that go back to 2007, those need to be 
spent by this June. For 2008 and 2009, those need to be spent 
by the end of the fiscal year, and so forth.
    One of the reasons for the backlog, quite frankly, is some 
of those original grants were for things like hardening port 
security, and by the time you go through the environmental and 
historic reviews that are required for those and do the 
procurement processes and all the rest, the money just has not 
gone out.
    We have streamlined that process and that review process so 
that we turn those around much more quickly. We are trying by 
this mechanism to encourage States and locals to cut through 
their own red tape to the extent they can and get money where 
it is needed. These are for safety, security, and terrorism 
prevention. They are not just for equipment. They cover a whole 
range of things. And we think if Congress is going to 
appropriate the money, we need to do what we can to get the 
money into the field.
    Senator Coburn. Well, if, in fact, they cannot get the 
money into the field, what is wrong with them returning it to 
the Treasury and letting us spend it somewhere where it might 
be more effective?
    Secretary Napolitano. There is nothing wrong with that.
    Senator Coburn. But has that been part of the directive 
that you sent out--if you really cannot spend this money at 
this time, please send it back?
    Secretary Napolitano. I think that is part of the guidance, 
that the money will not go out.
    Senator Coburn. One question about US-CERT, and then I 
would like to submit some questions for the record to you and 
have them returned on a timely basis, if I may, and not go 
through them here today.\1\
---------------------------------------------------------------------------
    \1\ Responses to Senator Coburn's questions for the Record appear 
in the Appendix on page 78.
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    Is it true that you all have reported that the US-CERT's 
own network is vulnerable to cyber attack?
    Secretary Napolitano. I think every network is vulnerable, 
yes.
    Senator Coburn. I do not think that is classified at all. I 
think that is a public statement that we have made. What are we 
doing to make sure it is not?
    Secretary Napolitano. That would be classified, and I would 
be happy to provide a briefing for you.
    Senator Coburn. Then I guess the answer is we are working 
to make sure that US-CERT is not vulnerable, correct?
    Secretary Napolitano. Correct.
    Senator Coburn. All right. Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Coburn. Senator 
Johnson.

              OPENING STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Thank you, Mr. Chairman. Madam Secretary, 
welcome back. Nice to see you.
    In earlier testimony, Defense Secretary Leon Panetta said 
that he certainly felt that because we are running huge 
deficits and huge debts, that is definitely a national security 
issue. Admiral Mike Mullen, former Chairman of the Joint 
Chiefs, said that the most significant threat to our national 
security is our debt. Secretary Hillary Clinton said our rising 
debt levels pose a national security threat.
    I guess I am just asking you as Secretary of the Department 
of Homeland Security, do you also agree that our debt and 
deficit is a security threat?
    Secretary Napolitano. Yes, they can be.
    Senator Johnson. How significant a threat?
    Secretary Napolitano. Well, to the extent they implicate 
the fundamentals of your economy, I think that is part of a 
cluster of security issues that we have to confront.
    Senator Johnson. Do you believe that the deficits that we 
have been running, the $1.4 to $1.3 trillion a year, and 
probably now again this year maybe $1.3 trillion, do you 
believe that is sustainable?
    Secretary Napolitano. You know, Senator, I am here as the 
Secretary of Homeland Security. You all have to make the 
spending decisions, but I will say this: When we prepared our 
budget for this year, we did that in the context of knowing 
that there needed to be fiscal austerity measures taken. That 
is why we came in at less than the fiscal year 2012 
appropriated amount. It is the first year ever that the 
President has requested a lower amount for Homeland Security. 
It is because we all are dealing with that issue and trying to 
solve it as much as we can.
    Senator Johnson. Again, having recognized that the debt and 
deficit is a security issue, as Secretary of the Department of 
Homeland Security, do you believe that is part of your 
responsibility?
    Secretary Napolitano. In the sense that the security of the 
country is part and parcel of the daily responsibility I have, 
I would have to agree.
    Senator Johnson. Have you ever spoken to President Obama 
about the security threat that the debt and deficit issue poses 
within that context?
    Secretary Napolitano. No.
    Senator Johnson. As a former governor, I believe you 
probably submitted--I have written down here--six budgets?
    Secretary Napolitano. Well, more than that when you add 
midyear, etc. Lots.
    Senator Johnson. Did you always submit those on time?
    Secretary Napolitano. Yes.
    Senator Johnson. Were those balanced?
    Secretary Napolitano. Yes.
    Senator Johnson. Are you surprised or, let us say, 
disappointed that now after four bites of the apple President 
Obama has not submitted any plan for ever balancing the budget?
    Secretary Napolitano. If I might, Senator, I think a 
Federal budget is very different than a State budget. I mean, 
the Federal Government assumes obligations and 
responsibilities, for example, for the national defense and the 
national security that States do not have. It is a different 
animal.
    Senator Johnson. But, again, I think we just established 
that the level of debt and deficit is a security threat.
    Secretary Napolitano. Well, it is among many, and I think 
we are all working to be fiscally responsible with how we 
conduct our affairs. But I think it is a little bit like 
comparing an apple and an orange to say a State budget is just 
like a Federal budget. They are not similar.
    Senator Johnson. I did not say that.
    Let me turn to the cybersecurity bill that you testified 
about in January. I asked you whether or not the Department had 
developed any sort of estimate on the cost of the regulations 
that were being proposed in that piece of legislation. At the 
time, you did not have any kind of estimate. Have you developed 
an estimate since that point in time?
    Secretary Napolitano. No, but I think, if I might, Senator, 
the bill is really a very robust public-private partnership 
approach to how we raise the base level of cybersecurity for 
the core critical infrastructure of the country--core critical 
infrastructure that right now is being subject to attack. And 
so there is no regulation per se to evaluate I think in the 
sense that you mean.
    Is this something that we need to do as a country? 
Absolutely. You just asked me whether I thought the deficit was 
a threat. I am here testifying that I think the cybersecurity 
threat in my wheelhouse is the one right in front of us.
    Senator Johnson. That is the one that keeps you awake at 
night. Me, too. I think it is extremely important.
    One of the questions I asked is whether there were 
companies that were supporting that particular piece of 
legislation, and you said that there were, and you were going 
to supply us a list. We have not received that list. Are there 
companies?
    Secretary Napolitano. We will get you a list of some 
supporters, yes, sir.
    Senator Johnson. What about companies or people who would 
be falling under those regulations that are posed? Have people 
come out of that that you are aware of?
    Secretary Napolitano. Well, I think the first thing is the 
decision about what constitutes core critical infrastructure of 
the country, and what the Lieberman-Collins bill would do would 
be to set up the process by which those are determined at the 
outset. But it makes common sense when you think about it, 
those where if they are shut down or attacked, you would have 
loss of life, massive economic damage, displacement of persons. 
So within that realm, then you would want to work with those 
participants, as we do across critical infrastructure across 
the country now, in terms of what are the base standards that 
should be met? Leaving to the actors to decide how to meet 
them, but what should you be able to do if you want to be in 
the core critical infrastructure business?
    Senator Johnson. But, again, I am concerned that we 
actually pass a cybersecurity bill that starts allowing 
companies to share information. Are there companies that have 
come out against this? And why would they be against it? Again, 
I am just trying to address their concerns. I want to make sure 
that we can actually develop a piece of legislation that we can 
pass so we can start moving that football forward.
    Secretary Napolitano. Thank you, and we look forward to 
working with all of you on this. I have not seen all of the 
traffic, but the opposition that I have seen is a regulation 
kind of opposition, but not to the information-sharing parts.
    Senator Johnson. One of my concerns is that during that 
hearing, one of the witnesses--Stewart Baker--testified that 
the industry is concerned about waiting up to 7 years for the 
Department to actually write the regulations. Let us face it, 
the development of technology moves incredibly rapidly. Do you 
really believe that the government can keep up with that pace 
of technological advancement?
    Secretary Napolitano. Yes. But we are not waiting 7 years; 
the problem will not wait 7 years.
    Senator Johnson. Thank you, Madam Secretary and Mr. 
Chairman.
    Chairman Lieberman. Thanks, Senator Johnson.
    I am going to resist the inclination to get into a dialogue 
on the cybersecurity bill because there will be plenty of time 
for that, and I look forward to working with you on it.
    Senator Pryor.

               OPENING STATEMENT OF SENATOR PRYOR

    Senator Pryor. Thank you, Mr. Chairman. And, Madam 
Secretary, it is always good to see you.
    I have a question about the Anti-Border Corruption Act of 
2010 that we passed a few years ago. As I understand it, 
Customs and Border Protection has made significant progress 
under the new law. However, there is still some work to be 
done.
    It is my understanding that CBP will be caught up with the 
backlog of background investigations by the end of this 
calendar year and that the polygraph requirement is going to 
take a little bit longer. Do you have an update on that? Do you 
know the status of that?
    Secretary Napolitano. Right. I think actually the 
background investigation part, I hope, will be a little bit 
sooner than that, Senator. With respect to polygraph, one of 
the practical problems is the lack of enough polygraphers, so 
we are hiring and getting them on staff and contracting and 
doing everything we can to get those polygraphs out there. So, 
as soon as possible, I will try to get you a more definitive 
answer.
    Senator Pryor. It would be great if we could get a sense of 
a timetable on that, and I do understand the constrictions you 
have with the polygraphers. I understand that.
    Do you think that Customs and Border Protection has 
adequate resources to implement the new law?
    Secretary Napolitano. Yes.
    Senator Pryor. It is just really a matter of finding the 
expertise for the polygraphers. Is that right?
    Secretary Napolitano. That is it. And then the other thing, 
and we are working on this very hard, is that the vast majority 
of the men and women who do that work are honest, they are in 
it for the right reasons. But when you have a big swell in new 
hiring, as we have had, particularly in the Border Patrol, 
there are issues that can go along with that. So it is not just 
background checks but recurrent checking, using the polygraph, 
all of those things to make sure that we maintain that honest 
workforce.
    Senator Pryor. Right. This may be a little bit of a follow-
up to Senator Coburn's questions a few moments ago. I have a 
question about grants, specifically about the proposal to 
consolidate and streamline 16 existing grant programs into one 
bigger program. And part of that, as I understand it, is the 
Pre-Disaster Mitigation (PDM) Grant Program, which apparently 
Homeland Security thinks is duplicative of other grant 
programs. But the Hazard Mitigation Grant Program (HMGP) is 
only accessible through a major disaster declaration, meaning 
that if States or localities want to apply, they have to have 
had either a recent or a frequent disaster in their area; 
otherwise, they cannot get mitigation funds.
    And so to me, it seems that on those two you may have 
different requirements that would maybe be consolidated into 
one thing. Are you confident that Homeland Security will still 
be providing assistance for people who want to mitigate 
disasters and prevent the damage on the front end?
    Secretary Napolitano. Yes, I think this is one of the 
things we will work through, but the Pre-Disaster Mitigation 
Grant Program has been relatively unused. That is one of the 
reasons we are recommending that it be streamlined or folded 
in, and part of it is because of just the nature of the beast 
and the other statutory requirements that go with those monies. 
And as I mentioned, the President has asked for an additional 
$500 million for grants that would enable us to keep working on 
hazard mitigation.
    Senator Pryor. On the importance of pre-disaster 
mitigation, one example would be in 2011, of course, we had 
terrible flooding in the mid-section of the country, up and 
down the Mississippi River, the Ohio River, and those areas. 
This is a great example of how sometimes you spend millions but 
save billions. The Army Corps of Engineers system worked up and 
down the Mississippi River, but there were lots of local levees 
in States, counties, and cities that were also doing pre-flood 
mitigation during that time, and, again, largely it worked.
    I saw a number the other day--it was way in the billions--
of the amount of money that we saved because of that 
investment. So I would just encourage you and your team to be 
very confident that the money will be available because these 
cities and counties and levee districts are putting it to good 
use.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Pryor. Senator 
McCain.

              OPENING STATEMENT OF SENATOR MCCAIN

    Senator McCain. Thank you, Mr. Chairman. It is nice to see 
you again, Madam Secretary.
    As you will recall, last year the Border Patrol initiated a 
very successful operation called Operation Samurai, and it led 
to the apprehension of 31 cartel scouts operating on 
mountaintops in Arizona, in addition to 84 smugglers, over 800 
illegal aliens, and thousands of pounds of marijuana and other 
illegal drugs. It was a very professional and impressive 
operation. The operation, as you know, was enabled through the 
use of air support that allowed the Border Patrol agents to get 
in position before the scouts had an opportunity to flee.
    So I have concerns about the proposed reduction of flight 
hours from 106,000 mission hours in fiscal year 2010 to 65,000 
mission hours in 2013. Can you give me an explanation about 
this reduction in flight hours?
    Secretary Napolitano. Yes, two things, Senator. One is that 
we are putting into the air equipment that has more sensors and 
other types of equipment on it, on the platforms. So the hours 
that we are getting are yielding a lot more than some of the 
older planes that we were putting up in the air in 2009 and 
2010.
    Second, as you know, we will be and are receiving air 
equipment from the Department of Defense to put in the air over 
the Southwest border. We think of it as boots in the air and 
boots on the ground, and it is the combination that really 
works best.
    Senator McCain. Well, I will be glad to exchange 
information with you, but that kind of reduction, even though 
we have enhanced capabilities, in my view, does not keep 
aircraft in the air 24/7 or drones in the air. And it certainly 
does not provide for the 24/7 coverage that I think we need. So 
maybe for the record you can provide me with additional 
information.
    In December, Senator Collins and I wrote to you asking for 
justification over media reports that the DHS spent over 
$770,000 on automated cameras to document the movement of 
jaguars crossing into Arizona from Mexico. We received a 
response indicating the jaguar project was just one of about 
$50 million in projects to ``mitigate the environmental impact 
of the border fence,'' and the funding would come from the 
Border Patrol's fencing and infrastructure budget. And among 
those projects were $925,000 to find and study the bat caves of 
the Mexican long-nosed bat, $500,000 to help breed Aplomado 
falcons, and $230,000 to put radio collars on bighorn sheep.
    I am pretty familiar with the border and fencing, Madam 
Secretary, but I do not know how studying the bat caves of the 
Mexican long-nosed bat has anything to do with the border 
fence. Perhaps you can educate me.
    Secretary Napolitano. Not today, but I will be happy to 
respond to you. I will have to look into it myself.
    Senator McCain. Well, here we are with stringent economic 
measures needed to be taken, and we are spending $230,000 to 
put radio collars on bighorn sheep, and maybe we need to put 
radio collars on bighorn sheep, but to call that a mitigation 
of the environmental impact of the border fence obviously is a 
great stretch of the imagination. I missed $2.1 million to 
plant agave cacti. The list, unfortunately, is rather long.
    You know, Madam Secretary, we have been having these 
hearings now since the Department of Homeland Security was 
created as a result of the 9/11 Commission, and most every 
weekend I go to an airport and get on a plane and go somewhere. 
And for the life of me, I cannot think of a single improvement 
in the technology and the screening of passengers that we have 
seen. The men and women who serve under you are very 
outstanding and dedicated people, but 11 years later, we still 
are subjecting passengers to the really invasive patting-down 
procedure.
    We now have a new device, I see, that you have to go into 
and raise your arms, and it lengthens the time of going through 
security rather than shortens it. And I have heard over the 
years, well, we are working on this technology, we are working 
on that technology, we have a Trusted Traveler Program, we will 
do optical--I have heard everything. And nothing has changed. 
The American people are very patient. The American people 
understand the need for airport security. But I can tell you, 
they do not understand why we cannot develop technology that 
eases their passage through security at an airport.
    Now, maybe you can not only help me out but help people who 
have to fly all over the country through commercial airports by 
telling me a little bit about what we can expect.
    Secretary Napolitano. Well, Senator, I am sorry that you 
feel that way because there have been a number of improvements, 
and one thing I can say is the traveling public is safe in the 
face of continuing threats in the aviation environment, which 
involve all kinds of populations. So we start from that 
premise. There is nothing we are doing that is not threat 
related.
    With respect to the technology, I would like nothing better 
than to sit at this table and announce that we do not have to 
take off our shoes and we do not have to divest ourselves of 
our briefcases and our backpacks, etc. The technology just is 
not there, Senator. We have made moves with specific 
populations--children, those over 75--who we view as low risk, 
but we still have to do a certain amount of random checking, 
even in those populations.
    We have met and worked with, among other things, the 
International Air Travel Association (IATA), which is the big 
global unit, on something called the Checkpoint of the Future, 
kind of a one-stop shop. You go in, check, etc. But that, I 
have to say, from a technology standpoint is years away.
    This is a complicated area. We are moving 1.5 million 
people per day through the Nation's airports. It is the largest 
airport system in the world. But, yes, if we can find that 
magic technology, we will use it.
    Senator McCain. Well, it puzzles the American people and 
this Member of the Senate that the most innovative, most 
technologically advanced Nation in the world has not made 
basically a single change. And, by the way, if you think that 
it is more rapid than it was when it was first installed, you 
are not going to the same airports I am. So the fact is, it has 
not been sped up. In fact, it has been delayed some.
    Maybe a trip out to Silicon Valley to meet with some of the 
people out there who are very good at the development of new 
technology might be something that you might think of. But, 
again, I understand your response. I understand exactly what 
you are saying. It is very plain English. But the fact is that 
we have not seen anything that has been a technological advance 
that I know of that would indicate that we could travel more 
expeditiously without the embarrassment of some of the 
procedures that are necessary in your view as we go through 
airports in this country.
    Secretary Napolitano. Yes. Senator, I think what would be 
useful for you is to meet not with us but with the people who 
are involved in the technology side of the industry because I 
think they will show you what is being looked at, what has been 
evaluated. Silicon Valley, Cambridge, Massachusetts, you name 
the high-tech centers of the United States, we have been there 
looking. No place in the world has it quite yet. But we will 
get it ultimately.
    Senator McCain. Thank you. Thank you very much, Mr. 
Chairman.
    Chairman Lieberman. Thank you, Senator McCain. Senator 
Akaka, welcome.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman, for 
holding this hearing. I commend you and Senator Collins for 
your leadership in these areas, and I do personally appreciate 
it. And, of course, I want to say aloha and welcome to 
Secretary Napolitano for being here with us today.
    I would like to express my admiration and sincere gratitude 
to the dedicated men and women of DHS who tirelessly are 
working to ensure our safety and security. And sometimes it is 
tough to do that, but they are doing it. These employees often 
turn down higher pay in the private sector to serve their 
country, and I am saddened by the proposals targeting Federal 
workers that will make it even harder for the Department to 
attract and retain the best and the brightest in our country. 
We must ensure that they have the resources and tools needed to 
do their jobs. I want to commend you for your leadership in 
these areas over these years now.
    Secretary Napolitano, as an island State, Hawaii relies 
heavily on the Coast Guard to protect our people, environment, 
and economic interests. The 14th Coast Guard District in 
Honolulu is the largest geographic command in the Coast Guard, 
covering over 12 million square miles of ocean. Despite the 
14th District's vital role in protecting national interests in 
the Pacific, it is relying on an antiquated fleet.
    How will the proposed cuts in the Coast Guard's budget 
affect its mission in the Pacific?
    Secretary Napolitano. Senator, I think the mission in the 
Pacific is very significant to us. It is significant to the 
Coast Guard. Our presence in Hawaii and its surrounding area is 
critical to the security of the United States, as you 
mentioned.
    When you look at the Coast Guard budget that has been 
submitted by the President, it maintains the long-range 
aircraft that are necessary for Hawaii. We are in the midst of 
the process of building the National Security Cutters: four and 
five are on schedule and on budget; six is contained within the 
President's budget. We are building out or replacing the Fast 
Response Cutters (FRCs).
    There is a minor personnel reduction in the President's 
budget for the Coast Guard, but that is primarily in the Office 
of Intelligence here, Senator, that has been increased 200 
percent in the last few years--we thought it could go down a 
little bit--and also some back-office administrative and other 
personnel here. So that should not be felt at the front line at 
all. So we are very conscious of the special role the Coast 
Guard has in Hawaii.
    Senator Akaka. Yes, and I am sure you know what I am 
referring to when I say antiquated fleet.
    Secretary Napolitano. Yes.
    Senator Akaka. Some of the ships that they have are really 
antiquated out there.
    Secretary Napolitano. I concur.
    Senator Akaka. I am just worried about what the budget 
would do to it.
    Secretary Napolitano, last November, Transportation 
Security Administration (TSA) whistleblowers at Honolulu 
airport alleged that two behavior detection officers (BDOs) 
regularly engaged in racial profiling by targeting Hispanic 
travelers for additional screening. Similar problems of racial 
profiling reportedly occurred at Newark airport as well. There 
are more than 3,000 BDOs nationwide, and the Administration's 
budget requests funding for additional officers. Concerns about 
racial profiling could undermine this entire program, and I 
urge you to fully investigate and address these allegations, 
and I am sure you have.
    How is DHS investigating and addressing alleged abuses? And 
when will DHS release the findings of their investigations?
    Secretary Napolitano. Well, I will have to get back to you 
on those particular investigations in terms of the timing. With 
respect to the behavior detection officer program, however, 
that is based in large part on a program that is done in 
Israel. They perfected some of the original methodology.
    We have over the last year done a study of it in terms of 
evaluating its ability to identify a traveler who deserves 
extra scrutiny versus simply doing random checks. And those 
BDOs were found to be statistically better at doing that than 
just simply doing random checks. So I think in terms of a tool 
to use properly and appropriately in that security environment 
at the airport, it is a good tool for us to use.
    Senator Akaka. Thank you. Madam Secretary, as you may know, 
the debris as a result of the 2011 tsunami in Japan is 
circulating the Pacific and may reach Hawaii within the year. 
The National Oceanic and Atmospheric Administration (NOAA) 
manages Federal debris removal efforts and partners with 
Federal agencies to coordinate their efforts.
    How is the Coast Guard working with NOAA to determine the 
best approach to address the tsunami debris? And does the 
budget take these efforts into account?
    Secretary Napolitano. Yes, Senator. As you noted, NOAA has 
the lead responsibility on the tsunami debris, but our Coast 
Guard region is working with them with respect to the tsunami 
that you are talking about and will coordinate in any way they 
think appropriate. But we are relying on NOAA as the lead.
    Senator Akaka. Thank you. Secretary Napolitano, in 2007, 
DHS committed to empowering CBP's agricultural mission with an 
enhanced leadership structure and authorities to safeguard 
American agriculture, the economy, and public health. Years 
later, our borders remain still vulnerable to dangerous pests 
and disease, and I am deeply concerned that agricultural 
inspections are a low priority for DHS. And as you know, in all 
these years in Hawaii, we have had these agricultural 
inspections going on. I have been informed that CBP uses most 
of the agricultural inspection fees to fund its offices instead 
of its agricultural specialists.
    What steps is DHS taking to fulfill its commitment to 
prevent the entry of harmful pests and bioterrorism agents and 
make sure agricultural user fees are spent as Congress 
intended?
    Secretary Napolitano. Well, I think, Senator, if they are 
not being spent as Congress intended, I want to know about it 
because that agricultural inspection program, as you say, is an 
important one, and we do it a number of ways.
    Actually, the safety of the Nation from bioterrorism or 
just an invasive species getting in, it is a lot of different 
levels, but that agricultural inspector at the gate of entry, 
so to speak, that is kind of the last line of defense. And so 
it is training, it is supervision, it is identifying and having 
people right there with the right kind of equipment so you do 
not have to travel a long time to test things out. So that is 
what we are using the fees for.
    Senator Akaka. Thank you. Mr. Chairman, may I ask my last 
question?
    Senator Moran. It is fine with me, Mr. Chairman.
    Chairman Lieberman. Go ahead.
    Senator Akaka. Thank you very much.
    Madam Secretary, I am pleased that the Department proposes 
to maintain total funding for emergency management performance 
grants. However, I understand that several changes have been 
made to homeland security preparedness grants to better support 
the national preparedness goal.
    Will you please explain how these proposed changes may 
better address special emergency preparedness needs of States 
like Hawaii?
    Secretary Napolitano. I think what we are working on and 
will work with the Committee on is to take the existing 
multiplicity of grants now, consolidate them, have one base 
level of funding population driven; but beyond that, look at 
risk, gaps, and capabilities within States and really try to 
direct those dollars to where they will best be used now given 
that we have already spent $35 billion across the country. So 
this is an Administration proposal that we will work with the 
Congress on and with other groups on.
    Senator Akaka. Thank you very much. Thank you very much, 
Mr. Chairman.
    Chairman Lieberman. Senator Moran.

               OPENING STATEMENT OF SENATOR MORAN

    Senator Moran. Mr. Chairman, thank you.
    Madam Secretary, last Friday, Under Secretary Tara O'Toole 
spoke to the National Research Council (NRC) about the NRC 
Committee that will be formed at your request to reassess the 
National Bio and Agro-Defense Facility (NBAF) mission. She said 
that panel will not revisit the site selection or consider 
alternative locations for the NBAF. Previously, you likewise 
have told me, Senator Pat Roberts, and others that the 
reassessment will consider only NBAF's scope. So in that 
regard, Under Secretary O'Toole, as far as I can tell to that 
point, did not say anything contrary to the conversations that 
we have had.
    However, Under Secretary O'Toole said that the reassessment 
committee will also consider the question of, ``Could the 
country manage Plum Island Animal Disease Center, which would 
not be pushed to a Bio-Safety Level 4 (BSL-4) level?'' And I am 
concerned that DHS even is asking that question.
    Plum Island has served a useful purpose. It is over 50 
years old. It is well beyond its end-of-life span. It is too 
small to enable necessary research. It does not have a BSL-4 
capability to do research on diseases like Nipah virus or 
Hendra virus. DHS's own studies point to Plum Island's severe 
limitations. From 2006 to 2009, DHS conducted an exhaustive 
site selection process for NBAF, and it considered Plum Island 
as a potential finalist site. And according to DHS's 2009 
Record of Decision for NBAF, Plum Island ``has much higher'' 
construction and operation costs associated with building on an 
island. As I understand it, the indications were that island 
costs are 15 to 24 percent above mainland costs. It lacks 
``proximity and accessibility to medical and veterinary schools 
as well as BSL-3 and 4 labs with related mission areas.'' My 
understanding is that this proximity is necessary and useful 
for attracting the best scientists and working with the animal 
health industry to get vaccines to market. And Plum Island's 
remoteness is a serious drawback in limiting research and our 
country's ability to protect itself.
    Your report indicated that in New York and Connecticut, 
there is ``strong political opposition at Federal, State, and 
local levels to expanding'' and including BSL-4 research 
capabilities; and, finally, ``a foot-and-mouth disease (FMD) 
virus outbreak on an island would be considered no different 
from a FMD outbreak on mainland with respect to impact.''
    Why would we now once again consider spending money on 
propping up an outdated, costly, and inadequate facility 
instead of building a state-of-the-art lab that our country 
needs?
    Secretary Napolitano. Well, I do not know exactly what 
Under Secretary O'Toole said, but if I might, as you and I have 
discussed, we are not reconsidering locale. We are not 
reconsidering the need for an NBAF. In my view, it is an 
essential part of the Nation's security structure moving 
forward.
    We have had a problem persuading the Congress to 
appropriate money in a steady enough stream so that we could 
really get the project moving, and that has left us in a 
position where we have the Plum Island, which in the end will 
not be able to be the kind of Level 4 facility that we envision 
for NBAF. But we are going to have to use it now for a while 
until NBAF is completed.
    We hope through this budget process and the other 
assessments that are being done that we can make material 
progress on that score. But I suspect what the Under Secretary 
was saying is, look, at some point we still have to have a 
biolevel lab, even though we know that lab in the end is not 
the final answer.
    Senator Moran. I think you have answered my question. Thank 
you, Madam Secretary.
    Chairman Lieberman. Thanks, Senator Moran.
    Just a couple more questions, and we will let you go back 
to your work. Last month, Director of National Intelligence 
(DNI) James Clapper testified before Congress that ``some 
Iranian officials, probably including Supreme Leader Ali 
Khamenei, have changed their calculus and are now more willing 
to conduct an attack in the United States in response to real 
or perceived U.S. actions that threaten the regime.''
    Obviously, the catalyzing event was the plot that was 
broken up, with particular help by a Drug Enforcement 
Administration (DEA) agent, to retain some members of a Mexican 
drug cartel to come in and assassinate the Saudi Ambassador 
here in Washington.
    So I wanted to ask you whether the Department is taking any 
actions in response to what the DNI says is this change in the 
attitude of Iran toward committing acts of terrorism here in 
the homeland, including with respect to departmental activities 
such as border screening and infrastructure protection or 
information sharing with State and local law enforcement.
    Secretary Napolitano. Without commenting on the specifics 
in an open setting, Senator, we are constantly monitoring 
threat information, scenarios that become more realistic than 
previously, and providing analysis and products at various 
classification levels out into the State and local environment. 
So I think I would leave that answer just at that level for 
right now.
    Chairman Lieberman. That is good enough. And, finally, let 
me ask you about the US-VISIT program. I agree with you and, by 
action I will describe in a minute, I think that most Members 
of the Committee agree that the US-VISIT's placement within the 
National Protection and Programs Directorate at DHS is 
problematic. One reason is that NPPD is not primarily an 
operating component. So the DHS Authorization Act that we 
passed last fall addressed this issue by creating a new entity 
within the Department to better coordinate DHS efforts to stop 
terrorists from traveling and placing US-VISIT there.
    The proposal that the budget makes, as I mentioned in my 
opening statement briefly, is to place US-VISIT within Customs 
and Border Protection and Immigration and Customs Enforcement, 
and I wanted to ask you about that. My concern is that moving 
the program, splitting it essentially into two sections, will 
make it more difficult to coordinate screening activities 
within the Department, across the interagency, and with our 
foreign partners.
    So we agree there is a problem here. We ended up with a 
different recommendation to deal with it. Why do you think the 
one in the budget is a good one?
    Secretary Napolitano. Well, what we are doing, Senator, is 
we are consolidating all the vetting and screening programs and 
databases in CBP. They have the largest nucleus of that data 
now. They now have the technologic capability for databases to 
talk with each other, etc. And so what we are proposing is, 
take all of the vetting and screening part of US-VISIT and 
merge that into the existing resources we have at CBP, and then 
going and picking up the overstays would go into ICE. That is 
their typical function, which is to do enforcement. So that is 
the theory behind the recommendation.
    Chairman Lieberman. I would like to continue this 
discussion. Again, incidentally, going back to our discussion 
about the grants and noting the absence of Senator Coburn so 
there is no chance he will pick up any support at this moment. 
[Laughter.]
    Although I do not know what his position is on this one, I 
would like to work with you on it to see whether we can have an 
agreement where we as the authorizers will agree on how to deal 
with this problem that we both agree exists.
    Secretary Napolitano. OK.
    Chairman Lieberman. Thank you. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Madam Secretary, I wish that Senator Johnson and more of 
our colleagues did not have to leave before I asked you this 
question. He brought up the issue of having a very limited 
cybersecurity bill that would just focus on information sharing 
about cyber threats. As you are well aware, that is part of the 
bill that Senator Lieberman and I have introduced. We drew on 
some work done by Senator Carper and others, Senator Dianne 
Feinstein as well. But the fact is that while information 
sharing about cyber threats is needed and those liability 
protections are essential, it does not remove the necessity of 
focusing on critical infrastructure, does it?
    Secretary Napolitano. No, they are not mutually exclusive. 
We need to have core critical infrastructure at a certain base 
level. Because they are a core critical infrastructure, we all 
rely on them. Families rely on them, small business relies on 
them, everybody relies on them. We need the information 
sharing, and it needs to be real time. We need some of the 
other elements. We need Federal Information Security Management 
Act (FISMA) reform. We need some help with some of the 
personnel rules so that we can hire more people more quickly.
    So there are a lot of things that need to be done in the 
cyber arena and that need to be done now.
    Senator Collins. And if, in fact, we just passed a very 
limited bill that dealt only with information sharing and did 
not give the Department the authority to designate what is core 
critical infrastructure and, working in partnership with the 
industry, develop risk-based standards and then leave it up to 
industry how to achieve those standards, we would be falling 
short in addressing what is a very serious threat, would we 
not?
    Secretary Napolitano. Senator, I think we would be back 
here in a year or 18 months, and we will have suffered a major 
infiltration or attack, and we will find that some part of our 
critical infrastructure was a gap and they were not doing it on 
their own, so to speak, and then the gap might be filled at 
that point.
    But it seems to me that what we know now is already enough 
to go ahead, and we should be moving forward.
    Senator Collins. Well, I could not agree with you more. I 
think this is the threat where there is the biggest gap between 
the seriousness of the threat and how little we have done 
legislatively to ensure that the Administration has the tools 
that it needs to address what is an escalating threat. And it 
is important once again to reinforce what we are talking about 
when we are talking about core critical infrastructure. We are 
talking about infrastructure against which an attack would 
cause mass casualties, severe harm to our economy, a serious 
degradation of our national security. We are not talking about 
covering every business, every system in our country. We are 
talking about the electric grid, key water supplies, and I 
think that is something that needs to be better understood. So 
I appreciate the chance to engage you on that colloquy.
    I want to ask you two more questions, and the rest I will 
submit for the record.\1\ First, you have used the term and the 
budget uses the term ``population-driven formula'' several 
times in talking about the grant. My staff has had great 
difficulty in getting from the Department exactly what you mean 
by that phrase. It could be meant in one of two ways. It could 
mean that you are talking about the formula that this Committee 
wrote that ensures that every State receives a certain minimum 
in order to build and now maintain the capabilities that have 
been built up over the past 10 years. Or it could mean that you 
are talking about a formula that is driven by the size of 
populations and, thus, the money is shifted away from that 
statutory minimum and instead given to the large cities and big 
States.
---------------------------------------------------------------------------
    \1\ Senator Collins' questions for the Record appear in the 
Appendix on page 117.
---------------------------------------------------------------------------
    So what do you mean when you use the term population-driven 
formula?
    Secretary Napolitano. A little bit of both in a way. What 
we want to have is one State formula. There are many different 
formulas now for basic State grants, depending on which grant 
program is at issue, so that there would be one consistent 
State formula of which population would be a key variable that 
would give you that base level. But beyond that, we would be 
looking at risk and gap and capability.
    So, for example, take a State like Maine. One of the things 
you would say is, well, the population is a smaller population 
base, it is a more rural State, but it has a lot of border and 
a lot of coast, and it has some critical infrastructure on 
those things. And that would go into the vast majority of the 
grant dollars, which would be how you look at the risk, how you 
look at consequence, gaps, and capabilities.
    Senator Collins. But are you proposing to still have a 
State minimum of some sort to ensure that every State can 
maintain certain capabilities?
    Secretary Napolitano. Yes, but it would be one uniform 
formula.
    Senator Collins. And, finally, I want to return to the 
Coast Guard. I am just very distressed by the cuts in the 
budget that affect the Coast Guard. A thousand uniformed 
personnel to me is not a small cut. This is not a big service. 
And it was just last year when I was unhappy about the 
reduction to eight National Security Cutters that you testified 
that we fully intend to build them, and we fully intend to 
build them on schedule. In January of this year, just 2 months 
ago, DHS provided the Deepwater Implementation Plan Annual 
Report that validated the Coast Guard's methodology for 
determining the appropriate mix for the Deepwater fleet, 
including verifying the methodology that produced the eight 
National Security Cutters.
    So I do not understand the Administration's budget cuts 
that would eliminate the seventh and eighth National Security 
Cutters from the Coast Guard's 5-year plan as well as that 
1,000 uniform personnel cut.
    Secretary Napolitano. Let me address each of those, and I 
would think one intervening factor is the passage of the Budget 
Control Act, which we are all trying to fit within. As I 
mentioned to Senator Akaka, the Coast Guard is roughly a 50,000 
member service. The 1,000 personnel cut is made up of some 
exchange between decommissioning higher personnel vessels and 
replacing them with vessels that do not need quite as many 
personnel. That is a small part. A second part is some non-
replaced attrition in clerical and backroom personnel here. A 
third part is, for example, we do not need as many recruitment 
officers in the Coast Guard as we had because we fulfill our 
recruitment at the end of the second quarter, so we do not have 
to fill all of those with full-time equivalent. And the fourth 
is the intelligence officers that I mentioned earlier where we 
have had a very dramatic increase over the last several years. 
We can cut back on that with no impact on front-line 
operations. That is the 1,000.
    With respect to the NSC, the budget fully funds six. There 
is language--and I think it is in a footnote in the budget 
documents--to the effect that the decisions on seven and eight 
will be done in relation to what the Navy is doing with its 
laydown because it is adjusting its forces in response to the 
Budget Control Act as well. And so we are beginning a process, 
working with the Chief of Naval Operations, before we make 
final decisions on seven and eight, which would hit dollar-wise 
not until 2014 anyway. So that is the thinking there.
    Senator Collins. Well, given the cutbacks in naval ship 
building, that is not of great comfort to me. The missions are 
different. I like seeing coordination. Do not get me wrong. But 
I think the cuts in the Coast Guard are something that we are 
going to need to take a very close look at.
    If you look at the expanded role of the Coast Guard, I 
mean, it has just changed enormously during the past decade. 
And while I think they are unparalleled in their ability to do 
more with very little, there is a limit. I have been on those 
cutters and actually seen where you could see through the side 
of some of the cutters because of the poor condition that they 
are in, and the number of cutters that are simply out of 
commission for so many days each year because of engineering 
and other failures. It just calls for recapitalization and not 
delaying with the Offshore Patrol Cutters either.
    Secretary Napolitano. If I might, Senator, one thing--it 
relates to recapitalization of the Coast Guard, it relates to 
the NBAF that Senator Moran referenced. At some point in this 
process, we need to work through how the Department is funded 
to pay for big capital expenditures without having to pay for 
those expenditures out of operations. We are constantly caught 
between those two things.
    So, for example, we need another icebreaker. Now, the 
budget has in it some planning money for another icebreaker. 
There is going to be more activities in the Arctic. Drilling is 
going to start off of Alaska. We know we need a Coast Guard 
presence up there. But that is a $1 billion vessel. Plus, there 
are the NSCs you mentioned, or other recapitalization with 
other kinds of vessels, or the NBAF.
    So these are big-ticket items, but what happens, 
unfortunately, I think, is in the budget process, somehow the 
big items and the operations get merged together. And so we 
will work with you on what the right balance is, but that 
really is a tension that we have to discuss.
    Senator Collins. Thank you. Thank you for your time.
    Chairman Lieberman. Thanks, Senator Collins.
    Of course, I agree with Senator Collins regarding the Coast 
Guard, and I have the same feeling toward this as I have 
expressed several times in the Armed Services Committee, which 
is a lot of these cuts are forced on you by the Budget Control 
Act, which we adopted. But in this authorization process, we 
have an obligation to look back and see if what you have done 
makes sense and whether we want to relook at the BCA and find 
other ways to fund some of these things that really need to be 
funded in the national interest, either by finding savings 
elsewhere or, perish the thought, by raising taxes. Thank you.
    Just when you thought it was safe, Secretary Napolitano, to 
go back to your office, Senator Carper appears. Senator Carper.
    Senator Carper. I would introduce me differently. I would 
say ``an unexpected pleasure.'' [Laughter.]
    Chairman Lieberman. It is that, too, of course.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. It was very good talking with you last 
week. Thanks for that opportunity. And for my colleagues, let 
me just say that the Department of Homeland Security has 
announced that they are going to be audit ready--not in a 
couple years, not in the next decade, but they are going to be 
audit ready this year, paving the way for the Department of 
Homeland Security to actually pass a financial audit--not just 
talk about it, not just think about it, but actually be able to 
do it. And I think this is a wonderful achievement and just a 
great example of one of the best ways that our Federal agencies 
can act to curb not just fraud but wasteful and ineffective 
spending. We are glad you set a great example for a bigger 
agency whose Secretary is trying to drag his agency--the 
Department of Defense--kicking and screaming to being auditable 
as well and trying to push them to beat their deadline of 2017. 
So thanks for being a good role model for them.
    Secretary Napolitano. I will share that with Secretary Leon 
Panetta.
    Senator Carper. He is on it. You know, when you take 
somebody who used to be a Budget Committee Chairman in the 
House, Office of Management and Budget Director, White House 
Chief of Staff, all of the above--you put all that together and 
put that person in charge of the Department of Defense, they 
care about this sort of thing. And the reason why it is 
important, as you know, is if we do not have good financial 
controls, if we do not have the ability to actually track 
money, I mean, we are doomed. It is hard to manage what we 
cannot measure, so it is important.
    I just want to commend you and the folks who work for you 
who have taken your Department to this point in time. And I was 
just hoping you might take a minute and just give us here on 
the Committee some idea how you plan to move forward to obtain 
a clean or unqualified audit for your Department.
    Secretary Napolitano. Well, first of all, the Under 
Secretary for Management, Rafael Borras, and his staff, the 
Chief Financial Officer and others, deserve the credit. I do 
not. But they have moved forward on a number of management 
fronts, really working particularly with one or two of our 
components that we are having particular difficulty in getting 
audit ready because of the complexity of the mission and the 
state of the books, etc. So it is training, management, 
supervision, and it is just constant monitoring the process and 
encouraging us. So we were recipients of a qualified audit this 
year, which is a huge step forward. We will be ready.
    Senator Carper. All right. Thanks.
    The second area I would like to just discuss briefly. This 
Committee has continued to challenge this Administration and 
the previous Administration to try to work smarter with Federal 
dollars and to find programs where we can get better results 
for less money or at least better results for the same amount 
of money. And I believe that your Department budget takes 
really a giant step in this direction, cutting, I am told, more 
than $850 million in administrative costs and duplicative 
programs for fiscal year 2013. And, again, I want to commend 
you and the team you lead for looking in every nook and cranny 
of your Department for ways to save money and doing your part 
to move our country from what I call a culture of spendthrift 
more to a culture of thrift.
    Can you take a moment and talk with us about some of the 
cuts that the Department has made and what type of impact they 
may have on your Department's ability to carry out its security 
mission?
    Secretary Napolitano. Well, I think, Senator, our goal is 
to cut but not deleteriously impact security mission, and so we 
are looking for ways where we can get rid of redundancies, 
inefficient processes, everything from unnecessary 
expenditures, things that are nice but not necessary, to 
acquisition reform, procurement reform. The whole contracting 
process required a real thorough look at by us-- fleet 
management, purchasing, purchase management, all the rest. 
Every component has come up with savings or places where they 
can take money back. ICE is a key example. A large part of 
their budget is not really a reduction. It is savings and costs 
they have been able to identify they can avoid next year and 
not impact mission.
    Senator Carper. In talking with Cabinet Secretaries and 
folks who run some of our other Federal agencies, one of the 
themes that I have heard from them is trying to change, if you 
will, the way people think about Federal programs and to really 
make it part of a cultural change to say how do we get a better 
result for less money about almost everything that we do, or 
how do we get a better result for the same amount of money. And 
given the magnitude of the cuts that you all are looking at, it 
sounds like that is the mind-set you are bringing, so bring it 
on.
    The third question I would have deals with cybersecurity 
within the realm of State and local training. We talked a 
little bit about this before, as you may recall. But a couple 
of weeks ago when you were here, we talked a fair amount about 
Federal cybersecurity efforts, and I know you have talked with 
some of my colleagues about it here today. But while I strongly 
believe we ought to improve our Federal cybersecurity efforts, 
I think it is equally important that we also take some 
important steps at the State and local level. And as you may 
know, my home State of Delaware has devoted a significant 
amount of time and resources and energy to enhancing public 
awareness of cyber attacks and has even participated in several 
Department of Homeland Security Cyber Storm exercises to 
prepare our local officials for cyber incidents.
    Could you just discuss with us briefly some of your hands-
on cybersecurity training programs and how the Department's 
budget request will maintain these important programs that have 
helped my own State become what we think is a bit of a leader 
nationally in cybersecurity?
    Secretary Napolitano. Absolutely, Senator. It begins with 
the fusion centers, which, as I mentioned to Senator Coburn, 
are a real focus for us in terms of how we get training out to 
the country on basic security needs and analysis. It is 
training programs at FLETC and other places. It is the 
exercises. Delaware participated in Cyber Storm. The National 
Level Exercise this year will be another cyber exercise, so we 
are going to have a continued drumbeat of exercises that will 
include our State and local partners.
    Senator Carper. Thanks again for your leadership, for being 
here today, and for the spirit that you bring to your job. 
Thank you.
    Secretary Napolitano. Thank you.
    Chairman Lieberman. Thanks very much, Senator Carper.
    Secretary Napolitano, thank you for your testimony. I was 
thinking as I was listening to you, leaving aside the fact that 
I have known you for a long time, and admire you and even 
consider you my friend, if I was just coming in from nowhere, I 
would say to myself, ``That Secretary is very informed.'' 
[Laughter.]
    Secretary Napolitano. Thank you.
    Chairman Lieberman. You really are on top of what is 
happening in the Department, and we agree most of the time, we 
disagree some of the time, but you were very responsive today, 
and I appreciate that.
    Secretary Napolitano. Thank you.
    Senator Collins. As do I.
    In all seriousness, it is such an important Department, and 
I do appreciate your leadership, particularly in the area of 
cybersecurity, and I have great confidence that you are going 
to fix the budget when it comes to the Coast Guard and that we 
will continue to work very closely together.
    I also want to thank all the men and women who work for the 
Department. So many of them are the unsung heroes who every day 
are so committed to the mission of protecting our country. I 
know, unfortunately, it has become in vogue nowadays to beat up 
on Federal employees, and I think that is really unfortunate 
because so many of them work so hard with the best of 
motivations and intentions. So I would ask that you pass on our 
thanks to them as well. Thank you.
    Secretary Napolitano. I will do that. Thank you very much.
    Chairman Lieberman. As do I.
    Secretary Napolitano. Thank you all.
    Chairman Lieberman. The record of the hearing will stay 
open for 15 days for any additional questions or statements. 
Again, I thank you. The hearing is adjourned.
    [Whereupon, at 4:34 p.m., the Committee was adjourned.]
                            A P P E N D I X

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