[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
ENSURING DOMESTIC SECURITY: ISSUES AND POTENTIAL COSTS
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, NOVEMBER 7, 2001
__________
Serial No. 107-18
__________
Printed for the use of the Committee on the Budget
Available on the Internet: http://www.access.gpo.gov/congress/house/
house04.html
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COMMITTEE ON THE BUDGET
JIM NUSSLE, Iowa, Chairman
JOHN E. SUNUNU, New Hampshire JOHN M. SPRATT, Jr., South
Vice Chairman Carolina,
PETER HOEKSTRA, Michigan Ranking Minority Member
Vice Chairman JIM McDERMOTT, Washington
CHARLES F. BASS, New Hampshire BENNIE G. THOMPSON, Mississippi
GIL GUTKNECHT, Minnesota KEN BENTSEN, Texas
VAN HILLEARY, Tennessee JIM DAVIS, Florida
MAC THORNBERRY, Texas EVA M. CLAYTON, North Carolina
JIM RYUN, Kansas DAVID E. PRICE, North Carolina
MAC COLLINS, Georgia GERALD D. KLECZKA, Wisconsin
ERNIE FLETCHER, Kentucky BOB CLEMENT, Tennessee
GARY G. MILLER, California JAMES P. MORAN, Virginia
PAT TOOMEY, Pennsylvania DARLENE HOOLEY, Oregon
WES WATKINS, Oklahoma TAMMY BALDWIN, Wisconsin
DOC HASTINGS, Washington CAROLYN McCARTHY, New York
JOHN T. DOOLITTLE, California DENNIS MOORE, Kansas
ROB PORTMAN, Ohio MICHAEL E. CAPUANO, Massachusetts
RAY LaHOOD, Illinois MICHAEL M. HONDA, California
KAY GRANGER, Texas JOSEPH M. HOEFFEL III,
EDWARD SCHROCK, Virginia Pennsylvania
JOHN CULBERSON, Texas RUSH D. HOLT, New Jersey
HENRY E. BROWN, Jr., South Carolina JIM MATHESON, Utah
ANDER CRENSHAW, Florida
ADAM PUTNAM, Florida
MARK KIRK, Illinois
Professional Staff
Rich Meade, Chief of Staff
Thomas S. Kahn, Minority Staff Director and Chief Counsel
C O N T E N T S
Page
Hearing held in Washington, DC, November 7, 2001................. 1
Statement of:
David M. Walker, Comptroller General, U.S. General Accounting
Office..................................................... 5
Hon. Newt Gingrich, former Speaker of the House of
Representatives, member, U.S. Commission on National
Security/21st Century...................................... 27
Hon. Lee H. Hamilton, former Member of Congress, member, U.S.
Commission on National Security/21st Century............... 29
Prepared statements and additional submission:
Hon. John M. Spratt, Jr., a Representative in Congress from
the State of South Carolina................................ 4
Comptroller Walker........................................... 8
New York Times article concerning bioterrorism, submitted by
Mr. Bentsen................................................ 23
ENSURING DOMESTIC SECURITY: ISSUES AND POTENTIAL COSTS
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WEDNESDAY, NOVEMBER 7, 2001
House of Representatives,
Committee on the Budget,
Washington, DC.
The committee met, pursuant to call, at 1:20 p.m. in room
210, Cannon House Office Building, Hon. Jim Nussle (chairman of
the committee) presiding.
Members present: Representatives Nussle, Gutknecht,
Thornberry, Watkins, Hastings, Schrock, Culberson, Putnam,
Kirk, Spratt, Bentsen, Clayton, Price, Clement, Hooley,
Baldwin, McCarthy, Moore, and Matheson.
Chairman Nussle. Call the Budget Committee hearing to
order.
Today we begin the process of hearings for the fiscal year
2003 budget, and for that matter, possible fiscal year 2002
supplemental budget requests and priorities. Today's hearing is
entitled, Ensuring Domestic Security: Issues and Potential
Costs. We have two very distinguished panels today who will
come forward and will enlighten us on a number of different
topics.
This hearing is intended to examine the broad issues and
challenges in ensuring the Nation's domestic security in the
midst of the current war against terrorism. It is not
specifically focused on President Bush's Office of Homeland
Security, although I have no doubt there will be many
references to that office and to priorities that office may in
the future bring forth.
The hearing today will in part examine the extensive work
on the part of the General Accounting Office in reviewing the
U.S. Government's antiterrorism programs, outlining the
agency's findings and presenting some specific recommendations
for organizational efficiencies and management improvement. In
addition, representatives of the United States Commission on
National Security/21st Century will be present and will present
Commission findings and recommendations on defending the United
States against terrorism.
Prior to the attacks of September 11, the administration's
fiscal year 2002 request for antiterrorism programs totaled
$12.8 million, spread across 43 different Federal agencies.
Additional resources will, no doubt, be forthcoming and have
been forthcoming, but funds may not be spent in the most
efficient manner absent a strong, effective organizational plan
that prioritizes these programs and avoids duplication. So one
of the questions today will be what is the most effective way
to consolidate and manage the government's antiterrorist
efforts. GAO has found that the government does not yet have a
sound terrorist vulnerability assessment in place, and without
such an assessment, it is probably not possible to target funds
to correct the most critical vulnerabilities in national
infrastructure.
The second question will be how soon can a comprehensive
threat and risk assessment be completed for this Nation.
Finally, fully recognizing that the President needs maximum
flexibility to get the Office of Homeland Security established
quickly, many details remain to be resolved including, but not
limited to, how much budgetary control will the Director
request; and will the Director truly have a single focal point
for homeland security as was promised by the President; how can
the Director leverage State and local enforcement and public
health resources for maximum effectiveness. In short, how can
the new Office of Homeland Security operate with the most
effective, efficient plan for the future?
The budget for 2003 that we will be discussing and
formulating in short order, needs to take into account an
emerging new and revitalized priority for homeland security. In
short, today's hearing only begins the process of examining
homeland security and combating terrorism. This is not meant to
try and take a drink out of the fire hydrant all in one fell
swoop. There are a number of other hearings, and there is, in
fact, a security briefing with Secretary Rumsfeld at 3 o'clock
that I know Members are interested in attending. But it is to
begin the process.
What I would suggest today, that our main focus be: where
has our priority been with regard to homeland security in
combating terrorism, and where is it today now as far as the
priority for the Federal Government. It will serve as a preface
for determining the priority in next year's budget. I would
recommend to Members that we do this in that light and that we
focus the hearing in that manner so that we can hold a number
of hearings in order to get to the bottom of this as we move
forward.
Before we begin with the panels, I would like to recognize
John Spratt for any comments he would like to make.
Mr. Spratt. Thank you, Mr. Chairman.
Mr. Chairman, Mr. Walker, Lee Hamilton and I guess the
Speaker is to arrive later. First of all, we look forward to
your testimony. It is my understanding that GAO has done almost
70 studies over the years on what you might today call homeland
security, and we look forward to your sharing the fruits of
that inquiry with us.
It is my understanding, that a former colleague, Mr.
Hamilton, and our former colleague, the Speaker, Newt Gingrich,
will be talking about organizing the government in order to
better protect ourselves against terrorist attacks, detecting
the attacks, deterring the attacks, responding to them once
they occur. This dialogue is long overdue, and I am glad we are
having it here in this committee.
I don't want to detract from that important topic, but the
Chairman said this is about priorities; what priorities have we
addressed and what priorities haven't we adequately addressed.
I want to take just a minute to talk about ``the fire next
time,'' the risk of nuclear terrorism and the need for nuclear
nonproliferation programs.
The devastation that was dealt us on September 11 was
horrendous, but it could have been far worse if they used
nuclear weapons. It could have wiped out all of Manhattan.
There is one element that stands between the terrorists and
nuclear weapons, and that is fissile material, plutonium,
highly enriched uranium, and we ought to take every possible
effort to see that they do not obtain them.
Just days before September 11, smugglers were apprehended
in Turkey--not the first time--but they were apprehended there
with what was at the time believed to be bomb-grade uranium;
trying to smuggle it out of Russia. Yesterday, President Bush
warned that bin Laden and al Qaeda have been actively seeking
nuclear materials for some time.
We are not doing nearly enough, nearly as much as we should
to keep nuclear materials and nuclear know-how out of the hands
of the terrorists. Mr. Thornberry and I have worked on it in
the Armed Services Committee. The main program that deals with
this whole problem is called Nunn-Lugar, but it needs more
attention even though it has some bipartisan support.
The fact of the matter is, nonproliferation has been a much
harder sell than it really ought to be. DOE shares the mission
with DOD--the Department of Energy. The amount of money that we
put up in the Department of Energy, all totaled, everything
that would fall under this rubric was $874 million last year.
One of the line items in those accounts that is a line item is
for nonproliferation and verification R&D, the sort of thing in
the budget that doesn't get a lot of attention. It doesn't have
any program connectivity back home with constituents unless you
come from one of the States with one of the national labs. But
in any event, by last budget year, a number of programs had
been clustered under this particular umbrella, and the total
funding for it was about $227 million. When this year's budget
request came over, that program, that line had been cut by
$57.5 million for reasons that I still do not understand.
Let me give you one out of many things that will suffer as
a consequence of that reduction. That is the development of
sensors that can detect bioterrorism activities that are taking
place either in the production of the weapon or in the
aftermath of an attack so that we can get a realtime readout, a
quick analysis, chemical analysis, biological analysis of what
the agent is, and then public health authorities knowing this
can act quickly to stop it.
There is a system called BASIS. It is an acronym for
Biological Aerosol Sentry and Information System. The labs have
been developing this and a lot of other systems. They field-
tested this system. It falls under the rubric of those accounts
that were cut by 27 percent, by $57 million, in this year's
budget. Now we raised the issue again in the Armed Services
Committee. It has been raised in the Appropriations Committee,
and we succeeded in restoring about $30 million, but there is
still a substantial cut there, and it is the sort of thing we
really need to call attention to. It doesn't have a lot of sex
appeal, a lot of drama, and it doesn't buy you a lot of
constituent support, but I think it is critically important. If
nobody else will champion the cause and the need, I think this
committee, among others, ought to take it up.
That is why I took advantage of your indulgence, just to
strike that particular theme. It may be totally off the script
that you are going to talk about, General Walker, but I wanted
to lay it on the record and bring it to the attention of my
colleagues.
Thank you for coming, and I look forward to your testimony.
[The prepared statement of Mr. Spratt follows:]
Prepared Statement of Hon. John M. Spratt, Jr., a Representative in
Congress From the State of South Carolina
Thank you, Mr. Chairman, and thank you, Mr. Walker, for joining us
today. GAO has done almost seventy studies over the last 4 years on
antiterrorism and homeland security, and I look forward to your
testimony.
During the hearing today, Mr. Walker and our second panel--
consisting of our former Speaker, Newt Gingrich, and our former
Chairman of the House Foreign Affairs Committee, Lee Hamilton--will
focus on organizational changes needed to protect against terrorist
attacks. Studies show that we are not organized to detect terrorist
threats, or to deter them from occurring, or to respond to them once
they do occur. These are vital issues and this dialog is long overdue.
I do not want to detract from the topic, but I do want to take just
a few minutes to talk about the ``fire next time,'' the risk of nuclear
terrorism and the need for non-proliferation. The devastation dealt by
terrorists on September 11, 2001 was horrendous. But had they used
nuclear weapons, it would have been far worse. There is one element
that stands between terrorists and the possession of nuclear weapons,
and that's fissile materials, and we should take every effort to see
that they do not obtain them. Only days before September 11, smugglers
were apprehended in Turkey trying to move weapons-grade uranium out of
Russia. Yesterday, President Bush warned that bin Laden and Al Qaeda
have been actively seeking nuclear materials.
We are not doing nearly as much as we should to keep nuclear
materials and nuclear know-how out of the hand of terrorists. This is
not a partisan issue; Mr. Thornberry and I have worked on the Armed
Services Committee to improve non-proliferation programs. The original
program was established by Senator Nunn and Senator Lugar. I worked
with Jon Kyl when he wa sin the House to set up the main DOE program.
Senators Nunn, Lugar, and Domenici established the legislation to
bolster homeland security in 1996. Bill McCollum and I introduced the
bill in the House. These programs have enjoyed bipartisan support, but
this the sad truth: nonproliferation has been much a tougher sell than
it should be.
The Department of Energy shares the non-proliferation mission with
the Department of Defense and focuses on its particular realm: nuclear
materials. DOE's non-proliferation budget is about double DOD's non-
proliferation budget. All told, the DOE non-proliferation budget in FY
2001 was $874 million. The administration's budget cut these programs
in its '02 budget request by $101 million, a cut of almost 12 percent.
The energy and water bill just adopted by Congress restored part of the
cut, but only part, about $30 million, leaving these programs $70
million below the 2001 level.
Let me tell you the impact these cuts will have on just one
program, non-proliferation and verification R&D.
Los Alamos National Laboratory and Lawrence Livermore National
Laboratory have been involved for years in developing sensors placed on
U.S. satellites to monitor the production, testing, or use of nuclear,
biological, and chemical weapons. Before 1991, the program was
unfocused. It was changed in the aftermath of the Persian Gulf when
inspectors discovered that Iraq's weapons of mass destruction were more
advanced than the U.S. intelligence community had estimated. Shortly
after the Gulf War, Congress set up a specific line in the DOE budget
for non-proliferation and verification to develop technologies to
detect the production, testing, transfer, or use of such weapons.
The President's budget request for this critical research in FY
2002 was $170 million; that's $57.5 million (25 percent) below the 2001
level of $227.5 million. The energy and water bill conference report
added back some of that cut, but still left the program almost $20
million below last year's level. Here are some of the projects that
will be cut:
New seismic monitoring devices to help ensure that Russia, China,
or others are not improving their nuclear weapons by conducting
underground tests with a yield below 1 kiloton.
The Biological Aerosol Sentry and Information System (BASIS),
designed to detect a bio-terrorism attack within hours so that public
health agencies can react quickly to stop the spread of the agent. This
capability is not in hand, but it is maturing. BASIS was field-tested
at Salt Lake City in March 2001. This cut will slow down the
development of a promising technology, and one sorely needed.
Development of new sensors to detect atmospheric nuclear
explosions. Our satellites that carry these sensors are all being
retired. We do not have any of the old sensors on hand they were all
custom built. This cut may delay the construction of new sensors in
time to be placed on replacement satellites. If not built on time, the
U.S. will not be assured of the ability to detect an atmospheric
nuclear explosion.
New sensors specifically geared to go on platforms to detect the
production, testing, transfer, or use of WMDs. These sensors pick up
various ``signatures'' telltale clues that may be chemical,
electromagnetic, infrared, optical, or radio-nuclide, all absolutely
critical to improving the ability of the U.S. intelligence community to
keep watch on what countries like North Korea, Iran, Iraq, and Libya
are doing.
If these cuts stand, and if they continue, we will be depriving our
intelligence community of the resources they need to improve the
technical means of gathering data and tracking threats. These cuts are
the exact opposite of what we should be doing. These programs have
limped along receiving more in lip service than real money. This must
change; and if the administration will not lead, Congress should.
Non-proliferation is just one part in our war on terrorism, and
weapons of mass destruction are just one aspect of our hearing today,
and not the primary subject; but I wanted to take this opportunity to
raise the issue, because I think it has not received the attention or
funding that it clearly calls for.
Chairman Nussle. David Walker, who is the Comptroller
General and works for us at the General Accounting Office, I
welcome you to the committee. I also want to parenthetically--
as I told you in private and in front of a number of Members
who were involved in the last 3 or 4 weeks as a result of the
anthrax scare on Capitol Hill--show our appreciation to you and
the General Accounting Office for the use of your facilities.
It is something that--as I told you--one of the things that I
have learned in Washington is that real estate on Capitol Hill
is probably one of the most prized possessions, and for you to
unselfishly allow us to come over and let us use your hall is
something that we are deeply grateful and indebted to you for,
and we appreciate all your staffs' indulgence and assistance as
we made that transition.
We welcome you today. Long before aviation security was a
topic on the public's agenda, GAO was conducting a number of
investigations in issuing reports. Long before bioterrorism and
weapons of mass destruction, back when it was just a possible
theoretical possibility, you were warning us. We appreciate
that you would now come before us and give us an update on the
questions that we have asked, and we welcome your testimony and
invite you to present it at this time. Welcome.
STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL, GENERAL
ACCOUNTING OFFICE
Mr. Walker. Thank you, Mr. Chairman. Mr. Spratt and other
members of the committee, it is a pleasure to be back before
you.
Let me say it was our pleasure to accommodate the Members
of the House of Representatives. Obviously it was something
that we felt was appropriate to do. It was a hardship on us,
but it enabled us to get close to our client in new and
unexpected ways. I am sure that you are happy to be back in
your offices, and we look forward to continuing to work with
you.
With regard to today's hearing, I have got an extensive
statement for the record and am going to summarize the most
important points and allow time for the Q&A. Obviously, we have
two distinguished individuals who are going to be on the next
panel.
The terrorist attacks of September 11 have profoundly
changed the agendas of Congress, the White House, Federal
agencies, State and local governments and a number of private
sector entities, while simultaneously altering the way of life
for many Americans. As a lesson from history inscribed in the
front of the National Archives states, ``eternal vigilance is
the price of liberty.'' Our fight against terrorism is not a
short-term effort, and homeland security will forever be a
priority for our Nation. As a result, we must find the best
ways to sustain our efforts over the significant time period
and leverage our finite resources, both human and financial, in
ways that will have the greatest impact.
An effective framework to address these challenges will
require not only leadership with a clear vision to develop and
implement a homeland security strategy in coordination with all
relevant partners, but also the ability to marshal and direct
the necessary resources, both financial and human, to get the
job done. The recent establishment of the Office of Homeland
Security is a good first step, but a series of questions must
be addressed regarding how this office will be structured, what
authority its Director will have, and how this effort can be
institutionalized and sustained over time.
The Director will need to define scope and objectives of
the homeland security strategy. This strategy should be
comprehensive and encompass the steps necessary to reduce our
vulnerabilities, deter attacks, manage the effects of any
attacks and provide for appropriate response. The strategy must
involve all levels of government, the private sector,
individual citizens, both here and abroad, and other nations.
This strategy should also use a risk management approach to
focus finite national resources on areas of greatest need.
We will never have zero risk. We don't have enough money
for zero risk. Even if we put every amount of money we could at
it, we will never get zero risk, it is virtually impossible.
As the first board notes, one of the challenges that former
Governor Ridge, will face is that even before September 11,
there were a lot of players on the field in the Federal
Government. Mr. Chairman, you noted 43 players in this year's
budget alone receiving money for homeland security, and
actually this is just to combat terrorism. I would argue that
combating terrorism is a subset of homeland security, and
arguably there are other issues that would come under homeland
security banner, although counter terrorism initiatives
constitute the biggest part of it. This doesn't count State and
local government programs, nor does it include the many other
entities it must be coordinated with.
While homeland security is an urgent and vital national
priority, we should recognize that the challenges that it
presents illustrate a range of challenges facing our government
in other areas that are not as visible or urgent, but
nevertheless important. These include a lack of mission
clarity, too much fragmentation and overlap, the need to
improve the Federal Government's human capital strategy,
difficulties in coordination and operation among levels of
government across sectors of the economy, and the need to
better measure performance and make sure that for the money
that Congress appropriates, you get demonstrable results. Just
because you get the money doesn't mean that you are going to
get results.
As we respond to these urgent priorities of today and the
long-term requirements of homeland security, our Nation still
must address a number of other short-term and long-term fiscal
challenges that were present before September 11, and remain
today. Our history suggests that we have incurred sizable
deficits when the security of our Nation or the state of our
economy was at risk. We are fortunate to face these risks today
at a time when we have some near-term budget flexibility. It is
important to remember that the long-term pressures on the
budget have not lessened; in fact, they are much worse as a
result of not only the events of September 11, but the
declining economy and continued increases in health care costs.
As a result, the ultimate task of addressing today's urgent
needs without unduly exacerbating our long-range challenges has
become much more difficult.
As the next two boards will note, the long term budget
outlook is daunting. Based on CBO's latest projection in
August, we have projected the long term budget outcomes
assuming that the entire unified budget surplus is eliminated
in the near term. Our long term budget model suggest that by
the year 2030, there will be no money for discretionary
spending. By the year 2050, the only thing the Federal
Government will be doing is paying bondholders.
The next chart demonstrates how it looked before September
11, and this is not just because of September 11 it is also
because of the decline in the economy and a number of other
things. Even before September 11 and before the additional
decline in the economy, the long term budget outlook was
already bad, even with the assumption that we were going to
save every penny in the Social Security surplus. Even with this
assumption, discretionary spending was going to have to be cut
by 50 percent by 2030; clearly these are bleak and
unacceptable.
My point is simple. There are a lot of legitimate demands
that must be addressed today because of the events of September
11, and there are a number of actions that Congress will
undoubtedly want to take in order to try to stimulate our
economy, but it is important that those be focused on
legitimate need rather than want. It is important to try to
avoid hitchhikers, those who want to stack wants on top of
needs; to be able to realize that what we have here is a very
profound long-range challenge, nothing less than a need to
review, reassess and reprioritize everything the Federal
Government does and how it does it, because the numbers do not
add up.
All too frequently, we assume that the base is acceptable,
and therefore, the debate is about the increment, the plus or
minus from the base. The base doesn't work. We cannot sustain
the base long term. We have to start figuring out what the
government is doing, what are you getting for it, what kind of
return on investment, and how does that compare with the new
and competing demands, whether they are security-related or
prescription drugs, whatever they might be. What is the most
important priority? Realistically you can't meet them all.
In summary, the terrorist attack of September 11 was a
defining moment for our Nation, our government and in some
respects the world. The appointment of former Governor Ridge to
head the Office of Homeland Security within the Executive
Office of the President is a promising first step in marshaling
the resources necessary to address our homeland security
requirements. It can be argued, however, that statutory
underpinnings and effective congressional oversight are
critical to sustaining broad-scale initiatives over the long
term. Therefore, as you move beyond the immediate response, I
think it is important that you consider the implications of
different structures for this Office of Homeland Security, not
only on its ability to effectively get the job done, but on
your ability--the Congress's ability--to conduct effective
oversight, and our ability at GAO to help you to be able to do
that.
I have serious concerns that the way that this office is
structured right now may not make it effective and could
seriously compromise our ability to help the Congress engage in
effective oversight. I also believe that we need to work
together to figure out how we and others can help the Congress
make sure the funds that you appropriate as a result of the
acts of September 11 are used for the intended purpose with
demonstrable results. The model that was used to track spending
for Hurricane Mitch and other kinds of disaster assistance
efforts may be something we want to explore with you going
forward.
We have already started talking with OMB. They are getting
their systems together to track funds. I think it is important
because we are talking about significant sums of money, and our
long-range challenges are now much tougher.
Obviously, we stand ready to help in any way that we can,
and we look forward to doing so. Thank you very much.
Chairman Nussle. Thank you, General Walker.
[The prepared statement of Mr. Walker follows:]
Prepared Statement of David M. Walker, Comptroller General of the
United States
Mr. Chairman and members of the committee, the terrorist attacks of
September 11, 2001, have profoundly changed the agendas of the
Congress, the White House, Federal agencies, State and local
governments, and a number of private sector entities, while
simultaneously altering the way of life for many Americans. The grave
events of September 11th not only ended the debate about whether
threats to our homeland are real, but also shattered the false sense of
invulnerability within our Nation's borders. At the same time, the
aftermath of the attacks also clearly demonstrates the spirit of
America and the enormous capacity of this Nation to unite; to
coordinate efforts among federal, state and local agencies, as well as
among private businesses, community groups, and individual citizens in
response to a crisis; and to make the sacrifices necessary to respond
both to these new threats and the consequences they entail.
Our challenge is to build upon this renewed purpose in ways that
create both short- and long-term benefits and allow us to sustain our
efforts. As the lesson from history inscribed on the front of the
National Archives states, ``Eternal vigilance is the price of
liberty.'' Our fight against terrorism is not a short-term effort, and
homeland security will forevermore be a priority for our Nation. As a
result, we must find the best ways to sustain our efforts over a
significant time period and leverage our finite resources, both human
and financial, in ways that will have the greatest effects.
I appreciate the opportunity to discuss with you today a framework
for addressing Federal efforts to improve our homeland security and the
fiscal implications that these actions may have for our Nation.
Specifically, I will discuss the nature of the threats posed to our
Nation, key elements of a framework to address homeland security, and
the potential short- and long-term fiscal implications these efforts
may have for the Nation.
summary
According to a variety of U.S. intelligence assessments, the United
States now confronts a range of increasingly diffuse threats that put
increased destructive power into the hands of small states, groups, and
individuals and threaten our values and way of life. These threats
range from incidents of terrorism and attacks on critical
infrastructure to cyber attacks, the potential use of various weapons
of mass destruction, and the spread of infectious diseases. Each of
these threats has varying degrees of potential to cause significant
casualties and disruption. GAO has reported on many of these issues
over the past several years, and the changing nature of security
threats in the post-cold war world remains a key theme in our strategic
plan. Appendix I contains a summary of our work and products in this
area.
An effective framework to address these challenges will require not
only leadership with a clear vision to develop and implement a homeland
security strategy in coordination with all relevant partners but also
the ability to marshal and direct the necessary resources to get the
job done. The recent establishment of the Office of Homeland Security
is a good first step, but a series of questions must be addressed
regarding how this office will be structured, what authority its
Director will have, and how this effort can be institutionalized and
sustained over time. The Director will need to define the scope and
objectives of a homeland security strategy. This strategy should be
comprehensive and encompass steps designed to reduce our
vulnerabilities, deter attacks, manage the effects of any successful
attacks, and provide for appropriate response. The strategy will
involve all levels of government, the private sector, individual
citizens both here and abroad, and other nations. Our strategy should
also use a risk management approach to focus finite national resources
on areas of greatest need.
While homeland security is an urgent and vital national priority,
we should recognize that the challenges it presents illustrate the
range of challenges facing our government in other areas not as visible
or urgent--but nevertheless important. These include a lack of mission
clarity; too much fragmentation and overlap; the need to improve the
Federal Government's human capital strategy; difficulties in
coordination and operation across levels of government and across
sectors of the economy; and the need to better measure performance.
As we respond to these urgent priorities of today and the enduring
long-term requirements related to homeland security, our Nation still
must address a number of other short-term and long-term fiscal
challenges that were present before September 11, 2001, and remain
today. Our history suggests that we have incurred sizable deficits when
the security or the economy of the Nation was at risk. We are fortunate
to face these risks at a time when we have some near-term budgetary
flexibility. It is important to remember, however, that the long-term
pressures on the budget have not lessened. In fact, they have increased
due to the slowing economy and the increased spending levels expected
for fiscal year 2002. As a result, the ultimate task of addressing
today's urgent needs without unduly exacerbating our long-range fiscal
challenges has become much more difficult.
the nature of the threat facing the united states
The United States and other nations face increasingly diffuse
threats in the post-cold war era. In the future, potential adversaries
are more likely to strike vulnerable civilian or military targets in
nontraditional ways to avoid direct confrontation with our military
forces on the battlefield. The December 2000 national security strategy
states that porous borders, rapid technological change, greater
information flow, and the destructive power of weapons now within the
reach of small states, groups, and individuals make such threats more
viable and endanger our values, way of life, and the personal security
of our citizens.
figure 1: threats to national security
Hostile nations, terrorist groups, transnational criminals, and
individuals may target American people, institutions, and
infrastructure with cyber attacks, weapons of mass destruction, or
bioterrorism. International criminal activities such as money
laundering, arms smuggling, and drug trafficking can undermine the
stability of social and financial institutions and the health of our
citizens. Other national emergencies may arise from naturally occurring
or unintentional sources such as outbreaks of infectious disease. As we
witnessed in the tragic events of September 11, 2001, some of the
emerging threats can produce mass casualties. They can lead to mass
disruption of critical infrastructure, involve the use of biological or
chemical weapons, and can have serious implications for both our
domestic and the global economy. The integrity of our mail has already
been compromised. Terrorists could also attempt to compromise the
integrity or delivery of water or electricity to our citizens,
compromise the safety of the traveling public, and undermine the
soundness of government and commercial data systems supporting many
activities.
key elements to improve homeland security
A fundamental role of the Federal Government under our Constitution
is to protect America and its citizens from both foreign and domestic
threats. The government must be able to prevent and deter threats to
our homeland as well as detect impending danger before attacks or
incidents occur. We also must be ready to manage the crises and
consequences of an event, to treat casualties, reconstitute damaged
infrastructure, and move the Nation forward. Finally, the government
must be prepared to retaliate against the responsible parties in the
event of an attack. To accomplish this role and address our new
priority on homeland security, several critical elements must be put in
place. First, effective leadership is needed to guide our efforts as
well as secure and direct related resources across the many boundaries
within and outside of the Federal Government. Second, a comprehensive
homeland security strategy is needed to prevent, deter, and mitigate
terrorism and terrorist acts, including the means to measure
effectiveness. Third, managing the risks of terrorism and prioritizing
the application of resources will require a careful assessment of the
threats we face, our vulnerabilities, and the most critical
infrastructure within our borders.
Leadership Provided by the Office of Homeland Security
On September 20, 2001, we issued a report that discussed a range of
challenges confronting policymakers in the war on terrorism and offered
a series of recommendations.\1\ We recommended that the government
needs clearly defined and effective leadership to develop a
comprehensive strategy for combating terrorism, to oversee development
of a new national-threat and risk assessment, and to coordinate
implementation among Federal agencies. In addition, we recommended that
the government address the broader issue of homeland security. We also
noted that overall leadership and management efforts to combat
terrorism are fragmented because no single focal point manages and
oversees the many functions conducted by more than 40 different Federal
departments and agencies.\2\
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\1\ Combating Terrorism: Selected Challenges and Related
Recommendations (GAO-01-822, Sept. 20, 2001).
\2\ Combating Terrorism: Comments on Counterterrorism Leadership
and National Strategy (GAO-01-556T, March 27, 2001).
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For example, we have reported that many leadership and coordination
functions for combating terrorism were not given to the National
Coordinator for Security, Infrastructure Protection and
Counterterrorism within the Executive Office of the President. Rather,
these leadership and coordination functions are spread among several
agencies, including the Department of Justice, the Federal Bureau of
Investigation (FBI), the Federal Emergency Management Agency, and the
Office of Management and Budget. In addition, we reported that Federal
training programs on preparedness against weapons of mass destruction
were not well coordinated among agencies resulting in inefficiencies
and concerns among rescue crews in the first responder community. The
Department of Defense, Department of Justice, and the Federal Emergency
Management Agency have taken steps to reduce duplication and improve
coordination. Despite these efforts, state and local officials and
organizations representing first responders indicate that there is
still confusion about these programs. We made recommendations to
consolidate certain activities, but have not received full agreement
from the respective agencies on these matters.
In his September 20, 2001, address to the Congress, President Bush
announced that he was appointing Pennsylvania Governor Thomas Ridge to
provide a focus to homeland security. As outlined in the President's
speech and confirmed in a recent executive order,\3\ the new Homeland
Security Adviser will be responsible for coordinating Federal, State,
and local efforts and for leading, overseeing, and coordinating a
comprehensive national strategy to safeguard the Nation against
terrorism and respond to any attacks that may occur.
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\3\ Establishing the Office of Homeland Security and the Homeland
Security Council, E.O. 13228, Oct. 8, 2001.
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Both the focus of the executive order and the appointment of a
coordinator within the Executive Office of the President fit the need
to act rapidly in response to the threats that surfaced in the events
of September 11 and the anthrax issues we continue to face. Although
this was a good first step, a number of important questions related to
institutionalizing and sustaining the effort over the long term remain,
including:
What will be included in the definition of homeland
security? What are the specific homeland security goals and objectives?
How can the coordinator identify and prioritize programs
that are spread across numerous agencies at all levels of government?
What criteria will be established to determine whether an activity does
or does not qualify as related to homeland security?
How can the coordinator have a real impact in the budget
and resource allocation process?
Should the coordinator's roles and responsibilities be
based on specific statutory authority? And if so, what functions should
be under the coordinator's control?
Depending on the basis, scope, structure, and
organizational location of this new position and entity, what are the
implications for the Congress and its ability to conduct effective
oversight?
A similar approach was pursued to address the potential for
computer failures at the start of the new millennium, an issue that
came to be known as Y2K. A massive mobilization, led by an assistant to
the President, was undertaken. This effort coordinated all federal,
state, and local activities, and established public-private
partnerships. In addition, the Congress provided emergency funding to
be allocated by the Office of Management and Budget after congressional
consideration of the proposed allocations. Many of the lessons learned
and practices used in this effort can be applied to the new homeland
security effort. At the same time, the Y2K effort was finite in nature
and not nearly as extensive in scope or as important and visible to the
general public as homeland security. The long-term, expansive nature of
the homeland security issue suggests the need for a more sustained and
institutionalized approach.
Developing a Comprehensive Homeland Security Strategy
I would like to discuss some elements that need to be included in
the development of the national strategy for homeland security and a
means to assign roles to federal, state, and local governments and the
private sector. Our national preparedness related to homeland security
starts with defense of our homeland but does not stop there. Besides
involving military, law enforcement, and intelligence agencies, it also
entails all levels of government--Federal, State, and local--and
private individuals and businesses to coordinate efforts to protect the
personal safety and financial interests of United States citizens,
businesses, and allies, both at home and throughout the world. To be
comprehensive in nature, our strategy should include steps designed to:
reduce our vulnerability to threats;
use intelligence assets and other broad-based information
sources to identify threats and share such information as appropriate;
stop incidents before they occur;
manage the consequences of an incident; and
in the case of terrorist attacks, respond by all means
available, including economic, diplomatic, and military actions that,
when appropriate, are coordinated with other nations.
An effective homeland security strategy must involve all levels of
government and the private sector. While the Federal Government can
assign roles to Federal agencies under the strategy, it will need to
reach consensus with the other levels of government and with the
private sector on their respective roles. In pursuing all elements of
the strategy, the Federal Government will also need to closely
coordinate with the governments and financial institutions of other
nations. As the President has said, we will need their help. This need
is especially true with regard to the multidimensional approach to
preventing, deterring, and responding to incidents, which crosses
economic, diplomatic, and military lines and is global in nature.
Managing Risks to Homeland Security
The United States does not currently have a comprehensive risk
management approach to help guide Federal programs for homeland
security and apply our resources efficiently and to best effect. ``Risk
management'' is a systematic, analytical process to determine the
likelihood that a threat will harm physical assets or individuals and
then to identify actions to reduce risk and mitigate the consequences
of an attack. The principles of risk management acknowledge that while
risk generally cannot be eliminated, enhancing protection from known or
potential threats can serve to significantly reduce risk.
We have identified a risk management approach used by the
Department of Defense to defend against terrorism that might have
relevance for the entire Federal Government to enhance levels of
preparedness to respond to national emergencies whether man-made or
unintentional in nature. The approach is based on assessing threats,
vulnerabilities, and the importance of assets (criticality). The
results of the assessments are used to balance threats and
vulnerabilities and to define and prioritize related resource and
operational requirements.
Threat assessments identify and evaluate potential threats on the
basis of such factors as capabilities, intentions, and past activities.
These assessments represent a systematic approach to identifying
potential threats before they materialize. However, even if updated
often, threat assessments might not adequately capture some emerging
threats. The risk management approach therefore uses the vulnerability
and criticality assessments discussed below as additional input to the
decisionmaking process.
Vulnerability assessments identify weaknesses that may be exploited
by identified threats and suggest options that address those
weaknesses. For example, a vulnerability assessment might reveal
weaknesses in an organization's security systems, financial management
processes, computer networks, or unprotected key infrastructure such as
water supplies, bridges, and tunnels. In general, teams of experts
skilled in such areas as structural engineering, physical security, and
other disciplines conduct these assessments.
Criticality assessments evaluate and prioritize important assets
and functions in terms of such factors as mission and significance as a
target. For example, certain power plants, bridges, computer networks,
or population centers might be identified as important to national
security, economic security, or public health and safety. Criticality
assessments provide a basis for identifying which assets and structures
are relatively more important to protect from attack. In so doing, the
assessments help determine operational requirements and provide
information on where to prioritize and target resources while reducing
the potential to target resources on lower priority assets.
We recognize that a national-level risk management approach that
includes balanced assessments of threats, vulnerabilities, and
criticality will not be a panacea for all the problems in providing
homeland security. However, if applied conscientiously and
consistently, a balanced approach--consistent with the elements I have
described--could provide a framework for action. It would also
facilitate multidisciplinary and multiorganizational participation in
planning, developing, and implementing programs and strategies to
enhance the security of our homeland while applying the resources of
the Federal Government in the most efficient and effective manner
possible. Given the tragic events of Tuesday, September 11, 2001, a
comprehensive risk management approach that addresses all threats has
become an imperative.
As this Nation implements a strategy for homeland security, we will
encounter many of the longstanding performance and accountability
challenges being faced throughout the Federal Government. For example,
we will be challenged to look across the Federal Government itself to
bring more coherence to the operations of many agencies and programs.
We must also address human capital issues to determine if we have the
right people with the right skills and knowledge in the right places.
Coordination across all levels of government will be required as will
adequately defining performance goals and measuring success. In
addressing these issues, we will also need to keep in mind that our
homeland security priorities will have to be accomplished against the
backdrop of the long-term fiscal challenges that loom just over the 10-
year budget window.
short- and long-term fiscal implications
The challenges of combating terrorism and otherwise addressing
homeland security have come to the fore as urgent claims on the Federal
budget. As figure 2 shows, our past history suggests that when our
national security or the state of the Nation's economy was at issue, we
have incurred sizable deficits. Many would argue that today we are
facing both these challenges. We are fortunate to be facing them at a
time when we have some near-term budgetary flexibility. The budgetary
surpluses of recent years that were achieved by fiscal discipline and
strong economic growth put us in a stronger position to respond both to
the events of September 11 and to the economic slowdown than would
otherwise have been the case. I ask you to recall the last recession in
the early 1990's where our triple-digit deficits [in billions of
dollars] limited us from considering a major fiscal stimulus to jump
start the economy due to well-founded fears about the impact of such
measures on interest rates that were already quite high. In contrast,
the fiscal restraint of recent years has given us the flexibility we
need to both respond to the security crisis and consider short-term
stimulus efforts.
figure 2: surpluses or deficits as a share of gross domestic product
(gdp) (1800-2000)
Note: Data through 1929 are shown as a percent of gross national
product (GNP); data from 1930 to present are shown as a percent of GDP.
Sources: Office of Management and Budget and Department of
Commerce.
As we respond to the urgent priorities of today, we need to do so
with an eye to the significant long-term fiscal challenges we face just
over the 10-year budget horizon. I know that you and your counterparts
in the Senate have given a great deal of thought to how the Congress
and the President might balance today's immediate needs against our
long-term fiscal challenges. This is an important note to sound--while
some short-term actions are understandable and necessary, long-term
fiscal discipline is still an essential need.
As we seek to meet today's urgent needs, it is important to be
mindful of the collective impact of our decisions on the overall short-
and long-term fiscal position of the government. For the short term, we
should be wary of building in large permanent structural deficits that
may drive up interest rates, thereby offsetting the potential economic
stimulus Congress provides. For the longer term, known demographic
trends (e.g., the aging of our population) and rising health care costs
will place increasing claims on future Federal budgets--reclaiming the
fiscal flexibility necessary to address these and other emerging
challenges is a major task facing this generation.
None of the changes since September 11 have lessened these long-
term pressures on the budget. In fact, the events of September 11 have
served to increase our long-range challenges. The baby boom generation
is aging and is projected to enjoy greater life expectancy. As the
share of the population over 65 climbs, Federal spending on the elderly
will absorb larger and ultimately unsustainable shares of the Federal
budget. Federal health and retirement spending are expected to surge as
people live longer and spend more time in retirement. In addition,
advances in medical technology are likely to keep pushing up the cost
of providing health care. Absent substantive change in related
entitlement programs, we face the potential return of large deficits
requiring unprecedented spending cuts in other areas or unprecedented
tax increases.
As you know, the Director of the Congressional Budget Office (CBO)
has recently suggested the possibility of a Federal budget deficit in
fiscal year 2002, and other budget analysts appear to be in agreement.
While we do not know today what the 10-year budget projections will be
in the next updates by CBO and the Office of Management and Budget
(OMB), we do know the direction: they will be considerably less
optimistic than before September 11, and the long-term outlook will
look correspondingly worse. For example, if we assume that the 10-year
surpluses CBO projected in August are eliminated, by 2030 absent
changes in the structure of Social Security and Medicare, there would
be virtually no room for any other Federal spending priorities,
including national defense, education, and law enforcement. (See fig.
3). The resource demands that come from the events of September 11--and
the need to address the gaps these events surfaced--will demand tough
choices. Part of that response must be to deal with the threats to our
long-term fiscal health. Ultimately, restoring our long-term fiscal
flexibility will involve both promoting higher long-term economic
growth and reforming the Federal entitlement programs. When Congress
returns for its next session, these issues should be placed back on the
national agenda.
figure 3: august 2001 projection--composition of federal spending under
the ``eliminate unified surpluses'' simulation
Note: Revenue as a share of GDP declines from its 2000 level of
20.6 percent due to unspecified permanent policy actions. In this
display, policy changes are allocated equally between revenue
reductions and spending increases.
Source: GAO's August 2001 analysis.
With this long-term outlook as backdrop, an ideal fiscal response
to a short-term economic downturn would be temporary and targeted, and
avoid worsening the longer-term structural pressures on the budget.
However, you have been called upon not merely to respond to a short-
term economic downturn but also to the homeland security needs so
tragically highlighted on September 11. This response will
appropriately consist of both temporary and longer-term commitments.
While we might all hope that the struggle against terrorism might be
brought to a swift conclusion, prudence dictates that we plan for a
longer-term horizon in this complex conflict.
Given the long-term fiscal challenge driven by the coming change in
our demographics, you might think about the options you face in
responding to short-term economic weakness in terms of a range or
portfolio of fiscal actions balancing today's urgent needs with
tomorrow's fiscal challenges. In my testimony last February before the
Senate Budget Committee,\4\ I suggested that fiscal actions could be
described as a continuum by the degree of long-term fiscal risk they
present. At one end, debt reduction and entitlement reform actually
increase future fiscal flexibility by freeing up resources. One-time
actions--either on the tax or spending side of the budget--may have
limited impact on future flexibility. At the other end of the fiscal
risk spectrum, permanent or open-ended fiscal actions on the spending
side or tax side of the budget can reduce future fiscal flexibility--
although they may have salutary effects on longer-term economic growth
depending on their design and implementation. I have suggested before
that increasing entitlement spending arguably presents the highest risk
to our long-range fiscal outlook. Whatever choices the Congress decides
to make, approaches should be explored to mitigate risk to the long
term. For example, provisions with plausible expiration dates--on the
spending and/or the tax side--may prompt reexamination taking into
account any changes in fiscal circumstances. In addition, a mix of
temporary and permanent actions can also serve to reduce risk.
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\4\ Long-Term Budget Issues: Moving From Balancing the Budget to
Balancing Fiscal Risk (GAO-01-385T, Feb. 6, 2001).
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As we move beyond the immediate threats, it will be important for
the Congress and the President to take a hard look at competing claims
on the Federal fisc. I don't need to remind this Committee that a big
contributor to deficit reduction in the 1990's was the decline in
defense spending. Given recent events, it is pretty clear that the
defense budget is not a likely source for future budget reductions.
(See fig. 4).
figure 4: composition of federal spending
Source: Budget of the United States Government FY 2002, Office of
Management and Budget.
Once the economy rebounds, returning to surpluses will take place
against the backdrop of greater competition of claims within the
budget. The new commitments that we need to undertake to protect this
Nation against the threats stemming from terrorism will compete with
other priorities. Subjecting both new proposals and existing programs
to scrutiny would increase the ability to accommodate any new needs.
A fundamental review of existing programs and operations can create
much needed fiscal flexibility to address emerging needs by weeding out
programs that have proven to be outdated, poorly targeted or
inefficient in their design and management.\5\ Many programs were
designed years ago to respond to earlier challenges. Obviously many
things have changed. It should be the norm to reconsider the relevance
or ``fit'' of any Federal program or activity in today's world and for
the future. In fact, we have a stewardship responsibility to both
today's taxpayers and tomorrow's to reexamine and update our
priorities, programs, and agency operations. Given the significant
events since the last CBO 10-year budget projections, it is clear that
the time has come to conduct a comprehensive review of existing
agencies and programs--which are often considered to be ``in the
base''--while exercising continued prudence and fiscal discipline in
connection with new initiatives.
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\5\ See Congressional Oversight: Opportunities to Address Risks,
Reduce Costs, and Improve Performance (GAO/T-AIMD-00-96, Feb.17, 2000)
and Budget Issues: Effective Oversight and Budget Discipline Are
Essential-Even in a Time of Surplus (GAO/T-AIMD-00-73, Feb. 1, 2000)
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In particular, agencies will need to reassess their strategic goals
and priorities to enable them to better target available resources to
address urgent national preparedness needs. The terrorist attacks, in
fact, may provide a window of opportunity for certain agencies to
rethink approaches to longstanding problems and concerns. For instance,
the threat to air travel has already prompted attention to chronic
problems with airport security that we and others have been pointing to
for years. Moreover, the crisis might prompt a healthy reassessment of
our broader transportation policy framework with an eye to improving
the integration of air, rail, and highway systems to better move people
and goods. Other longstanding problems also take on increased relevance
in today's world. Take, for example, food safety. Problems such as
overlapping and duplicative inspections, poor coordination and the
inefficient allocation of resources are not new. However, they take on
a new meaning--and could receive increased attention--given increased
awareness of bioterrorism issues.
GAO has identified a number of areas warranting reconsideration
based on program performance, targeting, and costs. Every year, we
issue a report identifying specific options, many scored by CBO, for
congressional consideration stemming from our audit and evaluation
work.\6\ This report provides opportunities for (1) reassessing
objectives of specific Federal programs, (2) improved targeting of
benefits and (3) improving the efficiency and management of Federal
initiatives.
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\6\ Supporting Congressional Oversight: Framework for Considering
Budgetary Implications of Selected GAO Work (GAO-01-447, March 9,
2001).1 GAO-01-822, Sept. 20, 2001.
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This same stewardship responsibility applies to our oversight of
the funds recently provided to respond to the events of September 11.
Rapid action in response to an emergency does not eliminate the need
for review of how the funds are used. As you move ahead in the coming
years, there will be proposals for new or expanded Federal activities,
but we must seek to distinguish the infinite variety of ``wants'' from
those investments that have greater promise to effectively address more
critical ``needs.''
In sorting through these proposals, we might apply certain
investment criteria in making our choices. Well-chosen enhancements to
the Nation's infrastructure are an important part of our national
preparedness strategy. Investments in human capital for certain areas
such as intelligence, public health and airport security will also be
necessary as well to foster and maintain the skill sets needed to
respond to the threats facing us. As we have seen with the airline
industry, we may even be called upon to provide targeted and temporary
assistance to certain vital sectors of our economy affected by this
crisis. A variety of governmental tools will be proposed to address
these challenges--grants, loans, tax expenditures, direct Federal
administration. The involvement of a wide range of third parties--state
and local governments, nonprofits, private corporations, and even other
nations--will be a vital part of the national response as well.
In the short term, we have to do what is necessary to get this
Nation back on its feet and compassionately deal with the human
tragedies left in its wake. However, as we think about our longer-term
preparedness and develop a comprehensive homeland security strategy, we
can and should select those programs and tools that promise to provide
the most cost-effective approaches to achieve our goals. Some of the
key questions that should be asked include the following:
Does the proposed activity address a vital national
preparedness mission and do the benefits of the proposal exceed its
costs?
To what extent can the participation of other sectors of
the economy, including state and local governments, be considered; and
how can we select and design tools to best leverage and coordinate the
efforts of numerous governmental and private entities? Is the proposal
designed to prevent other sectors or governments from reducing their
investments as a result of Federal involvement?
How can we ensure that the various Federal tools and
programs addressing the objective are coherently designed and
integrated so that they work in a synergistic rather than a fragmented
fashion?
Do proposals to assist critical sectors in the recovery
from terrorist attacks appropriately distinguish between temporary
losses directly attributable to the crisis and longer-term costs
stemming from broader and more enduring shifts in markets and other
forces?
Are the proposal's time frames, cost projections, and
promises realistic in light of past experience and the capacity of
administrators at all levels to implement?
We will face the challenge of sorting out these many claims on the
Federal budget without the fiscal benchmarks and rules that have guided
us through the years of deficit reduction into surplus. Your job
therefore has become much more difficult.
Ultimately, as this Committee recommended on October 4, we should
attempt to return to a position of surplus as the economy returns to a
higher growth path. Although budget balance may have been the desired
fiscal position in past decades, nothing short of surpluses are needed
to promote the level of savings and investment necessary to help future
generations better afford the commitments of an aging society. As you
seek to develop new fiscal benchmarks to guide policy, you may want to
look at approaches taken by other countries. Certain nations in the
Organization for Economic Cooperation and Development, such as Sweden
and Norway, have gone beyond a fiscal policy of balance to one of
surplus over the business cycle. Norway has adopted a policy of aiming
for budget surpluses to help better prepare for the fiscal challenges
stemming from an aging society. Others have established a specific
ratio of debt to gross domestic product as a fiscal target.
conclusion
The terrorist attack on September 11, 2001, was a defining moment
for our Nation, our government, and, in some respects, the world. The
initial response by the President and the Congress has shown the
capacity of our government to act quickly. However, it will be
important to follow up on these initial steps to institutionalize and
sustain our ability to deal with a threat that is widely recognized as
a complex and longer-term challenge. As the President and the
Congress--and the American people--recognize, the need to improve
homeland security is not a short-term emergency. It will continue even
if we are fortunate enough to have the threats moved off the front page
of our daily papers.
As I noted earlier, implementing a successful homeland security
strategy will encounter many of the same performance and accountability
challenges that we have identified throughout the Federal Government.
These include bringing more coherence to the operations of many
agencies and programs, dealing with human capital issues, and
adequately defining performance goals and measuring success.
The appointment of former Governor Ridge to head an Office of
Homeland Security within the Executive Office of the President is a
promising first step in marshalling the resources necessary to address
our homeland security requirements. It can be argued, however, that
statutory underpinnings and effective congressional oversight are
critical to sustaining broad scale initiatives over the long term.
Therefore, as we move beyond the immediate response to the design of a
longer-lasting approach to homeland security, I urge you to consider
the implications of different structures and statutory frameworks for
accountability and your ability to conduct effective oversight.
Needless to say, I am also interested in the impact of various
approaches on GAO's ability to assist you in this task.
You are faced with a difficult challenge: to respond to legitimate
short-term needs while remaining mindful of our significant and
continuing long-term fiscal challenges. While the Congress
understandably needs to focus on the current urgent priorities of
combating international terrorism, securing our homeland, and
stimulating our economy, it ultimately needs to return to a variety of
other challenges, including our long-range fiscal challenge.
Unfortunately, our long-range challenge has become more difficult, and
our window of opportunity to address our entitlement challenges is
narrowing. As a result it will be important to return to these issues
when the Congress reconvenes next year. We in GAO stand ready to help
you address these important issues both now and in the future.
I would be happy to answer any questions that you may have.
appendix i: prior gao work related to homeland security
GAO has completed several congressionally requested efforts on
numerous topics related to homeland security. Some of the work that we
have done relates to the areas of combating terrorism, aviation
security, transnational crime, protection of critical infrastructure,
and public health. The summaries describe recommendations made before
the President established the Office of Homeland Security.
Combating Terrorism
Given concerns about the preparedness of the Federal Government and
state and local emergency responders to cope with a large-scale
terrorist attack involving the use of weapons of mass destruction, we
reviewed the plans, policies, and programs for combating domestic
terrorism involving weapons of mass destruction that were in place
prior to the tragic events of September 11. Our report, Combating
Terrorism: Selected Challenges and Related Recommendations,\1\ which
was issued September 20, 2001, updates our extensive evaluations in
recent years of Federal programs to combat domestic terrorism and
protect critical infrastructure.
Progress has been made since we first began looking at these issues
in 1995. Interagency coordination has improved, and interagency and
intergovernmental command and control now is regularly included in
exercises. Agencies also have completed operational guidance and
related plans. Federal assistance to state and local governments to
prepare for terrorist incidents has resulted in training for thousands
of first responders, many of whom went into action at the World Trade
Center and at the Pentagon on September 11, 2001.
We also recommended that the President designate a single focal
point with responsibility and authority for all critical functions
necessary to provide overall leadership and coordination of Federal
programs to combat terrorism. The focal point should oversee a
comprehensive national-level threat assessment on likely weapons,
including weapons of mass destruction, that might be used by terrorists
and should lead the development of a national strategy to combat
terrorism and oversee its implementation. With the President's
appointment of the Homeland Security Adviser, that step has been taken.
Furthermore, we recommended that the Assistant to the President for
Science and Technology complete a strategy to coordinate research and
development to improve Federal capabilities and avoid duplication.
Aviation Security
Since 1996, we have presented numerous reports and testimonies and
identified numerous weaknesses that we found in the commercial aviation
security system. For example, we reported that airport passenger
screeners do not perform well in detecting dangerous objects, and
Federal Aviation Administration tests showed that as testing gets more
realistic--that is, as tests more closely approximate how a terrorist
might attempt to penetrate a checkpoint--screener performance declines
significantly. In addition, we were able to penetrate airport security
ourselves by having our investigators create fake credentials from the
Internet and declare themselves law enforcement officers. They were
then permitted to bypass security screening and go directly to waiting
passenger aircraft. In 1996, we outlined a number of steps that
required immediate action, including identifying vulnerabilities in the
system; developing a short-term approach to correct significant
security weaknesses; and developing a long-term, comprehensive national
strategy that combines new technology, procedures, and better training
for security personnel.
Cyber Attacks on Critical Infrastructure
Federal critical infrastructure-protection initiatives have focused
on preventing mass disruption that can occur when information systems
are compromised because of computer-based attacks. Such attacks are of
growing concern due to the Nation's increasing reliance on
interconnected computer systems that can be accessed remotely and
anonymously from virtually anywhere in the world. In accordance with
Presidential Decision Directive 63, issued in 1998, and other
information-security requirements outlined in laws and Federal
guidance, an array of efforts has been undertaken to address these
risks. However, progress has been slow. For example, Federal agencies
have taken initial steps to develop critical infrastructure plans, but
independent audits continue to identify persistent, significant
information security weaknesses that place many major Federal agencies'
operations at high risk of tampering and disruption. In addition, while
Federal outreach efforts have raised awareness and prompted information
sharing among government and private sector entities, substantive
analysis of infrastructure components to identify interdependencies and
related vulnerabilities has been limited. An underlying deficiency
impeding progress is the lack of a national plan that fully defines the
roles and responsibilities of key participants and establishes interim
objectives. Accordingly, we have recommended that the Assistant to the
President for National Security Affairs ensure that the government's
critical infrastructure strategy clearly define specific roles and
responsibilities, develop interim objectives and milestones for
achieving adequate protection, and define performance measures for
accountability. The administration has been reviewing and considering
adjustments to the government's critical infrastructure-protection
strategy and last week, announced appointment of a Special Advisor to
the President for Cyberspace Security.
International Crime Control
On September 20, 2001, we publicly released a report on
international crime control and reported that individual Federal
entities have developed strategies to address a variety of
international crime issues, and for some crimes, integrated mechanisms
exist to coordinate efforts across agencies. However, we found that
without an up-to-date and integrated strategy and sustained top-level
leadership to implement and monitor the strategy, the risk is so high
that scarce resources will be wasted, overall effectiveness will be
limited or not known, and accountability will not be ensured. We
recommended that the Assistant to the President for National Security
Affairs take appropriate action to ensure sustained executive-level
coordination and assessment of multiagency Federal efforts in
connection with international crime, including efforts to combat money
laundering. Some of the individual actions we recommended were to
update the existing government-wide international crime threat
assessment, to update or develop a new International Crime Control
Strategy to include prioritized goals as well as implementing
objectives, and to designate responsibility for executing the strategy
and resolving any jurisdictional issues.
Public Health
The spread of infectious diseases is a growing concern. Whether a
disease outbreak is intentional or naturally occurring, the public
health response to determine its causes and contain its spread is
largely the same. Because a bioterrorist event could look like a
natural outbreak, bioterrorism preparedness rests in large part on
public health preparedness. We reported in September 2001 that concerns
remain regarding preparedness at state and local levels and that
coordination of Federal terrorism research, preparedness, and response
programs is fragmented.
In our review last year of the West Nile virus outbreak in New
York, we also found problems related to communication and coordination
among and between federal, state, and local authorities. Although this
outbreak was relatively small in terms of the number of human cases, it
taxed the resources of one of the Nation's largest local health
departments. In 1999, we reported that surveillance for important
emerging infectious diseases is not comprehensive in all states,
leaving gaps in the Nation's surveillance network. Laboratory capacity
could be inadequate in any large outbreak, with insufficient trained
personnel to perform laboratory tests and insufficient computer systems
to rapidly share information. Earlier this year, we reported that
Federal agencies have made progress in improving their management of
the stockpiles of pharmaceutical and medical supplies that would be
needed in a bioterrorist event, but that some problems still remained.
There are also widespread concerns that hospital emergency departments
generally are not prepared in an organized fashion to treat victims of
biological terrorism and that hospital emergency capacity is already
strained, with emergency rooms in major metropolitan areas routinely
filled and unable to accept patients in need of urgent care. To improve
the Nation's public health surveillance of infectious diseases and help
ensure adequate public protection, we recommended that the Director of
the Centers for Disease Control and Prevention lead an effort to help
federal, state, and local public health officials achieve consensus on
the core capacities needed at each level of government. We advised that
consensus be reached on such matters as the number and qualifications
of laboratory and epidemiological staff as well as laboratory and
information technology resources.
Chairman Nussle. Prior to September, the Government's
proposed fiscal year 2002 budget for all programs under the
definition of combating terrorism was approximately $12.8
billion. As I understand it, 8.6 billion was categorized as,
quote, combating terrorism; 1.8 billion was, quote, to combat
weapons of mass destruction; and 2.6 billion was categorized,
quote, critical infrastructure protection, for a total of $12.8
billion. This is, as I understand it, a 78 percent increase
since fiscal year 1998, which was the first year that some of
these definitions appeared in the budget and appeared in
appropriations. There was slightly more than half spent by the
Department of Defense.
How do we measure the effectiveness of this money that has
been spent and the priority that has been put toward combating
terrorism, combating weapons of mass destruction and critical
infrastructure protection? Are we only able to do that through
the prism of what occurred on September 11, or is there a way
to examine the effectiveness of these resources that have been
spent and coordinated thus far, and what model would you
suggest?
I think you gave us some very good advice with regard to
oversight, particularly the caveat to Congress's often cheerful
method of providing hitchhikers for--under the rubric of
combating terrorism, just about everything has that definition
attached to it, it seems, for stimulating the economy. How
would we model the oversight for these programs?
Mr. Walker. First, let me say that those numbers that have
been reported to you, is how much money was appropriated and
how much money was spent for those activities. I think that one
of the things that has to be done on a targeted basis, and we
are happy to try to work with this committee and others as
appropriate, is what are they actually doing with that money.
In some cases it may be investment-oriented, or it may be R&D,
and you may need to do R&D, and R&D may not be getting a payoff
in year 1, but it is something you need to do to stay ahead of
the curve and ultimately will be able to demonstrate that you
are getting some return on that over some period of time.
One of the concerns I have is that there is not enough
focus on what is being done with the money and what we are
getting for the money. There has also been a challenge in
government in that most of the activities that have occurred
have been everybody looking at their silo, each of these
individual 43 departmental agencies being responsible and
accountable for what they do rather than looking across
government. In the area of counterterrorism, homeland security,
by definition, you have to take a horizontal approach across
the Federal Government as well as across boundaries,
domestically and internationally. I think we need to work
together building off GPRA, but targeting in on areas of
opportunity--security being one of the most fundamental--to try
to work with the Congress and others to do a more thorough
analysis of what actually is being done and what is being
achieved of what is being done.
Chairman Nussle. When could that analysis be completed,
because what I am concerned about is that we will very
cheerfully enter into a bidding war when it comes to--from a
partisan standpoint, or even in a nonpartisan standpoint--an
effort to demonstrate our desire to protect America. We have
said, the President has said, every American has said they
would be willing to pay just about any price to ensure that
September 11 never happens again. That is easy to say in a
speech. When the Budget Committee meets coming in January,
February and March to actually put that on paper and realize
the juxtaposition that it has with health care, welfare, the
environment, transportation and everything else in the Federal
budget, that will be a little bit harder pill to swallow and
more difficult to sustain long-term fiscal sanity and get us
back on an even keel in short order.
So how quickly can we come up with that kind of analysis so
that we are better prepared to enter into this next budget
cycle?
Mr. Walker. We have created a GAO task team to focus
horizontally on the issue of homeland security, and Randall Yim
is the director of that group. What I would suggest is we get
him and his people together with your staff and figure out what
we can do. It depends upon how much you want us to do. We can
make it a priority. I think it needs to be a priority, and I
think it is illustrative of what needs to be done in a whole
range of government areas. This happens to be the most acute
need right now, and we will work with you.
Chairman Nussle. As part of the horizontal approach, we
need to include State and local.
Mr. Walker. I agree. I met this morning, with a number of
State treasurers who are trying to work with us and will end up
working with the administration because they want to play a
part here and want to leverage the economic power of the States
and the State pension funds to combat terrorism. There are
things that can be done in that regard, and we are working with
them to facilitate networking with the executive branch to get
that done.
Chairman Nussle. Mr. Spratt.
Mr. Spratt. Let me follow up on that idea. Would it be
possible then for the General Accounting Office, first of all,
to take something like the wiring diagram you have there and
expand upon it and give us an inventory of all the programs in
the Federal Government, associated agencies, that are
counterterrorism, homeland security today, or is that--is that
a doable task?
Mr. Walker. I think it is a doable task. Mr. Spratt, we can
make a good faith effort to get that done.
Mr. Spratt. Usable. Give us a big compendium, and nobody
will ever look at it.
Mr. Walker. I understand what you are saying. Yes.
Mr. Spratt. Obviously we would want the organizations, and
we would want the programs associated with those organizations.
In many cases it will be dual and triple applications. It would
not just be homeland security. There would be other purposes.
We would like to know, I think, the cost associated with the
programs. Then once we get that, I guess we need to talk to you
about how do you measure effectiveness. We use the word ``cost-
effective'' all the time. We don't have a good device for
measuring cost-effectiveness.
Mr. Walker. We can come up with the agencies. We can make a
good faith effort of coming up with what they report as the
related cost.
Obviously one of the problems with cost is how do you
define it; are they allocating overhead to it, or is it just
direct cost. So I think what we can do is do the best we can to
get some meaningful information that gives you a baseline. But
ultimately this is something we are going to have to do, in
more depth, over time.
Mr. Spratt. Well, we welcome the opportunity to sit down
with your staff and work out that project.
Chairman Nussle. Mr. Gutknecht.
Mr. Gutknecht. Thank you, Mr. Chairman.
Mr. Walker, it has been said that one of the first
casualties of war is the truth, and there have been some rumors
floating around and I just want to find out what you know about
this. I was told last week, for example, over the last 3 years
the Federal Government has spent several hundred million
dollars on consultants to deal with bioterrorism. In view of
the rather ham-fisted way we seem to have dealt with anthrax, I
am curious.
Two things: First of all, can you confirm that; do you know
that; and is there a way to find out whether or not that is
true? Secondly, I think we owe it to our constituents to find
out what in the world we have gotten for all the money we have
spent.
What the number is, we don't know right now, but we know it
is a pretty sizable number over the last 3 years, and I would
just like to work with you, and I would hope that you would
work with the Budget Committee. I do think there will be a
tendency in the next year or so, and perhaps beyond, to be
willing to spend a lot more money, but I agree that at some
point we have to demonstrate to our constituents and to the
taxpayers that in fact they are getting fair value for the
money we spent. Do you know anything about the amount----
Mr. Walker. I do not know the amount of money that has been
spent on bioterrorism consultants, but hopefully at least we
will get a feel for what is being proposed to be spent on
bioterrorism as part of this other review. I don't know if we
have a way to figure that out or not. The information that we
get does not break it out by whether or not it is, for
consultants. I will see what, if anything, we can do on that,
but I cannot confirm the fact that we have spent several
hundred million dollars.
Mr. Gutknecht. Mr. Chairman, let me just brag for a minute,
if I can, on some of my constituents. For all the money we have
spent over the last number of years on bioterrorism, the one
thing that we learned, to our despair, that we really did not
have an effective test for anthrax. A team of researchers
working in my district, with no Federal funds, in the last 30
days, has developed a test for anthrax at Mayo Clinic which
will give you results within 30 minutes.
I think that there is an example and I think maybe a lesson
for us, and that is, all the money that we are throwing into
some of the Federal agencies, we don't seem to get the kind of
results; and here we have some scientists working in a lab in
Rochester, Minnesota with no Federal funds, and they come up
with a test within 30 days that will give us answers within 30
minutes. I hope we won't lose that lesson as we go forward. I
will yield back.
Mr. Walker. I think we also have to keep in mind that we
have had one producer for a vaccine for anthrax, or at least
one type of anthrax, that has not received FDA approval. So we
have spent a tremendous amount of money on that and yet FDA
hasn't approved the vaccine. This is an example of something
that has gone wrong.
Chairman Nussle. I am going to call on Mr. Bentsen next,
but let me propound a unanimous consent request. I would ask
unanimous consent that we invite to the table, after Mr.
Bentsen has an opportunity to ask questions, our second panel
and allow them to make their presentation. We have a briefing
at 3:00, and I think it would be good to get their thoughts on
this as well before we go around. So, Mr. Bentsen, and we will
call that second panel----
Mr. Bentsen. Thank you, Mr. Chairman. And excuse my voice.
Mr. Walker, you raised some interesting questions. And I
apologize to our second panel, but I am going to have to leave
to go back to a markup on the reinsurance bill that we are
working on in response to September 11 which may well have
future budget implications. But you raised some interesting
questions on whether or not the cost--and there will be a cost
associated with this--whether or not it is a supplemental cost
or becomes a substitution cost for other programs that we might
do. And I don't know that any of us have that answer.
We know that most of the first responders are State and
local, but we also don't know the answer of whether this is a
Federal cost that the Federal Government will ultimately have
to underwrite. So it is a very complicated issue.
I would like to turn your attention to a story that ran
Monday in the New York Times about the public health care
system in responding to bioterrorism, and I would ask unanimous
consent to insert it into the record, if I might.
[The information referred to follows:]
Struggling to Reach a Consensus on Preparations for Bioterrorism
by sheryl gay stolberg
[New York Times, November 5, 2001]
In his 5 years as president of Johns Hopkins Hospital in Baltimore,
Ronald R. Peterson has spent much of his time trying to make ends meet.
But now that the anthrax scare has made bioterrorism a reality, Mr.
Peterson is planning to spend money, not save it.
This year, Johns Hopkins will buy extra medicines, masks,
ventilators and radios for its security force. It will retrofit a
building with new air filters, to keep infectious germs from spreading.
The price: $7 million. The question is, who will pay for it?
``The Federal Government is going to have to give us some
assistance,'' Mr. Peterson said. Last week, the American Hospital
Association estimated that the Nation would have to spend $11.3 billion
to get hospitals ready to handle a serious bioweapon attack. But the
leading bioterrorism legislation in Congress proposes $3 billion for
all aspects of preparedness, with $400 million earmarked for hospitals.
The gulf between these two estimates shows how far the Nation is
from a consensus on what must be done to prepare for bioterrorism. The
current anthrax attacks, which have killed 4 people and sickened 14
others, have done more than years of reports and warnings to convince
Americans that the Nation must get ready for a large-scale germ attack.
But the anthrax-tainted letters, while terrifying, have not been
much of a test of the country's hospital network.
The system they have tested--the public health system--has been
strained to its breaking point.
``We have spent, in the last 3 years, one dollar per year per
American on bioterrorism preparedness,'' said Dr. Tara O'Toole,
director of the Center for Civilian Biodefense Studies at Johns Hopkins
University. ``We are basically getting what we paid for.''
Senator Bill Frist, Republican of Tennessee, and Senator Edward M.
Kennedy, Democrat of Massachusetts, are proposing legislation that
would increase that amount tenfold, to $3.1 billion a year, Mr. Frist
said.
Dr. O'Toole says that amount is merely a ``down payment on what is
going to have to be a long-term investment.'' There is little agreement
among lawmakers and policy experts about how much is needed.
Mr. Kennedy, for instance, initially wanted to spend $10 billion on
bioterrorism, including $5 billion to improve the public health system.
The current Frist-Kennedy package, which could be taken up by the
Senate this week, includes about $1 billion for public health.
In the House of Representatives, Democrats have proposed $7 billion
for bioterrorism, including $3.5 billion for public health
improvements; House Republicans are drafting an alternative.
The Bush administration has asked Congress for $1.5 billion to
fight germ attacks, most of it to stockpile antibiotics and vaccines.
``We can achieve much better preparedness very quickly,'' Mr.
Kennedy said, ``but it will require a major national effort and a major
commitment of new resources.''
``The question is not whether we have the ability to protect the
American people,'' he said, ``but whether we have the will.''
Having the will does not just mean having the money. It means
training doctors and nurses and public health professionals. It will
also mean a sea change in the way hospitals do business.
For more than a decade, managed care companies and the Medicare
system have pressed hospitals to squeeze the extras out of their
budgets. Hospitals have cut beds from emergency rooms. They have
eliminated laboratory technician positions and pharmacy jobs. They no
longer stockpile medicines, and instead buy drugs each day as needed.
These steps have eliminated what is known as surge capacity, the
ability of hospitals to handle a sharp increase in patients.
To prepare for bioterrorism, hospitals must build surge capacity
back in. Yet because they are reimbursed by health insurers only for
patient care, hospital executives say they have no way to pay for
bioterrorism preparedness. And because hospitals compete for patients,
most have not engaged in regional planning for a bioterrorist attack--
designating one city hospital as the burn unit, for instance, and
another the infectious disease ward.
``Back in civil defense days, there were regional hospital planning
committees that had some type of a game plan,'' said Amy Smithson, a
bioterrorism expert at the Henry L. Stimson Center, a research
organization in Washington. ``Privatization of the hospital industry
has meant that if physicians, nurses and hospital administrators could
not charge their time to a health insurer or Uncle Sam, then it was
difficult for them to do this type of thing.''
The American Hospital Association estimates that, in a large-scale
bioterrorist attack, each urban hospital will need to be able to care
for 1,000 patients; the preparations will cost about $3 million per
hospital, and more than $8 billion all told. Each rural hospital, the
association has said, will need to be able to care for 200 patients, at
a cost of $1.4 million per hospital, a total of more than $3 billion.
Some bioterrorism experts, among them Dr. Frank E. Young, the
former director of the Office of Emergency Preparedness at the
Department of Health and Human Services, have suggested that military
field hospitals could be used to help cope with an attack. Others say
that is not practical.
``I think it's naive to say we don't need to upgrade our hospital
capabilities,'' said Joseph Waeckerle, an expert on bioterrorism who
edits the Annals of Emergency Medicine. ``People are going to go to
emergency departments of hospitals, and they are going to go in
waves.'' Of the current anthrax attacks, he said: ``This is one small
incident. What happens if we have a big one?''
Senator Frist said he was reluctant to commit the government to
spending a lot of money on hospital preparedness until the hospitals
developed bioterrorism plans. ``Only one out of five hospitals even has
a bioterrorism plan,'' Mr. Frist said. ``If you gave them a billion
dollars, they don't have a plan to spend it on.''
There is general agreement, however, that the Federal Government
needs to stockpile vaccines and antibiotics. The Bush administration
has proposed spending $509 million to acquire 300 million doses of
smallpox vaccine, one for every American, and $630 million to expand
the National Pharmaceutical Stockpile, a cache of medicine and
equipment that could be used in the event of a national emergency.
Antibiotics from the stockpile are being distributed to people exposed
to anthrax.
Kevin Keane, a spokesman for Tommy G. Thompson, the secretary of
Health and Human Services, called the administration's $1.5 billion
plan ``a strong investment and a good start.'' Mr. Keane said the
health secretary is ``continuing to work very closely with Senators
Kennedy and Frist as well as other Members of Congress on a final
package.''
But Representative Robert Menendez, a New Jersey Democrat who is
chairman of the House Democratic caucus's task force on homeland
security, said Mr. Bush's plan did not go far enough. The Democrats' $7
billion package, for instance, includes $1.1 billion to improve
intelligence capabilities to detect bioterrorism, $870 million for law
enforcement and $720 million for the military.
``The administration is way behind the curve,'' Mr. Menendez said.
``They may be very aggressive in their war on Afghanistan. But in my
view, and in the view of many people, they are not as aggressive on the
homeland part of this issue.''
As the debate continues, the Nation's public health laboratories
are struggling to analyze tests generated by the anthrax scare. Dr.
O'Toole, of Johns Hopkins, said laboratory workers at the Centers for
Disease Control and Prevention were ``literally sleeping in the lab,''
while public health departments in affected states were working around
the clock to analyze suspicious powders.
``We've been doing this for a few weeks now and people are tired,''
Dr. O'Toole said. ``It is not sustainable over the long term. Public
health has been so frayed and reduced in recent years that it is very
hard to rise to the occasion.''
There is a shortage of epidemiologists who are trained to recognize
and investigate outbreaks of infectious disease, said Dr. Michael T.
Osterholm, a professor of public health at the University of Minnesota
who advises Mr. Thompson, the health secretary, on bioterrorism. ``Many
health departments couldn't hire one,'' Dr. Osterholm said, ``even if
they had the money.''
So no matter how much money Congress appropriates, Dr. Osterholm
said, the United States cannot prepare for bioterrorism overnight.
``It's going to be a multiyear building project,'' Dr. Osterholm
said. ``That's what people have to understand. It's like a skyscraper.
Even if you want to build it tomorrow, it's going to take time.''
Mr. Bentsen. It was in response to a letter, or at least in
part in response to a letter put out by the American Hospital
Association, where they estimated that the cost of bringing the
Nation's hospitals up to speed to deal with bioterrorism
response would be about $11 billion-plus. I didn't read this
article first thing Monday morning, because I was sitting at
Baylor College of Medicine in Houston, and the head of the
institution that I was sitting with had read it and mentioned
it to me. All over this country, major hospitals and medical
centers, including the Mayo Clinic, are in the process of
figuring out what they would do and how they would respond to a
bioterrorism attack.
Where are we, and where has the Federal Government been in
trying to deal with these issues? It is my understanding in the
past we have had a research budget of about $200 million at the
NIH and other funding at CDC, but have we taken any of the
appropriate steps to ensure that the public health system is
ready to address any sort of widespread bioterrorism attack,
and what do you all estimate the costs will be?
Mr. Walker. Well, Jan Heinrich, who is a director of in our
health care practice, will come up and would like to briefly
respond to what the government has done in the area of
bioterrorism, and then I would like to come back and talk to
you about infrastructure.
Ms. Heinrich. On the public health side, it has only been
recently that we have begun to reinvest in infrastructure that
we need if, in fact, we are going to be able to respond
adequately; that is our surveillance systems, our training so
that we can recognize these biological agents. On the hospital
systems side in the emergency rooms, I know there is a great
deal of concern within the American hospital systems because
all of our Federal programs have really been focused on
efficiency and really cutting out the excess capacity. I think
what we are hearing now is that we don't have that excess
capacity, and so we have heard varying reports about what in
fact it will cost us to expand emergency room capability and to
expand hospital beds.
Mr. Bentsen. Do you think that the $11 billion figure that
AHA puts out is a ballpark figure?
Ms. Heinrich. I would really want to look very carefully at
that figure.
Mr. Walker. I think there is a serious issue that goes
beyond this that I would like to touch on. Based on all the
work that GAO has done, even with the events of September 11
there is significant excess physical infrastructure in a range
of areas that we need to take a look at, and I would argue that
because of the events of September 11, we now need to look at
it quicker, because what we are going to have to do is to
ensure the safety and security and the proper equipping of a
number of facilities whether they be DOD, VA, postal service
facilities. We are going to need to do that.
We have significant excess physical plant right now and
ultimately we are going to have to rationalize that physical
plant. I would hope that we can think about accelerating the
rationalization of that, because we are going to have to invest
to safeguard that physical plant and properly equip and staff
whatever physical plant we have in light of the events of
September 11. I know there are a lot of people who are coming
out now saying, we would end up having to use all the physical
facilities and rooms that we have to address a potentially
catastrophic event.
We have to go back to the risk assessment. What is the
likelihood that that is going to happen? Can we afford to pay
for and staff for something that might have a 1 percent or less
than 1 percent probability? These are some of the issues we
have to address.
Mr. Bentsen. Thank you, Mr. Chairman.
Chairman Nussle. Thank you. I would invite Chairman
Hamilton and Speaker Gingrich to the witness table. Like the
GAO, the U.S. Commission on National Security/21st Century did
not regard domestic use of weapons of mass destruction by
terrorists as science fiction or as a threat that might be 20
years in the future. So for your farsightedness and your
willingness to do some heavy lifting on the Commission to begin
the thought process at that time, hopefully far into the
future--but as we know now not quite so--we are very grateful
for your work product. We are grateful for your attendance here
today.
We will begin with Speaker Gingrich. Welcome back to the
Budget Committee and to the Congress, and we look forward to
your testimony.
STATEMENT OF HON. NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE OF
REPRESENTATIVES, MEMBER, U.S. COMMISSION ON NATIONAL SECURITY/
21ST CENTURY
Mr. Gingrich. Mr. Chairman, and Mr. Spratt and members, I
am grateful to be here. Chairman Hamilton and I are very
grateful you took the time to let us chat with you. Let me
start for just 30 seconds and pick up on what General Walker
started with, which is that this committee should, I think,
take seriously; the notion that we have to rethink health care,
rethink Social Security, have a profound increase in the value
per dollar of government spending. DOD procurement would be the
example that Mr. Gutknecht cited, where within 30 days we had
generated a product in the private sector from a world-class
institution that probably would have taken 10 years under
normal processes.
Fourth, I think we have to look at economic growth, because
the difference over the 30 years you are citing between a 3
percent average and a 2 percent average is a stunning multiple.
I would say this committee ought to take those four zones as
very profound areas of reform without which you cannot solve
the problems that General Walker outlined.
We on the Hart-Rudman Commission--which I commend President
Clinton for having agreed to establish, and Secretary Cohen for
having agreed to sponsor--reached three key conclusions I want
to cite to you. The first is, as we reported in March, that we
have to plan on the assumption that a weapon of mass
destruction will be used in an American city and that we have
to assume that in the next 25 years that is the number one
threat to the United States.
At the time we said it, I think a lot of news media thought
it was either science fiction or irrelevant, but around
September 12 they became more interested. I just want to
emphasize what we cited was neither September the 11th nor the
anthrax event. The anthrax event has involved 4 deaths and 17
infections. September the 11th actually understressed the
system in terms of casualties, because so many people
tragically died in the buildings, they didn't need medical
care. I would suggest to you, if you look at all the reports in
the last 15 years, if you get a major biological problem,
either a large anthrax, a reengineered smallpox, or a
reengineered flu--the largest epidemic of the 20th century was
flu in 1918. It killed more people than died in the 4 years of
the First World War. So the flu can be, if properly engineered,
an extraordinarily illness. You have to remember we may not
have the correct vaccine, which is why buying 300 million units
is probably the right thing to do. But we had better be
building a brute force capacity to identify, analyze, and
respond. We may have to maintain shadow factories that are
capable of being converted rapidly, or factories that are paid
to have a double capacity, because we may literally have to
produce a brand new vaccine to a brand new engineered disease.
These are very serious things. I agree they may only be 1
percent occasions, but if you have a nuclear weapon go off in
an American city, or if you have a major biological event,
people in the next hearing are not going to say gee, you were
really prudent in not worrying about that. I think it requires
global systems, it requires using a large part of the National
Guard, and it requires a significant investment.
Let me also point out the second thing we said was a
danger, after a weapon of mass destruction in an American city,
was the failure of American math and science education and the
failure to invest enough in science, and I would argue the
tripling of the budget of the National Science Foundation. I
don't care where you take the money from. Tripling the budget
of the National Science Foundation is as big a national
security investment as anything else you do, and insisting on
measured productive math and science education is central to
our survival. We said to a group, unanimously, this is a larger
threat than any conceivable conventional war. I think that
should sober anybody who cares about national security in terms
of our education.
Third, we concluded that there has to be a Homeland
Security Agency, and our reason was simple. Based on the drug
czar's experience, having a coordinated exhortation role is in
the end futile. There has to be real power. Now, there are a
lot of different ways to design that real power, but if you
have 44 or 52 or 60 agencies after Governor Ridge leaves, after
the President ceases to focus on this crisis, the next Homeland
Security Director is going to be essentially impotent.
Furthermore, because homeland security is central to the
Congress, the Congress had better have a position which is
accountable to the Congress. This should be a position which is
approved by the Senate; it should be a position by which you
could compel testimony; I think it is a very important issue.
Let me say two last quick things. My personal bias is, as
you do all your planning, looking at the charts that General
Walker laid out, you can't get intelligence and national
defense on a world basis for less than 4 percent of GDP; that
every effort to try to do it is going to end up coming short,
and then later you will wonder why that particular shortfall. I
agree with what Mr. Spratt said: There are too many things like
that we need to be doing that we are not right now.
Lastly, I think the Congress right now should set a
benchmark of September the 15th next year. You could do this in
2 weeks. Set a benchmark of September 15 next year, assume two
major crises, one nuclear and the other biological, and lay out
what the United States should be capable of doing on that date.
Because if we don't set right now a tough goal for September a
year from now, then when it happens a year from now we will
wonder why we are not capable. I hope it won't happen, but I
think it is realistic to assume you could have a major problem
in at least one city, and we could be 10 percent prepared if we
don't cut through the red tape and the inertia and insist on a
wartime kind of urgency.
Chairman Nussle. Mr. Hamilton.
STATEMENT OF HON. LEE H. HAMILTON, FORMER MEMBER OF CONGRESS,
MEMBER, U.S. COMMISSION ON NATIONAL SECURITY/21ST CENTURY
Mr. Hamilton. Mr. Chairman and Mr. Spratt, thank you for
the opportunity to testify.
The Speaker was a little modest when he referred to the
Commission. The idea of the Hart-Rudman Commission really
originated with the Speaker--President Clinton, and Secretary
Cohen made the appointments. We had a remarkable Commission,
very broadly based--Republicans, Democrats, liberals,
conservatives, across the board of the political spectrum. The
unique thing about it was the unanimity of the recommendations.
The principal point was in terms of conclusions that Americans
will likely die on American soil, possibly in large numbers.
That was written about a year ago, and it unfortunately turned
out to be very prophetic.
We also concluded that the Federal Government was very
poorly organized to deal with the question of homeland security
and mentioned, as the Chairman did a moment ago, the number of
agencies that are involved. As a matter of fact, I think 43
probably understates it. I think it is a good many more than
that if you look at it carefully, and we said that the Federal
Government had a very fragmented, ad hoc approach to the
question of homeland security.
Let me summarize very quickly some of the other
recommendations and I will not go into any detail, just try to
cover them as quickly as I can. The President had to develop a
comprehensive strategy and I think that is underway now. The
three elements to it are:
Prevention. Preventing possible terrorist attacks from
taking place. That is the best defense, of course.
Protection. Protecting all kinds of critical infrastructure
across this country.
And, of course, the response mechanism for responding to a
disaster after it strikes.
We proposed, as the Speaker suggested, the National
Homeland Security Agency. I will want to say a little more
about that. The director would be a member of the Cabinet. He
would be confirmed by the Senate. He would have his own budget
and staff. The core of it would be what is today FEMA, but you
would add the Customs Service, the Border Patrol, and the Coast
Guard.
We also made a recommendation with regard to the Congress,
and we think the Congress is not very well organized either to
deal with homeland security. The problem here is not just with
the executive branch, but trying to explain to the Congress or
testify before the Congress on homeland security is an
enormously complicated task, because you split all over the
place jurisdictions with regard to homeland security, and you
have to get your act together in the United States Congress,
just as clearly as the executive branch has to get its act
together.
Now, on the point of organization, the threshold question
is how serious is the threat of terrorism to the national
security? If you believe that is the number one threat to the
United States, as the Commission unanimously believed, then it
has enormous implications as to the way you organize the
government and the way you allocate your resources. There are
plenty of other threats to the national security, some of them
very serious indeed. We would like to deal with all of them,
put all the resources against each of them, but you can't do
that. You have to establish priorities.
If this is the number one threat, then you had better begin
to allocate your budget and your resources and organize your
government in such a way that you deal with the number one
threat. At the moment, there are two schools of thought. One
envisions White House Office, National Security Council, or the
National Economic Council that has been put into place now by
the President. Mr. Walker, I think, was exactly right when he
said that is an excellent first step. I also agree with him
that is not sufficient.
The second approach, a Cabinet official, direct control
over department, direct control over budget, direct control
over staff. The Commission is pretty solid on this; we were
very solid. We thought you needed a department of government
with Cabinet status. Does the person in charge have the clout,
does he have the money, does he have the staff to get things
done? That is the key.
Now, I think Governor Ridge, an excellent choice, will have
total support of the President, good access to the President.
But over the long term you have got to look at this problem
beyond the Bush administration. You have got to look at it in
terms of years, not in terms of a few months or even 4 years'
time. I think it is terribly important, if you want to move
this Federal bureaucracy, you have got to have someone in that
position that has clout. You can't do it the balance of this
year, you have got a heavy schedule for the remaining few
weeks, but you certainly ought to be thinking about setting up
a Cabinet agency when you come back.
When Don Rumsfeld was the Secretary of Defense the first
time, not this time, he made this statement on one occasion
when he got into a conflict with the Intelligence Community. He
said, ``if it is in my budget, I control it.'' That is a
statement that every one of us can fully appreciate. If we are
running the Defense Department, any other department, agency,
if it's in our budget we would want to control it.
That is precisely the problem that Governor Ridge is going
to confront. He is going to be sitting around that table with a
lot of very powerful actors in this town, as powerful as you
can get around a single table, and the only way he is going to
be able to move that bureaucracy over a period of time,
Governor Ridge and his successors, will be to have his budget
and to be able to control that budget.
I know there is a lot of arguments here for coordination
and we have to deal with a lot of problems through interagency
coordination and cooperation. It is an important thing to do in
ordinary times, but these are not ordinary times. This is a
national emergency and we are at war, and the business of
national homeland security is an urgent national priority.
So I think--my time is concluded. You have got to look at
this in terms of clout, in terms of budget, in terms of
strategy, or in terms of staff. And the point that has been
made by both the Speaker and Mr. Walker is this: If you want to
leave the Congress out of the action, do it by Executive order.
The National Security Adviser is tough to get up before this
Congress. You cannot compel the National Security Adviser to
come up here. They often cooperate, they are often very
generous in that. If you are a department head, the Congress
can compel him to be here and you can ask him the tough
questions which it is your duty to do in your oversight
responsibilities. If you want to leave the Congress out of all
of this, just let it drift along for a period of years and
months under an Executive order. If you want to put the
Congress into the action, give it a statutory base.
Chairman Nussle. I thank our witnesses. Mr. Sununu.
Mr. Sununu. Thank you, Mr. Chairman. Thank you for joining
us.
I would like the panel members to address or at least begin
by addressing in a little more detail one of the Commission
recommendations dealing with establishing an independent Agency
for Homeland Security. There is also a recommendation to
establish an Assistant Secretary of Defense for Homeland
Security. How would those two interact? And the proposal is to
move Customs, Border Patrol and the Coast Guard into Homeland
Security. Would they report within the Department of Defense to
the Undersecretary, would they report to the Homeland Security
Director, or are they one and the same?
Mr. Hamilton. I think with respect to the Coast Guard,
Border Patrol, and Customs, they would report to the director
of the Homeland Security Agency. When you are dealing with the
Federal Government with all of these cross-cutting
responsibilities, it is literally impossible to bring
everything under one person. We did not recommend that the
intelligence functions be put under the director of Homeland
Security. We did not recommend the defense functions--we kept
that different. We did say that the DOD, as you have suggested,
Mr. Sununu, should have an Assistant Secretary reporting
directly to the Secretary of Defense on homeland security,
which I think the Department of Defense does not have today. So
we try to elevate it within the Department of----
Mr. Sununu. What elements within DOD would that individual
be responsible?
Mr. Hamilton. I don't think I can respond to that other
than to say those elements that have responsibility for
homeland security defense. We did believe that the primary DOD
agency or bureau that would have responsibility here would be
the National Guard. The National Guard is in place. The
infrastructure is in every State. They already perform
functions that are very similar to what we are asking here. So
that becomes the primary DOD body that you would deal with.
Mr. Sununu. Speaker Gingrich, you talked a little bit about
bioterrorism and, I guess, the scope of the threat; the
technology that is out there that we would even have a
difficult time imagining at this point, modified bugs, whether
it is flu or smallpox or other. There are a number of key
elements to dealing with a bioterrorism threat where I think
there were probably--we could argue there are some weaknesses:
the R&D side, developing vaccines and treatment; the
distribution and logistics associated with providing vaccines
and treatment where it might be needed; the first responders,
their need for equipment and training and technology.
My question is, is there a particular area here, or one
that I haven't mentioned, where you see the greatest technical
weakness or the greatest need for resources that we as a
Congress ought to focus our attention first?
Mr. Gingrich. That is a very good question and I am going
to give you a very discouraging answer. If you go back and
watch the movie Titanic, there is a fateful moment where the
designer of the ship tells the heroine that he actually
designed the ship to have the full number of lifeboats, but
they didn't want to crowd the promenade so they only put half
of them on, a decision which ultimately cost well over 1,000
lives.
Before the First World War, outside the professional
military, nobody understood the change in scale, and you can
read all sorts of books before the First World War that said no
war could last more than 60 days because the economies would
collapse, et cetera. Before the Second World War, to have
suggested either the Holocaust and the deliberate massacre of 6
million people or to have suggested nuclear weapons, or, for
that matter, fire-bombing which actually killed more people
than nuclear weapons, would have been unthinkable. People would
have said that is not at all likely.
You are in the same boat now. The challenge is to say to--
to just go back and have your staff put together the seven to
ten best reports of the last 10 years on biological events and
put it on a chart and stare at it. It probably won't occur. It
is probably not really a threat. But the study that said a lay-
down by airplane of an aerosol anthrax over Washington would
kill 1,100,000 people--look what 4 deaths and 17 total people
involved did to this economy, to the Congress, to staffing, to
buildings, and then imagine a serious event. We have not seen
by the standard of our Commission a serious event yet.
So I would just say to you, you have to look at all of it
and be ruthless about the notion that you can't necessarily
know what will hit you because we don't today understand
biological knowledge. So you have got to have a very fast
response time, which is why the breakthrough that Mr. Gutknecht
mentioned was so important. I would say you have got to look at
the whole system, because it is the piece that you don't fix
that is going to kill a lot of people.
Mr. Hamilton. If I may respond.
Mr. Sununu. Please.
Mr. Hamilton. The one that worries me most in the
biological area is smallpox. Smallpox is, of course,
exceedingly contagious. The American population, if you are
under--I don't know the age--30, 40 years of age, you have not
been vaccinated. If you have a breakout in smallpox you will
have devastating numbers of dead from smallpox in the younger
population. Those of us who are my age had a smallpox
vaccination, and the percentages are that we would experience a
very small number of deaths even though the vaccination was
many, many years ago. Smallpox is the killer biological weapon.
I agree with Mr. Spratt's comments earlier about nuclear
weapons. That I would rank even higher probably in the total
list.
Mr. Sununu. Thank you.
Mr. Walker. I think it is important to bring these
together. First you have to look at a risk assessment. You have
to do a comprehensive risk assessment; what is the spectrum of
risk? I would like to piggyback on what Speaker Gingrich said.
You may assess that the risk of a certain thing happening is
not very high, but nonetheless we have got to be able to deal
with it. But how you deal with it is important.
For example, Speaker Gingrich talked about the fact that in
order to address the adverse implications of a particular
weapon of mass destruction in city X, maybe we should have a
national capability that has the ability that can be moved to
city X, because we don't know where city X will be. So, we need
a national response team to respond very quickly. In the
absence of looking at it that way, let me tell you how people
are going to treat it. Every city and every department and
agency will want to end up building their own infrastructure,
which is totally irrational and unaffordable. So we have to do
the risk assessment, set the priorities, and then figure out
how best to respond to that risk. Certain things may be local,
certain things may be regional, certain may be national,
certain may be Federal.
Mr. Hamilton. But we should begin now to vaccinate
everybody in the country for smallpox.
Mr. Sununu. Thank you.
Chairman Nussle. Mr. Clement.
Mr. Clement. Thank you, Mr. Chairman. This is a wonderful
panel. All of you are great leaders and you have given us a lot
of food for thought.
General Walker, I will start with you first. You mentioned
the role of government almost as if you were saying that you
feel like your hands are tied right now when it comes to moving
forward with effective oversight. Were you saying that?
Mr. Walker. What I am saying is, that what is clear to me
when you look at these numbers and you project them out is that
in addition to entitlement reform--which Speaker Gingrich
talked about--there are current and future priorities that
Congress is going to want to fund and that the American people
are going to want to fund and it would be prudent for it to
fund. But, because of what is in the baseline right now, the
numbers just don't work. Growing the economy obviously will
help but it is not going to close the gap that we are talking
about here. So if you want to close the gap that I showed
between what current tax burdens will allow and what the
projected spending is going to be. You are going to have to
look at the base departments, agencies, programs, and
activities; you are going to have to review, reassess and
reprioritize. Some programs may be doing things that are
worthwhile, but they are not generating decent results and you
may have higher priorities that you want to be able to fund or
need to be able to fund.
In addition, with regard to homeland security, I am very
seriously concerned about how you are going to conduct
effective oversight and how we are going to help you do that
unless this agency is a statutory agency.
Mr. Clement. We could get into the position of being almost
a drunken sailor, spending money as if there is no tomorrow,
with no accountability, because we are spending it for national
security or counterterrorism.
Mr. Walker. It is amazing how many things can be cloaked
under the rubric of national security or counterterrorism. I
will just leave it at that.
Mr. Clement. Speaker Gingrich, I know you can say more
things in fewer words than any fellow I have ever worked with,
even being a Georgian. That is pretty good, being a Tennesseean
myself. I know you mentioned rethinking Social Security and
health care. I could argue that is a national security, too,
because if people don't have enough money to live on or if they
don't have the proper health care, they can't survive either.
That is national security. Am I wrong or right?
Mr. Gingrich. Well, no. I think, first of all, President
Eisenhower, who had a fair background in the military, always
emphasized that financial security and financial strength were
a key particular part of how we would ultimately defeat the
Soviet Union. He was very frugal with defense spending and
tough-minded about having a strong economy and a strong
society. I think certainly you have to look at a range of
issues where I would argue this committee, if you take General
Walker's charts, which said even without the problems since
September 11 there were certain inevitable long-term challenges
you are faced with. I have spent most of the last 3 years
looking at health care and I will say flatly, if we don't
transform the health care system, you can't possibly make the
current structure work when the baby boomers retire. It is
going to fall apart. You go down a list of things. I think that
is another hearing for another day.
Your point is exactly right. For the long-term future of
the country, there are Social Security issues, there are
financial issues, there are health issues that are as profound
for the country as national security, and unless they are all
working, the country does not work. I think that is a more than
fair point, which is why I would argue you want to think
carefully and cleverly about as much of your civil defense
being either volunteer or part time.
Let me give you three quick examples. We ought to have a
public health corps of volunteers so if you got to a biological
event--in a city like New York, you can absorb 100,000 people
dealing with smallpox. So you want those to be part-time
volunteers who get trained twice a year and are doing it
because there is a crisis like the World War II bomb shelter
wardens were in Britain.
Second, you probably want a civil defense system much like
in the fifties, where FEMA would organize people so if you had
a big nuclear event or a big bomb event, you could have people
who could go to it.
Third, I believe notionally--and I wouldn't defend the
number precisely--but you would probably want 40 percent of the
National Guard redirected to medical and construction
challenges, which frankly the Guard hierarchy will probably
fight, but for the country's future that is where you imbed it
at lowest cost to have the local response capability.
Mr. Clement. Mr. Hamilton, no one have I learned more from
when it comes to international relations than you. You have
become my mentor over the years. I want to ask you to diffuse
the situation we have right now. Is there something that could
break where we could have peace in the Middle East or between
the Israelis and the Palestinians? I know we have Afghanistan
to deal with right now, but knowing we are not going to get to
zero risk, ever, as General Walker said, is that the key that
unlocks the door if we truly are going to grasp terrorism
today?
Mr. Hamilton. No, I don't think it is a key that unlocks
the door. Like it or not, the Arab countries today do in fact
link the war on terrorism with progress in the Israeli-
Palestinian dispute. So it is a factor, but I think you could
remove that very troublesome factor, the Palestinian-Israeli
dispute, and you still will have the phenomenon of terrorism
because it is much more deep-seated than just the Israeli-
Palestinian dispute.
Mr. Clement. Thank you.
Chairman Nussle. Mr. Thornberry.
Mr. Thornberry. Thank you, Mr. Chairman, and I appreciate
this hearing and those which are to follow. I agree with Mr.
Spratt on the issue of nonproliferation, but I also believe
that is but one example in our government where one can
question whether our priorities are right, whether they have
changed since September 11, and whether they are right going
into the rest of the century. I think this committee has a role
in helping focus on those priorities.
I guess I would like to ask each of you to comment on two
questions. One question is, it seems to me that the Hart-Rudman
recommendations are not necessarily inconsistent with Governor
Ridge's office. In other words, I see Governor Ridge, as
described by the White House, as a national security adviser.
The National Security Adviser has departments to implement this
coordinated policy which he or she formulates, and it does seem
to me that a Department of Homeland Security to implement at
least those policies dealing with the border and cyberterrorism
and emergency response makes some sense, so it is not
inconsistent with Governor Ridge's position. Indeed, it could
help him do his job better. If Governor Ridge is going around
making sure the Border Patrol radios talk to the Customs
Service radios, then he is functioning at the wrong level, but
somebody has got to do it.
General Walker, it seems to me that arrangement is not
inconsistent with the principles you laid out, and I would like
to know if anybody disagrees with that.
My second question is more difficult. How do we impart this
sense of urgency that is necessary to make the changes here and
in the executive branch? I am circulating an editorial from USA
Today from last week that basically says there is no way
Congress is ever going to do the Hart-Rudman recommendations,
because Congress will not step on toes here or the executive
branch to rearrange. It is just too politically difficult. I
agree with the Speaker, we have not yet gotten to the big
event.
How do we impart that sense of urgency in order to better
prepare for that big event? I would like for each of you to
give us some advice on how we can do that.
Mr. Walker. First, with regard to the Office of Homeland
Security, we issued this report which ironically came out very
shortly after September 11, because we had done a lot of work
before September 11 on combatting terrorism. In fact, we issued
it on the day that the President came up here and spoke to the
joint session of Congress, and the first recommendation was
that they create an office similar to what he did the night
that we issued the report. We obviously had talked to the
administration several weeks in advance. It was a partial
adoption. We were clear that we thought it needed to have a
statutory basis, and that it would be preferable if it was a
PAS appointment.
Why? Two reasons. Number one, history has told me that
whether you are in the public or private sector, if you don't
have significant control over financial and human resources, if
all you have is an outbox and not an inbox, you are not going
to be effective over time.
Number two, there is no question that Governor Ridge and
President Bush know each other well, like each other, work
effectively, and in this environment maybe there is a good
chance that this model could work. However, that is looking at
it on an individual basis, not an institutional basis, and I
think that Congress needs to look at it on an institutional
bases.
Number three, I am very concerned if this office does not
have a statutory basis, less about whether or not it is PAS or
Cabinet level, if this office does not have a statutory basis.
I care about the Congress and because we are an instrument in
helping you to do your job. Some of the problems we have
experienced already in conjunction with the energy task force
and the Vice President, you are going to have problems and we
are going to have problems getting access to information to
help you do your job, and in an area like homeland security I
would argue that is unacceptable to the American people.
Mr. Gingrich. I agree with everything General Walker just
said. I would simply add, on the issue of being a national
security adviser, it is a profound misunderstanding of why the
National Security Adviser matters. The National Security
Adviser matters because the President of the United States
talks with his or her counterparts all over the world virtually
every day, and in order to do that, the National Security
Adviser is the first person to brief them every day, and is
with them at different times every day. That will never be true
of a Homeland Security Office. They will never be comparable in
centrality to the President.
Second, we have got to decide whether we are going to be a
comfortable country until the crisis, or a serious country.
This is at the core of your urgency question. I think hearings
matter. I think the Congress ought to hold a series of threat-
based hearings and then say OK, do we want to be the people who
take the right steps before there is a catastrophe or would we
rather just wait and hold the hearings after the catastrophe?
There is a very real--not gigantic--but real possibility of
something really bad happening and I think I agree with you,
the reason people don't feel urgency is they are told over and
over again by the government things are under control. This is
not like Desert Storm. We are not sending professionals half a
world away while we get to watch it on TV. This is a very
complicated long-term struggle that has direct life-and-death
implications at home. We are not today functioning that way. I
think the President gets it. I think the Vice President gets
it, I think the Secretary of Defense gets it. I am not sure,
frankly, much beyond there that people have a sense of driving
urgency that there could be a crisis tomorrow morning and we
are not prepared for that crisis.
Mr. Hamilton. I should say, first of all, that Mr.
Thornberry recognized this problem far before his other
colleagues did, and we on the National Security Commission are
grateful to you for your recognition of that and your
leadership. He was talking about this months and months ago,
and I think has been an effective voice of leadership.
I agree with your observation. There is nothing
inconsistent here. The President deserves a lot of credit for
moving this forward. He did what he had to do. He has created
an Executive order and started the process. Now the Congress
has to do what it is supposed to do. It is an evolving matter.
I don't think there is a right or wrong way to deal with
this organizational question necessarily. There may be a more
effective way to do it than the other way, but whatever we do
it is going to be an improvement over what we had before. I am
sure of that.
Secondly, on imparting a sense of urgency, let me make this
observation. I think the people of this country today are in
the grip of fear and they want information and they want
leadership today, and the domestic situation proved more
serious than our public officials initially indicated, I
believe. This is a function of leadership. You have to disclose
fully what you know and what you don't know. We don't know
everything about anthrax. We have all learned, even the
scientists have learned a lot about anthrax in the last few
days. You have to avoid speculation. You have to make sure your
facts are straight and you have to recommend specific steps
that people can take. They are out there today, they hear all
of you talking about it, they hear the President talking about
how urgent the situation is and how great the risk is. My gosh,
they had it demonstrated graphically on September 11. What they
are really saying to themselves is, what do I need to do for
myself and my family? You have got to give them some direction.
You are the leaders. I think the President is making a
genuinely good effort to do this, and I know Governor Ridge is.
The President and Governor Ridge are not going to get it
right every time. There are too many things we are not sure of
here. So how do you impart the sense of urgency? That is your
job. You are the leaders and the rest of us have to do the best
we can to try to give you support.
Chairman Nussle. Ms. McCarthy.
Mrs. McCarthy. Thank you, and I find the testimony of
everyone really extremely interesting. I agree with the sense
of urgency. I don't know whether it is my nursing training--and
I will be very honest with you--even when we were here without
an office, and I thank you for sharing space, and I'm looking
at my colleagues--everyone is saying like oh, this is nothing.
It is something.
On the health care needs, smallpox, I mean that is what we
should be worrying about. You know, obviously we didn't get the
message across on anthrax. An awful lot of people did know some
things about it but not to the extent of what was happening.
Buildings didn't have to be closed, in my opinion, because the
spray at the beginning is usually depleted at that time. The
other stuff would be negative or positive on the swabs. We
spent so much money and time and fear among people, and we have
to get that right and we have to have one spokesperson, as far
as I am concerned, giving that education out there.
I agree with you, Mr. Gingrich, that we have to start
educating the people. They are scared. Yet when I give a speech
and say we have a long haul ahead of us and we are going to
have to be careful, and yet we are sending a message out there,
``oh, go to the movies and everything,'' and that is fine
because we have to keep the economy going, but I also happen to
agree that it is almost like we are taking care of children. We
don't want them to know too much, and yet they know a lot more,
and then their fears are built on their imagination and that is
what we are seeing with our adults, our families.
As far as home security, we have to get this right and that
is going to be the toughest job, in my opinion, here in
Congress, because it is going to become political, and you know
it and everyone else knows it. Once politics get involved in
what we are trying to do as far as the right thing,
unfortunately I think that we might lose in the end. I happen
to think there is a sense of urgency. I happen to think that
something is going to happen whether it is next week, whether
it is next month, and we are not prepared for it. We are not,
and that is a sad thing, but we will learn from it. I hope they
listen to you when we look to see how to set up the correct
formula for home security. I hope everyone works together on
it.
This is the biggest challenge this Nation has faced in a
long, long time. Other nations are going to be looking toward
us to see if we do it right. So we have a lot at stake in this.
The biggest problem, as far as I am concerned with the budget
that we are talking about is taxes. Whether you agree that we
need tax stimulus or not, our moneys right now should be going
for national security and everything else has to be put on
hold, and just at the basic line as far as I am concerned.
Mr. Walker. Real quickly on that, Ms. McCarthy. First,
after these events happened, I thought back to my undergraduate
days where I was taught about Maslov's theory. Some of us might
remember that. At the base of his hiearachy of needs was self-
preservation; at the pinnacle was self-actualization. I would
argue that prior to September 11, a lot of people in this
country were focused on the word ``me'' and self-actualization;
how can I maximize what I get out of life? Today there are a
lot of people focused on self-preservation, which is a concern,
but they are also focused on the word ``we,'' both family and
country, which is a positive.
The other side is--I agree with Mr. Hamilton, because of
the fact that if you look at risk with regard to smallpox from
the standpoint of mortality and its infectious nature. It is a
very serious issue. Even those of us who had the vaccine,
evidence notes that if it was years ago, it is not likely to be
as effective.
Mrs. McCarthy. Actually after 10 years it doesn't have any
effect. I was lucky. After nursing school, we had to get
another shot. So I had it twice in my life. 1964 was the last
time. 1974 was when they gave the last shots, if I am not
mistaken.
Mr. Gingrich. Can I just comment, because I think you put
your finger on something very important. We are very likely to
have overreacted to the relatively small anthrax event and be
underreacting to the scale of the threat simultaneously. So we
are spending an enormous amount of energy running in circles
and not nearly enough energy on tough, deep decisions that
would enable this country to survive a serious problem.
Mrs. McCarthy. Thank you.
Chairman Nussle. Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman. I found the
testimony of all three of you to be fascinating. It probably
wouldn't have been as fascinating if it were held on September
the 10th, but nevertheless that is where we are.
I guess one observation--I would like to ask all three of
you. General Walker, you were talking about the idea that it
will never get to zero risk, you can never attain that 100
percent. Yet at the same time, you are all talking about an
inventory of some sort of risk assessment on a variety of
areas, and I haven't fully looked into your reports, so I can't
respond to everything that you have suggested. The question
then becomes: If you can't get zero risk, at what percentage is
it acceptable to be on guard? Then in that process, what do we
do or how do we respond to maybe the threats that different
political philosophies will have as it relates to us in a free
and open society?
So I invite you, if hopefully understand what I am saying,
to respond to that, to give us some sort of guidance on that.
Mr. Gingrich. Let me draw a distinction. I don't think you
would want to live in a society that was so tightened down that
you had no risk of anything bad happening, just as people don't
want to buy a car which is so heavy and structured that nothing
could ever hurt you. It would be a tank. It would be effective,
but it wouldn't sell very much.
I think the biggest challenge from a homeland security
standpoint is to think through the responses and, as General
Walker said, to design them to be mobile and fluid and, as we
have argued, to make them as much as possible Reserve, Guard,
and civil defense oriented, so that you recognize most of the
time you don't need them, but to actually build them to be
pretty robust. Because if you have a big problem--and a large
anthrax exposure would be a big problem, smallpox or another
engineered contagion would be a big problem, one or more
nuclear weapons would be a big problem--what you want to have
is enough response capability that you could smother a problem
of that size. You want to build it in such a way that most of
the time you are not paying for it to be on stand-by. Most of
the time it is a reserve capability built into the society,
rather than a full-time agency standing by, waiting for what
could be a once-in-30-year event. The same thing as carrying
lifeboats, what you don't want to do is find out you are at the
once-in-30-year event and you have no capacity to respond.
Mr. Hamilton. I think your question, Mr. Hastings, is
really on the mark because it raises the most difficult task I
think the President and Governor Ridge confront, and that is
the question of priorities. You have got the nuclear attack,
you have got the biological, you have got the chemical, you
have got conventional. I think what they have to do is
determine what kind of attacks are most likely and what can be
done to prevent those attacks.
Now, that is a very, very tough call because what you would
like to do is say, OK, we are going to defend against all of
it, and we have got enough money to do it. But we don't have.
Where do you put your resources? And that is tough. Most people
now put chemical down the list, for example, but it was a
chemical attack that blew up the building in Oklahoma City. The
materials used in that attack were the materials that are used
every day on the farm, so you can't just ignore that.
I would put the nuclear first. I would put biological and,
as I have indicated, smallpox at the head of the list. There
are about eight or nine, what do you call them, pathogens or
whatever; and I would rank them, and then I would begin to
identify what kind of things should be done to prevent each
one. You may get the list wrong because you can't predict it. I
have sat in on 100 meetings on terrorism. Nobody at any time
ever suggested to me that somebody would fly a jet airliner
into the Trade Towers or the Pentagon. So you can't hit it
every time, but the tough job is priorities and allocating
resources.
Mr. Walker. A couple things that I think are important.
First, there is no single right answer. There is no minimum
acceptable percentage. You have to do a risk assessment. You
have to assess your threats, vulnerabilities, their
criticality, and you have to compare that against the resources
that you have. Governor Ridge is the one who has to be
responsible for doing that for the executive branch. I would
argue that since the Congress appropriates the money and since
the Congress is also going to be accountable for what happens
or what doesn't happen, all the more reason why it is important
that you have the ability to conduct effective oversight, not
micromanagement, with regard to these activities. So that comes
back to the bulk of my testimony. Thank you.
Mr. Hastings. That leads to a follow-up here. I found your
testimony on figure 2 of page 10 of the spikes that you had of
the deficits throughout our history, they all showed up in
times of war. Maybe there is a study on this elsewhere but you
don't mention it--at least what I read here--is what I call the
``unintended consequences'' of other legislation. For example,
we are still trying to repeal the telephone tax of 1898 that is
still on the books--but also because of the wage and price
controls of the Second World War, which led to health care
being delivered by employers, an ``unintended consequence.''
Is there a study that you have within GAO where you have
looked at statutes that were passed during this period of time
that may still be on the books that have had consequences that
are contrary or causing this problem right now? I mean, you put
up the Medicare chart. You probably could have put Medicaid up
there. And I would suggest that part of that is at least linked
to the policies of the Second World War.
Mr. Walker. We haven't done that. If you look on page 10,
figure 2, that talks about deficits and surpluses as a
percentage of GDP and properly points out that in times of war
or serious economic recession or depression, we have had
deficits, but we have come out of it.
There are two things that we face now that we never faced
before. Number one, demographics are working against us, not
for us; and number two, health care costs are out of control.
The system is fundamentally broken. So, therefore, we didn't
face those issues, and we better do something about them.
Mr. Hastings. Thank you, Mr. Chairman.
Chairman Nussle. Thank you.
Mrs. Clayton.
Mrs. Clayton. Thank you, Mr. Chairman, for having the
hearing. I would like to thank the panelists for their
thoughtful presentations. Also, it is appreciative in both
instances that your studying and deliberation was prior to the
events of September 11, and you have been giving a considerable
amount of thought to it.
I was struck by the Commission's report on the national
security's preface. It says that the U.S. Commission on
National Security 21st Century was born more than 2 years ago
out of the conviction that the entire range of the U.S.
national security policies and processes required reexamination
in light of the new circumstances. The question is that when
you looked at the stretch, your more extensive one gave all
kinds of reasons for the threat. Yet, when we look at
responding to the threats, we correctly looked at how do we
need to make an assessment, but also, how do we detect and stop
it. We do not look at the causes of which we can prevent these
threatening events from occuring.
You describe the new circumstances as the advancement of
information, the globalization, the quick access to
information, the lack of stability in certain countries. You
describe also in some instances about our failure to invest in
science and education because we are not possibly keeping up.
When I look at the recommendations initially from Mr. Walker,
as well as the initial part from the Commission, Mr. Walker
doesn't mention them at all. You put those kind of
recommendations in the back of your report, investment in
science and education--not the back, but it is not the first.
My question is, is it important to talk about the root
causes of these, or is it important to talk about the
organization and the leadership? Back to the question of how
urgent is urgent; who describes the urgency of the situation?
Is it the talking heads on the media who describes it? That is
why we have the anthrax anxiety rather than having all of the
anthrax facts. And when we also begin to try to examine the
structure at the lower level of our health department and try
to get them engaged in it, they are fearful because the science
is changing so fast.
We do need homeland security. It is very, very important.
It is the same threats in part that have threatened us abroad
that is really threatening us here. The difference is that we
as Americans have never suffered from that. So now we are now
trying to find out how the current infrastructure can respond
to these new circumstances. So it seems to me that we also have
to not only create, but coordinate one who can bring all these
little boxes together to respond to it, but to think of how we
should respond to that. In fact, one of you talked about a new
paradigm of thinking. I have not heard enough today to make me
feel that I understand the basis of the recommendations of the
U.S. Commission's report. I did read some part of it earlier
when it first came out with the commissioners talking about it,
because I was interested in the science and education component
of it, and there was a lot of emphasis on that. Can you speak
to those?
Mr. Gingrich. When we first sat down with the President to
create the Commission, our point was that the world was
changing so dramatically that we wanted an unconstrained look
at the future. So it doesn't start with defense. It doesn't
start with intelligence. It doesn't start with any narrow
position. It says, what is going to affect American security in
the next 25 years. In that sense it was the broadest commission
since 1947. As Mr. Hamilton pointed out, it was one that was
very bipartisan and very serious and took us the 3 years to
think these things through.
As I pointed out earlier, I thought it was remarkable the
Commission on National Security would list science and math and
science education as the number two problem, and every
commission member signed off on it. This is a bigger threat
that any conceivable conventional war. In that sense there is a
root challenge that we tried to highlight. I know you were very
helpful. One is, I believe, the long-term overseas threats we
are dealing with are vastly beyond al Qaeda and bin Laden and
require a very profound look at how we encourage modernity and
how we encourage the rise of states that are compatible with
the world we live in. It is a much harder problem than we have
dealt with, and it is a topic I would be glad to talk to you
about sometime.
Second, when you start talking about the civil defense of
the future, I believe the Internet, the capacity to reach every
single doctor, including every retired doctor, every single
nurse, including retired nurses, if you have planning in
advance, you could have a web page that was highly
authoritative that the National Institutes of Health and the
Centers for Disease Control jointly produced that was exactly
accurate, that gave you the most accurate information as of 3
minutes ago. People could build a high sense of certainty. That
requires a willingness to cut through the baloney of the
current bureaucracies and the current pork barrel and the
current unwillingness to reach outside normal institutions,
which in part goes back to the earlier question that was raised
about the sense of urgency.
We are still behaving as though politics as usual and
bureaucratic infighting as usual is tolerable, and is a very
real risk that we are going to kill a lot of Americans, because
we can't get people to understand we are in a modern world with
modern technologies, and those technologies cut across all of
the bureaucracies and create totally new capabilities if you
organize around them instead of cutting them off by your
bureaucratic channels.
Mr. Hamilton. I might say a word, Mrs. Clayton, about why
the Commission reached the conclusion it did with respect to
Americans dying on American soil. You raised the question of
root causes. We went to 28 different countries. One of the
things we found there was resentment and hostility against the
United States, not just in countries that are adversaries of
ours, but almost every country. Now, sometimes that was
expressed more strongly than others. Sometimes there was a deep
hostility, but always a resentment, and we came to recognize
that though it is hard for us to believe in this country, an
awful lot of people in this world have grudges against us, some
of them to the extent that they want to kill us and kill
innocent people.
Secondly, we determined that the terrorists have--and this
is obvious, I guess--greatly expanded their capabilities and
their sophistication in using those capabilities. Third, we
found that the American communities are very vulnerable. You
put all of this together, and we said terrorism is the number
one threat.
Now, your question about root causes or organization or
leadership, here I move into an area that is admittedly
controversial, but I do believe myself that to deal with
terrorism, you have to look at the question of root causes. I
don't want to suggest for a moment that that is easy to do. I
know how difficult it is to deal with those problems, but I
think we have to look at the reasons why people turn to
terrorism, and we have to understand that there is a lot of
misery, and there is a lot of despair. There is a lot of
hopelessness. There are a lot of governments out there that
just are not responsive to the needs of their people and who
serve only a very few people in the country, and that is part
of why people turn to terrorism.
Now, I don't suggest for a moment we can deal with that
easily. I know how complicated that is. On the other hand, you
have to be sensitive, I think, to it and have to try to
understand this phenomenon of terrorism better than we do.
Why do these people do these things? A partial answer is
that foreign policy has consequences. It has been the unanimous
view of every Member of Congress I have known, every President
that I have known that the United States should put forces in
Saudi Arabia. I have never, ever heard a speech against it.
That is what triggered Osama bin Laden. What really made him
mad was American forces' presence in Saudi Arabia. From our
standpoint, that is a given. We have to have forces there to
protect the supply of oil. From his standpoint, he sees it as
defiling everything that he holds sacred.
Mrs. Clayton. One final question, please.
Mr. Gutknecht [presiding]. There are three other members
who would like to ask questions.
Next we have the gentleman from Florida Mr. Putnam.
Mr. Putnam. Thank you, Mr. Chairman.
I read the report, and I think General Boyd did an
outstanding job as your Executive Director for that Commission.
And quite honestly, I am a little bit envious of the
opportunities that you all had to participate in this and deal
with the best epidemiologists and the best demographers and the
best sociologists and the best educators and the best foreign
policy folks in every possible region of the world to come up
with a broad-based, comprehensive plan in dealing with
technology and everything all over the map.
One of the things that you highlighted in the report that
you have just mentioned, Mr. Hamilton, is that one of the
greatest threats the United States faces in the next decade is
resentment. You said that the Nation was not prepared for a
terrorist attack on its own soil. Then you took it a step
further and then said not only is the Nation not prepared, but
it is less prepared than it thinks it is.
How has the reaction of the United States to the attacks in
New York and Washington fit within your expectations for the
American's public's response?
Mr. Hamilton. I must say I have been favorably impressed.
As I look at the response in New York City, which was the
principal focus of the attack, it was better than I would have
anticipated--the manner in which they dealt with that horrible
tragedy. As I see, what I think is happening across the country
now is every community says, well, my hospital prepared to deal
with an attack in my hometown. I am encouraged by this, and I
think the President deserves credit in alerting the country to
it.
I don't want to be Pollyanna-ish about this. We have a
long, long way to go to be prepared, but September 11 has had a
profound impact on the American people, and I think that we are
seeing the American people respond as we would expect them to,
very constructively and favorably. Overall I have been well
impressed with the way they have responded.
Mr. Gingrich. I guess I want to agree, but with a very deep
condition. I draw a distinction between how people responded to
the World Trade Center and how they responded to anthrax,
because there have been very different responses so far. If we
had had a really big attack, I think the odds-on even money, we
would be in a total mess. The weapons of mass destruction is a
totally different event than even the World Trade Center, which
was a confinable and definable event in one small part of New
York City. It was not an event that had a 2, 3, or 4-mile
radius with all sorts of secondary and tertiary damage.
Second, if we had been hit by a wave of attacks every other
day for a week, we would have been in a totally different
situation.
And third, if we get hit by a biological on a big scale,
whether it is infectious or it is simply widely disbursed
aerosols, we will be in a different situation.
I would say the American people have responded in a very
positive way to a threat that is very real, but we should not
in any way underestimate how rapidly this system would break
down in its current structures if we were hit by a really
serious attack.
Mr. Walker. First I think the U.S. has always done a great
job in responding to crises. Both at the Pentagon and in New
York City, people came together to do what had to be done,
whether they worked for the Federal, State, local government,
whether they were public sector, private sector or not-for-
profit sector. It is amazing. From that standpoint I think it
is a positive.
Personally, I have been disappointed with regard to the
public's reaction with regard to the anthrax situation. I think
there has been more fear and more concern and more of a
potentially emotional adverse reaction than potentially should
be justified. We haven't done enough to really focus on some of
the other areas, whether it be smallpox or whatever else that
could, frankly, have more profound with regard to the
implications.
In summery, I have a positive view on crisis management
response and was disappointed with regard to the reaction to
the real nature and extent of the threat for anthrax. Let us
hope we can end up moving forward from here.
Mr. Putnam. Recognizing that the psychology--the motivation
of these terrorists and your focus, quite understandably, on
low-risk, high-consequence events, how much attention or focus
did the Commission have on low-risk, low-casualty types of low-
tech terrorist events that would have a fundamental impact on
public confidence, food safety, food supply, quality of public
health, things of that nature, which would have much less of an
impact than a nuclear weapon, but tremendous economic and
psychological ramifications?
Mr. Hamilton. Mr. Putnam, I think we just didn't go into
that kind of detail. We did not try to speculate on which types
of terrorist attacks would be employed by the terrorists. I
don't recall extensive discussions as to, for example,
poisoning the American food supply.
Mr. Putnam. Thank you.
Mr. Gutknecht. Mr. Kirk.
Mr. Kirk. Thank you. Just ask a rhetorical question. Can we
have Social Security without national security? If a bomb hit
the Social Security Administration, would we be able to secure
the future retirement of Americans? Or maybe what happened to
the social security system of Poland as the German Army swept
over with their plains. We are not used to domestic damage in
the United States. When you look at the bloody destruction of
France or Britain in the last wars, this is something that
passed us by, something the United States has not seen since
1865 on a large scale.
I am worried about your chart, General Walker, about how
debt can threaten democracy, that we have seen various French
Republics vote themselves into debt, depression and
dictatorship by transferring such a huge burden onto a future
generation.
So I wonder if the panel can comment on that, that we
haven't suffered domestic damage before. It lifts the costs by
quantum levels above the damage that we delivered against
Germany or Japan because we were not being hit back. How can we
conduct a vast social program if a foreign army is able to
destroy large amounts of real estate in our country? What about
a vast amount of debt? I am wondering if you could give us for
the record a comparison with huge levels of debt that other
countries have run up in the past and what happened to their
political dynamic.
Mr. Walker. Let me try to reinforce a couple of points from
my testimony. It is clear that, with regard to today, that
Congress is going to have to respond to the effects of
September 11, but it is also clear that before September 11 we
had a big problem. Now it is a much bigger problem that we have
got to figure out how to deal with, and it is a structural
problem. It is a structural problem that should cause us to
reexamine what government does and how government does business
in the context of how the world has changed in the last 20
years and how it is going to change even more in the future. I
don't think we have done that.
Mr. Kirk. Did you perceive the key point of where we reach
such a level of debt that people won't buy it?
Mr. Walker. Theoretically that is possible. We are not
close to that at this point in time. One of the issues you have
to ask yourself, it is not just the level of debt, it is the
level of tax burden and the level of flexibility that the
Congress will have to make choices on discretionary programs
and for future generations to make choices about what they want
government to do.
That is part of the problem. Mandatory spending has gone
from one-third of the Federal budget when Kennedy was President
to two-thirds now, and it is getting worse. So it is a
combination of all these things that I think represent a risk.
Mr. Gingrich. If I could, let me put it in a little
different context. I think we have some real problems. I think
we have some real problems in national security. I think we
have some real problems structurally, particularly as it
relates to health, Social Security and the core and competency
of the government as a bureaucratic delivery system that is now
increasingly out of date with the way we organize to do things
in the rest of society.
I am strategically a 100 percent optimist. Gil Gutknecht
years ago gave me a study of the 1st Minnesota, which took 82
percent casualties at Gettysburg, stopping the last great
charge that might have broken the Union. Chairman Nussle and I
used to participate in a period of seeming hopelessness when we
had this fantasy that you could not only have a change of 40
years power structure in the Congress, but you could balance
the budget, reform welfare and do a whole range of fantasies
that people often laughed at us about.
This is a country which emerged on the edge of a continent;
defeated the most powerful nation in the world in order to
become a country; had a very restrictive President who
personified limited government--Jefferson--who sent the Marines
to Tripoli, where part of their song comes from, bought all of
the Louisiana territory, dramatically expanded the Nation. We
survived the Civil War. We survived Imperial Germany. We
defeated Fascist Italy, Nazi Germany and Imperial Japan
simultaneously, and we outlasted the Soviet Union in a 45-year
conflict that was strategically one of the most profound and
brilliant campaigns ever fought.
If you were asking my bet, my bet is we will reform Social
Security. We will reform health care. We will defeat terrorism.
We will complete the job of modernizing the underdeveloped
world. Your grandchildren will live in a country and on a
planet that is remarkably prosperous, healthy and safe. But it
takes your generation now having the same courage as the 1st
Minnesota or the same courage as that band of people in past
generations, and Chairman Hamilton will agree. We have seen
bleak moments, and there were periods when the Congress was
confused. We cheerfully participated in the confusion. But over
time the system does do a remarkable job of forcing very big
reforms.
Mr. Kirk. Thank you, Mr. Chairman.
Chairman Nussle. In that context, first of all, thank you
for all of the substantive discussion we have had today.
I would like to turn to process for a moment because the
Budget Committee, Mr. Speaker, is where much of those reforms
begin in setting the predicate and determining so much of the
process that put us on the track to at least the most recent
reforms. Let me ask your opinion as well as Chairman Hamilton,
who also has a very distinguished career as a chairman of a
committee, your advice to me and to Mr. Spratt and the
committee members here as we begin to formulate the budget for
2003 and try to take into consideration all of these very
important matters, juxtaposed with the other challenges, health
care, Social Security, how do we do it? What is your
recommendation to us making these big changes? We are going to
start that process. If it isn't successfully started here, it
may not begin at all. So what would be your recommendation on
how we organize ourselves and this committee to change the
budget paradigm for 2003?
Mr. Gingrich. Well, if I might, first of all, thank you for
inviting us. And let me say I think you are doing exactly what
this committee ought to do, which is to intellectually look at
the totality, because that is the one great virtue this
committee has the over the entire rest of the House and the
rest of the institution.
I will go back to what I said earlier. I think this
committee ought to look at the total reform of health care, not
just the pieces, not just Medicare, but the total structure of
how we deal with health in America, because if you get another
doubling of GDP for health, we won't be able to afford anything
not just in government, it will have a profoundly distorting
effect, and it is mostly unnecessary. We can find ways to do
that.
Second, I do think you ought to look at retirement
security, because you have to cope with the scale of the baby
boomer generation and the burden that if it is not done
correctly, it will be on their children.
Third, I think there is a need for a profound rethinking of
how government operates. If you look at the Ford Motor Company
now laying off 20 percent of its white collar employees, look
at all the different efforts to rationalize, modernize,
downsize, make more productive, and then you look at the
bureaucracies at the State, Federal and local level, they are
just unconscionable. And all the bureaucracies will explain to
you why they can't change.
I want to cite one example that ought to be a case study.
The Indian Trust Fund is a multibillion-dollar fiasco that it
would be a comedy if it weren't so tragic. Just take that one
example where the taxpayers end up on the hook for billions of
dollars for a process run by thousands of bureaucrats, run
badly, that would be outsourced to an agency like Schwab or
Merrill Lynch. There are hundreds of agencies that handle this
kind of information without scandal. In the Federal Government,
the answer to a scandal is to double the number of people
engaged in the scandal.
I think you have to really look at a profound rethinking of
the structure of government because you cannot micromanage your
way through these systems. I would say that before September
11, Secretary Rumsfeld is moving in the right direction with
enormous opposition, but he needs a profound overhaul of the
procurement system, the management system and the R&D system of
defense as a predicate to being able to effectively transform
the defense system. That is the scale of change I think you
have got to be looking at. This committee ought to try to
contextualize all the budget decisions in terms of these very
large changes.
Mr. Hamilton. Mr. Chairman, I don't think I can give you
much advice. The Commission led by Senators Rudman and Hart had
the easy job in a sense. We are looking at the fairly narrow
question of national security. We didn't have to worry about
money. You have to worry about the money, and you have to worry
about lots of things other than national security narrowly
defined. We all know that the toughest job in government is
setting priorities, but if there is anyplace in the world where
that ought to be done it is in the Budget Committee. That is
why you were established, to look at the big picture, as the
Speaker said a moment ago, and to establish the priorities for
the American people in light of the resources that are
available.
Let me just conclude with this. When I first came to the
Congress, I was in a room about two or three doors down and
listened to then New York Times bureau chief Scottie Reston. He
said, ``Always take time in the Congress to put your feet up on
the table and to look out the window and ask yourself what is
good for the country.'' There are so many things that press
upon you as a Member of Congress every single day, so many
people after you, so many groups that want to get your ear, and
that is good because it gives you a lot of good information.
Somewhere along the line every Member of Congress has to put
their feet up on the table, so to speak, look out the window,
take time to reflect and to think and to be honest with
yourself, what are the most important things that this country
needs to be doing at the moment. If you do that, you will not
hit it right every time, and you will not always persuade your
colleagues that you are right, but you are at least approaching
it in the right way.
Mr. Walker. Two words and some examples: leadership and
stewardship. We need leadership to focus on what should the
priorities be, what should government be doing, how should
government be doing business today and tomorrow; and secondly,
there needs to be stewardship to think about the long-term
implications of decisions that are made today, both actions and
inaction.
One of the problems you have right now is you are flying
without instruments. Where are your metrics? Should you
establish some type of metrics as to, for example, debt as a
percentage of GDP; mandatory spending as a percentage of the
overall budget? What are not only the short-range implications
of actions that are taken today, what are the implications
beyond 10 years, because guess what? The first baby boomer
doesn't reach 65 until 11 years from now, and the crest of the
wave doesn't come until about 2016. We don't live on a flat
Earth, so we can't cut our budget view off 10 years from now.
Setting priorities is tough work. Changing how government
does business is tough work. But this committee is uniquely
positioned. Along with the Government Reform Committee to try
to track the issues about how government does business.
Secretary Rumsfeld ironically on September 10 had an
historic speech in which he announced an agenda to reform DOD's
bureaucracy, and we have been working very closely with the
Secretary and others to try correct long standing problems.
Needless to say, that is no longer as high a priority today,
but that was an example of the type of courage and conviction
it is going to take. It is going to take years, but this
committee and other committees are going to help make it
happen.
Chairman Nussle. Well, none of that advice was very
helpful--no, I appreciate that. There is obviously a lot of
work that we are going to have to do. It is a different world,
and the Budget Committee will be the first step in that
process. I appreciate the comments, as sobering as they are. I
think they are realistic, and they are given straightforward
with a lot of heart of true patriots. I have no doubt that you
will continue to be in touch with us as we continue to navigate
these uncharted waters.
With that, if there aren't any other questions for this
panel, I appreciate your time today, and this committee will
stand in recess.
[Whereupon, at 3:30 p.m., the committee was adjourned.]