[Senate Hearing 117-39]
[From the U.S. Government Publishing Office]
S. Hrg. 117-39
PREPARING FOR FUTURE CRISES: EXAMINING THE
NATIONAL RESPONSE ENTERPRISE
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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
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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
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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
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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.
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\1\ The prepared statement of Senator Hassan appears in the
Appendix on page 27.
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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.
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\1\ The report referenced by Senator Hassan appears in the Appendix
on page 32.
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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.
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\1\ The prepared statement of General Votel appears in the Appendix
on page 29.
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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\
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\1\ The report referenced by Senator Hassan appears in the Appendix
on page 32.
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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
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