[Senate Hearing 117-39]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-39

                  PREPARING FOR FUTURE CRISES: EXAMINING THE 
                            NATIONAL RESPONSE ENTERPRISE

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                EMERGING THREATS AND SPENDING OVERSIGHT

                                 OF THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS


                             FIRST SESSION

                               __________

                             MARCH 24, 2021

                               __________

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

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs
        
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                  U.S. GOVERNMENT PUBLISHING OFFICE                    
45-042 PDF                  WASHINGTON : 2021                     
          
--------------------------------------------------------------------------------------
       

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
                Pamela Thiessen, Minority Staff Director
    Andrew Dockham, Minority Chief Counsel and Deputy Staff Director
                     Laura W. Kilbride, Chief Clerk
                     Thomas J. Spino, Hearing Clerk


        SUBCOMMITTEE ON EMERGING THREATS AND SPENDING OVERSIGHT

                 MAGGIE HASSAN, New Hampshire, Chairman
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                     Jason Yanussi, Staff Director
                Jillian Joyce, Professional Staff Member
                 Greg McNeill, Minority Staff Director
                Adam Salmon, Minority Research Assistant
                      Kate Kielceski, Chief Clerk
                            
                            
                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Hassan...............................................     1
    Senator Hawley...............................................     9
    Senator Cassidy..............................................    11
    Senator Rosen................................................    13
    Senator Ossoff...............................................    18
    Senator Scott................................................    23
Prepared statements:
    Senator Hassan...............................................    27

                               WITNESSES
                       Wednesday, March 24, 2021

General Joseph L. Votel, U.S. Army (Retired), President and Chief 
  Executive Officer, Business Executive Officer, Business 
  Executives for National Security; Accompanied by the Hon. W. 
  Craig Fugate, Former Administrator, Federal Emergency 
  Management Agency, U.S. Department of Homeland Security; Kristi 
  M. Rogers, Managing Partner, Principal to Principal LLC; and 
  Michael Capps, Ph.D., Chief Executive Officer, Diveplan 
  Corporation
    Testimony....................................................     3
    Prepared statement...........................................    29

                                
                                APPENDIX

Findings and Recommendations of the BENS Report..................    32

 
                      PREPARING FOR FUTURE CRISES:
               EXAMINING THE NATIONAL RESPONSE ENTERPRISE

                              ----------                              


                       WEDNESDAY, MARCH 24, 2021

                                     U.S. Senate,  
                       Subcommittee on Emerging Threats and
                                        Spending Oversight,
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10 a.m., via 
Webex and in room SD-342, Dirksen Senate Office Building, Hon. 
Maggie Hassan, Chair of the Subcommittee, presiding.
    Present: Senators Hassan, Sinema, Rosen, Ossoff, Scott, and 
Hawley.
    Also present: Senator Cassidy.

             OPENING STATEMENT OF SENATOR HASSAN\1\

    Senator Hassan. Good morning, everybody. This hearing will 
come to order. I want to thank our witnesses for joining us 
today and for volunteering to serve on the Business Executives 
for National Security (BENS) Commission on the National 
Response Enterprise.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Hassan appears in the 
Appendix on page 27.
---------------------------------------------------------------------------
    The Commission's purpose was to bring former government 
leaders together with business executives to find ways to 
better prepare for, and respond to, future crises. Thank you 
all for answering that call to service.
    I also want to thank Senator Paul as well as his staff for 
working together with me to hold the Emerging Threats and 
Spending Oversight (ETSO) Subcommittee's first hearing of the 
117th Congress. I look forward to working together to address 
the emerging national, economic, and homeland security threats 
facing the United States and identifying ways to prevent waste, 
fraud, and abuse related to Federal spending. I will work with 
Ranking Member Paul and all of my colleagues on the Committee 
on a bipartisan basis to make our country safer and more 
fiscally responsible.
    The Business Executives for National Security Commission 
was founded nearly 40 years ago as a national and nonpartisan 
organization to bring senior, private sector executives 
together with government policymakers to discuss business 
challenges faced by public and private sector organizations 
dealing with national security issues. While some members of 
BENS have previously served in government, many have spent much 
or all of their careers in the private sector and bring fresh 
perspectives to pressing national security issues.
    In the summer of 2020, with the United States and the rest 
of the world battling the coronavirus disease 2019 (COVID-19) 
pandemic, the organization convened a Commission on the 
National Response Enterprise. They brought together some of the 
most respected and accomplished leaders from government and 
corporations to research and analyze many of the factors that 
lead to effective emergency preparedness and response. The 
Commission was prompted to make sure that it did not view 
issues too narrowly through the lens of the current pandemic, 
but to understand what needs to be done to improve preparedness 
and response to virtually any type of future crisis, whether it 
be a pandemic, a natural disaster, a coordinated cyber attack, 
or an act of terrorism.
    The commission was co-chaired by Jeh Johnson, the former 
Secretary of Homeland Security; Alex Gorsky, the chairman and 
Chief Executive Officer (CEO) of Johnson & Johnson; and Mark 
Gerencser, the former managing director of Booz Allen Hamilton 
and the BENS Chairman of the Board. Thirty-three additional 
commissioners from government, business, and civil society 
joined these co-chairs, in addition to General Votel, the 
president and CEO of BENS, to identify ways to increase U.S. 
resiliency for future crises. I was honored to be included in 
the process as a guest to provide a congressional perspective 
alongside my colleague, Senator Cassidy, who is also joining us 
today.
    In just a few months, the commission interviewed 165 
government, private sector, and other stakeholders and 
developed 11 recommendations for ways to improve our 
preparedness and response capabilities. The Commission's 
recommendations focused on three key areas: facilitating 
communication and coordination, delivering supplies and 
volunteer resources, and leveraging emerging technology. 
Recommendations range from amending the Stafford Act to include 
pandemics, cyber events, and other emergencies of extended 
duration, to expanding the inclusion of nontraditional partners 
by the Department of Homeland Security (DHS) and the Federal 
Emergency Management Agency (FEMA) in response efforts. The 
Commission also recommended consistent and pervasive exercises 
across the emergency response enterprise and enhancing 
stockpile resilience by investing in cutting-edge technology 
that can enable real-time information sharing and rapid 
decisionmaking.
    The Commission's report\1\ and the testimony provided today 
will provide a foundation for action for this Subcommittee. I 
will work with the commission, Senator Cassidy, and the Members 
of the Subcommittee to introduce legislation to address the 
issues that we will discuss today, to better prepare 
communities all across the United States to manage future 
crises.
---------------------------------------------------------------------------
    \1\ The report referenced by Senator Hassan appears in the Appendix 
on page 32.
---------------------------------------------------------------------------
    Now we will move to introductions. I want to thank 
everybody for joining the Subcommittee here today, and I am 
going to introduce our witnesses. Ranking Member Paul, when he 
arrives, will have an opportunity to make an opening statement.
    It is the practice of the Homeland Security and 
Governmental Affairs Committee (HSGAC) to swear in witnesses. 
If the witnesses would please raise your right hands? Do you 
swear that the testimony you will give before this Subcommittee 
will be the truth, the whole truth, and nothing but the truth, 
so help you, God?
    General Votel. I do.
    Mr. Fugate. I do.
    Ms. Rogers. I do.
    Mr. Capps. I do.
    Senator Hassan. Thank you.
    I will now proceed with witness introductions. First, 
General Votel.
    Our first witness today is General Joseph Votel, the 
president and CEO of Business Executives for National Security. 
General Votel leads the organization's talented staff across 
seven regional offices and works with the Board of Directors 
and the organization's 400-plus members to develop and execute 
their strategy. General Votel joined BENS in January 2020 
following a decorated 39-year military career where he 
commanded special operations and conventional forces at every 
level.
    In his last military position, he served as the commander 
of U.S. Central Command (CENTCOM), where he was responsible for 
U.S. and coalition military operations in the Middle East, 
Levant, and Central and South Asia. He led the 79-member 
coalition that successfully liberated Iraq and Syria from the 
Islamic State Caliphate. He is a nonresident distinguished 
fellow at the Middle East Institute and the Belfer Center at 
the John F. Kennedy School of Government. He sits on the 
executive board of the Center for Ethics and the Rule of Law at 
the University of Pennsylvania Law School, is an adviser to the 
Combating Terrorism Center at West Point, and is a member of 
the Council on Foreign Relations.
    General Votel graduated from the U.S. Military Academy at 
West Point and later earned a Master's degree from the U.S. 
Army Command and Staff College and the Army War College.
    Welcome, General Votel. You may now proceed with your 
opening 5-minute statement.

 TESTIMONY OF GENERAL JOSEPH L. VOTEL,\1\ U.S. ARMY (RETIRED), 
PRESIDENT AND CHIEF EXECUTIVE OFFICER, BUSINESS EXECUTIVES FOR 
   NATIONAL SECURITY; ACCOMPANIED BY THE HONORABLE W. CRAIG 
  FUGATE, FORMER ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT 
AGENCY, U.S. DEPARTMENT OF HOMELAND SECURITY; KRISTI M. ROGERS, 
   MANAGING PARTNER, PRINCIPAL TO PRINCIPAL LLC; AND MICHAEL 
  CAPPS, PH.D., CHIEF EXECUTIVE OFFICER, DIVEPLANE CORPORATION

    General Votel. Good morning, Chairwoman Hassan and Ranking 
Member Paul and distinguished Members of the Subcommittee. 
Thank you for the opportunity to appear before you today to 
discuss the work of the Commission on the National Response 
Enterprise, convened by Business Executives for National 
Security last June.
---------------------------------------------------------------------------
    \1\ The prepared statement of General Votel appears in the Appendix 
on page 29.
---------------------------------------------------------------------------
    Let me start and enhance on your introduction of BENS here 
by saying BENS is a national, nonpartisan organization of 
senior executives who volunteer their time, talent, and 
treasure to address business-related challenges faced by 
organizations across the national security enterprise. Since 
its founding in 1982, BENS' members have assisted military and 
government partners by sharing expertise, recommendations, and 
best practices from their own experiences in the private sector 
and proactively identifying and offering insights, 
perspectives, and advice on security objectives.
    Just over a year ago, Americans were barraged around the 
clock by news of skyrocketing COVID diagnoses and deaths, the 
devastating toll of the pandemic on the U.S. economy and supply 
chain problems for everything from toilet paper to respirators 
to medical personnel. In these reports, our BENS members 
recognized business challenges with which they grapple every 
day and saw an opportunity to use their experience to help--if 
not immediately, then to strengthen the Nation's response to 
future crises.
    With that goal in mind, BENS launched the Commission on the 
National Response Enterprise to create what we believed would 
be a new emergency response model to strengthen U.S. resiliency 
through enhanced coordination, communication, and cooperation 
between government, business, and civil society. We assembled 
33 commissioners representing each of these sectors to work on 
the issue--former military commanders or leaders, CEOs of 
respected American corporations, a former Cabinet Secretary, a 
Nobel laureate, former homeland security advisers, Members of 
Congress, and State and local leaders.
    Joining them were 58 additional business leaders, mostly 
members of BENS, who interviewed 165 government, private 
sector, and civil society stakeholders and researched five 
critical component areas of emergency response: roles and 
responsibilities, surge capacity, supplies management, people--
the human resources--and infrastructure and economy. I want to 
take this opportunity to thank Senators Hassan and Cassidy for 
their support and guidance as commissioners throughout our 90-
day work period and in the months since. It has been and 
continues to be invaluable to us.
    The commission ultimately concluded that the Nation does 
not, in fact, need a new model of emergency response; the 
components of an integrated national response capability are 
present within the U.S. National Response Framework (NRF). 
However, significant execution challenges do exist, 
particularly when a crisis impacts numerous States 
simultaneously or extends over a prolonged time period. Gaps 
and breakdowns in systems and operations have disrupted 
communication, coordination, and surge and supply chains across 
all sectors throughout the COVID-19 response.
    Until these weaknesses are addressed, future pandemics, 
natural disasters, coordinated cyber attacks, or acts of terror 
will have the ability to imperil our citizens, cripple our 
infrastructure, threaten our economy, and put our national 
security at risk. Now is the time for transformational thinking 
about emergency response strategy, policies, and processes.
    The commission's Call to Action offers 11 recommendations 
for redesigning our response capabilities to embrace 21st 
century realities in how the United States handles national 
crises. They are focused in three areas: facilitating 
communications and coordination, delivering supplies and 
volunteer resources, and leveraging emerging technologies.
    I highlight for your awareness several actions embedded 
within these recommendations that appear especially relevant to 
the Subcommittee's mission areas. These include, as you 
mentioned, amending the Stafford Act to include pandemics, 
cyber events, and other emergencies of extended duration or 
with nationwide impact; biennial delivery of a National 
Emergency Response Strategy by the Secretary of Homeland 
Security; establishment of expense reporting authority for all 
emergency-related response spending by the Federal Government; 
redesign of FEMA's National Response Coordination Center (NRCC) 
to link responder networks and help create a common operating 
picture for all stakeholders; wider inclusion of nontraditional 
partners by the Department of Homeland Security and FEMA in 
response efforts; creation of a FEMA Surge Center that can 
deliver the situational awareness, secure information exchange, 
and data analytics needed to drive accurate, real-time 
decisionmaking; development of a secure national disaster app 
offering access to features like a map displaying current 
disaster and response activities, and artificial intelligence 
(AI)-enabled predictive analytics indicating future threat 
areas; the acquisition and use of technologies capable of 
engendering trust in the handling of personal data; exploration 
of targeted protections for organizations and businesses asked 
to share data with governments during times of crisis; driving 
information technology (IT) modernization by Federal 
organizations that are part of the National Response Framework; 
and migration of State and local legacy systems to new, secure 
platforms capable of integration with those National Response 
Framework organizations; and, finally, establishment of 
consistent, pervasive exercising across the emergency response 
enterprise.
    Joining me today are three commission experts with deep 
subject matter knowledge related to FEMA, to surge and supply 
activities, and data and technology. They will help answer your 
questions on these or any other recommendations. They are 
former FEMA Administrator Craig Fugate, who was involved in all 
aspects of our report related to FEMA, as well as all of the 
recommendations related to communications and coordination; 
Kristi Rogers, a managing partner at Principal to Principal 
LLC, who spent considerable time focused on supply and surge 
and the human resource (HR) aspect of our recommendations; and 
Michael Capps, the CEO of Diveplane Corporation, who is an 
expert in leveraging technology.
    We cannot change what has already occurred, but we can 
commit ourselves to doing better in the months and years ahead. 
BENS hopes that our commission's work can be a blueprint for 
elevating America's ability to respond to future crises. We 
stand ready to work with you, the full Committee, and all 
interested Representatives and Senators in moving the Nation 
forward toward this critical goal.
    Thank you very much.
    Senator Hassan. Thank you so much, General Votel. I am 
going to take a minute, too, to recognize the accompanying 
witnesses with you and say a little bit about them for the 
record. I am very grateful not only to you, General, but to the 
witnesses you mentioned for being part of this testimony today. 
Let me recognize all three: the Honorable W. Craig Fugate, Ms. 
Kristi Rogers, and Mr. Michael Capps.
    Mr. Craig Fugate is a former Administrator of the Federal 
Emergency Management Agency, a position he held for nearly 8 
years. He previously served as the Director of Florida's 
Division and is a recognized expert on emergency preparedness 
and response issues. As a member of the Commission on the 
National Response Enterprise, Mr. Fugate lent his experience 
and expertise regarding the Federal role in national 
emergencies, existing gaps, and how to address surge capacity.
    Ms. Kristi Rogers is the managing partner of the consulting 
firm Principal to Principal LLC, which advises business 
executives and leaders. Earlier in her career, she served in 
several government roles, first at U.S. Customs and Border 
Protection (CBP) within DHS, beginning shortly after September 
11, 2001, later serving 9 months in Iraq with the Defense 
Department (DOD). As a commissioner, she lent her expertise on 
a variety of emergency response issues, including supply chain 
and surge capacity.
    Mr. Michael Capps is the CEO of Diveplane Corporation, an 
artificial intelligence computer that works with the Department 
of Defense. Mr. Capps has taught artificial intelligence and 
the use of virtual reality for training at the Naval 
Postgraduate School. He has extensive experience in the 
technology sector, including as president or CEO of three 
cutting-edge software companies. As a commissioner, Mr. Capps 
helped guide work on data and technology use in national 
crises.
    Mr. Fugate, Ms. Rogers, and Mr. Capps, I understand you are 
all prepared to help answer the Subcommittee's questions today. 
I thank you so much for your work and for joining us.
    We are now going to begin our round of questions. I have 
been notified that due to a conflict, it is unlikely that 
Senator Paul will be able to join us. I am going to proceed now 
to a set of questions, and then after that I will recognize 
Senator Hawley for his.
    General Votel, while some people associate FEMA with 
disasters like major storms and wildfires, I know that FEMA, as 
well as State and local emergency managers, tries to make an 
all-hazards approach in drills and preparation. But Congress 
may need to clarify Federal law to reflect that all-hazards 
approach.
    The commission's first recommendation includes amending the 
Stafford Act to include pandemics and cyber attacks for FEMA 
disaster assistance. General, can you tell us why and what 
would be the practical effect of such a change?
    General Votel. Thank you, Madam Chairwoman. Yes, I think 
the immediate response would be inclusion of pandemics or these 
other types of national shocks that we have been talking about 
would allow for a more rapid distribution and focus of 
resources, money, and leadership toward the problem. I think 
one of the things that we discovered in the process of this, 
because there was some initial confusion in the early days of 
the pandemic, looking at it as a medical issue, the government 
initially focused in on medically oriented organizations, the 
Department of Health and Human Services (HHS), before 
ultimately assigning the responsibility of this to the Federal 
Emergency Management Agency. In that time, valuable time was 
lost in focusing on the problem.
    I think the key thing that this amendment does is it 
provides the opportunity to immediately focus on the emergency 
and get the necessary resources flowing toward them.
    Senator Hassan. Thank you.
    General, another question. Recent events have highlighted 
the challenges of stocking, maintaining, and distributing 
emergency supplies in the Strategic National Stockpile (SNS). 
The Department of Health and Human Services is the lead agency 
when it comes to management of the Strategic National 
Stockpile, but should FEMA have a role in coordinating with HHS 
going forward?
    General Votel. Yes, I think they should. Through the 
National Response Coordination Center, FEMA can have some 
ability in making sure that we have the appropriate resources 
on hand to deal with any of these particular emergencies. An 
important role that FEMA plans in this through things like the 
NRCC is the ability to have well-established relationships with 
industry and with other civil organizations out there who are 
providing the resources for this. I think it is absolutely 
critical that they play in this particular area.
    Senator Hassan. Thank you. I want to ask a follow-up. How 
can emerging technologies such as artificial intelligence help 
address these challenges? Certainly, if Mr. Capps or Ms. Rogers 
want to add thoughts about this, that would be great.
    General Votel. Let me jump in here, and then I will defer 
to my colleagues here. I think one of the key things where 
artificial intelligence can help us in the modeling aspect of 
this. This is another area where the work of the commission 
identified some challenges here in trusting models that can be 
used to help predict what is happening. All of us are aware, 
with hurricanes and other natural disasters, we have become 
very confident in the models that are used by the National 
Weather Service (NWS) and others to predict landfalls where all 
that takes place so that people can get out of the way, they 
can prepare, we can have the necessary resources ready to go, 
we are thinking about it in both time and space.
    I think one of the things that technology can help do, 
particularly artificial intelligence, is help fill that gap as 
we look at some of these other disasters. I will defer to Mike 
and others to comment.
    Mr. Capps. Thank you, General, and thank you, Madam 
Chairwoman. I look at AI as both a defensive concern as well as 
a capability in that we need to make sure that our data, our 
systems, our cloud are operational, because we cannot maintain 
an economy or resilience without them. But then looking to what 
they can do for us, it is just impossible to tabletop all the 
scenarios with people around the table in the way that you can 
do with AI, so building models and then building resilient 
models is a real opportunity.
    When we were working on this commission, we thought of 
issues like Hurricane Katrina and difficult it is to know where 
are people and what needs to be where. If you imagine, if we 
just simply knew where every operating Internet of Things 
(IOT), Internet-enabled refrigerator was in Louisiana, what 
that could have done for us. That is information you need to 
gather in advance, which is exactly what these sort of 
partnerships we are proposing might be able to do. Thank you.
    Senator Hassan. I assume artificial intelligence and 
technology can help us keep track of what we have in the 
National Strategic Stockpile, for example, and again, match 
supplies to need in a much more efficient way.
    Mr. Capps. Absolutely. Just the tracking problem, it is 
interesting how hard it is to know what is on what truck and 
where. But that is the sort of thing that, again, with IT 
modernization efforts across government and partnering with 
private enterprise, it is the sort of thing we could do. Having 
a real situational picture is the first step toward 
prioritizing response.
    Senator Hassan. Great. Ms. Rogers, do you want to add 
anything? I wanted to also add about data collection and 
analysis in terms of identifying where distribution needs are 
the greatest. If you wanted to address that or just generally 
the use of other technologies, that would be helpful.
    Ms. Rogers. I do. Thank you. Thank you, Madam Chairwoman, 
again for the opportunity to speak today and the recognition 
for this important issue.
    I will take a bit of what General Votel said in regard to 
the commission's recommendation to create or, actually, I would 
say transform, evolve FEMA's National Response Coordination 
Center and make it a permanent state-of-the-art organization 
that could be an interagency organization, meaning it could 
coordinate or should coordinate directly with the Strategic 
National Stockpile, with HHS, the Centers for Disease Control 
(CDC), U.S. Food and Drug Administration (FDA), and the 
Biomedical Advanced Research and Development Authority (BARDA) 
all within it, but we need one organization that is responsible 
for the preparedness planning and response. That is important 
to deliver consistent information on supply demand to the 
private sector. A lot of companies stepped up and wanted to 
help, but weaknesses in supply and demand signaling by the 
Federal Government and the lack of a coordinated, consistent 
voice by the government to the private sector really hampered 
the production and the delivery of much-needed personal 
protective equipment (PPE), medical equipments, and 
pharmaceuticals.
    The Surge Center, as we are recommending for FEMA, could 
also be housed in the National Response Coordination Center, 
and it would be state-of-the-art, completely digitalized, 
allowing secure sharing of information between the government 
and the private sector, and it would allow a clear demand 
signal to be provided to government so companies would know 
what they needed to ramp us in production, when to deliver, and 
where to deliver.
    Senator Hassan. Thank you. Before I turn it over to Senator 
Hawley, I wanted to ask Mr. Fugate, since we got into his area 
of expertise, whether he has anything to add on this particular 
topic.
    Mr. Fugate. Madam Chair, talking about AI, talking about 
data, this always goes back to the question that we also talk 
about in the report. We have to have production capacity within 
the United States when we are dealing with global threats. One 
of our big challenges in the supply chain is even knowing where 
stuff is, if it is not being produced in the United States, we 
may not be able to get it fast enough.
    Senator Hassan. Great. Thank you so much. Now to Senator 
Hawley.

              OPENING STATEMENT OF SENATOR HAWLEY

    Senator Hawley. Thank you, Madam Chair. Thanks to the 
witnesses for being here.
    General Votel, let me turn back to you. It is nice to see 
you again in a somewhat different capacity than when I saw you 
last before the Senate Armed Services Committee. Let me ask you 
about this report. Just on the subject of supply chains, what 
do you think that we should learn from the pandemic about the 
vulnerability of our critical supply chains in particular?
    General Votel. Thank you, Senator, and it is good to see 
you again. I think the most important point is that we have to 
come to some resolution on what it is that we need to have 
stockpiled and what those essential resources and supplies are 
that we need to have stockpiled, of course, and ready to go. 
Then we need to make sure that we know where those things come 
from and what the supply chains are associated with those and 
where there are dependencies that are overseas or where 
production capacities are within the United States that can be 
invoked to address those.
    I really think this gets down to overall awareness and 
understanding of what we are going to have on hand and then how 
we reach out and grab the things that we need as a crisis 
emerges.
    Senator Hawley. Let me ask you about the just-in-time 
production. It seems to me that one of the weaknesses with our 
supply chains is this just-in-time production model and other 
efficiency measures that, while they no doubt help the 
corporate bottom line, also can leave us vulnerable and exposed 
in a crisis, as we saw this last year.
    You talk about this a little bit in the report, I believe. 
I wonder if you could discuss the problem, some of the problems 
with the private sector's emphasis on just-in-time production 
as it relates to the National Response Enterprise.
    General Votel. Sure, Senator. The real challenge here is 
that when we do just-in-time supply, what that means is that 
the initial surge of capabilities that we need early in a 
crisis to respond and bring things under control may not be 
immediately available to us. Of course, this is the challenge. 
What is needed is more coordination and discussion between 
those at the Federal level, and perhaps State level, who are 
managing these stockpiles and those who are producing the items 
that go into them. We will need to accept the fact that we have 
to work very closely with businesses to provide--have stuff on 
hand, rotated in and out of stock so that it stays up to date, 
and that the businesses will have arrangements that they are 
not doing this at a loss to their bottom lines. There has to be 
much closer coordination over this particular issue right here. 
It is absolutely critical, especially in the early stages of a 
crisis.
    Senator Hawley. Let me ask you about the responsibilities 
that our largest corporations have when it comes to this issue 
and, in particular, supply chain resilience. For example, what 
I am thinking of is if we have a major corporation that 
produced certain essential goods, like medical devices, for 
instance, should they be required to take steps to boost supply 
chain resilience, onshore jobs back domestically, report on 
where they source their products, things of that nature, given 
the fact that we rely on these essential products so much?
    General Votel. Thanks, Senator. I would invite Ms. Rogers 
to comment on this as well, but, yes, I think we have to--for 
these organizations, private sector organizations that we rely 
on for these critical resources, they need to be incentivized 
and encouraged to make sure that we know with some level of 
reliability that we can get our hands on those particular 
supplies.
    Ms. Rogers. Senator, if I may address that in two different 
ways. You are correct that resiliency in companies today often 
means sort of vital capacity, which is the antithesis of a 
lean, efficient, profitable business model. But I do not think 
you have to do away with that, actually. With today's 
innovative technologies, the widespread adoption of them could 
actually build in resiliency. The adoption of 3D printing, of 
digital twin, of, additional AI and other data sharing, that 
could allow a surge capacity without delayed time and still 
allow a company be profitable.
    You could further enhance that, as the General said, with a 
combination of incentives, and I would say sort of modern-day 
public-private partnership. The private sector has the 
innovation, the ingenuity, and the wherewithal to be able to do 
this. What the government needs is to create a path to allow 
those companies that want to help in the state of a crisis to 
do so. It could be a combination of tax incentives, of grants. 
It just depends upon the size of a company and what a company 
needs. A smaller company might need access to capital, so it 
could be also a loan.
    I would say it needs to be a combination of integrating 
state-of-the-art technology along with tax incentives, grants, 
and loans to the private sector.
    Senator Hawley. Very good. Thank you, Ms. Rogers, for that. 
Thank you, General.
    General, let me switch to FEMA, if I could for a minute. 
FEMA, of course, took a major role in procuring and 
distributing PPE during the early stages of the pandemic, 
including Project Airbridge, which arranged air transport for 
PPE from other countries. How would you assess FEMA's role in 
that operation?
    General Votel. I think perhaps Mr. Fugate can provide some 
more expert information on this, but in my view, what FEMA 
encompasses here is the expertise and the management skills to 
deal with crises. I think their role in this early on is 
absolutely essential, and as we have seen, they end up being an 
organization that becomes a go-to for many of the crises that 
our country faces.
    Craig, thoughts, please?
    Mr. Fugate. Thanks, Senator. They did what they had to do. 
I think our concern on the commission was it was late to need. 
It was not clear that FEMA had this role. In prior planning, we 
had focused on FEMA's role in supporting the Governors as a 
consequence of a pandemic, with HHS having the primary lead on 
supply chain, supply, distribution, acquisition. I think, as we 
point out, clarifying these roles now that FEMA does have a 
role supporting HHS, these are things that FEMA would likely be 
called upon to do, I think even improves that capability and 
speeds it up so it is not late in the ending before they are 
being utilized.
    Senator Hawley. Very good. Thank you all. I have some more 
questions I will submit for the record.
    Thank you for your work, and thank you for being here.
    Thank you, Madam Chair.
    Senator Hassan. Thank you, Senator Hawley. As we look at 
timing, there will likely be an opportunity for a second round 
of questions as well, for everybody's awareness.
    Now I want to move to Senator Cassidy, who is joining us as 
a special guest because of his role with BENS over the last 
several months.

              OPENING STATEMENT OF SENATOR CASSIDY

    Senator Cassidy. Yes, I am not on the Committee, so they 
are allowing me to join from my kitchen. Thank you, Madam 
Chair. Thank you, BENS, for all the work you have done.
    I got so many questions. Let me just start with you, Mr. 
Fugate. Building upon that last line of questioning, when 
everything hit the fan, my appropriations guy said there is no 
way FEMA does not take the lead because they have to dispense a 
lot of money very quickly, and HHS does not have the 
infrastructure to do that.
    I was speaking to a doctor involved with disposition of 
ventilators, HHS had that expertise, but FEMA took it over, as 
I gather, because they were now writing the checks. They may 
have come late to the game, but they were dominating the game. 
They were now making decisions which, frankly, they did not 
have the training to do.
    There has been some kind of, we need to build out HHS so 
they can dispense lots of money quickly. But that seems like we 
should be able to concentrate that in one agency, not duplicate 
in both. On the other hand, you do not want FEMA making 
decisions about health care when it is just some guy who slept 
in a Holiday Inn last night.
    How do we reconcile those tensions?
    Mr. Fugate. It is going back to FEMA's classic role, 
Senator. FEMA is a support agency. They are not the lead 
agency. They support Governors in most disasters, or in the 
case of a lead Federal agency like HHS, where HHS is in charge 
of the response. But FEMA has a convening power. It has tools 
on their staff for that. It has capabilities that support that. 
It was not much different than our role in supporting the 
Centers for Disease Control during Ebola. We did not take over 
that response, but we sent teams in to help CDC staff the----
    Senator Cassidy. Can I ask you a group dynamic question? 
Because it does seem that if somebody has the convening power 
and somebody has the ability to dispense dollars all over the 
Nation and somebody, et cetera, et cetera, et cetera, that 
whether or not they are technically supporting, in reality they 
begin to assume responsibility of leadership. You have been 
there. I have been in the middle of a hurricane hitting 
Louisiana, and it does seem at some point the Federal role 
becomes pretty prominent in terms of direction of activity.
    I know that how it is on paper. It did not seem to work out 
that way. That may have been an internal dynamic within the 
administration. Is it possible for FEMA to only be supporting 
when they have such a prominent role otherwise?
    Mr. Fugate. Absolutely. FEMA had a prominent role in 
responding to the hurricanes in Louisiana and coordinating the 
Federal response, but the lead was always the Governor of 
Louisiana. I think that is the thing we missed when the 
decision was made to put FEMA in charge of the response. I 
would not have done that. I would have kept Health and Human 
Services in charge of the medical, the decisions, the policies, 
but I would have tasked FEMA for coordinating with the rest of 
the Federal family where they have a lot of built, deep 
relationships to support that, and then focus on supporting the 
Governors on a lot of the consequences.
    We have looked at this in a variety of types of emergencies 
that fall out of that traditional Governors, State led, FEMA 
supported, where there is a Federal lead agency. There are 
always going to be personalities, but I think the role of FEMA 
is as the support agency, the support element to that lead 
role, whatever Federal agency it is. It is personalities 
sometimes, but I think codifying that structurally in statute, 
the Stafford Act and other ways, can also ensure that FEMA has 
that role, is called in early, but it is a support to that lead 
Federal agency.
    Senator Cassidy. OK. Ms. Rogers, there have been a couple 
questions here regarding inventory management. Now, we know the 
private sector will often use vendor-managed inventory, first-
in, first-out, that sort of thing. We heard stories of these 
strategic national supplies inventory declining, having 
obsolete equipment, or stuff that was just on the brink of 
being expired--nothing that should happen in a well-run major 
hospital. That would have been used before it expired. Any 
thoughts regarding a vendor-managed inventory to manage our 
Nation's stockpile? For context, the buyer owns the inventory, 
but there is a vendor which manages the inventory without 
taking possession. I am asking you on that one.
    Ms. Rogers. I think a vendor-managed inventory would be an 
exceptional way to go. I think there needs to be increased 
visibility in the Strategic National Stockpile and the State 
stockpiles. I think it is critical. I do think it is 
something--the commission recommended sort of a Surge Center 
that would have visibility and coordinate with the Strategic 
National Stockpile, understanding what the supply is, and also 
at the same time maintaining a sort of 
24/7 visibility on the supply and the demand, not just during a 
crisis. But it is most important to actually do it ahead of 
time so you have that visibility and you are able to much 
better manage the first-in, first-out, what is needed, and 
then, of course, combining the latest technological 
innovations. We have just not done that. If you actually look 
at the Strategic National Stockpile and what digital twin 
technology and 3D printing could do to dramatically improve the 
response capability and capacity of the SNS, it would be 
incredible.
    Senator Cassidy. Let me ask you, though, I think of 3D 
printing as being kind of a one-off, not the sort of surge and 
supply we needed for ventilators, or at least we thought we 
needed for ventilators. Am I wrong? Can 3D printing actually 
give you that volume of, you name it, say ventilators, pretty 
complex, et cetera?
    Ms. Rogers. We have worked with several companies, small 
and large, including some of the largest companies, like 
Siemens Government Technologies, 3M, General Motors, Ford, with 
some of the small ventilator companies. The biggest concern 
with the company that has the technology that is producing the 
ventilator is the proprietary information. Once you deal with 
the proprietary information and maybe license the technology, 
the 3D printing as well as the digital twin can actually 
greatly enhance and strengthen the volume and capacity.
    Senator Cassidy. Can you give me a sense of how many 
ventilators you can make with--I mean, do we have to build out 
our 3D manufacturing capacity? Or is there right now the 
ability to make 10,000 ventilators in a week using 3D printing?
    Ms. Rogers. I would say yes and yes. We do need to enhance 
and strengthen, and, yes, we currently have the capacity. 3M 
was creating--building ventilators--I am going to get this--let 
us say in a month, 300,000 on a normal basis pre-COVID. During 
the height of COVID, it was up to 10 million, 300 million, and 
it vastly enhanced their capability when they looked at 
implementing the digital twin, the 3D printing.
    Senator Cassidy. I will have a second round, but I see 
Senator Rosen is on, so I will log off for a second.
    Senator Hassan. Thank you very much, Senator Cassidy.
    I now recognize Senator Rosen.

               OPENING STATEMENT OF SENATOR ROSEN

    Senator Rosen. Thank you, Madam Chair. Thank you, Senator 
Cassidy. Thank you to all the witnesses for being here today 
and for your service.
    I am going to talk a little bit about coordinating with 
nontraditional partners, particularly as it relates to natural 
disasters, because in 2020 the wildfire season was incredibly 
devastating, burning more than 10 million acres nationally and 
hundreds of thousands of acres in my home State of Nevada. As 
communities continue to recover from COVID and natural 
disasters like wildfires, we have to provide the support and 
the investment to prevent further catastrophes. For wildfires 
in Nevada, various stakeholders coordinate response and 
recovery efforts. They include our Federal land management 
agencies, State and local governments, first responders, and 
one of the report's recommendations is to expand the inclusion 
of nontraditional partners when responding to incidents.
    In Nevada, farmers, ranchers, conservation groups, they 
play a key role in defending against wildfire and recovering 
the lands after, but they are not always brought to the table.
    Mr. Fugate, how can FEMA and the Federal Government expand 
outreach to these kind of nontraditional partners, encourage 
the kind of collaboration we need, particularly for us in 
Nevada, the west coast, we have wildfires, but other natural 
disaster responses even more broadly?
    Mr. Fugate. Senator, this is something I came to the 
conclusion a long time ago that government-centric problem 
solving does not scale up the bigger the disaster is. We 
developed the term ``whole of the community'' and looked at the 
public as a resource and not a liability. How do you bring in 
those nontraditional folks that are on the ground that are 
going to take action anyway. There is a bias in the Federal 
Government not to engage outside those partnerships. At FEMA, 
we had to make the disasters big enough to break the system to 
force people into those relationships.
    I think as we talk about the pandemic and we saw how that 
introduced new partners, it is a bias that the Federal 
Government has to get through, that you do not have to always 
be the traditional organization, you do not have to have the 
incident command certification. We spend a lot of time talking 
about credentialing, but in a disaster, who is going to show up 
and work that we need to be looking at. I think part of this is 
lowering the barriers to the public and to those nontraditional 
folks to be part of the team.
    Senator Rosen. I agree. I would think that there might be 
potential cost savings and really proactive efficiencies when 
you strengthen these relationships. For example, farmers and 
ranchers, they could be doing things ahead of time to 
mitigate--of course, in the case of wildfires, you can do some 
mitigation, maybe other things not so much. But do you think 
there is cost savings there for the efficiencies?
    Mr. Fugate. There is cost savings, and it speeds up 
response. But if you go into the wildfire community, they are 
traditionally not going to be very receptive to people who do 
not have their training and are not part of their system. They 
are very much focused on their safety and working with people 
they are comfortable with. That is when you have enough 
resources. When you do not have enough resources, who are you 
going to call? I grew up and I lived in the State of Florida, 
and I can tell you a lot of our brushfires here, it is a farmer 
with a tractor and a disc plow out there cutting a fire break. 
I know that works. I think it is the question of how do we 
bring this from the one-offs to systemically in the Federal 
Government recognizing the public as a resource in a crisis, 
not a liability, and how do we engage them more effectively.
    Senator Rosen. I agree with you there. I want to turn and 
build on this subject in our cybersecurity arena. Of course, 
speaking of nontraditional partners, we have to think about 
that in cybersecurity as well, so I am particularly concerned 
that the Federal Government, of course, alone cannot secure our 
critical infrastructure from the evolving, increasingly complex 
cyber threats that we face.
    To General Votel and then Ms. Rogers, how do you think the 
Federal Government can expand the partnerships and information 
sharing with the companies that possess the cybersecurity 
knowledge and experience to better protect us all and kind of 
create that grid, if you will, of security?
    General Votel. Thank you, Senator. I really like this 
discussion we are having about the nontraditional partners. 
This is really important. What the commission recommends here 
is that we look and organize to make sure that we have a point 
of contact for businesses in things like the National Response 
Coordination Center that they can reach out there to link into 
them.
    I think what we have recognized throughout the pandemic is 
that while we have a tendency to think about the traditional 
private sector that we would go out to, in many cases, as you 
just highlighted, there are parts of the private sector that 
are not normally concerned, but are, of course, very key to 
this, and cybersecurity is absolutely central to this.
    I agree with the assessment that you are laying out here, 
and I think maybe Kristi or Mike Capps can add some additional 
details to this particular area.
    Ms. Rogers. Thanks, Senator. I appreciate the question on 
this. If I may just add a little bit of context, because my 
answer will make more sense. Just after 9/11 I was brought in 
to the Department of Transportation (DOT) to work with New York 
City's Metropolitan Transit Authority on response. I then went 
to the Department of Defense and was in Iraq working on a 
contingency operation, then Homeland Security at Customs and 
Border Protection during severe acute respiratory syndrome 
(SARS) and Hurricane Katrina, directly involved.
    My two companies in which I was CEO after, one was a 
contingency operation company helping the government emergency 
response, and the last one was we ran nine Ebola treatment 
units in Sierra Leone and Liberia. I had a different 
perspective on government response and preparedness, and an 
unfortunate reoccurring theme in all of those has been the 
government's inability to reach out and grab nontraditional 
partners, because it is not as though the partners--the private 
sector, civil society--does not want to participate in health; 
they do.
    One of the things that I will add is in what we call Phase 
Zero, in the planning and preparation phase of any crisis, 
bring in private sector, bring in civil society to help 
prepare, help respond, so they are not caught off guard, so it 
is an integrated, systemic response.
    Furthermore--and you saw this in COVID--so often there are 
examples where U.S. manufacturers volunteer to address needed, 
but could not get a go or no-go decision from the government. 
There was not one single authority responsible, and, two, the 
contracting processes did not exist. I would further recommend 
and the commission further recommends implementing executive 
emergency purchase orders, issue predefined or indefinite 
delivery, indefinite quantity Federal contracts, also issue 
blanket purchase agreements in the time of non-crisis, which 
means you issue a contract to, let us say, seven companies you 
identify. You award a nominal fee annually to those companies 
just to hold the capacity and capability in times of a crisis.
    Senator Rosen. I think that is very informative, and we all 
need IT modernization to do a lot of this. I look forward to 
speaking with you about that.
    Thank you. My time has expired.
    Senator Hassan. Thank you, Senator Rosen.
    I am going to go ahead and start a second round of 
questions, and I think we may have one other Senator who wants 
to do the same after I finish my second round.
    I think the first thing I want to ask is, in this last set 
of questions, General Votel, you and the panel have been asked 
generally about supply chain. I want to drill down on that a 
little bit and give you all an opportunity to add anything you 
have not said and then move on to a couple other topics.
    Early in the pandemic, the supply chain issues regarding 
certain items needed amid the pandemic reinforced what many of 
us already knew, that the United States was overly reliant on 
Chinese manufactured goods. General Votel, how can we reduce 
U.S. reliance on Chinese goods before or during the next 
national crisis?
    General Votel. Certainly this is something that the 
commission looked at, as you know, Madam Chair. I think, the 
answer lies in making the deliberate decisions about where we 
are getting our supplies from and understand exactly what the 
supply chains are. The idea that we talked about within the 
commission is the idea of right-shoring, that there are some 
dependencies that we do have overseas, that are OK to maintain. 
Obviously, there are real concerns with China, but we also are 
very dependent on a number of our other international partners 
for these things who are fairly reliable in terms of delivering 
supplies to us. I think it is absolutely critical to understand 
where our supply chains lead us and what we need to have on 
hand to address the initial response to these types of 
emergencies.
    Senator Hassan. Thank you.
    Ms. Rogers, you addressed this at a certain level and so 
did you, General Votel, but we obviously need to know where our 
critical assets are in the supply chain during an emergency. We 
also acknowledged and you have testified about the high levels 
of stress that the pandemic put on different parts of several 
supply chains.
    I will start with you, General, and then the rest of the 
panelists can add if they would like to. How can we improve the 
government's visibility into the Nation's supply chains? You 
have all talked about it a little bit, but I want to give you a 
chance to expand on it if you would like to.
    General Votel. One of the recommendations that we make is 
the establishment of a national disaster app that is kind of an 
opt-in ability, that gives people, particularly the private 
sector, really all stakeholders, civil society as well, an 
opportunity to see how a crisis is developing, what the future 
looks like for that, and then the ability to share data with 
government partners here to understand where supplies may be 
and how they may be applied to the situation.
    As a military man, in looking at this, the development of a 
common operating picture of how we are looking at the crisis is 
absolutely essential in this. This is absolutely critical when 
it comes to both maintenance of our supplies and surge 
capacity, which essentially is getting the right tools to the 
right place at the right time. The establishment of a common 
operating picture through a redesigned National Response 
Coordination Center, and the establishment of an app to which 
stakeholders can opt in, I think are two very critical 
recommendations that the commission makes that will help go a 
long way toward this.
    Senator Hassan. Great. Thank you.
    Would any of the other panelists like to add anything?
    Ms. Rogers. I will, briefly. I think with this newly 
redesigned National Response Coordination Center, whether it is 
within FEMA or within DHS, it needs to be one responsible, 
accountable body. The first thing I would say is that we do 
need to review and make clear to all parties what the critical 
goods are. What is a critical good and what are critical 
infrastructure? Then work backwards in that supply chain and 
see where the supply chain is.
    If a large portion of the critical goods supply chain is in 
China, then we need to look at a strategy to re-shore some of 
it, and that might include incentivizing some of these 
companies. It could be re-shoring domestically, or it could 
actually also mean re-shoring it to an allied nation. I think 
that is critical, because regional diversification, whether it 
is regional domestically or regional amongst our allied 
nations, will further strengthen the resiliency of our supply 
chains, especially in a crisis. But I do think that a Surge 
Center or this National Response Coordination Center needs to 
have sort of state-of-the-art supply chain asset mapping 
capability, and it could be then downloaded to a digital app. 
But I think one of the first steps in the preparation planning 
stage is it needs to map our supply chain assets. We have not 
done that. We do not know where they are and where the 
vulnerabilities are.
    Senator Hassan. Thank you. Let me quickly move to one other 
and maybe two other issues before I turn to Senator Ossoff for 
a first round of questions.
    General Votel, the commission proposes the creation of a 
leadership position within the Department of Homeland Security 
to oversee the development of a National Crisis Response 
Exercise Framework. How would this build upon the existing 
national exercise program at FEMA?
    General Votel. Thank you. That is an excellent question, 
Madam Chair. The idea here is to put leaders in charge of our 
exercises and in our response planning, and there is no more 
definitive way of doing that than actually to have somebody 
that is held accountable for that, that can work across the 
organizations in the National Response Framework and bring them 
together to participate in exercises and rehearse plans that 
are in place, but also has the ability to compel leadership to 
participate in this. Oftentimes what we see in these instances 
is that we have mid-level staff participating in these, but not 
the leaders who are going to be making decisions. Adding 
leadership into the creation of this position I think gives us 
the best ability to really focus in on this critical task that 
is so important for the preparation of the Nation for these 
disasters.
    Senator Hassan. It is the right stakeholders as well as 
leadership of those stakeholders to make sure that they are at 
the table.
    General Votel. That is exactly right. It is getting all the 
right organizations and then getting the participation at the 
right level of leadership that is going to be involved in 
making decisions in an actual emergency.
    Senator Hassan. Thank you very much.
    I am over my time, and I will now recognize Senator Ossoff 
for his first round of questions.

              OPENING STATEMENT OF SENATOR OSSOFF

    Senator Ossoff. Thank you, Madam Chair, and thank you to 
the panel for your work in preparing these recommendations for 
the Committee and for Congress.
    General Votel, I want to ask you about financial 
infrastructure and resilience in a crisis. We saw during this 
COVID-19 pandemic that the provision of emergency and swift 
financial support directly to households has been vital to 
sustaining an economy that was crippled by all of the 
mitigation measures that were necessarily implemented in 
response to the pandemic. Did your working group consider what 
changes may need to be made to our payments infrastructure or 
to our macroeconomic policymaking apparatus so that in a future 
crisis, whether a pandemic or some other contingency, if we 
need to swiftly get financial support directly to households 
rather than via the banking system, we can do so more 
efficiently?
    General Votel. Senator, the aspect that we addressed in 
this was not necessarily focused on amounts and that type of 
stuff, but it really was focused on the technology and the 
reliance in getting those payments to families. In the event 
that we do not have the right databases, we do not have the 
right technology to move this very quickly, these resources, to 
where they need to be, this was an area of some focus for us. 
We did make some specific recommendations, particularly as we 
looked at leveraging technology to help do this. It is one 
thing for the administration and Congress to authorize 
payments; it is another thing to make sure that those payments 
actually get to the recipients who need it in a timely fashion. 
In this particular area, this is where, again, technology can 
help us do this much faster and make sure that it gets to the 
targeted individuals and families and others who require these 
payments.
    Senator Ossoff. Thank you, General. In the event of a 
crisis or an attack which undermines the integrity of our 
telecommunications infrastructure or our financial system, 
particularly our payments infrastructure, what recommendations 
do you present for improving both the resilience but also the 
redundancy of those core systems?
    General Votel. Thank you, Senator. The report talks about 
making use of multi-cloud technologies that are available to us 
today to help build resiliency into our overall system of 
storing data and then relying on that data at a particular time 
in the crisis. There are a variety of technologies that are 
available out there and that will actually help us do this and 
will actually build a level of robustness into this.
    I might invite Mr. Capps to comment on this since the 
technology area was an area in which he focused specifically on 
during the commission.
    Mr. Capps. I am happy to, General. Thank you, Senator, for 
the question. I would say that decentralization is critical for 
resilience, and decentralization requires modernization across 
State, local, Federal Government. I do not think we are on the 
path to that. The last infrastructure protection plan was in 
2015, maybe, and cloud is mentioned as a future exercise of 
investigation. But every one of the services that we are 
talking about are completely built upon data links that are in 
the cloud. There is no notion of infrastructure resilience for 
the cloud. It is not part of the current mission. AI is not 
even mentioned anywhere on the Cybersecurity and Infrastructure 
Security Agency (CISA) website. CISA is a fantastic 
organization. They work hard. But it is not part of their 
mission, and so I think we have a lot of basic work to do to 
catch up to where private enterprise is first before we start 
thinking about the next steps of how would we handle black sky 
post a well-built cyber defense.
    Senator Ossoff. Thank you, Mr. Capps. While I have you, any 
recommendations or I would even invite speculation beyond the 
constraints of this report with respect to how mobile 
technology might have multi-band capacity in the event 
predominant cell networks are deteriorated? Any comments on 
whether or not we need to enhance satellite communication 
capacity, the ability to use satellite links to generate more 
local networks, either via the cell system or WiFi networks or 
mesh networks so that we can have decentralized, effective 
communication in the event that some of the centers of our 
telecommunications network are degraded?
    Mr. Capps. Sir, that is a wide question, and I will say 
that I think we are seeing civilian advances in satellite 
communication. 5G is nothing but resilient. It is meant to have 
machine learning right in the radio centers so that it can 
adapt anytime systems go down. You will see the migration of 
mesh networks, when you think of Internet of Things devices, 
within a few years we will be at a million-ish devices on 
network per square kilometer in urban centers. If you think of 
the pure availability of radios, our job is going to be let us 
make sure those devices are secure, which there is really no 
handling of that right now, which I could go into detail on if 
you would like, and then open networks, 4- or 5G like ORAM, 
that allow devices to plug and play together. It is all about 
interface and letting them communicate with each other so that 
they can be resilient. Then as we transition to edge computing, 
which is when we have cloud at the edge, that is going to allow 
that small town in North Carolina to be able to be completely 
severed from Amazon Web Services or whatever else, but still 
have plenty of data locally, plenty of computation locally, and 
be able to be functional if they need to be in a decentralized 
manner.
    Senator Ossoff. Thank you. I think you touched upon this 
briefly or at least referenced it--any comments or 
observations, conclusions, recommendations you have with 
respect to encryption on prevailing communications networks. 
Also, are there any lessons that should be drawn from the 
recent SolarWinds and Microsoft Exchange Server breaches that 
touch upon some of the recommendations in the report, please? 
Thank you.
    Mr. Capps. Thank you, sir. I would start with cyberspace as 
a sovereign entity. It is something that is difficult for us in 
the United States to think about. We grew up with the Internet 
as a public space, but our competitors treat cyberspace as 
sovereign for their nations. We like to joke in the IT industry 
that if guys with guns show up at the front door, then there 
will be somebody on our side to defend us. But if Russians 
attack or the Chinese attack or North Koreans attack the 
website, which they do. Even from my small AI company, I get 
30,000 attacks a day. I get warnings from CISA letting me know 
that I might be attacked. But there is no notion of defending 
critical infrastructure. I think that step one is we cannot 
treat our companies as a critical part of resilience for the 
national enterprise and also assume that they can take care of 
themselves. That is a bad combination.
    Senator Ossoff. Thank you. Thank you all for your 
testimony.
    Madam Chair, I yield back.
    Senator Hassan. Thank you.
    Senator Scott, for his first round of questions? Do we have 
Senator Scott?
    [No response.]
    Senator Hassan. If not, I see Senator Cassidy on my screen. 
Senator Cassidy, I will recognize you for your second round of 
questions.
    Senator Cassidy. I will start with you again, Ms. Rogers, 
regarding the supply chain. Now, there has been interest in the 
administration and the Senate to re-shore some things that we 
found were embargoed for shipment to the United States when the 
pandemic began in China. For example, N95 masks made by 3M, by 
force majeure, the Chinese decided not to allow them to be 
shipped to us.
    But we have to recognize that some of this being 
manufactured depends upon a low labor cost in order for it to 
be otherwise marketable, not just during a pandemic but also in 
normal times. If we have a pandemic every decade, which is far 
more than we currently have been having one we may have a 
stranded asset in the 10 years between by which point the 
manufacturing equipment is outdated.
    Now, one thing I have been interested in is a question of 
re-shoring and near-shoring. If we had some of this placed in a 
low-cost country, for example, Central America or Mexico, in 
which the PPE was made there or some other product made there, 
we would have the advantage of not having to cross an ocean, 
but you would have something that could remain competitive 
selling as goods in the interim. Any thoughts on that?
    Ms. Rogers. I agree. First, I would go back to we need to 
be clear on what we deem a ``critical good,'' depending on 
which crisis. Then we need to look at where those supply chains 
are and where they are manufactured. When we do that and we say 
it is a critical good as manufactured in a nonallied country, 
we need to implement strategies, and that might be 
incentivizing the company to re-shore or near-shore. Mexico and 
Central America are great options. There are so some Far East, 
Near East, that are also other options that are allies.
    I think we really need to be clear on what the critical 
goods are, and when we talk about incentivizing companies to do 
this, we need to recognize that there are a lot of government 
obstacles, impediments, and regulations that have forced 
companies overseas to produce these goods.
    That needs to be a recognition on behalf of the Federal 
Government. The companies are looking at their bottom line 
saying we need to produce this for the United States, and if 
these are U.S. companies, they want to help the United States. 
There is no doubt about that. I have seen that throughout 
COVID. But they also need to sort of protect their bottom line 
and ensure they are still in business, and there are a lot of 
bureaucracies and regulations in place that impede some of the 
re-shoring.
    Senator Cassidy. I agree with that. By the way, I think 
during the cold war that North Atlantic Treaty Organization 
(NATO) or NATO allies, there was a distribution of essential 
materials so that in every country there was something. But we 
did not have to depend upon a non-NATO ally for penicillin, for 
example. I bring up penicillin because right now so-called 
beta-lactam drugs, which penicillin is one of, so essential, is 
only produced in China. I am told that creating a strategic 
stockpile of the active pharmaceutical ingredient is just not 
practical. But I am also told that companies do not like to 
make it in the United States because it involves fermentation, 
and that in turn brings Environmental Protection Agency (EPA) 
upon them in a way which is onerous to comply with.
    I am not saying other countries like Mexico have a lower 
standard, but I think the company may be more comfortable 
producing a fermentated product in a country like Mexico as 
they currently are in China.
    Now, China greatly subsidizes this industry, so you already 
have a lower cost basis because they have a State subsidy. Are 
you suggesting--and just to be explicit--that we may consider 
doing a U.S. subsidy for a manufacturing facility that would be 
built not in the United States but in a near-shore country?
    Ms. Rogers. I would emphasize ``may.'' You may consider it. 
I would weigh the cost option of doing that. I will give you an 
example. In Ireland right now, there are numerous companies, 
pharmaceutical and medical manufacturing, that have deemed it 
less expensive and cost-prohibitive to have their plants in 
Ireland. Ireland is now sending 20 flights a week to the United 
States with no passengers but full of supply. That is an allied 
country that we are relying on for supply and U.S. companies 
that actually have their manufacturing plants there. That has 
not been subsidized.
    Senator Cassidy. Yes, but there must be some reason for it. 
There must be a lower cost of doing business.
    Ms. Rogers. Yes, it is.
    Senator Cassidy. What is the source of that lower cost of 
doing business? Tax Code?
    Ms. Rogers. It is Tax Code, EPA regulations primarily.
    Senator Cassidy. If we are saying Tax Code, taking you 
someplace you may not want to go, but knowing that the 
administration currently wants to raise corporate tax rates, 
you are, implicitly stating that they may indeed drive 
companies to move operations out of the United States elsewhere 
if that were the case?
    Ms. Rogers. That would be counterproductive to our 
recommendations on increasing resiliency and surge capacity in 
the United States, correct.
    Senator Cassidy. That is very interesting. Also, you 
mentioned EPA, but I still think of the European Union (EU) as 
having fairly stringent, in some cases more stringent than 
ours, environmental regulations. It is not just the regulation 
you are implying, but it is also the means of enforcement and/
or penalty. Is that something I can take from your statement? I 
am getting you in trouble here maybe, Ms. Rogers.
    Ms. Rogers. You could, and I could get you specific 
examples, but I am not prepared to name those companies now.
    Senator Cassidy. I got that, but you can give me specific 
examples with a little preparation in terms of----
    Ms. Rogers. Yes.
    Senator Cassidy [continuing]. How it is not just the 
regulation but it is otherwise enforcement.
    Ms. Rogers. I can do that.
    Senator Cassidy. OK. That is good.
    Then, Mr. Capps, in the report they speak of a distributed 
ledger/blockchain. I am interested in the distributed ledger in 
a variety of ways. Can you explain how we would be able to use 
that to better manage pandemic response or any other kind of 
natural disaster or manmade disaster response?
    Mr. Capps. Distributed ledger, all it is is a notebook that 
everyone has a copy of and that you can trust. When we were 
speaking earlier to Senator Ossoff's question about 
decentralization, if everyone has a full copy of every, let us 
say, procurement contract that has been related to PPE, 
everyone has it, and they all know where the material is. Then 
when we have some event that pinches you off from the rest of 
the network, you have still got all the information you need 
and it is a trustworthy copy.
    Senator Cassidy. Let me interrupt you for a second.
    Mr. Capps [continuing]. It is just about that.
    Senator Cassidy. When the pandemic hit, New Orleans was 
getting slammed, and Los Angeles was wide open, but there was a 
nationwide shutdown on elective surgery. I got a call from an 
anesthesiologist saying, ``I cannot believe there is a shortage 
of machines. I got 100 machines no one is using. Yes, they are 
anesthesia, but you could still use them for general if you had 
to. But we also have general anesthesia machines. We could ship 
them to New Orleans and then get them back, when inevitably you 
go down there and we go up here.''
    But no one had an inventory, a nationwide inventory of 
this. On the other hand, if we use blockchain for such an 
inventory, it would have to be low cost, easily done, with 
minimal friction cost, and still protect proprietary 
information.
    You are the expert. Is it possible that we can have such a 
national inventory such as that, low cost, minimal friction, 
and protecting proprietary information?
    Senator Hassan. I am going to ask you to be fairly quick in 
your response, please?
    Mr. Capps. It is a good question you are asking, and it 
kind of depends on what is within the purview of that. If we 
are just talking about anesthesia devices nationwide, that 
feels like a sort of thing that would be quite tackleable. If 
you are talking about any resource in the United States in 
order to be applied to, obviously that is very hard. But the 
notion of this is a trusted system, data is encrypted so I 
cannot access the information until there is some key given, 
everyone has a copy of it, and we are not spending tons of 
energy burning a blockchain to do it. Yes, those are totally 
solvable problems. You see it in supply chain management in 
private enterprise all the time. It all comes down to: Can I 
ask you some simple questions and get a simple answer--not 
unlike these hearings, sir--where if you can do that, you can 
get a lot done quickly. That is exactly how the Web works, and 
there is no reason this could not work the same way.
    Senator Cassidy. I yield back.
    Senator Hassan. Thank you.
    Senator Cassidy. Thank you for your indulgence, Madam 
Chair.
    Senator Hassan. Thank you, Senator Cassidy.
    Senator Scott.

               OPENING STATEMENT OF SENATOR SCOTT

    Senator Scott. All right. First, I want to thank Chair 
Hassan and Ranking Member Paul for holding this hearing today.
    General Votel, in an op-ed in December, Director Ratcliffe 
declared China would be our number one national security 
threat. On his first day in office, President Biden revoked an 
order blocking Chinese components in the U.S. power grid. It 
seems like this would be a dangerous door to open to Communist 
China, and imposes an unnecessary risk to our critical 
infrastructure and Nation's security. Do you think Chinese 
components should be allowed to be used in the U.S. power grid? 
Or should this decision be revoked?
    General Votel. Senator, thank you very much. My view is we 
are accepting unnecessary risk by incorporating Chinese 
components into things that we depend upon for our citizens, 
and especially for things that we depend upon for emergency 
response. Yes, I think it is a great vulnerability for us.
    Senator Scott. We all need to understand--every American 
needs to understand the risk of Communist China, whether it is 
that they are stealing our jobs or technology, they are 
building a military to dominate us, they take away the basic 
rights of Hong Kong citizens, and are imprisoning Uyghurs. What 
do you think of the idea that all Americans ought to just say, 
look, the Communist Party of China has decided to become our 
enemy, our adversary, and all of us need to say we are going to 
stop buying Chinese products, it is a national security threat, 
from the standpoint if they can be in our power grid, but on 
top of that, it is a national security threat if they continue 
building their economy to use those dollars to ultimately 
dominate Americans.
    General Votel. Senator, this topic is a little bit beyond 
what the commission addressed, but what I would share with you 
is that I agree with you. It is important for American 
citizens, American business, to understand exactly what is at 
stake in this competition that we have with China, and that 
their very aggressive, centralized approach that they execute, 
things like the Belt and Road Initiative and some of the 
predatory practices that they impose on other countries around 
the world to gain resources, is, in fact, a threat to our 
national security. I think it is absolutely vital that all 
American citizens in the private sector, public sector, and in 
the civil sector understand what is at stake with respect to 
our competition with China.
    Senator Scott. Thank you, General.
    Last year I introduced the American-Made Protection for 
Healthcare Workers and First Responders Act to ensure the 
United States built its stockpile of personal protective 
equipment so our first responders and health care workers have 
everything they need to keep everybody safe from COVID-19 or 
the next pandemic. I think we ought to focus on making 
American-made products.
    What do you think about the need to build an American-made 
stockpile and also put ourselves in a position that American 
companies have the ability to ramp up when we have the next 
pandemic?
    General Votel. Thanks, Senator. As we have discussed a 
little bit previously, I think it is really important that we 
understand what are the critical resources, what are the 
critical supplies that we must have on hand. Then once we 
identify what those are, then we have to look at the sources of 
those. Certainly we have to be very careful about dependencies 
on countries like China or critical resources that we need in 
terms of an emergency, and we need to look at where those 
supply chains go. Producing them in the United States or 
perhaps producing them in friendly allied countries are 
certainly options that we ought to look at in this, but I 
absolutely agree with you, and the report recommends that we 
look very closely at where these supply chains take us, 
particularly with these critical resources that we need in 
times of emergency.
    Senator Scott. We have seen Russia and we have seen 
Communist China try to steal sensitive data. What do you think 
our Federal Government ought to be doing in conjunction with 
our business community to make sure that we deal with our 
biggest cyber threat, which I think clearly part of it is 
Russia, but I think with the economy that China is building, it 
appears to me that our biggest risk will continue to be China?
    General Votel. Senator, I would invite Mr. Capps to address 
this as well, but what I would just say to you is that we 
should look at these as serious threats, that we would protect 
our borders from these type of things, and there needs to be 
more focus from the Federal Government in helping protect some 
of our private companies and the data and the technology that 
they have.
    Mr. Capps. Yes, sir, I would agree with that. I think the 
notion of protecting our private enterprises--some of our most 
valuable assets are exactly there. I worry about us not taking 
the time now and the massive expense it will take to re-shore 
technology like, let us say, Internet of Things. If we allow 
China to keep making that at cheaper rates, selling it cheaply 
in the United States, they are just getting better and better 
and better. We can argue about who has the better position in 
artificial intelligence or computing. It does not matter. Their 
velocity is faster than ours. They are putting $1.4 trillion 
into networks in AI over a 6-year period. We will fall behind 
as long as we are sending our money to them for innovation, and 
that is something we are going to have to solve. It is a very 
big problem.
    Senator Scott. What do you think about the idea--it might 
be outside of your purview, but I have a bill that requires 
companies like Amazon and other online resellers to disclose 
country of origin, because Americans are fed up with China. If 
you look at the national polls now, people realize what China 
is doing. But companies like Amazon will not disclose the 
country of origin of products, so it makes it very difficult 
when you are buying a product to know where it is from. When we 
buy products from China, we just keep building their economy so 
they can use it eventually to dominate us. What do you think 
about----
    Mr. Capps. It is, of course, outside of my technical 
expertise area, but I absolutely agree with the notion of 
disclosure. As a small business, I need to know who I feel 
comfortable taking money from, and finding the Chinese LPs that 
are supporting that venture capital firm that are the ones that 
are funding my company is nearly impossible. The same issue 
happens with provenance of data. Where did it come from? Was 
that done in a responsible manner, that it fits the way we like 
to operate our freedoms in this country, and then for 
manufacturing, same exact thing. Do not tell me to ``Buy 
American'' and then tell me I cannot figure out how to do it.
    Senator Scott. Yes, you cannot figure out how to do it. I 
thank each of you for being here.
    Senator Hassan. Thank you, Senator Scott.
    We do not have any other Senators who have signed on for 
either a first or second round of questions, and we are going 
to have votes in a few minutes. I am going to call the 
Subcommittee hearing to a close, noting that we did not get to 
a couple of topics that I will submit for the record concerning 
particularly financial accountability in disaster response and 
IT modernization, both of which are issues that the commission 
addressed, and I look forward to the written responses.
    I would like to thank all of our witnesses for appearing 
before the Subcommittee today. Thank you, General Votel, Mr. 
Fugate, Ms. Rogers, and Mr. Capps, for your testimony and for 
answering our questions. I appreciate the work of all the BENS 
commissioners and the BENS staff in crafting the report.
    With unanimous consent (UC), I ask that a copy of the 
report be included in the hearing record.\1\
---------------------------------------------------------------------------
    \1\ The report referenced by Senator Hassan appears in the Appendix 
on page 32.
---------------------------------------------------------------------------
    The Emerging Threats and Spending Oversight Subcommittee 
will continue to look at emergency preparedness and emerging 
threats and hold further hearings and take legislative action 
when and where it is needed.
    With that, the hearing record will remain open for 15 days, 
until 5 p.m. on April 8th, for the submission of statements and 
questions for the record.
    The hearing is now adjourned. Thank you all very much.
    [Whereupon, at 11:24 a.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                 [all]