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[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]

           NATIONAL AND HOMELAND SECURITY: MEETING OUR NEEDS

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, FEBRUARY 16, 2005

                               __________

                            Serial No. 109-3

                               __________

           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
ROB PORTMAN, Ohio,                   JOHN M. SPRATT, Jr., South 
  Vice Chairman                          Carolina,
JIM RYUN, Kansas                       Ranking Minority Member
ANDER CRENSHAW, Florida              DENNIS MOORE, Kansas
ADAM H. PUTNAM, Florida              RICHARD E. NEAL, Massachusetts
ROGER F. WICKER, Mississippi         ROSA L. DeLAURO, Connecticut
KENNY C. HULSHOF, Missouri           CHET EDWARDS, Texas
JO BONNER, Alabama                   HAROLD E. FORD, Jr., Tennessee
SCOTT GARRETT, New Jersey            LOIS CAPPS, California
J. GRESHAM BARRETT, South Carolina   BRIAN BAIRD, Washington
THADDEUS G. McCOTTER, Michigan       JIM COOPER, Tennessee
MARIO DIAZ-BALART, Florida           ARTUR DAVIS, Alabama
JEB HENSARLING, Texas                WILLIAM J. JEFFERSON, Louisiana
ILEANA ROS-LEHTINEN, Florida         THOMAS H. ALLEN, Maine
DANIEL E. LUNGREN, California        ED CASE, Hawaii
PETE SESSIONS, Texas                 CYNTHIA McKINNEY, Georgia
PAUL RYAN, Wisconsin                 HENRY CUELLAR, Texas
MICHAEL K. SIMPSON, Idaho            ALLYSON Y. SCHWARTZ, Pennsylvania
JEB BRADLEY, New Hampshire           RON KIND, Wisconsin
PATRICK T. McHENRY, North Carolina
CONNIE MACK, Florida
K. MICHAEL CONAWAY, Texas

                           Professional Staff

                     James T. Bates, 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, February 16, 2005................     1
Statement of:
    Frank J. Gaffney, Jr., President, Center for Security Policy.     7
    James Jay Carafano, Ph.D., senior research fellow, the 
      Heritage Foundation........................................    14
    COL Randall Larsen, USAF (Ret.), CEO, Homeland Security 
      Associates, LLC............................................    22
    Michael O'Hanlon, senior fellow, Brookings Instutution.......    34
Prepared statement of:
    Hon. Jim Ryun, a Representative in Congress from the State of 
      Kansas.....................................................     6
    Hon. Pete Sessions, a Representative in Congress from the 
      State of Texas.............................................     6
    Mr. Gaffney..................................................    10
    Dr. Carafano.................................................    17
    Colonel Larsen...............................................    25
    Mr. O'Hanlon.................................................    38

 
                    NATIONAL AND HOMELAND SECURITY:
                           MEETING OUR NEEDS

                              ----------                              

                      WEDNESDAY, FEBRUARY 16, 2005

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10 a.m., in room 
210, Cannon House Office Building, Hon. Jim Nussle (chairman of 
the committee), presiding.
    Members present: Representatives Nussle, Garrett, 
Hensarling, Ros-Lehtinen, Mack, Putnam, Ryun, Barrett, Diaz-
Balart, Lungren, McHenry, Sessions, Portman, Crenshaw, Spratt, 
Baird, Allen, Cuellar, Schwartz, Kind, Davis, and Cooper.
    Chairman Nussle. Good morning and welcome to everyone. This 
is the Budget Committee's hearings with regard to national 
security. Today the Budget Committee hearing will focus on both 
the national and homeland security budget for the fiscal year 
2006. We have decided to look at both of these critical areas 
at once today. We have a shortened period of time between the 
submission of the President's budget and the actual markup. We 
want to get all of the security concerns before us today and 
how fast we can meet them. So, we have asked that the witnesses 
come together today and visit with us about these very 
important topics.
    Since 9/11, Congress has shown that we are more willing to 
spend whatever is needed to defend our country and support the 
needs of our troops, and our security needs both home and 
abroad. I can tell you that there will be no greater priority 
in this year's budget than to ensure that those priorities are 
met.
    That said, we better make absolutely sure that the money we 
are spending is being spent wisely, and with proper planning 
and oversight. I think too often around here we judge our 
progress simply by how much we are spending instead of how well 
we are spending it.
    While I am generally pleased with the submission the 
President has sent us in his budget, it is ultimately the 
responsibility of the Congress to set the Federal budget. So, 
instead of our usual course of hearing only from the 
administration on this issue this year, we are bringing in some 
outside experts to tell us what they think as well, not only of 
this year's administration request, but also their take on how 
well we have been doing the last couple of years providing for 
and achieving our needs for national security.
    I am pleased to have with us a number of witnesses to help 
us with this topic: Frank Gaffney, President of the Center for 
Security Policy; James Carafano, the senior research fellow at 
the Heritage Foundation; retired United States Air Force 
Colonel Randall Larsen, who is currently the CEO of Homeland 
Security Associates; Michael O'Hanlon, who is a senior fellow 
with the Brookings Institute. We welcome all of you and we look 
forward to hearing your testimony today.
    Let us start by taking a look at the funding we have 
provided in the past few years. In total since we were attacked 
on September 11 we spent about $1.9 trillion to provide for our 
defense and homeland security. That is a staggering amount of 
money, if you think about it. That doesn't include the 
supplementals that we have enacted, which add on about another 
$248 billion. That is an enormous amount in anyone's 
pocketbook.
    Yet, while I often hear a lot of hand wringing about the 
size of the Federal deficit, it is pretty rare to hear any 
mention of the fact that a large portion of the deficit is due 
to this intentional spending we did to correct the deficits of 
the past. I will remind everyone again, we have done much of 
this spending around these two areas because prior to September 
11 we had a pretty severe deficit in both defense and homeland 
security that needed and required--in fact that we addressed 
it.
    So we have done a lot and it has been very costly building, 
rebuilding and across-the-board, updating to correct these 
security deficits. We acted deliberately in a bipartisan way, 
to ensure that we provided whatever was needed to defend our 
country and support the needs of our troops.
    Again, with this year's budget we will work to continue the 
progress that we have already made. So, now let us turn our 
attention to what the President has proposed in these areas.
    The President's request for all homeland security funding 
is $49.9 billion, which is an increase of 8.6 percent. About 55 
percent of that would go to Department of Homeland Security 
(DHS), with other homeland security-related funding going to 
the Department of Defense (DOD) with 19 percent. The Department 
of Health and Human Services (HHS) would receive about another 
9 percent of that, the Department of Justice was 6 percent and 
the remainder spread throughout the Government.
    The President's request will continue to increase all 
homeland security funding by about 4.5 percent over the next 5 
years. Let me show you a chart with regard to homeland security 
that lays this out, I think pretty well. Take a look at this 
chart. It shows that only the nondefense discretionary piece, 
which is the homeland security piece, and showing just how much 
shoring up we have done since 2001. In 2000 spending in this 
category was about $9 billion. So over the past 5 years we have 
increased spending in this category at about an average rate of 
about 28 percent per year to get us where we are now.
    Let us look at defense, the next chart. Here you see 
funding for the Department of Defense military. For defense the 
President's budget recommends increasing the Department of 
Defense budget to $419.3 billion, which is an increase of about 
4.8 percent. It also proposes a sustained average increase of 
4.2 percent over the next 5 years, not counting the 
supplementals, following on the heels of an average of 6.9 
percent increase per year over the past 5 years. These funds 
will be used for: pay and benefits for our military and 
civilian personnel, weapons development and procurement, 
operating costs to train and equip the United States military 
forces, and housing benefits for our troops and their families.
    I think it is important to note that the administration's 
budget office did include in this year's deficit estimates a 
proposed supplemental, a difference from last year that we made 
a specific request for last year. That is certainly, I believe 
a step in the right direction. It did not, however, include any 
funding for the ongoing operations in Afghanistan and Iraq in 
its budget for the coming fiscal year. So I think we are going 
to have to take a look at that as we develop the budget in this 
committee here yet again.
    Now, I think it is also important to put this in the 
context that all other discretionary spending in this regard is 
going to be held in line.
    Clearly, the driving force of the President's proposal, as 
it will be in our budget, is to ensure first and foremost, that 
we protect the country and that the most urgent needs are met. 
At the top of that list is ensuring America's freedom and 
security at home and abroad, and in and of itself it makes up 
half of all the Federal Government's discretionary spending. 
But not too much further down the priority list is controlling 
the rest of spending, so that we can get our Federal deficit 
under control.
    Aside from increases the President has proposed for both 
homeland security and defense, his budget recommends reducing 
funding for every other domestic discretionary program by about 
1 percent of the current year level for the first proposed 
reduction, I might add, since the Reagan administration in the 
early 1980s.
    So particularly under these circumstances, we better make 
sure that every dollar we spend is spent wisely and with proper 
planning and oversight--and our homeland security and defense 
spending is certainly no exception to that.
    So I look forward to a good and informative discussion 
today as we continue to look at our national security needs 
here at Budget Committee.
    With that, I will turn it over to my friend, Mr. Spratt.
    Mr. Spratt. Mr. Chairman, thank you very much. Let me 
associate myself with much of what you just said and add 
something to it. First of all, I have to say that I am 
disappointed that there are no administration witnesses here. I 
am glad to have the panel before us, glad to have in particular 
our witness, Dr. O'Hanlon. But I think the administration 
should be here to explain and justify their own request, which 
is about $18 or $19 billion for next year, and in addition to 
justify a third occasion on which they have bypassed the 
regular budget and sent to the Congress a substantial increase 
for emergency supplementals, an $82 billion emergency 
supplemental which arrived yesterday.
    As the chairman just said, the sums of money being spent on 
national defense are compelling but they are also very, very 
large. If we are going to get our hands around the budget as a 
whole, we can't ignore an item that is spiking in the budget 
like this, that is so significant, $440 billion nearly in 2006, 
plus a likely supplemental again in 2006 that should have been 
put in this particular budget, put in the baseline. We 
shouldn't be looking for another extraordinary supplemental. We 
have 3 years of cost experience now with debates on what the 
likely cost of unemployment and Iraq and Afghanistan is, and 
that should be in the 2006 budget. When it is included in the 
2006 budget, the budget is well over $.5 trillion.
    So given the fact that our economy is the first instrument 
of national defense and the deficits are becoming a problem for 
our economy, we have to stop. Where does it stop? Where does it 
go from here? How much do we need to forecast over the next 5, 
10 years that we are going to realistically lay down a plan for 
getting a grip on the deficit?
    For example, next year the administration in its projection 
for the budget said that we will have a deficit of $290 
billion. But at the same time except for the outlay tail of 
this year's supplemental, lapsing over and lapping over into 
next year, at the same time there is nothing included in the 
administration's budget as laid out in the calculation of the 
$390 billion deficit to pay for the deployment of our troops in 
Afghanistan, Iraq and for enhanced North American security. We 
know that is likely to be at least $50, $60 billion based on 
what we have been spending and our expectation for the gradual 
diminution of forces in the Iraqi theater. We know that is 
going to be a substantial sum of money, and when it is added to 
the admitted bottom line, $390 billion, the deficit for 2006 is 
going to be just as large as the deficit for 2005, which means 
we are not moving in on them, we are not closing in on the 
President's stated objective to halve the deficit in 5 years. 
We simply can't get there if we continue having these huge sums 
added outside the budget process every year in emergency 
supplementals.
    We also need to ask some questions because the Defense 
Department itself is recognizing that there are finite limits 
to how much the country can spend on national defense. They 
have just put through a $60 billion program budget decision. 
Before they sent us a budget they tried to say I think we are 
doing our part to at least whittle away some of the defense 
costs, but we have got a lot on our plate.
    We have got a legacy force which is employed at an OPS 
TEMPO ratio to an extent that we have not seen in years. We 
have got modernization which is necessary, block obsolescence 
in many systems. We have certain projects that Mr. Gaffney has, 
ballistic missile defense, which are taking a big claim on the 
budget. We have got transformation layered on top of 
modernization. They to some extent overlap and are the same but 
modern transformation requires whole new systems for the United 
States Army, for example.
    We have got problems with recruitment and teaching. We have 
got the Deputy Secretary of Defense complaining in the Wall 
Street Journal that the Congress has been much too aggressive 
in pushing personnel benefits and things that are beginning to 
take a toll on the rest of the defense budget.
    We have got reconstitution, repair and replenishment in 
much bigger sums. If you listen to the service chiefs off the 
record and in the news as opposed to what they testified to and 
what is put in the budget, we have big bucks to come as a 
contingent liability for all of these things.
    So we have here, number one, a deficit problem that is 
getting to be an extraordinary monumental problem, and, number 
two, the biggest account in it, outside the medical 
entitlements that is growing steadily, we have to ask how can 
we get more bang for our buck. How can we bring the deficit to 
heel and also accommodate what are the legitimate national 
security needs of this country.
    We want to spend everything we have to spend to see that 
this country issecure. We want to be unstinting of our troops 
when we have deployed them in the field, but at the same time 
we don't want to spend a buck absolutely more than we have to 
for these purposes.
    Thank you very much for taking the time to come testify 
today.
    Mr. Baird. Mr. Chairman.
    Chairman Nussle. Yes.
    Mr. Baird. Can I ask for a point of information? Would this 
be an acceptable time?
    I look forward to the testimony of these gentlemen, but it 
sounds to me like is it accurate that we are not going to have 
any administration cabinet members come talk about the 
President's budget for the remainder until we submit our House 
budget?
    Chairman Nussle. Well, without looking at the schedule I am 
not sure I can answer the gentleman's question, but we have 
administration witnesses all over the Hill. Some have just been 
confirmed. The Homeland Security Director was just sworn in 
this week. So I am not sure that he could provide as much 
information as maybe some of the rest of the people who are 
before us today on exactly what is happening with the Homeland 
Security budget.
    Mr. Baird. I respect that, and I understand that. We had 
Mr. Wolfowitz----
    Chairman Nussle. We look for other opportunities for the 
administration to come up.
    Mr. Baird (continuing). Terrific.
    Chairman Nussle. We are on an expedited path here to 
getting a budget resolution completed, and we will do our best 
to provide and hold as many hearings as possible between now 
and the markup.
    Mr. Baird. For the record, personally, I would certainly 
like to be able to see Mr. Wolfowitz or Mr. Rumsfeld or others 
who have been in the office a while and have given testimony in 
the past address budgets such as this for the future and 
perhaps answer questions about their testimony from the last 
visit.
    I thank the chairman.
    Chairman Nussle. I thank the gentlemen. Let us take--would 
it help to take a quick recess here? We will take a quick 
recess here so that we can do a sound check. I think we have 
maybe had a technical glitch that we will be able to figure 
out, and then we will proceed. It should only be a moment. 
[Recess.]
    Thank you for bearing with us. We had a little technical 
glitch happen, and I think we have taken care of it now.
    We are pleased to have before us today--and let me ask 
unanimous consent that all members be allowed to put a 
statement in the record at this point in the hearing.
    We are pleased to have before us four expert witnesses with 
regard to our national and homeland security and meeting the 
needs that our country faces.
    As I introduced them before, we will take them in that 
order. First on our panel is Frank Gaffney, Jr., who is the 
President of the Center for Security Policy. We welcome you 
before the committee. Your written testimony--and this is true 
for all of the witnesses--your written testimony will be made 
part of the record and you may summarize.
    [The prepared statement of Congressman Ryun follows:]

Prepared Statement of Hon. Jim Ryun, a Representative in Congress From 
                          the State of Kansas

    As a member who also sits on the Armed Services Committee, I am 
pleased to be able to address national security budget needs before the 
House Budget Committee. Clearly, funding for the national defense 
should be our top priority, and not just for operations in Iraq.
    As we have recently seen, we are facing new challenges with an old 
foe in North Korea, which recently announced its possession of nuclear 
weapons. Our continued development of weapons systems and missile 
defense systems should be a priority as we face new these threats.
    Additionally, continued funding is necessary for Army 
transformation. The global environment has changed drastically since 
the height of the cold war, and the Army needs to adapt accordingly. To 
this end, transformation will create a more modular Army force that 
will allow the Army to be more flexible and will increase available 
resources.
    Our ongoing commitment in Iraq requires that we have enough 
available troops ready for deployment. While Army transformation will 
address some of these needs, more must be done. To that end, the budget 
should include funding for additional troops, as well as funding for 
the resources necessary to recruit these individuals. Furthermore, we 
must address quality of life issues in order to retain our current 
forces.
    First, we must continue to evaluate military pay, especially for 
active duty soldiers. Second, adequate housing is necessary for 
military families around the world. Military barracks and other units 
for family housing should be assessed and upgraded where needed. Third, 
we should provide servicemembers and their families with adequate 
health care. Fourth, with our ongoing global commitments, we must also 
address the death gratuity for people who are unfortunate to lose a 
family member in combat. Currently, the military death gratuity is only 
$12,000. There are several proposals before the House that would raise 
this benefit to $100,000. I think this is necessary and urge the Budget 
Committee to consider this in formulating the FY2006 Budget.
    I look forward to the input of our panel on how to best address our 
national security needs.

Prepared Statement of Hon. Pete Sessions, a Representative in Congress 
                        From the State of Texas

    Mr. Chairman, the President's fiscal year 2006 request builds on 
the Administration's promise to keep our homeland secure. The 
President's request of $47.6 billion represents an 8.8-percent increase 
over 2005 levels for all discretionary government-wide Homeland 
Security spending. This budget request fully funds our defense and 
homeland security priorities and in doing so, creates a new homeland 
security framework and strategy that meets the needs of the 21'' 
Century.
    I am pleased to see significant increases in funding for the 
Department of Homeland Security. The President's fiscal year 2006 
request is $34.152 billion. The request represents a $2.162 billion, or 
6.8-percent, increase over fiscal year 2005 enacted levels. These 
monies include significant funding increases for vital agencies like 
the Transportation Security Administration (TSA), Customs and Border 
Protection, and Immigration and Customs Enforcement.
    Having represented the large metropolitan city of Dallas for 8 
years, I believe that it is important to continue to ensure that our 
first responders, law enforcement agencies, and emergency personnel are 
always well ahead of those who would bring harm to our nation. 
Accordingly, I believe that we need to make sure all of our first 
responders are working with interoperable communications systems, and I 
look forward to working with my colleagues on achieving this goal 
nationwide. We must ensure that our police, fire, and Sheriffs 
departments are communicating.
    That is why I am pleased to see that the President's Budget 
includes $873 million for DHS' Information Analysis and Infrastructure 
Protection Directorate, which coordinates the Federal Government's 
efforts to protect the Nation's critical infrastructure, including 
commercial assets, government facilities, dams, nuclear power plants, 
chemical plants, bridges, and tunnels. In addition, the Budget would 
provide $600 million for the Targeted Infrastructure Protection Program 
to assist State and local governments in reducing the vulnerability of 
critical infrastructure, such as chemical facilities, ports, and 
transit systems.
    I also believe it is crucial that we continue to guard our nation's 
cyber infrastructure. The consequences of a cyber attack on our 
infrastructure can cascade across many sectors, causing widespread 
disruption of essential services, damaging our economy, and imperiling 
public safety. That is why I am pleased to see that the President's 
Budget Request provides $73 million for the National Cyber Security 
Division within DHS to monitor, respond to, and notify the general 
public of cyber threats. In addition, the
    Budget would make available $94 million in funding for the National 
Science Foundation for research related to cyber security, which is 
critical to staying ahead of threats to our IT infrastructure.
    Under the President's leadership, the Department of Homeland 
Security has focused on a crucial mission--to prevent, protect and 
respond to the threat of terrorism. DHS has made important progress, 
working to enhance the security of our borders, ports, and critical 
infrastructure. I look forward to working with the Administration to 
ensure that our homeland remains secure. We must continue to be 
vigilant in staying ahead of the terrorists, and acting before they 
have the ability to strike America or our national interests.

  STATEMENTS OF FRANK J. GAFFNEY, JR., PRESIDENT, CENTER FOR 
  SECURITY POLICY; JAMES JAY CARAFANO, PH.D., SENIOR RESEARCH 
 FELLOW, THE HERITAGE FOUNDATION; AND COLONEL RANDALL LARSEN, 
       USAF (RET), CEO, HOMELAND SECURITY ASSOCIATES, LLC

    Chairman Nussle. Mr. Gaffney, welcome.
    Mr. Gaffney. Mr. Chairman, thank you very much.
    Chairman Nussle. There is a button you need to push and 
hold down.

               STATEMENT OF FRANK J. GAFFNEY, JR.

    Mr. Gaffney. I appreciate that. Thank you, Mr. Chairman. My 
voice is not as strong as usual, so the amplification is 
appreciated much. There is a lot to cover in not too much time.
    I appreciate the opportunity to address you and other 
members of the committee about what I believe is the highest 
priority of the Federal Government, and we are providing for 
the common defense. I commend the President in this budget for 
allocating scarce resources to meeting the urgent needs of the 
military and homeland defenders.
    There are, of course, deeper reductions being made 
elsewhere in the Government, but I fear that some of the cuts 
that are being made in this budget are going to have far-
reaching and negative effects. I would like to concentrate 
particularly on some that I have--I fear most in the Defense 
Department budget. Clearly, the budget emphasizes meeting the 
near term and most especially the combat-related requirements 
of the department. I think it does that fairly well, but not 
fully.
    It falls short, however, in meeting what I think are the 
future needs. Congressman Spratt talked about the 
transformation and modernization challenges that we are going 
to confront over the next 5 to 10 years, perhaps certainly 
longer.
    Specifically, I am worried that the budget is reflective of 
a growing focus on sizing and equipping the military to contend 
with unconventional conflicts and terrorist insurgencies. It 
will be interesting to see whether that is modified as a result 
of the Quadrennial Defense Review, which is now under way, 
which I gather is going to be looking at the emergence of 
Communist China as a threat.
    But in any event it seems to me that cutting money from the 
defense programs essential to our ability to dominate the 
future battle space against adversaries who will be armed with 
sophisticated weapon systems in the interest of making the 
military more responsive to lesser threats is neither pennywise 
nor pound sensible. Indeed, history teaches that downscaling of 
this kind merely emboldens prospective foes.
    I must say I think the trends with respect to China are 
such that we don't need to embolden them to be concerned about 
the prospect of a future conflict with them.
    Of particular concern are the investments that need to be 
made, some of which have already been subjected to long overdue 
and much too much budgetary uncertainty. I will speak to four 
areas of particular concern in the Defense Department. The 
first is the shrinking of the United States Navy.
    As you know, there is a $1.7 billion cut in shipbuilding. 
We are down to four ships to be procured in this budget.
    Against the backdrop of Admiral Vern Clark, the CNO, saying 
just last week, ``We are...keeping a weather eye on increasing 
anti-access and sea denial capabilities being developed by 
other nations in the world, particularly the Middle East and 
Asia.''
    These are challenges to our sea control that we currently 
possess and that enables the United States military to operate 
freely around the globe. He is, I gather, being asked to 
contemplate a fleet of as few as 260 ships. I respectfully 
submit that such a fleet would be unable to maintain the sort 
of presence and power protection capability that we are likely 
to require around the world for the duration of this war on 
terror, particularly in places like the Middle East and Asia.
    In the interest of time, I will just touch on concerns 
about retiring another carrier and cutting back dramatically on 
submarine production. I have to tell you that when we talk 
about weapons of mass destruction, we almost always talk about 
the weapons themselves. There is rampant proliferation in one 
of the delivery systems for those weapons; namely, advanced 
propulsion, very quiet submarines. They are capable of putting 
on this country or other targets of concern to us chemical, 
biological, nuclear, more traditional weapons of mass 
destruction, and I think should be viewed as such as well. The 
only antidote we really have to this threat is our own potent 
and hopefully numerous fleet of nuclear submarines.
    I trust you will be addressing, among other things, how to 
fund a larger shipbuilding program. I hope one of the things 
you will consider is in the area of advanced appropriations. 
Other Federal departments are allowed to do this. It seems to 
me it may be the only way we can beef up our production of 
ships as we need to. I realize the time is rapidly getting away 
from me.
    Aircraft production is inadequate, particularly, I have to 
tell you, in the area of the F-22--F/A-22, an aircraft that it 
seems to me is going to prove itself invaluable in the kinds of 
conflicts we will confront in the future. It alone among 
America's fighter attack inventory may be able to establish and 
maintain air superiority over territories increasingly defended 
by advanced anti-aircraft missile systems.
    Other aircraft, as you know, are being affected as well. 
There is an incomprehensible cut in the multiyear procurement 
just authorized last year of the C-130Js. The V-22 is being 
slipped and the modernization of existing helicopters is also 
at risk.
    Congressman Spratt mentioned missile defense. I am indeed 
an advocate of missile defense. I am delighted that President 
Bush has seen fit to take steps to end our irresponsible 
vulnerability to the attack, the prospect of attack by 
ballistic missiles. Like other advocates, I am, of course, 
disappointed by some of the difficulties we have had with 
recent testing, but somewhat heartened by the fact that they 
appear to reflect not a problem with physics or the systems 
themselves but with some of the quality control. That needs to 
be fixed.
    It also, I think, would behoove us to augment and 
complement the ground-based missile defense system with sea-
based missile defenses, using the Navy's substantial fleet of 
Aegis ships, airborne laser, and I would like to see also 
missile defenses in the place that they will do us the most 
good; namely, space.
    A fourth area of concern in this budget, Mr. Chairman, is 
the industrial base. Congressman Hunter, last year, I think, 
took some important steps in the Armed Services Committee to 
address our ill advised, if not downright reckless, growing 
reliance on foreign sources of supply for critical military 
equipment. His efforts generated considerable controversy, and, 
as I understand it, were dropped from the bill.
    The problem has not gone away. We confront, I am afraid, a 
situation where in the future we will increasingly find 
ourselves at the mercy of people who may not be willing or able 
to supply us components that are critical to our military's 
operations on a day-to-day basis, an intolerable situation, 
needless to say.
    A quick word, Mr. Chairman, about the Department of 
Homeland Security. Others here are more expert on some of its 
aspects than I. I would just like to make a special plea to you 
to pay attention to a commission report that was issued ill 
advisedly about the same time as the 9/11 Commission report was 
issued. This was generated at the request, I believe, of 
Congressman Roscoe Bartlett, to look at the danger posed to 
this country by electromagnetic pulse. This is a phenomenon 
associated with a nuclear detonation that could be optimized by 
an attack high over the United States.
    Its effects, according to this blue ribbon commission, 
could be catastrophic if we do not take steps to shield 
electronic devices which are used, as you know, everywhere, 
both in our civil society and economy and in our military, to 
the point where a single burst, say, a North Korean or Iranian 
nuclear weapon delivered by ballistic missile high over the 
United States, could literally fry every piece of unshielded 
electronic gear in the country with--I think, catastrophic is 
not too strong a term--effect.
    I really encourage you to look at whether anybody in the 
Homeland Security Department is taking aboard the 
recommendations for corrective action identified by this 
commission and make it a priority, because clearly that is an 
Achilles heel that we cannot afford to live with.
    Finally, Mr. Chairman, a word about the Department of 
Energy National Security Program, something you all may not 
have otherwise thought you wanted to address, but it is an 
important reason why I think we are as vulnerable to 
electromagnetic pulse attack as we are. Because about 13 years 
ago, I think we stopped thinking very seriously about this 
problem, coincident with our decision to stop doing nuclear 
testing. Underground nuclear testing was for years the 
principal means by which we established vulnerabilities and 
took corrective action against electromagnetic pulse.
    I believe the test moratorium has had a myriad other very 
negative consequences for our nuclear deterrent. Indeed, it is 
ironic but today we are the only nuclear power, let me repeat 
that, the only nuclear power that is capable of producing 
nuclear weapons. I do not think that is a responsible or 
sustainable position for this country at a time when 
proliferation is going forward even without countries like 
North Korea and Iran doing nuclear tests.
    In that regard, Mr. Chairman, I would just have to say one 
reason why I think we are in this state is I think Congress has 
been ill served by decisions taken, sort of in the dark of the 
night last year at the initiative of one of your colleagues, 
Congressman David Hobson, to cut important nuclear weapons-
related initiatives the President has identified as critical to 
maintaining the future reliability, safety and effectiveness of 
our nuclear deterrent. I hope these will be addressed as well 
in the course perhaps of your deliberations and that of other 
relevant committees in the Congress. It mustn't be allowed to 
stand.
    If so, I think you will go a long way, together with other 
recommendations I have made here, to meeting the needs for our 
homeland and national security.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Gaffney follows:]

Prepared Statement of Frank J. Gaffney, Jr., President and CEO, Center 
                          for Security Policy

    Mr. Chairman, thank you for affording me an opportunity to address 
the President's budgets for National and Homeland Security. I 
appreciate the chance to contribute to congressional deliberations 
about the adequacy of what is--and must be--our government's highest 
priority in time of war: ``Providing for the common defense.''
    In general, I commend President Bush for allocating scarce Federal 
resources to meeting the urgent needs of our military and homeland 
defenders. As you know, their budgets have been largely spared the deep 
cuts imposed on other, less vital programs. Instead, the Pentagon and 
Homeland Security Department are facing reductions in the previously 
projected growth in spending they would be allocated.
    Unfortunately, the effect on the national security is still 
significant and deleterious. I would like to review briefly areas of 
special concern in the DOD and DHS budgets and close with a word about 
the related national security programs of the Department of Energy.

                       THE DEPARTMENT OF DEFENSE

    President Bush's FY2006 budget, together with the supplemental 
request just submitted to the Congress, mostly--though not fully--meets 
the immediate requirements of the United States' armed forces, and 
particularly those associated with the ongoing combat activity in Iraq 
and other fronts in the War on Terror. A far greater shortfall, 
however, is this budget's failure adequately to prepare us to deal with 
major security threats that may present themselves in the next 5-10 
years.
    Specifically, the budget reflects a growing focus on sizing and 
equipping the military to contend with unconventional conflicts and 
terrorist insurgencies. (It remains to be seen whether this apparent 
bias will still be appropriate in the aftermath of the Quadrennial 
Defense Review (QDR) now underway, which will--as I understand it--
examine other possibilities, including that of the emerging threat from 
Communist China.)
    Of particular concern in this regard is the prospect of cutting 
programs that are critical to America's future ability to project power 
as required to implement the national security policy Ronald Reagan 
dubbed ``Peace through Strength.'' I will have a bit more to say in a 
moment about the continuing decline in the size of the U.S. Navy's 
blue-water fleet, the sharp decline in tactical aviation and airlift, 
and cuts in the vital missile defense program--as well as their 
implications for the associated industrial bases.
    A general observation is in order at this point, however: Cutting 
money from defense programs essential to our ability to dominate the 
future battlespace against adversaries armed with sophisticated weapon 
systems, in the interest of making the military more responsive to 
lesser threats, is neither penny wise nor pound sensible.
    History teaches that such down-scaling of our capabilities merely 
emboldens prospective foes. Given the trends with respect to China--
notably, the cumulative effect of its massive investment in advanced 
armaments (an investment that may soon be made vastly more ominous if 
Europe begins supplying Beijing with weaponry) and the PRC's growing 
appetite for the world's finite oil and gas resources--we face a 
serious prospect of future conflict with the Communist Chinese even 
without encouraging them to contemplate it.
    To be sure, different types of conflicts can require different 
types of capabilities. Yet, the sorts of platforms that are the focus 
of most of the defense budget cuts--an aircraft carrier, nuclear 
submarines, F/A-22s, the V-22 Osprey and C-130s have in common an 
inherent flexibility that make them valuable investments in most 
scenarios currently in prospect.
    As members of this Committee know all too well, much of the present 
problem is a result of fiscal constraints associated with this budget. 
While the desire to exercise spending discipline is understandable, and 
even laudable under other circumstances, I would respectfully suggest 
that it is ill-advised to engage in it at the expense of defense 
preparedness during wartime.
    That is particularly true in light of the fact that the accounts 
being disproportionately reduced involve investments that have been 
long-overdue and already subjected to too much budgetary uncertainty. 
In addition, a number of the programs being cut are now at the point 
where the bulk of the investment has already been made and the return 
on that investment--for example, in terms of aircraft procured--can be 
obtained most cheaply.

                              Major Issues

                         1. OUR SHRINKING NAVY

    Improvements in the combat capabilities of U.S. Navy vessels, 
changes in the way they are manned and the deferral or elimination of 
some maintenance are said to allow cuts safely to be made to ship 
construction schedules and fleet size. The budget request amounts to a 
$1.7 billion cut in shipbuilding, and reduces the number of new ships 
to be built from six to just four in the current fiscal year.
    This is happening even as the threat posed to America's capital 
ships grows inexorably. As the Chief of Naval Operations, Admiral Vern 
Clark USN, told the Senate Armed Services Committee last week:
    ``* * * We are * * * keeping a weather eye on increasing anti-
access and sea denial capabilities being developed by other nations in 
the world, particularly in the Middle East and Asia. The greatest 
challenge that we face in the Navy is this: What are the intentions of 
those nations who are displaying emergent investment patterns that 
could challenge the sea control that we currently possess that enables 
the United States military to operate freely around the globe?''
    Adm. Clark has testified that he is now contemplating a Navy that 
has as few as 260 ships. I respectfully submit that such a fleet would 
be unable to maintain the sort of presence and power projection 
capability we are likely to require around the world for the duration 
of the War on Terror. That is especially true if, as the foregoing 
quote makes clear, the Navy is going to be facing vastly more serious 
threats to its ships, ``particularly, in the Middle East and Asia.''
    I share the concern expressed by others about the proposed early 
retirement of the conventionally powered aircraft carrier, the USS John 
F. Kennedy. While the Navy is to be commended for improvements it has 
made in the readiness and availability of carrier battlegroups (CVBGs), 
it is clear that eliminating the ship at the core of one of these units 
will make sustaining such schedules problematic. It will almost 
certainly result in leaving the Nation unable to respond as we may need 
to in the event of future acts of aggression, or acts of God. Worse 
yet, current funding projections suggest that the Navy may ultimately 
be reduced to as few as 9 CVBGs. Such unilateral disarmament is 
reckless in the face of the emerging challenges to our maritime power 
and interests.
    Other cuts that will dramatically slow the builds of Navy blue-
water combatants are no less troubling. Especially worrisome is the 
decline in the number of nuclear attack submarines (SSNs) contemplated 
by a build-rate of just one-per-year for the foreseeable future. As I 
noted above, these vessels have proven to be among the most flexible 
platforms in the American arsenal--performing vital sea-control, 
intelligence-collection and land-attack functions, among others.
    We often talk about proliferation of weapons of mass destruction in 
terms of chemical, biological and nuclear arms. It has been observed, 
however, that extremely quiet, advanced-propulsion submarines should 
also be considered a type of WMD, insofar as they can be utilized with 
great effect to deliver the other kinds of such weapons. The best 
antidote we have to the world-wide proliferation of these submarines is 
a large and potent fleet of our own SSNs. At the low rate of production 
and with refueling overhauls being slipped, we risk being unable to 
counter the potent threat posed by prospective enemies' growing 
submarine warfare capabilities.
    I hope that the Committee, as it weighs the adequacy of a 4-ship 
building plan for FY 2006, will consider endorsing an approach other 
Federal departments have been allowed to use, but not the Department of 
Defense--namely, advanced appropriations. As you know, Mr. Chairman, in 
the absence of such a practice, CBO scorekeeping has the effect of 
forcing the Navy to ``pay'' for each ship up front, even though 
payments for the construction of most are actually made over several 
years time. This practice is contributing to the current, grossly 
inadequate shipbuilding program.

                    2. CUTS IN AIRCRAFT PROCUREMENT

    Cuts to major aircraft programs in the FY06 budget request are 
financially unwise and come at a time when potential enemies are 
upgrading their air capabilities and defenses. I am particularly struck 
by the reduction in the number of F/A-22 Raptors being purchased, in 
light of the plane's extraordinary performance and the prospect that it 
alone among America's fighter/attack inventory may be able to establish 
and maintain air superiority over territories increasingly defended by 
advanced anti-aircraft missile systems.
    A similar logic seems to be at work as with the Navy. Better 
performance, higher reliability and more cost-effective sustainability 
is said to justify cuts in the number of units procured. At some point, 
however, even vastly superior weapons can be overwhelmed by less 
capable ones. We are entering an era in which there will be many 
fighters far more advanced than those we designed in the 1970s, as well 
as fourth-generation air defenses, in unfriendly hands. If our 
objective is to deter war--not just prevail if it occurs--we must be 
capable of giving our troops not only unsurpassed equipment, but 
sufficient quantities of such gear, as well.
    Unfortunately, the planned cuts will not only deny the Nation the 
least costly and most capable F/A-22s, i.e., those that would otherwise 
be purchased at the back-end of the production run. They will also 
cause the production line to shut down 3 years ahead of schedule--well 
before the fruits of the Joint Strike Fighter program are fully 
validated; the latter aircraft does not IOC until 2013.
    I would be happy to discuss with the Committee my concerns about 
other reductions, including those that will cause a costly termination 
of the previously authorized C-130J multi-year procurement, stretch out 
production of the transformational V-22 Osprey, and defer planned 
modernizations of the Huey, Cobra and Super Stallion helicopter 
programs.

                           3. MISSILE DEFENSE

    Mr. Chairman, I have long believed that it was irresponsible for 
the United States to choose deliberately to be vulnerable to ballistic 
missile attack. Consequently, I commend President Bush and his national 
security team for taking the steps necessary to complete development 
and begin the deployment of anti-missile defenses.
    Like other proponents of such a course of action, I am of course 
disappointed by the difficulties encountered in recent months in 
aspects of the Ground-Based Missile Defense test program. It is 
important to note that these difficulties appear to involve quality 
control issues associated with certain software and test interfaces, 
not a fundamental problem with the GBMD system itself, let alone the 
physics of missile defense.
    Having said that, these persistent problems reinforce my conviction 
that the Nation needs near-term defense-in-depth against missile 
attack. For that reason, I am generally comfortable with the cuts 
proposed in the President's budget for the Kinetic Energy Interceptor, 
a medium-term research and development effort, but would urge a far 
more aggressive investment in sea-based anti-missile systems using the 
Navy's Aegis ships and full funding for the Airborne Laser program, 
coupled with accelerated funding for developing and fielding missile 
defenses where they will do the most good--in space.

              4. DETRIMENTAL EFFECT ON THE INDUSTRIAL BASE

    I have alluded above to the negative effects of the proposed cuts 
on the U.S. industrial base. In my experience, Members of Congress are 
generally well aware when jobs are jeopardized by programmatic slips or 
cancellations. My view has long been that the defense budget is not, 
and should not be viewed as, a jobs bill. If programs are not justified 
on their merits, spending should be applied to meet the military's many 
other, pressing needs.
    There is, however, a real danger entailed in allowing the 
military's needs to be met through potentially unreliable off-shore 
sources. I commend the Chairman of the House Armed Services Committee, 
Rep. Duncan Hunter, for the efforts he made in the 2005 Defense 
authorization bill aimed at addressing this challenge. While the 
various remedies he proposed were highly controversial and ultimately 
not included in the final version of that legislation, the problem he 
identified has certainly not gone away.
    It is simply intolerable to contemplate American servicemen and 
women possibly being put at risk due to a foreign supplier's 
unwillingness or inability to provide needed components or spares in 
time of war. I urge the Congress to address this issue anew as part of 
its deliberations on the adequacy of this budget and the industrial 
base needed to support our armed forces and national security policy.

                  THE DEPARTMENT OF HOMELAND SECURITY

    As with the Defense Department's budget, real growth in proposed 
spending by DHS in FY2006 is commendable, but not sufficient to the 
tasks of securing our homeland. In the interest of brevity, permit me 
to offer but one example that illustrates the magnitude and complexity 
of the challenge in a time of terror and war--and the need for an even 
greater Federal effort to meet it.
    As I hope members of this Committee know, a blue-ribbon, 
congressionally mandated commission recently conducted a detailed 
assessment of the effects of a nuclear attack on the United States 
involving the detonation high above the Nation of a ballistic missile-
delivered weapon. The panel, which was charged with ``assessing the 
threat to the United States from an electromagnetic pulse (EMP) 
attack,'' concluded that the EMP effects of such an attack at altitudes 
between 40 and 400 miles above this country could so severely disrupt, 
both directly and indirectly, electronics and electrical systems as to 
create a ``damage level * * * sufficient to be catastrophic to the 
Nation.'' Worse yet, the commission concluded that ``our current 
vulnerability invites attack.'' (The executive summary of this 
classified report can be viewed at http://armedservices.house.gov/
openingstatementsandpressreleases/108th congress/04-07-22emp.pdf)
    It is not clear from a review of the Homeland Security Department's 
budget what office, if any, would be responsible for responding to the 
EMP Threat Commission's recommendations for urgent action to reduce our 
vulnerability to such an attack. This is a monumental undertaking, 
requiring shielding and other measures to mitigate disruptions and 
prevent extensive damage to systems upon which virtually every aspect 
of life in America depends today.
    Failure to take such steps could mean that a single North Korean or 
Iranian missile, possibly launched from a ship off the coast of the 
United States, could instantly transform this country from an advanced 
21st Century society to an 18th Century one. It is hard to imagine a 
more devastating form of terror than that entailed in the dislocation, 
hardship and destruction that would accompany an America returned to a 
pre-industrial state--except now with its population crowded into 
cities that could not function.
    Let me emphasize that this problem is not confined to the civilian 
economy. It applies as well to our military. Which brings me to a point 
that I hope you, Mr. Chairman, and your colleagues will address 
forthrightly in the 109th Congress.

            DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

    One of the reasons this country is so vulnerable to EMP attack is 
that we largely stopped worrying about this phenomenon thirteen years 
ago. In 1992, the United States adopted a moratorium on nuclear 
testing, thus precluding the most rigorous and reliable means of 
establishing the susceptibility of electronic systems to 
electromagnetic effects.
    The folly of foregoing such testing has only been compounded by the 
reality that our moratorium has also had very deleterious effects on 
our nuclear deterrent. For example, we no longer can be certain that 
the weapons in our arsenal will work as they are supposed to. We are 
reduced to relying on what amounts to informed scientific guesswork 
based on computer simulations. Guesses are no substitute for the 
certitude we need when it comes to such life-and-death matters.
    One thing is certain: Our stockpile is not as safe and reliable as 
we could make it. Without realistic testing, we can only introduce 
changes in the components or designs of existing weapons at the risk of 
further degrading confidence they will work.
    What is more, we are unable to introduce new designs that would be 
better suited to countering threats posed by countries like Iran and 
North Korea than the hugely destructive weapons developed more than 
twenty years ago to counter targets in the Soviet Union.
    Worst of all, these costs have been incurred for no good reason. 
Neither North Korea nor Iran have, as far as we know, conducted nuclear 
tests on their way to joining the ``nuclear club.'' Consequently, it is 
now indisputable that the United States' foreswearing underground 
testing has not had the promised effect--impeding proliferation.
    In an important analysis published recently by the Center for 
Security Policy (http://www.centerforsecuritypolicy.org/A--Different--
Approach.pdf), Vice Admiral Robert Monroe USN (Ret.), a former director 
of the Defense Nuclear Agency, argues persuasively that if we are to 
have any hope of preventing proliferation in the future, the United 
States must maintain a credible nuclear deterrent--and undertake the 
associated testing, developmental and industrial actions.
    I regret to inform you that a leading Republican member of this 
House--Rep. David Hobson, Chairman of the House Energy and Water 
Resources Appropriations Subcommittee, has played a decisive and highly 
counterproductive role by working to prevent the Department of Energy 
from making virtually any progress in these areas. I very much hope 
that this committee, and others concerned with the adequacy of the 
measures being taken to provide for the Nation's security will ensure 
that the Nuclear Weapons Program and associated activities--including 
assessing our vulnerability to EMP--are funded, along with the 
Departments of Defense and Homeland Security, to ``meet the needs.''
    Thank you, Mr. Chairman.

    Chairman Nussle. Thank you for your testimony.
    Next on our witness list is Dr. James Jay Carafano, senior 
research fellow from the Heritage Foundation. Welcome. We are 
pleased to receive your remarks.

                STATEMENT OF JAMES JAY CARAFANO

    Mr. Carafano. Thank you, Mr. Chairman, and I commend the 
committee for grouping homeland security and defense together 
as a single issue, as I think that type of dialogue and 
discussion is long overdue. I think the analysis suggests that 
if you look at the spending in defense and homeland security as 
a percentage of GDP spending, either in historic terms or 
looking at the nature of the strategic challenges in the world 
today, I think you could argue that this year's budgets are 
appropriate.
    My concerns, actually, are slightly different. One is the 
capacity to maintain adequate levels of defense and homeland 
security spending in the outyears, which I think is the real 
issue, and the second is making sure that the spending in 
defense and homeland security is efficient and effective and 
not just the right overall level.
    There, I think, the challenges of defense or homeland 
security are fundamentally different, and I would just like in 
my opening statement to touch briefly on both of those. But I 
would just like to take a second to put the analysis in 
context.
    I think one of the things I think we should have done on 
September 12 is asked a question, which is what does it take to 
win a long war, because this essentially will be another 
protracted conflict and there are options.
    If you look through history, the way most countries fight 
long wars is as wars get protracted, whether it is the 
Polyponesian War or World War I, what states do is they tend to 
pull power to the center because they are trying to generate 
the power to win.
    So they become more authoritative. They increase taxation. 
They are more directive because they are trying to generate 
this power to win. The irony is, in the process of doing that, 
is that it eventually becomes less competitive, and they 
generate less power because the States become less productive 
and less flexible. So typically you see at the end of 
protracted conflicts both sides are prostrate, and the question 
is who won and the answer is who doesn't matter.
    There are very few exceptions to that history. One of the 
exceptions is the United States during the cold war, where the 
United States actually came out of a long protracted conflict 
in better shape in the economy or in terms of the protections 
of civil liberties to its citizens or its national security 
interests than it did at the beginning. The question is what 
was done differently.
    I think you go back to the Eisenhower years and look at 
some of the fundamental strategic choices that Eisenhower tried 
to put in place in terms of the fundamental strategy that 
really suggest why what we did during the cold war was 
different.
    Eisenhower says you really need three things. Really 
everybody kind of follows after that. First of all, one of the 
components of a long war strategy is you have to have security, 
you have to have offense. You can't let the enemy have the 
initiative in the war. You have to have the ability to take the 
initiative in any war. So you got to have an offensive 
component. So you have to have a defensive component.
    Certainly that is true in the war on terrorism. We live in 
a world that thrives on the free exchange of goods, services, 
people, ideas, we like it that way. It is what makes the 
country strong, we want to maintain that. But that always means 
that there are going to be threats that find ways to get to our 
shore, and we have to defend against them. So you have to have 
security. But Eisenhower said, you know, that is not good 
enough.
    He made a point, for example, when he responded to things 
such as the launch of Sputnik. You know, he said it is guns and 
butter, stupid. He says you have to have both. A strong economy 
is the foundation of what allows you to compete over the long 
term.
    So part of a long war strategy is, one, security, but at 
the same time you have to have the promotion of economic 
growth.
    And the third component is you have to protect the civil 
liberties and privacies and freedoms of your citizens, both 
because that is what makes you a stable nation and allows you 
to compete over the long term. But what I think, and often 
forgotten to mention, is it is those civil liberties and 
protection of personal freedom which in many cases are the 
engine of economic growth.
    In all of our research, what we have done is to say we need 
security solutions that do all three. You can't and shouldn't 
make trade-offs if we really want to win a long war. We need 
security, both offense and defense. We need policies that 
promote economic growth, and we need to promote the private and 
economic liberties of our citizens.
    Addressing those challenges in defense and homeland 
security, I think, are effectively different sets of problems. 
I think in Defense we have a long tradition of understanding 
the trade-offs that need to be made, and we have frameworks for 
discussing them. I think the problems in defense are really 
twofold. We really--I think the administration and the Congress 
really need to have kind of a joint strategic direction.
    One is in the short-term spending I would certainly make 
the argument that supplemental spending needs to be done 
outside the general budget. I would do that for two reasons, 
both really lessons from Vietnam. One is when you put 
supplemental spending for ongoing operations inside the main 
budget, typically what happens, it begins to eat away from 
other operational activities in the main budget.
    This was certainly the problem in Vietnam where the war in 
Vietnam basically ate up everything. It ate up the 
modernization costs, it ate up the maintenance of the force in 
Europe, and it essentially drained everything else.
    The second reason, which I think is equally important, is 
it is important to get the supplemental funding out, to get 
these monies out, these operational activities quickly and 
efficiently and as quickly as possible. Holding them up for the 
regular budget process only costs months, but those are 
critical months in terms of spending the money efficiently and 
effectively, I think certainly in the short term to prosecute 
the war effectively, and that it is important to keep the 
supplemental funding outside the main budget.
    The second issue, and I think a more important issue, 
addresses, I think, what really is in the long term. When we 
came out of Vietnam in 1973, what we immediately did was war 
over, let us cut the budget.
    What we immediately wound up with is what was called the 
hollow force. The hollow force is you have three main things 
you have to do. You have to maintain a trained and ready force. 
You have to modernize and you have to pay for current 
operations. If you don't have enough money to do all three, you 
may have the numbers, you may have the flags, but you don't 
actually have the capacity to act. So what you wind up with was 
for really a decade a force which was there in name only.
    Those surpluses will certainly reappear when we come out of 
Iraq. I don't really worry about this year or next year. I 
worry about actually when we came out of Iraq and the 
supplemental funding ends and everybody is living in the top 
line, because then we are going to have to meet all three of 
these challenges. If we don't have robust defense budget in the 
outyear, we will wind up right back in 1972 all over again.
    Let me just very quickly turn to the question of homeland 
security. There I think we really don't have a framework to 
really have the discussion. I think the problem there is 
basically efficient and effective spending, for two reasons.
    One is because we simply don't have the way to define the 
strategic requirements and the priorities in a way that we 
really are making sure that we are putting our money against 
the most important things.
    The second thing is we really don't have a metric for 
really figuring out where is the biggest bang for the buck. 
Pick an issue--if you had picked either border security or 
immigration security or transportation or supply chain, we 
really don't have a way to argue. If I can only spend a dollar, 
where am I going get my best payoff for the dollar. So what we 
really have is we have a lot of spending going on a lot of 
different things. It is really by stakeholder as opposed to 
spending by strategy. The money is really going to the 
stakeholders, which can have the biggest play on the process, 
as opposed to necessarily what the most strategic spending is. 
To me that seems to be the real greatest terms, it is not the 
level of homeland security spending, but actually whether it is 
actually making us safer or not.
    Thank you.
    [The prepared statement of James Carafano follows:]

 Prepared Statement of Dr. James Jay Carafano, Senior Research Fellow, 
                        the Heritage Foundation

    Chairman Nussle, Ranking Member Spratt, and other distinguished 
Members of the committee, thank you for the opportunity to discuss 
homeland security and defense spending. I want to make three points 
today. First, we are spending the right amount on defense and homeland 
security. Second, even though we may begin drawing down forces in Iraq, 
we need to maintain defense funding levels to prevent returning to the 
hollow force of the 1970s. Third, Congress needs a set of strategic 
principles to create a comprehensive approach to homeland security 
spending, instead of wasting money in a scattershot approach to 
programming.

                   A SHORT REVIEW OF FEDERAL SPENDING

    With the recent delivery of the President's budget request to 
Congress, it is time to consider what defense and homeland security 
funding levels should be. But first, it is important to consider some 
budget history.
    The Federal Government has expanded substantially during the past 
century. One of the best measures of the burden that the Federal 
Government, as a whole, imposes on the national economy through its 
spending policies is the percentage of GDP taken up by outlays. During 
the nation's first 140 years, the Federal Government rarely consumed 
more than 5 percent of the GDP. In accordance with the U.S. 
Constitution, Washington focused on defense and certain public goods 
while leaving most other functions to the states or the people 
themselves.
    The Great Depression brought about President Franklin Roosevelt's 
New Deal, a program that expanded government in an attempt to relieve 
poverty and revive the economy. President Roosevelt created the Social 
Security program in 1935 and also created dozens of new agencies and 
public works programs. Although the economy remained mired in 
depression, the Federal Government's share of the GDP reached 10 
percent by 1940.
    World War II pushed the United States into the largest war 
mobilization effort the world has ever seen. From 1940 through 1943, 
the Federal Government more than quadrupled in size--from 10 percent of 
GDP to 44 percent. The enormity of this 34 percent government expansion 
cannot be understated: An equivalent expansion today would cost $3.9 
trillion, or $37,000 per household. Even with a top income tax rate of 
91 percent, the nation could not fund World War II on tax revenues 
alone. The nation ended the war with a national debt larger than the 
GDP (which is three times the size of today's national debt). Following 
the war, Washington's share of the economy fell back to 12 percent of 
GDP in 1948.
    In the long decades of Federal expansion from the end of World War 
II to former President Ronald Reagan's election, Washington expanded 
into several new policy areas, creating the Departments of Health, 
Education and Welfare (in 1953; eventually becoming Health and Human 
Services), Housing and Urban Development (in 1965), Transportation (in 
1966), Energy (in 1977), and Education (in 1979; it had been a part of 
Health, Education and Welfare).
    Federal spending generally fluctuated at just over 20 percent of 
GDP throughout the 1980s and early 1990s. However, in the last few 
years spending has sharply increased again as the war on terrorism 
collided with domestic spending.

             CHANGES IN THE COMPOSITION OF FEDERAL SPENDING

    Over time, the composition of Federal spending has evolved as well. 
Between 1962 and 2000, defense spending plummeted from 9.3 percent of 
GDP to 3.0 percent. Nearly all of funding shifted from defense spending 
went into mandatory spending (mostly entitlement programs), which 
jumped from 6.1 percent of GDP to 12.1 percent during that period.
    The importance of this evolution cannot be understated. For most of 
the nation's history, the Federal Government's chief budgetary function 
was funding defense. The two-thirds decline in defense spending since 
1962 has substantially altered the make-up and structure of the U.S. 
national defense.
    After 28 consecutive years of budget deficits, the 1998 fiscal year 
ended with a $69 billion budget surplus. These budget deficits, which 
had reached 6 percent of GDP in 1983, were eliminated by a combination 
of three factors: First, real defense spending plummeted by 30 percent 
in the 1990s as a result of winning the cold war. Second, tax revenues 
reached their highest level since World War II as a result of the 
economic boom. Third, legislative gridlock between Democratic President 
Bill Clinton and the Republican Congress doomed most new spending 
initiatives and allowed spending growth to slow to a crawl.
    The arrival of budget surpluses, however, saw Federal spending 
accelerating once again. These spending increases went mostly unnoticed 
because tax revenues continued pouring in at a pace rarely seen in 
American history, culminating in a $236 billion budget surplus in 2000.
    Between 2001 and 2004, wars with Afghanistan and Iraq were funded 
by a 48 percent increase in defense spending. Homeland security 
spending, which had not even existed as a category before September 11, 
leapt from $16 billion to $33 billion. The low defense spending that 
helped bring balanced budgets in the late 1990s was over.

                      APPROPRIATE SPENDING LEVELS

    Although not quite reaching the levels it did under President 
Lyndon Johnson, Federal spending during the war on terrorism has more 
closely reflected the Vietnam-era spending binges than the spending 
restraint of World War II and the Korean War. Spending not related to 
defense and 9-11 increased by an average of 5 percent per year from 
2001 through 2003. That 2-year, 11 percent increase in non-security 
spending represents the fastest growth in a decade. At a time when 
defense and homeland security priorities require especially tight non-
security budgets, lawmakers have not made necessary trade-offs, and in 
fact, have accelerated non-security spending growth.
    Budgets are about setting priorities, and the central priorities of 
the Federal budget are to defend the American people from external 
threats and to protect individual's paychecks. We should learn the 
lessons of the Eisenhower presidency and stick to the economic 
strategies mapped out by the Bush Administration after 9-11. This 
requires appropriate funding for defense and homeland security while 
keeping taxes low. In doing so, policymakers must deal with two truths:
    Defense and homeland security spending are critical elements of our 
nation's future. The world has changed and so must America's security 
budget. Although defense and homeland security costs dropped to 3 
percent of GDP in the 1990s, they have since rebounded to 4.4 percent 
of GDP--representing a $160 billion increase. Given the long-term 
dangers posed by transnational terrorist groups--as well as the 
proliferation of weapons of mass destruction and other dangers that 
might arise from aggressor, enabler, or slacker states--American 
security spending must likely remain at this higher level indefinitely.

                    PREVENTING ANOTHER HOLLOW FORCE

    As the Iraqis begin patrolling their country, there will be 
pressure to cut the military's budget. Congress should maintain funding 
levels for defense or we risk returning to the hollow force we had 
after Vietnam.
    After Vietnam, Congress moved quickly to downsize the military and 
cut funding. The Army became a ``hollow force'' with inadequate troops, 
training and equipment. By the end of the decade, Army Chief of Staff 
Edward ``Shy'' Meyer told President Carter that only four of the 
service's 16 active divisions stood ready for battle.
    The Reserves were even worse off. Recruiting plummeted after the 
war. Nearly one out of every two volunteers for the new post-draft 
``all-volunteer force'' was a high-school dropout or scored in the 
lowest category on the Army's intelligence test.
    I was a lieutenant in the hollow force. When I was commissioned 
from West Point, our class was told, ``It's an OK Army.'' In a way, 
this was correct. There was no money to modernize weapons and 
equipment. That task had been deferred to pay for the war, and units 
didn't have enough people to train on the equipment, anyway. Even if 
they had the people to fill the ranks, there wasn't enough money to pay 
for training and maintenance. It was all OK--as long as we didn't 
actually have to fight anybody.
    In the 1980s, an adrenalin shot of funding from the Reagan 
administration saved the services. Some parts of the force, such as the 
National Guard, still never got the resources they needed, but by the 
end of the cold war, after a decade of investment, it again was an Army 
to be proud of. In 1991, as the operations officer of an artillery 
battalion in Germany, I sent part of my unit to support Operation 
Desert Storm. I never worried about them for a minute. They were 
terrific kids, well-trained and well-armed.
    The post-cold war drawdown took its toll on the military. Defense 
spending as a percentage of GDP sank to its lowest levels since the 
outbreak of World War II. The Clinton administration took a prolonged 
procurement holiday and cut the force to the razor-thin minimum needed 
to get by.
    One presidential term, particularly with all the demand for 
military forces in the war on terror, wasn't enough to get us the 
military we needed for the 21st century. And Iraq is making 
transforming even tougher. Operations are straining the force. 
Helicopters are wearing out at five times their anticipated rate. 
Trucks are going into overhaul five times faster than anticipated. 
America's military is serving the nation well, but it's becoming a 
tired warhorse.
    After Iraq, it'll be 1973 all over again. There will be pressure to 
balance the budget on the back of defense cuts. Pentagon proposals for 
trimming spending are already floating around Washington like 
inauguration-parade confetti.
    Cutting funding levels before resetting the military for its next 
mission is a bad idea. The military has been stretched, and it shows. 
The National Guard alone has had to transfer more than 74,000 soldiers 
from one command to another just to fill the ranks deploying overseas. 
Since 9-11, the Army has transferred more than 35,000 pieces of 
equipment from non-deploying units to forces in Iraq, leaving the stay-
behind commands lacking more than a third of their critical equipment. 
Thus it is critical to maintain sufficient funding levels so the 
Defense Department has time to refit the force.

                    PRINCIPLES FOR DEFENSE SPENDING

    There are areas where chronic under funding hinders the armed 
services. For instance, there have been shortages for such programs as 
vehicle armor, military construction, aircraft survivability equipment, 
and ballistic missile submarine communications. Sustained budgets are 
necessary to ensure that America's forces are prepared for the future.

  PRINCIPLE NO. 1: WAR SPENDING SHOULD BE SEPARATED FROM THE REGULAR 
                             DEFENSE BUDGET

    Until the drawdown in Iraq begins, Congress must provide timely 
supplemental funding. There are multiple reasons for separating war 
costs from the regular defense budget. First, a war cannot be run on 
the budget's schedule. It takes over 2 years to develop and pass the 
defense budget. Given the long planning stage, the potential for hold 
ups, and the inconsistency between the war's schedule and the budget's, 
it is prudent to bifurcate war spending from regular defense spending. 
Second, inserting war costs in the regular budget could eat away at 
critical programmatic funding, thus weakening the military and 
preventing transformation. Third, by keeping the costs of the war 
separate from other defense requirements, it will be easier to track 
just how much we as a nation are spending on the war. Finally, the 
costs of prosecuting the war have not yet become stable, so it would be 
very difficult to do the longer range cost projections needed for the 
budget.

    PRINCIPLE NO. 2: KEEP DEFENSE SPENDING AT ABOUT 4 PERCENT OF GDP

    The United States can reasonably afford to dedicate up to 4 percent 
of GDP to defense--a level of spending that would be well within 
historical norms. Given a focused and well-balanced modernization 
strategy, this level of spending would be adequate to maintain a force 
capable of protecting U.S. territory and interests today, as well as to 
field an adequate force in the future.

  PRINCIPLE NO. 3: PROVIDE ADEQUATE MONEY FOR TRAINING AND READINESS, 
                 MODERNIZATION, AND CURRENT OPERATIONS

    By definition, a hollow military is one which cannot support 
training, modernization, and current operations. To avoid returning to 
that type of military, the Defense Department needs a steady stream of 
funding at today's levels to allow it to revitalize the nation's 
forces. If funding cuts begin in conjunction with the draw down in 
Iraq, the military will not be able to prepare for future operations, 
restock and update its equipment, while maintaining current operations.

               PRINCIPLES FOR HOMELAND SECURITY SPENDING

    Merely disbursing funds to meet many demands risks spending a 
little on everything and not providing much security for anything. 
Investing in the wrong priorities can be equally troubling. Congress 
cannot address homeland security funding in a piecemeal fashion. They 
must wade through a maze of proposals without losing sight of the big 
picture. Congress and the administration should agree on a set of 
strategic guiding principles that will allow smart spending to replace 
more spending.

       PRINCIPLE NO. 1: BUILD A NATIONAL HOMELAND SECURITY SYSTEM

    The first and highest priority for Federal spending must be 
investments that assist in creating a true national preparedness 
system--not merely supplementing the needs of state and local 
governments. Dollars that might be needed to equip every state and U.S. 
territory with sufficient resources to conduct each critical homeland 
security task could run into the hundreds of billions. Although the 
Federal Government has a responsibility to assist states and cities in 
providing for homeland security, it cannot service every one of their 
needs. Indeed, state and local governments are having difficulty 
absorbing and efficiently using the Federal funds that are already 
available.
    Federal funding should focus on programs that will make all 
Americans safer. That includes providing state and local governments 
with the capability to integrate their counterterrorism, preparedness, 
and response efforts into a national system; and expanding their 
capacity to coordinate support, share resources, and exchange and 
exploit information. In addition, the Federal Government must enhance 
its own capacity to increase situational awareness of national homeland 
security activities and to shift resources where and when they are 
needed.

          PRINCIPLE NO. 2: PREPARE FOR CATASTROPHIC TERRORISM

    The age when only great powers could bring great powers to their 
knees is over. Long before 9-11, national security experts argued that 
modern technology and militant terrorist ideologies are creating 
conditions that increase the potential for catastrophic attacks--
risking tens of thousands of lives and threatening hundreds of billions 
of dollars in damage. Catastrophic threats will overwhelm the response 
capacity of any state or local government.
    The Federal Government must be prepared to fund the lion's share of 
response preparation to these threats. Priorities must be: detecting 
smuggled nuclear, radiological, chemical, and biological weapons; 
improving decontamination and medical responses to such dangers; 
ensuring the protection of critical infrastructure whose destruction 
might result in catastrophic damage; and harnessing scientific 
knowledge and tools for counterterrorism efforts.
    Assistance on the state and local level should focus on medical 
surveillance, detection, identification, and communication so that 
problems can be identified quickly and regional and national resources 
can be rushed to the scene. Meanwhile, Federal programs should be 
exploring innovative solutions for increasing national surge capacity. 
Appropriators should support Administration efforts to shift resources 
from hospital-preparedness grants to more relevant national biomedical-
preparedness programs.

           PRINCIPLE NO. 3: GET THE BIGGEST BANG FOR THE BUCK

    Congress should also direct funding toward programs that provide 
the greatest contribution to supporting the critical mission areas 
established by the homeland security strategy. Getting the ``biggest 
bang for the buck'' is a worthwhile criterion for guiding spending 
decisions.
    No area deserves more attention than the challenge of maritime 
security. Estimates for enhancing support security run into the 
billions of dollars. Lobbying efforts are underway to demand dramatic 
increases in Federal port grants--as much as $400 million per year. On 
the other hand, the Administration has proposed limiting port grants in 
FY 2005 to $50 million. The government's restraint is appropriate. The 
infrastructure at U.S. ports is so vast that providing resources for 
other than the most critical of needs may not be prudent. On the other 
hand, grant programs have proven far more effective when Federal money 
has been used to encourage public-private partnerships that adopt 
sustainable and effective port-security programs.
    To address the considerable vulnerabilities of maritime 
infrastructure, the greater share of Federal dollars might be more 
effectively used by investments in effective intelligence and early 
warning, domestic counterterrorism, and border and transportation 
security programs. These could help to reduce risks by limiting the 
opportunities for terrorists to reach U.S. ports.

         PRINCIPLE NO. 4: WATCH INFORMATION TECHNOLOGY SPENDING

    Congress needs to pay particular attention to homeland security 
programs with significant IT components. The Federal Government's track 
record in developing IT networks is checkered at best. Programs that 
lack senior leader involvement, well-developed enterprise 
architectures, appropriate management and contractual oversight, and 
effective risk-mitigation strategies often find that results fail to 
meet expectations or that IT costs balloon out of control--crowding out 
funding for other critical operational needs.
    The Department of Homeland Security is no exception. The DHS 
Inspector General has already warned that IT management represents a 
major challenge for the department. Congress must watch these efforts 
closely.

              PRINCIPLE NO. 5: FUND HUMAN CAPITAL PROGRAMS

    Human capital programs, training, professional development, and 
career management initiatives often receive far less attention than 
big-dollar acquisition programs that buy expensive, high-tech 
equipment. Yet human resources are often far more critical to the long-
term development and success of an organization. This dynamic is 
particularly true for the Department of Homeland Security, which has to 
wed the culture and skills of over 180,000 personnel from 22 different 
agencies, activities, and programs into one cohesive, versatile, and 
effective workforce.

        PRINCIPLE NO. 6: CONSIDER NON-HOMELAND SECURITY FUNDING

    A final concern that must be carefully addressed by Congress is 
ensuring that homeland security and non-homeland activities covered by 
the same appropriation are not placed in competition with one another. 
About one-third of the DHS budget, for example, funds non-homeland 
security related activities. Additionally, within the department's 
accounts, many appropriations fund both homeland security and other 
missions. In some cases, it is virtually impossible to differentiate 
personnel costs and other general expenses supporting specific 
activities. Thus, under-funding non-homeland security missions or 
unnecessarily burdening DHS with non-essential activities could 
significantly detract from the department's capacity to perform its 
domestic security tasks.

                               CONCLUSION

    In conclusion, defense and homeland security spending is at a 
proper level. That level needs to be maintained in the future, once we 
pull out of Iraq, to allow the military to recover from its recent 
operations or face creating another hollow military. Finally, homeland 
security spending should be targeted toward the areas where it will be 
able to have the greatest impact.
    Once again, thank you, Chairman Nussle and the rest of the 
Committee for holding this hearing and for inviting me to participate. 
I look forward to answering any question you might have.

    Chairman Nussle. Thank you very much.
    Next we will hear from COL Randall Larsen, the CEO of 
Homeland Security Associates. Welcome, and we are pleased to 
receive your testimony.

                STATEMENT OF COL RANDALL LARSEN

    Colonel Larsen. Thank you, sir. Mr. Chairman and 
distinguished members, the priorities I am going to give you 
today----
    Chairman Nussle. You need to turn on your microphone, 
please.
    Colonel Larsen. The priorities I will give you today and 
that were in detail in my statement will remain constant, 
regardless of what is on the next news cycle, regardless if al 
Qaeda hits a shopping mall today or a chemical plant tomorrow, 
because the priorities I gave you are strategic priorities, not 
tactical. We have spent far too much time working at the 
tactical level and defending our homeland since 9/11.
    Now what happens at the tactical level? You end up with 
spending programs that are basically ready, shoot, aim. That is 
understandable on the 12th of September in 2001. We had to take 
fast action to do things. We are 3\1/2\ years down the road 
now, and in my opinion we don't have the proper strategy for 
defending this Nation against terrorism.
    Dr. Carafano talked about General Eisenhower's 
recommendations for the cold war. I borrowed the strategy that 
I provided the Committee on Government Reform last year from 
George Kennan, containment, but it is different than what 
George Kennan talked about containment in 1947. We must have a 
strategy that will help us contain the capabilities, global 
reach and financial resources of terrorists and terrorist 
organizations. It is going to be here for a while, the threat. 
We must contain the proliferation of weapons of mass 
destruction, particularly those that threaten our survival, 
nuclear and biological weapons, and we must contain our 
response to these new threats.
    We must not overreact, either as the U.S. Congress, the 
administration, or the American public. Now I know the 
pressures that you are under every time you go back to your 
home district. I know that people back there tell you we need 
to spend money to secure seaports, airports, train stations, 
shopping malls, government buildings, chemical plants and other 
critical infrastructure. I understand that every fire 
department, sheriff's department, police department, emergency 
management agency and hospital in your home district says I 
need more money. The demand is unlimited.
    However, my recommendation to this committee is that you 
focus the spending of the Congress on threats, not targets and 
not organizations. There are about 87,000 different 
jurisdictions out there involved in homeland security. All of 
them look to you for money.
    So where do I think you should be focusing your spending? 
Where will we get, as Dr. Carafano talked about, the best 
return on investment? As a taxpayer that is certainly what I am 
interested in, that and security. So let us talk quickly about 
the nuclear threat.
    It is physically and economically impossible to harden 
America against an attack. There is no effective response to a 
nuclear weapon in a U.S. city. So our only option is to prevent 
al Qaeda from getting their hands on weapons grade nuclear 
material.
    On September 30, 2004, at the end of the first presidential 
debate, both presidential candidates said if elected, their 
number one priority would be to prevent terrorists from getting 
their hands on weapons grade nuclear materials.
    Now, I know Mr. Gaffney likes--is a big fan of missile 
defense, and primarily I think when they talk about missile 
defense, we talk about--we think a nuclear weapon. It is 
certainly not the way to deliver a biological weapon.
    My concern is that there are many ways to deliver a nuclear 
weapon. Probably the easiest way to deliver a nuclear weapon to 
Washington, DC, would be to put it in the trunk of my car that 
I drove down here this morning. I sometimes think we are 
spending too much money on delivery systems, instead of the 
weapons.
    The other weapon where I think you need to focus your 
spending, the threat, is the biological threat. I am afraid 
that too many people in this town do not understand that we 
cannot prevent the enemy, al Qaeda or other terrorist 
organizations, from building and using a biological weapon. We 
have the means to prevent al Qaeda or terrorist organizations 
from building a nuclear weapon with programs like the Nunn-
Lugar program to prevent them from getting their hands on the 
material. I can build a nuclear weapon if I can get about 9 
pounds of plutonium or about 80 pounds of high highly-enriched 
uranium.
    By the way, the University of Wisconsin research reactor 
has enough highly enriched uranium to make three Hiroshima 
bombs. There are about 140 of those facilities around the 
world. But there is a way to do that. There is a simple answer. 
There is no simple answer for protecting this country against 
biological weapons. With modern technology, it is far too easy 
to build one. So, therefore, we must focus our spending on 
programs that will give us an effective response and mitigation 
to biological weapons.
    Now, there are different types. There are those that affect 
people and, Mr. Chairman, I know being from Iowa you understand 
the threat of agro-terrorism. The animal most susceptible to 
foot and mouth disease is the hog. In Iowa there are 5.3 hogs 
for every human being. That is the most dense concentration of 
hogs in the United States. I will tell you that foot and mouth 
disease will move through a swine feed lot like a prairie fire 
through dry grassland.
    In an exercise several years ago called Crimson Sky, 
Senator Pat Roberts played the President of the United States. 
He had to order the killing of 50 million cloven-hooved animals 
to get the FMD under control. I will never forget the question 
that Deputy EPA Administrator asked the DOD representative: 
``Do you have 50 million bullets?'' Just imagine the enormity 
of having--it is not a threat to human beings, but imagine the 
economic and psychological impact of doing something like that.
    Our short-term goal for biological defense, whether we are 
talking about agro-terrorism or public health, is that we need 
information technology to provide improvements for mitigation 
and response capabilities. We have no situational awareness 
today. If an attack happened today, we are not going to know 
what is going on. We don't really know how to organize our 
response.
    I have been in the business since 1994. I find it very 
frustrating that we have made very few improvements. The mid-
term goal should be the creation of a national system that can 
detect and respond to and mitigate catastrophic health care 
crises, whether it is manmade or naturally occurring.
    Long term, there are two areas we have to focus on. First, 
something the Defense Science Board recommended a few years 
ago, called bug-to-drug in 24 hours. We detect a new pathogen 
and create a treatment for it all within a 24-hour period, 
which is doable in the long term.
    Second, we need something called preclinical detection. 
That means developing a test that would detect a disease 
organism in your body before you have symptoms. That technology 
is capable in the long term. Imagine the dual benefit of those 
sorts of technologies in everyday healthcare. We all know early 
detection and response is the key.
    Information is the other area that is very important. I see 
it as an asymmetric advantage over all of our enemies, 
particularly terrorists. Information is the weapon terrorists 
fear most, finding out about them, detecting them when they 
travel. The 9/11 Commission report made a very clear point of 
that. I think a lot of work has been done by the think tanks in 
this town, particularly the Potomac Institute, looking at how 
we can leverage information technology and at the same time 
protect civil liberties and privacy.
    The one thing I know for sure about information is when my 
family and I get on an airplane I would like to know that the 
guy sitting next to the my daughter is not on a terrorist watch 
list. The system we have today doesn't provide me that. So we 
certainly must do something about that. I think the next time a 
major attack occurs the American public is going to ask you why 
don't we have a nationally standardized identity system in this 
country.
    Mr. Chairman, I speak to audiences all across the country 
from the private and public sector, and I go back to my 
statement, I know there are enormous demands on you to spend 
money on a lot of different things, and I know we will. We will 
spend money on ports, we are going to spend money on a lot of 
things. But I want you to keep this in mind when you make these 
decisions this year about your priorities, and when you get 
done with the whole appropriations process have we really set 
the right priorities in how we are spending our money.
    I always give my audiences this perspective. Since 2001 not 
a single American has died from terrorism on our soil. But in 
the past 3 years 15,000 Americans have died from food 
poisoning, 120,000 from automobile accidents, 300,000 from 
medical mistakes, 1.5 million from cancer, and 2 million from 
heart disease. A nuclear weapon in an American city or a 
sophisticated biological attack on America would exceed all of 
those numbers, combined--the potential for killing more 
Americans with a nuclear weapon or a sophisticated biological 
weapon than all Americans that have died in war since we have 
been around.
    So when you sit down to think about your priorities I 
suggest that you look at things that threaten us most, nuclear 
weapons and biological weapons, and the one piece that we have 
of our technology that gives us the greatest asymmetric 
advantage and that is information technology.
    Thank you, Mr. Chairman.
    [The prepared statement of Randall J. Larsen follows:]

 Prepared Statement of COL Randall J. Larsen, USAF (Ret.), Founder and 
                 CEO, Homeland Security Associates, LLC

    Mr. Chairman and distinguished members, I began my study of 
homeland security in 1994, and in January 1995 published my first 
monograph on the subject. Since then I have been actively engaged in 
the study of securing the American homeland. In 1998, while serving as 
the Chairman, Department of Military Strategy and Operations at the 
National War College, I created the nation's first graduate course in 
homeland security, and in 2000 I founded the ANSER Institute of 
Homeland Security. After more than a decade of research, writing, 
teaching and consulting in both the public and private sectors, I must 
admit that I still have much to learn about this dynamic and complex 
subject.
    Nevertheless, I am pleased to have the opportunity today to offer 
my analysis and recommendations for homeland security spending 
priorities. For the past several months, this has been the focus of my 
research efforts and the main theme of my forth coming book, Our Own 
Worst Enemy: The Terrorist Threat is Real, but our Responses to 9-11 
May Pose a Greater Threat.
    Mr. Chairman, and distinguished members, if we, as a nation, do not 
develop a comprehensive strategy and supporting fiscal priorities for 
defending our homeland, then our own incompetence will become a greater 
threat to our security than al Qaeda. If we do not display the wisdom, 
vision and courage to properly analyze the new security environment; 
develop a long-range, comprehensive strategy; and provide bi-partisan 
priorities for the tough budgetary decisions that lay ahead, then I 
have serious concerns about the security of our nation.
    When the cold war ended General Colin Powell predicted it would 
take a decade before we understood the new international security 
environment. We all knew it was transforming from bi-polar to multi-
polar or perhaps, uni-polar, but our intelligence community, executive 
and legislative branches of government, and the academic community 
failed to understand the role that technology would play in shaping the 
new security era--what we now call homeland security.
    Fifty years ago, Osama bin Ladin would have just been another angry 
guy in the desert with an AK-47. In the 21st century, technology 
provides bin Ladin, and those who will follow, with the means to 
threaten a superpower. In the decade preceding 9-11, we failed to 
recognize this. We must not fail a second time. Or, to borrow a phrase 
from President Harry Truman, ``No learning takes place the second time 
you are kicked by a mule.''
    To provide a better perspective for my comments, let us assume for 
a moment that it has not been three and one half years since the last 
attack on our homeland. Let us assume that a large-scale attack 
occurred just a week ago. I ask you, ``In light of the most recent 
attack, what are your spending priorities?'' You might respond, ``What 
type of attack just occurred?'' And I would say, ``That is totally 
irrelevant.''
    We, not the enemy, must be in charge of our destiny. The priorities 
I give you today will remain constant over the next decade, regardless 
of what is in the next news cycle. This is true because I am giving you 
strategic advice, not tactical. We have spent far too much time 
thinking about homeland security from the tactical rather than from the 
strategic level, and this is not the first time that America's national 
security leaders have had difficulty with the strategic perspective.
    When General Eisenhower returned from World War II, he stated that 
American military officers were equal to the British officers at the 
tactical and operational levels. However, when it came to the strategic 
thinking, the British officers were far superior. Ike said, ``Fix it.'' 
And that Mr. Chairman is why the National War College was created--to 
teach our future military leaders to think strategically. It has 
produced many strategic thinkers, including General Brent Scowcroft and 
Secretary of State Collin Powell. That is what is sorely missing in the 
homeland security community today--strategic thinking. So that is where 
I will begin.

                             STRATEGY FIRST

    I understand you asked me here today to provide my recommendations 
for spending priorities. I understand that priorities are the bottom-
line of this hearing and this committee, but if I immediately go to 
them, then I would be guilty of committing one of the most common 
mistakes made in Washington DC: ``ready, shoot, aim.'' I have seen this 
repeatedly during the past decade. We began spending money on homeland 
security in 1996. After 9-11, we vastly increased the rate of spending, 
but it was not until the summer of 2002 that we actually published a 
national strategy for securing the homeland. And even then, it was not 
really a strategy. The principal author of the document agrees it is 
not a strategy; he said it is a ``good plan.''
    Mr. Chairman, we still do not have a long-range, comprehensive 
strategy for defending the American homeland. Without one, how can I 
possibly recommend spending priorities? If we do not know where we are 
headed, how can I offer a plan to get us there? Therefore, I submit as 
an attachment to this statement, my statement from a hearing on 
February 3, 2004 before the House of Representatives, Committee on 
Government Reform, Subcommittee on National Security, Emerging Threats, 
and International Relations. (Attached)
    In that hearing I was asked to provide an analysis of the 
Administration's strategy for defending our homeland. I examined eight 
strategies that had been released by the Administration since 9-11, and 
found them to be primarily plans focused on subjects ranging from cyber 
security to money laundering and counter terrorism. None, however, 
provided a long-range, comprehensive strategy--a strategy that would 
stand the test of time as did George Kennan's containment. Containment 
was the strategy that guided eight presidents and twenty congresses and 
eventually led to victory in the cold war. That is the type of strategy 
that is needed today.
    I will not repeat my entire testimony from last February, but let 
me say that I did not end my statement with just a critical analysis of 
the Administration's efforts--I also offered my recommendation for a 
strategy. Despite the fact that I still do not particularly like the 
name I gave this strategy, I have yet to find a better one. I called it 
containment. But containment, Mr. Chairman, in the 21st century is far 
different than the containment George Kennan spoke of nearly six 
decades ago.
    Excerpt from the February 3, 2004 statement:
    It is unrealistic and even naive to believe that we can permanently 
end terrorism or terrorist threats to our homeland. One of the 
candidates for President recently stated in a television advertisement 
that he could prevent attacks on the American homeland--a preposterous 
idea that he quickly withdrew. Nevertheless, in the case of defending 
our homeland, we all hate to admit that which is true. We cannot defeat 
terrorism.
    We cannot win the War on Terrorism as we did the war on fascism. 
Unconditional surrender by the Germans and Japanese ended the threat. 
That is not possible today. Secretary Ridge has stated there will be no 
victory parades. He is absolutely correct. Therefore, let us make our 
strategy reflect this reality. We should seek to control certain 
factors, or better yet, contain the threat from terrorism.
    We must contain the capabilities, global reach, and financial 
resources of terrorists and terrorist organizations. We must contain 
the proliferation of weapons of mass destruction, particularly those 
weapons that most threaten our survival, nuclear and biological. We 
must contain the spread of hatred with our own offensive campaign in 
the war of ideas. We must contain the vulnerabilities of our nation. 
And we must seek to contain our response to the new threats. We must 
not overreact.
    Some will comment that this is a defeatist strategy. I say it is 
realistic. We cannot stop every determined truck bomber, but we must 
prevent a mushroom cloud over an American city or a catastrophic 
biological attack on the nation. We can't kill, capture, or deter every 
terrorist, but must contain them by limiting their capabilities, their 
global reach and financial resources.
    We cannot prevent the proliferation of all weapons of mass 
destruction. Chemical agents, including industrial chemicals are far 
too easy to produce or buy. Radiological material for use in a dirty 
bomb has already proliferated beyond control. It exists in most 
hospitals, laboratories, and even at many large construction sites 
around the world. However, we must contain the proliferation of nuclear 
weapons and biological weapons. Programs such as Nunn-Lugar are great 
investments in homeland security.
    The Wahabi sect of Islam supports schools, organizations, and 
special programs, some in our own country. Registered with the IRS as 
501 (c) 3 charitable institutions they preach hatred and violence 
against America and Americans. We cannot end all coordinated 
information campaigns against the United States, but we must retaliate 
with our own offensive campaign to contain this contagion of hatred, 
disinformation, and instigation.
    We are a free and open nation. That makes us a target-rich 
environment for terrorists. We must take prudent and fiscally 
responsible actions to reduce these vulnerabilities and implement 
realistic and measurable prevention and incident management programs. 
The measurement part is critically important. If we do not set 
standards and goals, how can we measure progress?
    One distinguished group of Americans released an often quoted 
report last year calling for an increase in spending on security within 
US borders that would approach $100 billion over 5 years. But we have 
yet to establish standards and measurable goals for such programs. How 
did they determine these numbers? How would Congress allocate and 
prioritize spending? It would be a great for pork. It would send money 
to every Congressional district. But would it make us more secure?
    The press has a field day when a college student smuggled a few box 
cutters on an airliner, but do we really want a security system that is 
100 percent successful? If so, it will take us hours to get through an 
airport. A system that is 80 percent effective is not an attractive 
target--even to a suicide bomber. A system that stops four out of five 
attackers is a strong deterrent, and one we can afford. If it is part 
of a layered defense, it will provide the security required. A 
passenger and cargo screening system, backed up by hardened cockpit 
doors, thousands of armed sky marshals, armed pilots, and passengers 
who have not forgotten Todd Beamer and his compatriots is the type of 
security system we need and can afford.
    Finally, we must not allow Congress or the Administration to 
overreact. This will be most difficult during election years. On some 
days, the hyperbole, hype and hollow promises of some politicians 
frighten me more than terrorists. Following the President's State of 
the Union address, a prominent Democratic leader stated that less than 
5 percent of cargo entering the US is currently inspected. She demanded 
that 100 percent of cargo that comes into this country by sea, and 100 
percent of the cargo carried on domestic and international flights be 
inspected. That is a recipe for economic disaster. That is what I mean 
when I say the US government could do more damage to the American 
economy than terrorists.
    It is important that I maintain my nonpartisan status, so let me go 
on the record that I have heard equally troubling statements from 
Republicans, such as spending billions of dollars securing our borders. 
According to the Department of Homeland Security, there are 7,000 miles 
of borders and 95,000 miles of shoreline in this country. Understanding 
that we are in this for the long-haul, how can we ever hope to seal our 
borders against terrorists? Imagine the costs. It is not economically 
feasible. We must contain our impulse for overreaction.

                          SPENDING PRIORITIES

    Mr. Chairman, it is from this perspective of containment that I 
offer my recommendations for spending priorities for Fiscal Year 2006 
and beyond. The challenge will be to take these spending priorities and 
translate them into a national security system that was designed for a 
different threat and a different time.
    To defend America from the Soviet threat, Congress provided funds 
to the Department of Defense and the intelligence community. For the 
threats of the 21st century, it will require funding programs in the 
Departments of Homeland Security, Health and Human Services, Justice, 
Agriculture, Defense, Treasury, the Environmental Protection Agency, 
the intelligence community, and state and local governments. One 
estimate stated that as many as 87,000 government jurisdictions are 
involved in homeland security--most, or perhaps all of which look to 
the US Congress for funding. How can you possibly establish priorities 
within all of these stovepipes?
    My recommendation is that you focus your efforts on threats, not 
organizations. Some would tell you that the range of threats is nearly 
as diverse as the government organizations involved. That also may be 
true, but it is critical to understand that there are only two threats 
capable of bringing this nation to its knees--nuclear and biological 
weapons. These two threats must receive top priority for spending. 
Additionally, there is one other area that can provide the American 
taxpayer with the best return on investment for the broad range of 
threats we will face in the coming years--information technology. 
Information systems can provide substantial security benefits for the 
broad range of threats--from weapons of mass destruction to suicide 
bombers in shopping malls.

                            NUCLEAR WEAPONS

    Since the United States lost its monopoly on nuclear weapons in 
1949, no other weapon has emerged that equals severity of the nuclear 
threat. One Hiroshima-sized bomb in an American city would forever 
change the course of our history. A second nuclear weapon in a second 
city would threaten the foundations of our political, economic, and 
social structures. A nuclear armed al Qaeda would be an existential 
threat to the United States of America. This is neither hyperbole nor 
fear mongering. It is simply a fact.
    There are no means to mitigate the effects of a nuclear detonation. 
Once the Soviets improved the accuracy of their missiles, we learned 
that even a super-hardened facility such as Cheyenne Mountain was 
vulnerable. It is physically and economically impossible to harden 
America against a nuclear attack. Likewise, there is no effective 
response after an attack. Therefore, the only effective strategy is to 
prevent such an attack.
    The good news in this case is that there is a relatively simple 
solution to preventing such an attack: do not let al Qaeda or another 
terrorist organization get their hands on weapons grade material. I am 
confident that no terrorist organization today, or at any time in the 
next decade will have the capability to enrich uranium to weapons grade 
levels or produce plutonium. The problem however, is that it only 
requires 35 pounds of highly-enriched uranium (HEU) or 9 pounds of 
plutonium to produce a bomb. In other words, a large briefcase could 
contain enough material to build a nuclear weapon.
    Where would you find such material? It is not as difficult as you 
may think. There is enough HEU sitting in research reactors to build 
hundreds of Hiroshima-sized bombs. There are more than 100 such 
reactors, in 40 countries, that use HEU as their fuel. The fuel in 
these research reactors is generally not highly radioactive. Unlike the 
fuel rods in a nuclear power plant, these fuel elements would not 
require massive shielding to transport. Several research reactor fuel 
elements could be safely carried in an ordinary suitcase. A 1977 
unclassified report from the Argonne National Laboratory stated that 
the processing required to convert these fuel elements into weapons 
grade material could be accomplished with commercial off-the-shelf 
equipment. Details on the chemical processes required is also available 
in open literature.
    (For more details on this issue see: Securing the Bomb: An Agenda 
for Action, Matthew Bubb and Anthony Wier, www.nti.org/cnwm)
    In addition to the material in research reactors, there are 
hundreds of tons of weapons grade material inadequately protected in 
the former Soviet Union. Considerable money has been appropriated and 
some success has been achieved, but securing 99 percent of this 
material means that sufficient material would be available to 
terrorists to build scores of nuclear weapons. Additionally, we now 
have even more weapons-grade material to worry about, thanks to Dr. 
Khan in Pakistan.

                   DOMESTIC NUCLEAR DETECTION OFFICE

    The newly created Domestic Nuclear Detection Office is certainly a 
worthwhile tactical effort, but not the strategic program we require. 
The two greatest shortfalls are clearly identified in the title of the 
new office: domestic and detection. While most details on the roles and 
responsibilities of this office have yet to be determined, the word 
domestic leads me to believe its focus will be inside US borders. Most 
of the nuclear material that we must contain is outside US borders. 
Additionally, detecting nuclear material inside our borders is the last 
step in a long process, and what I would describe as a desperate effort 
with low probability of success.
    America's goal must be to contain the proliferation of nuclear 
material and to prevent it from ever reaching our shores. That is where 
we should focus our spending. Nunn-Lugar type programs will provide 
America with the best return on investment for securing our homeland. 
Without question, America's number one spending priority for FY 06 and 
beyond should be exactly what both Presidential candidates said at the 
end of their first televised debate on September 30, 2004--preventing 
the terrorists from getting their hands on weapons-grade nuclear 
materials.

                           BIOLOGICAL WEAPONS

    Protecting America against nuclear terrorism is a daunting 
challenge, but the action required is not complicated--we only need to 
prevent the terrorists from obtaining weapons-grade nuclear material. 
Unfortunately, protecting America against bioterrorism is far more 
complex and a far greater challenge. Equally troubling is the fact that 
the revolution in biotechnology means that the likelihood of a 
sophisticated biological attack during the next decade is far greater 
than a nuclear attack.
    Going back to the strategy of containment, we must understand that 
it is impossible to prevent bioattacks. This was demonstrated a few 
years ago with a government program called Bacchus. A small team of 
scientists with no experience in the production of bioweapons or access 
to classified information on the process demonstrated how easy it is to 
make them using open sources and equipment bought over the Internet. 
They showed that the funding required to weaponize pathogens is less 
than the price of a luxury car. The seed stock for bioweapons--such as 
bacillus anthracis (anthrax), yersinia pestis (plague), and viral 
hemorrhagic fevers (Ebola and Marburg)--exist in laboratories around 
the globe. With the exception of variola virus (smallpox), all of the 
40 pathogens tested in various bioweapons programs exist in nature.
    The biological weapons genie is out the bottle. There is no 
legislation you can enact to prevent terrorist from obtaining and 
weaponizing these pathogens. It is only a matter of time until a 
significant bioterrorism event occurs. Therefore, the second priority 
for spending homeland security funds must be for the mitigation and 
response to a bioattack.
    I have spent more than a decade studying the bioterror threat, and 
I must admit it is at times mind-boggling. I am fortunate to have 
worked with many of America's top experts in the field of biodefense. 
For specific details on the programs I recommend, I refer you to these 
experts. My comments are from the perspective of a national security 
strategist. From this perspective, I can tell you that a national 
public health system in the 21st century will be as important to 
national security as the Department of Defense was in the 20th century. 
And when I say public health, I also include the issue of food and 
water security. In fact, a bioattack on our food supply is one of the 
most likely scenarios.
    Preparing America for the 21st century biothreat is far more 
complex than moving dollars around on a line-item budget. We must think 
strategically. The ``all-hazards'' approach that is endorsed by the 
Department of Homeland Security is a sound policy for most threats--
man-made and natural. It does not, however, work for an attack with a 
contagious pathogen.

                              ORGANIZATION

    If one believes that a bioattack is likely at some point in the 
future, one must be appalled with how America is currently organized to 
defend itself. I often use the following analogy to describe this 
egregious situation.
    ``Many people have submitted plans to transform the Department of 
Defense for the 21st century. Here is my plan. Instead of having it 
centrally organized, I suggest that we do away with the Pentagon and 
give each county, one tank, one fighter plane, and one infantry 
platoon. Each state will be provided with a few Navy ships. There will 
be no standards for credentialing the officers or NCOs. Some will be 
political appointees. Funding will come from various sources, and money 
that is sent from Washington can be easily moved to other programs 
outside of defense.''
    Sound like a good idea? Well, that is a reasonable description of 
our current public health system in this country. In fact, it is not a 
system at all. In some states, like Maryland, the county public health 
offices all are under the centralized control of the state public 
health officer. In other states, such as New Jersey and Massachusetts, 
city and county public health offices are decentralized--marching to 
their own drummers. In South Carolina, there is no state official whose 
primary responsibility is public health. There are no nationally 
recognized standards for credentialing of state and local public health 
officers, and the funding of these offices comes from a hodgepodge of 
uncoordinated sources. Furthermore, it has not been uncommon for 
Federal bioterrorism funds to be to diverted to programs that have no 
connection to bioresponse efforts.
    The bottom line is that America does not have a coordinated public 
health system. I cannot in good faith recommend that you increase 
funding to state and local public health offices for biodefense until 
there is a national plan and a national system. Continuing to pour 
money into a non-functioning system will not improve our security.
    For more details on the state of our public health community see, 
Drafted to Fight Terror: U.S. Public Health on the Front Lines of 
Biological Defense by Dr. Elin A. Gursky, 2004. (http://
www.homelandsecurity.org/bulletin/drafted--gursky.pdf)
    I am not criticizing the half million people who work in state and 
local public health offices. Most are highly dedicated, overworked, and 
underappreciated. The problem is organization. As General Eisenhower 
said, ``The right organization will not guarantee success but the wrong 
organization will guarantee failure.'' Today, we are not properly 
organized to defend this nation against a biological attack. There is 
no biodefense leader or organization in America. That should keep you 
awake at night.
    Prior to the 1960s, environmental issues were primarily seen as 
state and local responsibilities. We have since learned that the only 
effective way to approach the issue is with a national strategy. The 
same is now true for biodefense. As was demonstrated in the Dark Winter 
exercise in June 2001, and most recently in the Atlantic Storm exercise 
in January 2005, contagious pathogens do not recognized borders--
neither state nor national. (see: http://www.upmc-biosecurity.org/)
    America requires a national system for biodefense. Someone must be 
in charge. This recommendation may not be well received from some state 
and local public health officers. They do not want Washington telling 
them what to do. I do not blame them; I understand their concerns. Much 
of what state and local public health offices do on a daily basis is 
unique to their locations. But during a crisis, we must have a national 
response capability.
    Building such a national system will require the long-term 
commitment of significant funds, although it would likely be just a 
fraction of what is spent each year on National Missile Defense. I have 
never understood why we are spending more on defense against a delivery 
system than we do on defense against the actual weapons. A nuclear or 
biological weapon can be delivered in a variety of ways, and in my 
opinion, a missile is the least likely. If a nuclear or biological 
weapon were to be used against Washington DC, the most likely delivery 
system will be a small truck, a car, a briefcase, or the US Postal 
Service, as we witnessed in October 2001--not an intercontinental 
ballistic missile that would provide us with a return address.
    Furthermore, some of the changes needed will not require enormous 
amounts of taxpayers' money. As one example, the State of Texas has 
more than 40,000 nurses who no longer work in health care. Creating a 
reserve corps of health care workers would required only a few weekends 
a year for training, but could deliver enormous surge capability during 
a crisis. It would provide the American taxpayer with a significant 
return on investment. The reserve component of the Department of 
Defense played a major role in winning the cold war and it continues to 
play an important role today. Why not a homeland security reserve 
corps? Not every solution requires a billion dollar price tag.

                         SITUATIONAL AWARENESS

    One of my greatest frustrations is the lack of progress in 
developing and fielding a system to provide situational awareness 
during a bio crisis, either man-made or naturally occurring. While the 
technology exists to create such a system, one has not been deployed. 
America needs a system that would provide public health offices, 
medical staffs, and local, state and Federal officials with near real-
time information on the spread of the disease and the resources 
available to respond. This one system would be a major step forward in 
our mitigation efforts. Without such a system, there is little or no 
hope of an adequate response.

                        RESEARCH AND DEVELOPMENT

    When I mentioned bioweapons such as smallpox, anthrax, and plague, 
you need to understand that these are yesterday's weapons. The 
bioweapons that keep me awake at night are the pathogens we will face 
in the future. Unfortunately, this future could be 2005. A genetically 
engineered pathogen that is contagious, lethal and resistant to our 
vaccines and treatments would be an existential threat to America. It 
is a very real possibility, and it is why I say spending priorities 
must focus on the biological threat.
    I am not an expert in the field of research and development 
programs for biodefense. However, I am a national security strategist, 
and I know that funding research and development for new vaccines and 
treatments is as important as funding new weapons systems for 
Department of Defense. Our technological prowess is our asymmetric 
advantage over the terrorists. It is an advantage we must exploit. For 
details, I recommend you seek advice from the University of 
Pittsburgh's Center for Biosecurity, headed by Dr. Tara O'Toole. The 
Center can provide you and your staff with detailed information on key 
biodefense research and development programs.

                             AGRO-TERRORISM

    Just prior to leaving office, the Secretary of Health and Human 
Services, Tommy Thompson said he was surprised that the terrorists had 
not yet attacked our food supply. I understand his concern. A 
biological attack on America's food supply is in many respects easier 
to conduct than a bioattack on people, as demonstrated in the Crimson 
Sky and Crimson Winter exercises. Just ask Senator Pat Roberts (R-KS). 
He played the role of the President in Crimson Sky, and had to order 
the killing of 50 million cloven hoofed animals to get the foot and 
mouth disease (FMD) epidemic under control.
    Mr. Chairman, your state, Iowa, is the prime target for agro-
terror, one of the most likely biothreats. The animal most susceptible 
to FMD is the hog. FMD will spread through a feedlot like a prairie 
fire through dry grassland. Iowa has 5.3 hogs for every human being--
the most dense concentration of hogs in the US. FMD will not harm 
humans, but it would be an economic and environmental disaster for not 
only your state, but the entire nation. Just think, what would you do 
with 50 million carcasses?
    Additional funding for laboratory facilities, an information 
network to link these labs and more training exercises are the best 
means to improve mitigation and response capabilities for agro-
terrorism.

                        GOALS AND DUAL-BENEFITS

    The short-term goal for biodefense should be on information 
technology that will provide improvements in mitigation and response 
capabilities, primarily, in the area of situational awareness. The mid-
term goal (FY 08-11) should be the creation of a national system that 
can detect, respond to, and mitigate catastrophic health crises, either 
man-made or naturally occurring. The long-term goal should be focused 
on research and development programs that will best use our 
technological advantage to create revolutionary capabilities such as 
``bug to drug in 24 hours'' (as recommended by the 2002 Defense Science 
Board study) and something called preclinical detection.
    Preclinical detection can move the advantage from the attacker to 
the defender in both man-made and naturally occurring diseases. For 
instance, if everyone in this room were exposed to variola virus today 
during this hearing, we would not begin to show symptoms for at least 7 
days--some people would take as long as seventeen days to become ill. 
In other words, we would all be ``walking time-bombs''. Each of us 
would unknowingly be carrying a contagious and lethal disease. No 
currently available test could detect this disease in our bodies. Only 
when we became symptomatic, and began to experience high fever and 
rash, would today's laboratory tests diagnose smallpox. For us, it 
would be too late. There is no treatment available once the rash 
begins. Thirty percent of us would die, some would become blind, all 
would suffer extraordinary pain and carry the scars of smallpox 
pustules for life.
    With preclinical detection, the variola virus could be detected 
soon after it entered our bodies. The smallpox vaccine is effective if 
given within 4 days of exposure. Likewise, early antibiotic treatment 
against anthrax and plague would make the difference between a bio-
incident and a bio-catastrophe. Preclinical detection would not end the 
biothreat, but it would significantly contain the consequences. It 
could, over time, reduce the effects of such attacks to a degree that 
it would serve as a deterrent.
    The ability to detect disease before the onset of symptoms should 
be one of your top funding priorities. This capability would also 
provide an incredible dual-benefit to the health of all Americans. For 
any disease, man-made or naturally occurring, early detection is 
critically important.
    One great advantage of spending on biodefense is this dual-benefit. 
When you buy a new nuclear powered aircraft carrier for national 
security, you get a powerful weapons system to defend America against 
its enemies, but in the end, it is just a weapons system. If you 
properly fund a biodefense system you will reduce the vulnerability of 
America to a bioattack or a naturally occurring epidemic, and at the 
same time, significantly improve health care and food security--an 
extraordinary return on investment for the American taxpayer.
    The US Congress has the power to reduce America's vulnerability to 
a bioattack. I hope and pray you do so before we experience a large 
attack, not after.

                              INFORMATION

    Information is an area in which we have the asymmetric advantage 
over the terrorists. We must use it wisely, and in a manner consistent 
with the value we place on privacy and civil liberties. We must 
understand that information is the weapon that terrorists fear most. 
Much work has been accomplished by think tanks and other not-for-
profits on how we can use information technology without sacrificing 
our privacy. The Potomac Institute's work on the Project Guardian is 
one to be commended. They have designed a system that allows our 
incredible technology to outwit the enemy while at the same time 
involving all three branches of government to provide the oversight 
necessary to protect our privacy. (http://www.potomacinstitute.org/
research/projectguardian/pgintro.htm)

              GUARDING OUR PORTS WITH INFORMATION SYSTEMS

    To best protect our ports, priority should be placed on information 
systems, not on more gates, guns, guards, and gamma detectors. In the 
Democratic response to the President's 2004 State of the Union message, 
there was a call to ``inspect all of the containers that enter this 
country.'' It takes 4 hours to inspect a container, and even then there 
is a possibility weapons of mass destruction could go undetected. 
Moreover, it is too late once a nuclear weapon arrives at a US port. 
Ports themselves are primary terrorist targets. A nuclear detonation in 
one of our mega ports would have unimaginable economic and political 
consequences. Obviously, then, hands-on inspection of each of the six 
million containers that enter the country yearly is neither possible 
nor desired.
    So what would be fiscally responsible and increase security? 
Inspect containers with information tools before they enter our ports. 
Today's information systems must be harnessed to track container 
contents all the way back to purchase orders. It can be accomplished in 
a manner that neither slows the pace of commerce nor burdens our 
transportation system with unreasonable costs. Such inspection systems 
and methodology would provide both deterrence and prevention.
    So when you are faced with spending priorities on cargo security, 
focus on systems that reach beyond our borders, not within them. 
Focusing your spending programs on systems within the boundaries of our 
ports, would be the equivalent of putting radiation detectors outside 
of this building. When the nuke gets that close, it is too late.
    Shortly after 9-11 many began talking of ``pushing out our 
borders.'' This, however, is not best accomplished with a manpower 
intensive effort, but with an electronic border in cyber space. During 
the cold war we called this competitive strategies. We must do the same 
today--funding those initiatives where we can best exploit our 
strengths against their weaknesses.

                   NATIONAL LEVEL INFORMATION SHARING

    The sharing of information is another area that requires attention 
and funding support. The technologies exist today that would allow 
local, state and Federal law enforcement organizations, plus 
intelligence agencies, pass information to a common data hub for 
national level compilation and analysis. The hub will be the National 
Counter Terrorism Center, which also needs the capability to provide 
processed intelligence and information to local, state and Federal law 
enforcement agencies. Obviously, an oversight function is an essential 
element in a data-sharing system. (See Project Guardian at the Potomac 
Institute for the details on the oversight function.) Information 
technologies exist today that would have caught at least 11 of the 19 
hijackers before they boarded their airplanes on 9-11.The deployment of 
such a system should be one of your highest priorities.

                              INTELLIGENCE

    Intelligence is a subset of information. Homeland security 
intelligence analysis requires the recruitment, training and employment 
of individuals with expertise in the high priority threat areas, such 
as nuclear and biological. The focus in the Department of Homeland 
Security information analysis office (as well as other intelligence 
agencies) has been current intelligence (the news cycle): what is hot 
today; what threat needs to be briefed to the Secretary; and what 
information is coming in from the Joint Terrorism Task Forces. The 
Department of Homeland Security objective has been to hire top-notch, 
recent graduates from America's universities who can function 
successfully in that current intelligence environment. We need those 
new analysts for the current intelligence mission, but to deal with the 
nuclear and biological threats we need intelligence analysts who 
understand the science as well as the political/international context.
    Analysis is supposed to drive collection, not the other way around 
(a major contributor to our intelligence failures.) We need to build 
expertise on nuclear and biological threats in the information analysis 
office. This office should focus on the strategic threat, provide 
collection requirements to HUMINT, SIGINT and other collectors, and 
provide threat analysis to the Department of Homeland Security and 
other national security policymakers.

                         THE IDENTITY QUESTION

    There is one last area of information technology I must mention, 
one that is quite controversial: personal identification. Fifteen 
European nations already have a form of nationally standardized 
identification. The United Kingdom, after much debate, has recently 
decided to begin such a program.
    Some would say that we already have one in the United States, our 
state-issued driver's license. We all use it every time we transit an 
airport. The only problem is, it does not provide us an effective anti-
terrorism system. We have all heard the stories about the 9-11 
hijackers--that seven had Virginia driver's licenses, and none lived in 
Virginia. There are some states with laws that authorize the issuance 
of driver's licenses to people who are known to be illegal aliens. We 
all know that any reasonably intelligent college student understands 
how to use the Internet to get a photo ID card that ``proves'' he or 
she is 21.
    We are in the process of spending billions of dollars on the US-
Visit program that was designed to deter or capture terrorists entering 
our country. If and when the system becomes highly effective, the 
terrorists will stop using our ports of entry and begin crossing our 
7,000 miles of unguarded borders and 95,000 miles of shoreline. 
Remember, they are a thinking enemy. When we close and lock one door, 
they will move to another. We can spend ourselves into bankruptcy by 
staying just one step behind them.
    Today, many Americans are not ready for a national identity system. 
I am one of them. However, if we experience several major attacks, 
larger and more deadly than 9-11, the American people may change their 
attitudes on this subject. A poll taken shortly after 9-11 stated that 
70 percent of Americans favored a national identity system
    I recommend that you give high priority to the study of this issue 
through the think-tank you created--the Homeland Security Institute. 
You should direct the Institute to lead the effort and examine four key 
issues:
    1. Does an organization and system exist that can ensure 
identification credentials are properly issued?
    2. Does the technology exist to create a means of identification 
that cannot be altered or counterfeited?
    3. Can we build a system that is affordable?
    4. Does the American public feel secure that such a system would 
protect their privacy?
    Today, the answers are: no, yes, yes, no. The purpose of the study 
would be to determine if it is technologically and politically feasible 
to get four ``yeses''. Then, and only then, would I support such a 
system.
    Perhaps, we should include a fifth question: Would such a system 
make us more secure? I believe the answer is yes. There is no way to 
effectively control 7,000 miles of borders and 95,000 miles of 
shoreline. If we spend billions making it virtually impossible for 
known terrorists to enter the United States through our sea, air and 
land ports, they will begin crossing our borders in the same way the 
economic refuges and migrant workers from Mexico and Central America 
have done for decades. And even though some Members of Congress want to 
build impregnable borders with physical and electronic barriers, you 
must understand such an initiative would be no more effective 
protecting our homeland today than the Maginot Line was at protecting 
France in 1940. It would waste valuable resources and leave us no more 
secure.
    One thing I know for sure--when I get on an airplane with my 
family, I would like to know that the person setting next to my 
daughter is not on a terrorist watch list. The system we have today 
does not provide me that security. After the next major attack, the 
question of identity will come up again. And when it does, it would be 
nice to think that our elected leaders had shown the strategic vision 
to look into the future, and to have some answers ready when the 
American public asks the question, ``Why don't we have a nationally 
standardized identity system?''

                               CONCLUSION

    America can survive a car bomb or two. America can survive an 
attack on a train, a shopping mall, chemical plant, or even another 
attack with an airplane. On the other hand, attacks with nuclear and 
biological weapons have the potential to radically change our 
political, social and economic foundations. They are in a class by 
themselves and must receive your top priority.
    Unfortunately, America is not well organized for this challenge, 
particularly, the biological threat. Who is in charge of protecting 
America from biological attacks? There is no single person or single 
agency. The Departments of Homeland Security, Agriculture, Health and 
Human Services, Defense, the Environmental Protection Agency, the 
intelligence community, 50 states, 8 territories, and more than 3,000 
counties are involved in the effort. We are spending billions without a 
national organization or effective plan. Not a recipe for success.
    I know you have many pressures to provide homeland security funds 
for a wide variety of threats. I understand that every fire department, 
police department, sheriffs department, emergency management agency, 
and hospital in each of your home districts wants priority for homeland 
security funding. The demand is unlimited, but we must keep the other 
threats in perspective. Since 2001, no Americans have died in our 
homeland from terrorism. During the past 3 years: 15,000 have died from 
food poisoning, 120,000 have died from automobile accidents, nearly 
300,000 have died from medical mistakes, 1,500,000 have died from 
cancer, and more than 2,000,000 have died from heart disease.
    A nuclear weapon in an American city or an attack with a 
sophisticated biological weapon could exceed all of these numbers, 
combined. Either one of these attacks could easily exceed the number of 
Americans killed in all wars during the past 230 years.
    Therefore, your priorities for homeland security funds must focus 
on preventing terrorists from obtaining weapons-grade nuclear material, 
building a national system to improve mitigation and response for 
bioattacks, and exploiting our asymmetric advantage in information 
systems. These are the priorities that will provide the American 
taxpayer with the best return on investment--a homeland that is secure 
from catastrophic attack and a nation that is making best use of its 
asymmetric advantage over the terrorists.

    Chairman Nussle. Colonel, thank you. Next on our witness 
list is Dr. Michael O'Hanlon, a senior fellow from the 
Brookings Institution. Welcome, and we are pleased to receive 
your testimony.

    STATEMENT OF MICHAEL O'HANLON, SENIOR FELLOW, BROOKINGS 
                           INSTITUTE

    Mr. O'Hanlon. Thank you, Mr. Chairman, Mr. Spratt, everyone 
else. It is a pleasure to be here and a privilege to be on this 
panel. I want to offer a slightly different perspective on a 
couple of points, but wind up agreeing with the thrust of what 
I think all of us have been saying, that while we do need to be 
selective about how we spend more money on homeland security 
and national security, we are not going to be able to cut this 
area of the budget. It is going to have to continue to be an 
area of growth.
    So I am going to wind up agreeing, but also in the spirit 
of both of your opening remarks I want to talk about the need 
for economies, the need for a selective eye to some of the 
programs that we now have still in the budget, because I think, 
especially at a time when the budgets are going to keep growing 
so much, it is incumbent on all of us who work in the field to 
try to find programs that are less priority, somewhat less 
important, at least have a debate about some of them before we 
quickly rubber stamp budgets that may need some more scrutiny.
    So I will give a somewhat different perspective on a couple 
of DOD programs than Frank, recognizing that he has advanced 
important arguments as well. But I just want to introduce the 
spirit of scrutiny on some of these programs.
    I do think we have to consider a way, especially within 
DOD's budget, to find a little bit of potential for savings to 
allow in fact for some needs that have not yet been addressed, 
specifically the need for more Army and Marine troops, to be 
pursued and for these additions to be made to our forces, even 
as we try to keep the top line under some control.
    Let me make a couple of points in regard to modernization 
accounts. I am going to give a couple of thoughts on where I 
believe we could actually save more money than the 
administration itself has proposed, leaving aside the F-22 
debate, where I actually think the administration's proposal is 
smart, because it provides enough air power and air superiority 
fighters for a possible China threat.
    But it doesn't envision the need for that airplane against 
the possible North Korea or Syria or similar lower technology 
threat. I think that thinking is just about right. We used to 
size the F-22 force to the two-war concept, the two-war 
framework. I don't think we need enough F-22s to fight two wars 
at once. We need F-22s for a possible war in China, in 
particular because China is the only potential enemy that has 
the possibility of large-scale modernization of its air force 
in the coming 10 to 20 years. So I agree with the 
administration's approach there.
    But let me now turn to a couple of areas that have not been 
addressed in the administration's budget, where I think there 
is a potential for savings. But I am going to come back to the 
point that again if you do all of these things you will still 
need to preserve the administration's overall top line 
projections in order to fund the increase needed in ground 
troops that I think we face in a compelling way, as well as 
some of the needs that Randy Larsen has just mentioned in 
homeland security. Even if you are very selective about which 
programs to enhance and create, there still are a number that 
need more funds.
    We probably have to increase homeland security funding in 
the order of $5 billion a year, in my judgment and that of the 
Brookings study that I will be making reference to that was 
done a couple of years ago.
    But going to these DOD programs, let me take the V-22, V-22 
tilt rotor aircraft, the Osprey. It is a fascinating 
technology, it does have promise. It would be much faster, much 
longer range than even the most modern helicopters that we have 
in the fleet today. The Marine Corps clearly has fought very 
hard for this airplane for 15 years, even after Mr. Cheney 
tried to cancel it when he was Secretary of Defense. The 
Congress and the Clinton administration and the Marine Corps 
brought it back.
    I think Cheney was right. I would have liked to see it 
canceled at that time. But given where we are today, we spent 
15 years developing this technology, it is important to pursue 
it. Let us buy enough to see how well it works for special 
purposes where the speed and range are the most critical. Be it 
long-range commando operations, long-range search and rescue, 
let us use it as a prototype. Let us buy 100, but let us also 
acknowledge that a lot of studies that have been done about V-
22 do not suggest it would be all that much better in large-
scale amphibious assault than modern helicopters, which could 
be bought more quickly, give our Marines more dependable 
technology in the near term instead of hoping we can make the 
V-22 work.
    So that is the sort of philosophy I believe one could 
adopt. I don't want to get into a lot of detail on a program-
by-program basis, but if you look at each of these major 
weapons systems that we still have in our account, there often 
is an argument for a somewhat more selective or more limited 
approach to buying a modest number or delaying the technology 
or viewing it as a prototype technology that may someday be 
more useful but right now is in an early stage of development .
    The Joint Strike Fighter program. We are going to provide 
2,500 manned airplanes in an era when unmanned airplanes are 
becoming more and more effective and when our current 
generation airplanes are not seriously at risk from most of the 
enemies that we are facing on the battlefield today.
    Again, I agree with Frank's point. We have to worry with 
possible future foes. Some of them could be much higher in 
technology, China in particular. We don't want to close our 
eyes and pretend that F-16s will suffice forever. Of course the 
F-16s are getting old. We will have to do something with them, 
F-16s, Harriers, other kinds of aircraft in the existing stock. 
So we do need an airplane replacement strategy. But we don't 
necessarily need 2,500 manned airplanes bought over the next 20 
years, by far the most expensive program in the history of the 
Pentagon, at a time when again we have so much promise from 
other kinds of future technology and so much capability still 
existing inside of our current aircraft fleets that have been 
modernized by better munitions, better electronics, better 
sensors, and so forth.
    So I think you can go to a strategy where you refurbish or 
you rebuild or you buy additional quantities of airplanes like 
F-16s and you buy a limited number of Joint Strike Fighters. 
Perhaps you buy 1,000 Joint Strike Fighters, you get the Navy 
out of this program. They already have a pretty good airplane 
they are purchasing, the Super Hornet. I don't think they need 
also to be in the JSF.
    I think maybe the Air Force will try to use and refurbish 
existing F-16s for a longer period of time, look to the day 
when it can have unmanned combat airplanes doing more of the 
air-to-ground attack role, and don't put all of the money into 
a JSF program that is really just too big for this moment in 
our technological history. I think it is an imprudently large 
and expensive program.
    The Army's future combat system. Again, there are a lot of 
good ideas in this program. You do want to try to digitize your 
Army divisions. You do want to try to link them through 
electronics. You do want to try to take advantage of better 
propulsion technology, better armor. But the Army is still 
hoping to do one thing that I believe is just simply 
technologically infeasible for the next 10 to 15 to 20 years, 
which is to replace a 70-ton tank with something just as 
survivable weighing only 20 tons. It is just not in the cards 
at the moment. If you go out to the research labs, you talk to 
the people who know the technology, we are not going to be able 
to do this. The Army's plan is unrealistic. I think the Army's 
plan should be streamlined, focused more on sensors, more on 
networks, and be a little more patient about buying that next 
generation main combat vehicle.
    It doesn't mean we can zero out the program. We should 
still we doing basic research on a lot of the relevant 
technology, but I don't think this technology is right for 
spending nearly $5 billion a year, which is where we are headed 
in the very near term if we keep on our current trajectory.
    On nuclear weapons issues, I have a somewhat difference 
perspective than Frank. I really don't think we need new 
capability, we don't need new testing, and we don't need a 
larger arsenal. In fact, we don't even need the size that we 
are now planning to keep under the Moscow treaty. But I will 
admit--and I will start now to make my transition to my final 
concluding, overarching comment--even if you make my 
recommended change in the Department of Energy, nuclear 
capability, maybe you save half a billion dollars a year. Even 
if you make the recommended change that I am talking about in 
the Joint Strike Fighter program, since you still have to 
refurbish or replace your F-16 fleet, your Harrier fleet, your 
F-14 fleet and so forth, maybe you save $3 billion, $4 billion 
a year. Even if you go to a smaller F-22 program the way the 
administration has proposed, you maybe save $2 billion a year. 
The future combat system, instead of being a $3 billion, $4 
billion, $5 billion a year program, will probably have to be a 
1, 2 or 3 billion program. But even so, you are spending a lot 
of money.
    You add up all of these cuts, which I admit are easier to 
make in a Brookings book than in the halls of Congress or in 
the Pentagon, you still wind up maybe saving $10 billion a year 
in the modernization account to make a larger Army, which right 
now, in my judgment, is simply unconscionably small for the 
missions we have asked our brave soldiers and Marines to carry 
out. It is just not conscionable, to my mind, to send back the 
same people who won the war 2 years ago in the invasion phase, 
to send them back already and to have a policy that would 
require us to keep doing that same thing as long as the mission 
endures.
    I just think we have dropped the ball on this. I think Mr. 
Rumsfeld's arguments, with all due respect to many of his other 
good decisions, on this point are simply wrong. We have too 
small of an Army for the missions we are potentially going to 
be undertaking in the next few years, especially Iraq. I am 
actually a proponent of developing a modified gradual exit 
strategy for Iraq. But even if you do that, you have to 
recognize it is going to take time, you are not go to go down 
to zero in the foreseeable future and events could change on 
the ground.
    So even if you think we may be able to start talking about 
an exit strategy in the next year, and getting out in a large 
fraction within the next couple of years, I still think you 
need this debate about a larger Army and a larger Marine Corps. 
We are simply sending people to do too much too often. It is 
one thing to ask a Marine or a soldier to risk their life for 
their country, but to ask them to be a stranger to their own 
country and to their own families, to be here for a year and 
then to go back oversees and sustain that pace of deployment as 
far out as the eye can see, I think is a mistake.
    Likewise, I agree with a lot of the points my fellow 
panelists made about the homeland security agenda and where we 
have unmet needs and existing and enduring vulnerabilities. You 
have to be very selective about which homeland security 
vulnerabilities you address. Not all of them can be addressed 
in an economical way.
    We should worry most about catastrophic threats. I fully 
agree with Randy. But even if you take that more discriminating 
and selective approach to dealing with our international 
vulnerabilities, you still need to add at least $5 billion a 
year, above and beyond where the administration has so far 
budgeted. You also are going to need to use some incentives on 
industries like the chemical industry to protect themselves 
better than they have so far. It may not require big government 
expense, but it does require some level of government 
involvement and maybe some tax incentives or other kinds of 
things like that.
    Bottom line, the national security budget is not too big. 
It is going to have to keep getting bigger, at least on the 
trajectory we are currently on. The homeland security budget 
may need to get bigger than the administration itself has 
projected.
    In the broad scheme of national security, I also think we 
need a serious way to deal with the long-term threat of the 
next generation of al Qaeda, which means, for example, there is 
a strong case to have an educational reform initiative inside 
of the foreign assistance account that would offer up funds for 
countries like Pakistan that might want to reform their 
educational system to try to reduce the influence of these 
madrasas and so we don't see a second generation of al Qaeda 
recruited and created at the same time we are trying to deal 
with the first generation.
    I put all these things together just to underscore that 
even if you are a bit of a budget hawk on the defense 
modernization accounts, even if you look hard for savings 
inside the DOD budget, when you take a broad view of your 
overall national security requirements, it is very hard to see 
how we can make do with less.
    I think that is an important point that we need to--I think 
we have all made in one way or another, and that I would 
subscribe to myself.
    Thank you, Mr. Chairman.
    [The prepared statement of Michael O'Hanlon follows:]

  Prepared Statement of Michael O'Hanlon, the Brookings Institution\1\

    What military will the United States need in the future, and how 
much will it cost? In an era of apocalyptic terror and other threats, 
there is little doubt that the country must do what it takes to protect 
itself. That said, at a time of $400 billion Federal budget deficits, 
the country must also ask how to spend defense dollars wisely and 
efficiently.
    The Bush administration's planned defense budget increases of some 
$20 billion a year into the future are indeed necessary. Half of those 
increases account for inflation, roughly speaking, and the other half 
represent real growth in the defense budget. In particular, the 
administration should increase the size of its ground forces by a total 
of roughly 40,000 additional active-duty troops for the foreseeable 
future. This is necessary in order to treat soldiers and Marines fairly 
and to ensure that the extraordinarily high pace of overseas operations 
does not drive people out of the military, thereby putting the health 
of the all-volunteer armed forces at risk.\2\
    Given fiscal pressures, at the same time that it carries out this 
temporary increase in personnel, the military must look harder than 
ever for economies and efficiencies in other parts of the budget. That 
is most notably the case with weapons modernization accounts. 
Thankfully, the promise of modern high technology, and especially 
electronics and computers, can allow the United States to continue to 
innovate and improve its armed forces somewhat more economically than 
in the past. Once the Iraq mission ends or declines significantly in 
scope, the ground forces can be scaled back to their present size--or 
perhaps even slightly less--and it may become possible to hold real 
defense spending steady for a number of years. But not yet.

                         THE STRATEGIC BACKDROP

    For the foreseeable future, U.S. armed forces will likely remain 
engaged in Iraq and Afghanistan. They will also need to remain involved 
in deterrence missions in the Western Pacific, most notably in regard 
to Korea and the Taiwan Strait. The United States will wish to remain 
strongly engaged in European security as well, less because of threats 
to that region than because it is the continent where most of America's 
main security partners are located. The strength, capabilities, and 
cohesion of the NATO alliance therefore have important implications for 
the United States globally.
    But the United States does not know which if any major new wars it 
may have to wage in the coming years. It does not know if relations 
with the People's Republic of China will continue to improve or again 
worsen, even risking the possibility of war over Taiwan. It does not 
know if the current nuclear crisis with North Korea will be resolved 
peacefully. It cannot predict whether any other countries will allow 
their territories to be used by terrorist organizations bent on 
attacking the United States. It must contend with the remarkable degree 
of animosity toward the United States among most Muslim countries, 
particularly in the Arab world, which has worsened considerably in 
recent years (though it predated President Bush's administration). 
Additional military scenarios could be of immense importance to America 
as well. A nuclear-armed Pakistan could wind up in either civil 
conflict or war against nuclear-armed India. Iran could threaten 
Persian Gulf shipping or threaten Israel with the nuclear arsenal it 
seems bent on pursuing. Saudi Arabia's stability could be called into 
question.
    Given this uncertainty, defense planning must be based on 
assumptions. The important thing is to postulate circumstances that are 
realistic but not imprudently optimistic. Taking this approach, even 
though the world and the future will remain uncertain, the range of 
plausible national security challenges and military responses can be 
bounded somewhat.
    It is easy for defense planners to dwell on problems. But there is 
a great deal that is good in today's global security environment as 
well. The United States leads a remarkable and historic alliance 
system. Never before has a great power elicited such support from the 
world's other powers and provoked so little direct opposition. This 
conclusion is in some jeopardy after the Bush administration's 
internationally unpopular decision to go to war against Saddam Hussein 
in 2003, but on balance remains correct.
    Even powers outside the western alliance system-Russia, China, 
India, Indonesia-generally choose to cooperate with the United States 
and its allies on many security issues. They are likely to continue 
doing so, provided that American military power remains credible, and 
that the U.S.-led alliance system continues to be founded (however 
imperfectly) on common values on which most countries agree. This 
conclusion can be jeopardized-by a United States that seems too 
unilateralist and too inclined to use force on multiple occasions, or 
by allies that seem to prefer free riding to doing their fair share in 
international security. But what is most impressive about the western 
alliance system is how strong and durable it has become. And what is 
most reassuring about the challenge faced by the American defense 
planner is how little worry, with the important exception of possible 
conflict against China in the Taiwan Strait, need be given to possible 
wars against any other major powers.
    Some fear American military strength, and even many Americans think 
U.S. military spending at least to be excessive. But as Barry Posen 
convincingly argues, the United States is far from omnipotent. Past 
historical eras such as those during which the European colonial powers 
could easily conquer distant lands are gone.\3\ In today's world, the 
United States can be understood in Posen's phrase to possess impressive 
command of the commons-air, oceans, and space-but to have a great deal 
of trouble contending with many conflicts on land, particularly against 
irregular resistance fighters.\4\ The Iraq experience has reinforced 
this reality for those who may have begun to think of the Vietnam (and 
Lebanon and Somalia) experiences as aberrations or as ancient history. 
Moreover, America's high sensitivity to casualties limits its 
inclination to use military force. And its highly open and democratic 
political system suggests that it need not be feared to the extent many 
do.\5\ Even on Iraq policy, while the legality of the invasion was 
admittedly shaky, the Bush administration acted only when it could 
point to more than a dozen U.N. Security Council resolutions that Iraq 
had violated. So American power is, even in these politically 
contentious times, generally a force for good in the world.
    Maintaining global military capabilities, holding together this 
alliance network, and preserving stability in the global system offer 
great benefits to the United States and the world, but they also cost 
money. The United States presently accounts for almost half of all 
global military spending-to be specific, 41 percent in 2003 by the 
estimates of the Stockholm International Peace Research Institute. (Any 
specific estimate, however, is imprecise given uncertainty over true 
military spending by China and several other countries.) \6\ But 
arguments for or against the current level of American military 
spending cannot be based on such a figure; they must more specifically 
consider the missions asked of the American armed forces.

                          U.S. MILITARY BASICS

    U.S. troops and most types of military force structure have 
declined about one-third since the later cold war years. They now 
number 1.4 million active duty troops, plus about one million 
reservists, of whom some 150,000 to 200,000 have been activated at any 
time in recent years (see attached table).\7\ That active-duty force is 
not particularly big--just over half the size of China's military, and 
not much larger than the armed forces of India or Russia or North 
Korea. But the United States has a larger military presence outside its 
borders than does any other country-some 400,000 troops as of early-mid 
2004. It is also far more capable of projecting additional force beyond 
its own territory than any other country. And on a per person basis, 
the quality of its armed forces are rivaled by few and equaled by none.
    Republicans and Democrats generally agree about the broad contours 
of American military planning and sizing. Secretary Donald Rumsfeld's 
2001 Quadrennial Defense Review reaffirmed the active-duty troop levels 
of about 1.4 million maintained during the Clinton administration and 
also retained most of the Clinton agenda for weapons modernization 
while adding new initiatives in areas such as missile defense, advanced 
satellites, and unmanned vehicles. After September 11, 2001, the Bush 
administration sought and received a great deal more budget authority 
than President Clinton's defense plan called for. But a Democratic 
president would almost certainly also have boosted defense spending 
after the tragic attacks, since the existing Pentagon plan was 
underfunded. Moreover, no major Democratic candidate for president in 
2004 made a major issue out of the size of the U.S. defense budget.
    That the Bush administration retained most Clinton era ideas and 
programs is relatively unsurprising. Although decisions to buy specific 
weapons can be debated, the military needs many new or refurbished 
planes, ships, and ground vehicles since much of the weaponry bought 
largely during the Reagan buildup is wearing out. America's 
technological edge in combat may not require every weapon now in 
development or production, but the advantages to maintaining a 
resounding superiority in weaponry are evidenced in the rapid victories 
and relatively low casualties (on all sides, America's and its 
enemies') in Bosnia, Kosovo, Afghanistan, and Iraq. Early talk of 
cutting back on ground forces during the early Rumsfeld tenure has 
stopped-at least for the foreseeable future-given the challenges posed 
by the Iraq stabilization mission.
    The Two-War Framework. Since the cold war ended, U.S. armed forces 
have been designed to be able to fight and win two full-scale wars at 
once. The Bush administration modified the requirement in 2001 so that 
only one of the victories needed to be immediate and overwhelming. More 
broadly, the new force planning framework was dubbed ``1-4-2-1.'' \8\ 
That meant that American military capabilities would be designed to 
defend the homeland, maintain presence and deterrence in four theaters, 
fight up to two wars at a time, and be capable of winning one of them 
overwhelmingly including overthrowing the enemy government and 
occupying its territory.\9\
    There is a good reason that, even as specifics are debated and 
modified, a two-war capability of some sort has been maintained by the 
United States. It permits the country to fight one war without letting 
down its guard everywhere else, which would undercut deterrence and 
perhaps increase the likelihood of a second conflict.
    Given the strains on the U.S. military in Iraq and to a lesser 
extent Afghanistan, this purported two-war capability is somewhat shaky 
today. The United States would have a hard time conducting another 
major operation abroad now and for the foreseeable future. But in 
extreme circumstances, it would still have options. Most Air Force and 
Navy assets are available for possible crises. And in a true emergency, 
the Army and Marines would have several active-duty divisions available 
for deployment (as well as several more in the Army National Guard). 
These units would not be rested; they would have considerable amounts 
of equipment inoperable and in the maintenance depots; some of their 
ammunition stocks could be low. But they would still probably operate 
at anywhere from 50 to 80 percent of full effectiveness, constituting a 
substantial combat capability.
    If any such second major war occurred, there would be little or no 
rotation base from which to sustain and ultimately substitute for 
forces sent to fight it. Any large war which actually required such a 
deployment, while the Iraq operation remained substantial in scale, 
would probably also immediately necessitate full activation of the 
National Guard--and perhaps even a consideration of extreme steps such 
as limited military conscription. But at present, this extreme option 
need not be considered, and the quality of America's overall deterrence 
posture need not be seriously doubted.
    So the two-war logic is still sound, and U.S. forces are still 
capable of backing it up with the necessary capabilities. Still, with 
the Iraq invasion now over, 1-4-2-1 no longer seems quite the right 
framework for American force planning. In one sense, of course, it is 
still applicable, in that the last ``1'' is precisely the kind of 
operation that continues in Iraq today. But there is a need for greater 
flexibility in thinking about what the ``2'' might entail in the 
future. A major conflict against the PRC over Taiwan, with its likely 
naval and air predominance, would be much different than war in Korea; 
conflict against Iran focused on Persian Gulf waterways would be 
radically distinct from another land war against Iraq. There is a 
temptation to advocate, therefore, a slogan such as 1-4-1-1-1, with the 
latter three ``1s'' describing a major naval/air confrontation, another 
large land war, and a big stabilization mission like that now underway 
in Iraq. The last chapter of this book explores some of the other 
scenarios that could fall within these categories.
    Current Deployments. Prior to September 11, 2001, the United States 
military had about 250,000 uniformed personnel stationed or deployed 
overseas at any given time. Just over half were in permanent bases; the 
others on temporary assignments away from their main bases and 
families. In broad terms, just under 100,000 U.S. troops were in East 
Asia, mostly in Japan and South Korea or on ships in the western 
Pacific. Just over 100,000 were in Europe--mostly in Germany, with 
other substantial totals in the United Kingdom and Italy. Some 25,000 
were ashore or afloat in the Persian Gulf region.
    Since that time, of course, deployments have increased enormously 
in the Central Command's theater of responsibility, encompassing as it 
does Afghanistan and environs as well as Iraq. In the last 2 years, 
there have been about 200,000 personnel in the CENTCOM zone. All 
together, these deployments made for a grand total of about 400,000 
uniformed personnel overseas in one place or another (see table).\10\
    The Department of Defense is planning major changes in its overseas 
basing.\11\ Among the proposed changes are to reduce American forces in 
Korea and relocate many of those that remain south of the Han river and 
out of Seoul. In addition, the Pentagon would move large numbers of 
troops who have been garrisoned in Germany either back home to the 
United States or to smaller, less permanent bases in eastern Europe 
where they would be closer to potential combat zones.

                          THE PENTAGON BUDGET

    America's defense budget is, at first blush at least, staggeringly 
high. Specifically, in 2005 national security funding for the United 
States is $424 billion, including Department of Energy nuclear weapons-
related expenses but not counting the costs of Iraq and Afghanistan (or 
the Department of Homeland Security). For 2006, $442 billion has been 
requested.
    Depending on how one estimates the spending of countries such as 
China and Russia, U.S. defense spending almost equals that of the rest 
of the world combined, as noted above. And, even after being adjusted 
for inflation, it exceeds typical cold war levels, when the United 
States faced a great power or peer competitor with global ambitions and 
enormous capabilities deployed throughout much of Eurasia.
    But in a broader sense, judging whether U.S. defense is spending 
high or low depends on the measure. Compared with other countries, it 
is obviously enormous (see table on international comparisons). 
Relative to the size of the American economy, by contrast, it remains 
moderate in scale by modern historical standards at just under 4 
percent of GDP (less than Reagan or even Ford and Carter levels, and 
only half of typical cold war levels). And given the relatively modest 
size of the U.S. military--representing only about 8 percent of all 
military personnel in the world today--the budget is best understood as 
a means of fully and properly resourcing the country's limited number 
of men and women under arms. It does not reflect an American ambition 
to field an enormous fighting machine.
    The reasons for a very large U.S. defense budget are not hard to 
understand. The United States has security alliances or close 
partnerships with more than 70 overseas countries (featuring all of the 
other 25 members of NATO, all of the Rio Pact countries in Latin 
America, several allies in the Western Pacific, and roughly a dozen 
countries in the Persian Gulf-Mideast region). It alone among the 
world's powers takes seriously the need to project substantial amounts 
of military power quickly over great distances for sustained periods. 
Indeed, the United States possesses by my estimates more than two-
thirds of the world's collective power projection capability, and an 
even higher percentage if one focuses on high-quality units.\12\ The 
United States alone undergirds a collective security system in the 
western world that helps many countries feel secure enough that they do 
not have to engage in arms races with neighbors, launch preemptive wars 
of their own, or develop nuclear weapons.
    The era of increasing defense spending does not yet appear to be 
over. Expectations are for continued annual increases of about $20 
billion a year-roughly twice what is needed to compensate for the 
effects of inflation (or to put it differently, real budgets are 
expected to keep rising at about $10 billion a year, as shown in the 
attached table).\13\
    Indeed, in political terms, it may actually be easier to find some 
of those economies now--while the country is increasing defense budgets 
and increasing support for troops in the field--than to wait until a 
later moment of general budgetary austerity. Few could accuse any 
politician of being anti-defense if he or she is supporting $20 billion 
annual budget increases for the Department of Defense. So such 
individuals may be better placed to push for tough choices and 
economies currently than in the future.
    Many trends continue to push real defense spending upward even when 
troop strength is not growing. Historically, weapons costs have 
increased at 2 percent to 3 percent per year in real, inflation-
adjusted terms. A similar trend pertains in the operations and 
maintenance accounts. Rising health care, environmental cleanup, and 
other such activities affect the military as much as any other sector 
of the economy. For example, DOD's medical costs almost doubled in real 
terms between 1988 and 2003, to just under $30 billion.\14\ In 
addition, while military compensation is now rather good for most 
troops (by comparison with civilian jobs requiring comparable 
experience and education), it is important that it stay that way. To 
attract top-notch people, military pay increases must keep up with 
civilian pay, which can require real growth of at least 1 percent a 
year.\15\ Further increases in pay for certain specific groups may be 
appropriate, such as highly-skilled technicians with much more 
remunerative job opportunities in the private sector, or those 
reservists called up to active duty for extended periods who sacrifice 
large amounts of income as a result.\16\
    Potentially countering these broad trends are several opportunities 
to save money within the defense budget. In all probability, they will 
not save great deals of money quickly. In fact, they are best viewed 
not as means of saving money in the literal sense at all, but of 
reducing the rate of defense budget growth relative to what might 
otherwise naturally occur. But by this measure, they should be able to 
free up enough--$5 billion a year soon, perhaps two to three times as 
much by decade's end--to help fund the temporary increase in troop 
strength that seems necessary given the demands of the Iraq mission and 
the war on terror.
    Emphasizing Advanced Electronics and Computers in Defense 
Modernization. One reason the Pentagon budget is slated to grow so much 
in coming years has to do with buying weaponry. Some of the upward 
pressure arises from high-profile issues such as missile defense. But 
most comes from the main combat systems of the military services, which 
are generally wearing out. Living off the fruits of the Reagan military 
buildup, the Clinton administration spent an average of $50 billion a 
year on equipment, only about 15 percent of the defense budget in 
contrast to a historical average of about 25 percent. This 
``procurement holiday'' must end, and is ending.
    But the Pentagon's weapons-modernization plan is still excessive. 
Despite the cancellation of the Navy's lower-altitude missile defense 
program, the Army's Crusader howitzer, and the Army's Comanche 
helicopter, as well as the administration's planned cutbacks in the 
2006 budget request for weapons such as the F-22, more reductions would 
be appropriate. Although procurement budgets must continue rising, the 
rapid increases envisioned in current plans are not essential. 
Economies can almost certainly be found through expanded applications 
of modestly priced technologies, such as the precision weapons, 
unmanned vehicles, and communications systems used so effectively in 
Afghanistan and Iraq.
    A more discriminating and economy-minded modernization strategy 
would equip only part--not most or all--of the armed forces with 
extremely sophisticated and expensive weaponry. That high-end component 
would hedge against new possibilities, such as an unexpectedly rapid 
modernizing of the Chinese armed forces. The rest of the U.S. military 
establishment would be equipped primarily with relatively inexpensive 
upgrades of existing weaponry, including better sensors, munitions, 
computers, and communications systems. This approach would also 
envision, over the longer term, greater use of unmanned platforms and 
other new concepts and capabilities, while being patient about when to 
deploy them. Such an approach would not keep the procurement budget in 
the current range of $70 billion to $75 billion. But it might hold it 
to $80 billion to $90 billion a year instead of $100 billion or more 
now projected.
    Privatization and Reform. All defense planners endeavor to save 
money in the relatively low-profile parts of the Pentagon budget known 
as operations and maintenance. These accounts, which pay for a wide 
range of activities including training, overseas deployments, upkeep of 
equipment, military base operations, and health care costs--in short, 
for near-term military readiness--have been rising fast in recent 
years, and it will be hard to stop the upward trend.\17\
    Some savings are already in the works. Congress has agreed to 
authorize another round of base closures in 2005.\18\ Since the cold 
war ended, U.S. military forces have shrunk by more than one-third, yet 
domestic base capacity has fallen only 20 percent. That suggests that 
another reduction of 12 to 15 percent could be appropriate. The recent 
Bush administration decision to bring home about 70,000 troops from 
abroad might reduce the scale of the next BRAC round and imply a net 
reduction closer to 10 percent of existing domestic capacity. But after 
initial implementation costs that could reach $10 billion or somewhat 
more, retrenchment of base capacity will reportedly save about $7 
billion annually (including some savings from abroad).\19\
    Overhauling military health care services by merging the 
independent health plans of each military service and introducing a 
small copayment for military personnel and their families could save $2 
billion per year.\20\ Other savings in operations and maintenance are 
possible. For example, encouraging local base commanders to economize 
by letting them keep some of the savings for their base activities 
could save a billion dollars a year or more within a decade.\21\
    All that said, the activities funded by these accounts are crucial 
to national security and have proved tough to cap or contain. 
Privatization is no panacea; it takes time, sometimes raises various 
complicated issues about deploying civilians to wartime environments, 
and generally saves much less than its warmest advocates attest.\22\ 
Often it leads to increases in the size of civilian personnel payrolls 
funded out of the defense budget without reducing uniformed strength--
potentially thereby increasing, not reducing, total costs.
    Another broad approach is to improve the efficiency with which 
military forces are deployed and employed. That could lead to some cuts 
in personnel, at least over time. The Navy has some of the most 
interesting ideas in this light; they can be pursued further, perhaps 
allowing modest decreases in the size of the fleet (in addition to less 
strain on people and equipment). For example, more ships can be based 
near the regions where they are used, as with attack submarines on 
Guam. Crews can be airlifted from the United States to relieve other 
crews on ships deployed abroad, rather than sailing the ships all the 
way back to the United States so frequently. And the Navy's innovative 
concept for surging carriers in crises (or for exercises or other 
purposes), rather than slavishly maintaining a constant presence in key 
overseas theaters, also could offer at least modest benefits.\23\

                       GROWING THE GROUND FORCES

    The case for increased expenditure in one part of the defense 
budget--the size and cost of ground forces--also needs to be made. 
Enormous strain is now being imposed on U.S. soldiers and Marines by 
the Iraq mission and other responsibilities. The Rumsfeld Pentagon has 
pursued a number of approaches to free up more soldiers and Marines for 
deployment out of those already in the armed forces. But those 
initiatives, while worthy and indeed bold, are not enough given the 
demands of the times.
    The United States should promptly increase the number of soldiers 
and Marines under arms today--by at least 40,000 active-duty troops, 
above and beyond the increase of some 25,000 that the Bush 
administration has already carried out. Today's operations, which could 
last several more years, are too much for the all-volunteer force to be 
expected to sustain at its current size. Indeed, an increase is already 
18 months overdue. Even though it could take two to 3 years to carry 
out fully, it must be begun--even if there is a chance that the Iraq 
operation will be terminated while the increase is being put into 
effect. The cost of modestly and temporarily increasing the size of the 
U.S. ground forces, while large, is not terribly onerous. By contrast, 
the consequences for the nation of continuing to overdeploy soldiers 
and Marines and thereby risking a rapidly intensifying personnel 
shortage would be enormous. It is not a necessary risk to run.
    Over the longer term, even after the Iraq and Afghanistan missions 
are complete, the United States will still need substantial ground 
forces, in addition to major naval and air capabilities. In all 
likelihood, a force structure similar in size to today's will be needed 
then, though it may eventually be possible to reduce personnel rosters 
by 5 to 10 percent. But for now, the pressure of current operations is 
what must most concern American defense planners--and that pressure 
requires a temporary increase, not a decrease, in personnel.

  CONCLUSION--OTHER NATIONAL SECURITY REQUIREMENTS AND BROADER FISCAL 
                               REALITIES

    Defense is not the only area requiring budgetary increases. Within 
homeland security, for example, a much more robust system for 
inspecting container shipments into the United States is needed, as a 
team of Brookings scholars argued in a 2003 book, Protecting the 
American Homeland. Most border security agencies within the Department 
of Homeland Security each require increased spending in the range of 
several hundred million dollars a year. More initiatives are needed in 
aircraft safety, such as greater screening for explosives carried on 
individuals and for cargo carried on passenger airlines. Rail and truck 
security demands new efforts, such as greater security where equipment 
is stored and more robust tracking of hazardous shipments. The surface 
to air missile threat may require attention at some point. Some private 
industries that are not yet protecting themselves well enough may need 
tax incentives to do so. And the United States may have to help some 
countries abroad, particularly less wealthy ones, with security 
measures that affect Americans directly, such as better use of digital 
technology and biometrics in passports as well as better airline 
security for flights head to the United States.
    Similarly, some foreign assistance initiatives are needed if we are 
to prevent a second generation of al Qaeda to be formed to replace and 
succeed the first generation. Among other things, this could require a 
major educational reform initiative, with U.S. resources comparable to 
those devoted to the millenium challenge account and the HIV-AIDS 
initiative.
    The overall message is that the nation's foreign policy and 
national security efforts will not permit budgetary savings in the 
years ahead. Even if we can find economies here and there, as in 
defense modernization, new initiatives are needed that will generally 
more than consume any savings.
    In broad terms, these conclusions argue against President Bush's 
proposed tax cuts. Federal deficits, as noted already in excess of $400 
billion a year, may or may not be cut in half by President Bush's 
latest plan. But even if that occurs, his intention to cut taxes, the 
likelihood of further growth in discretionary accounts and health care, 
and any costs of Social Security privatization could easily make 
deficits exceed $500 billion annually in the next decade. They would 
thus remain at the economically unhealthy level of nearly 4 percent of 
GDP, driving down national savings rates and increasing America's 
dependence on foreign investors to propel its economy. Longer-term 
fiscal trends are even worse, given the pending retirement of the baby 
boomers together with rising health care costs.\24\ Such huge deficits 
are irresponsible, just as it would be irresponsible not to do what we 
must within the foreign policy and national security realm to win the 
war on terror.

                                ENDNOTES

    1. This testimony is derived primarily from my forthcoming 
Brookings book, Defense Strategy for the Post-Saddam Era, as well as 
our Brookings study of 2003, Protecting the American Homeland: One Year 
On.
    2. Secretary Rumsfeld's Defense Science Board reached a similar 
conclusion. See Mark Mazzetti, ``U.S. Military Is Stretched Too Thin, 
Defense Board Warns,'' Los Angeles Times, September 30, 2004.
    3. See Jared Diamond, Guns, Germs, and Steel (New York: W. W. 
Norton and Co., 1997).
    4. Barry Posen, ``Command of the Commons: The Military Foundation 
of U.S. Hegemony,'' International Security, vol. 28, no. 1 (Summer 
2003), pp. 5-46; for a related argument, see Michael O'Hanlon, 
Technological Change and the Future of Warfare (Washington, DC: 
Brookings, 2000), pp. 106-167.
    5. On the importance of America's transparent system, see G. John 
Ikenberry, ``Institutions, Strategic Restraint, and the Persistence of 
American Postwar Order,'' International Security, vol. 23, no. 3 
(Winter 1998/99), pp. 43-78.
    6. Matt Moore, ``Worldwide Military Spending Up Sharply,'' 
Philadelphia Inquirer, June 10, 2004.
    7. Department of Defense News Release, ``National Guard and Reserve 
Mobilized as of February 25, 2004,'' February 25, 2004, available at 
www.defenselink.mil/releases/2004/nr20040225-0366.html. At that time, 
mobilized Army reservists totaled approximately 155,000, Air Force 
18,400, Marine Corps 5,400, Navy 2,300, and Coast Guard 1,600.
    8. See Posture Statement of General Richard B. Myers, Chairman of 
the Joint Chiefs of Staff, before the Senate Armed Services Committee, 
108th Congress, February 3, 2004; and Secretary of Defense Donald H. 
Rumsfeld, Quadrennial Defense Review Report (Washington, DC: Department 
of Defense, September 30, 2001).
    9. General Richard Myers, National Military Strategy of the United 
States, 2004 (Department of Defense, 2004), p. 18.
    10. Testimony of General John P. Abizaid, Commander, United States 
Central Command, before the Senate Committee on Armed Services, March 
4, 2004, pp. 1, 7-8, available at www.senate.gov/?armed--services/
testimony.cfm?wit--id=2312 &id=1043.
    11. As General Richard Myers put it, ``During the FY 2004 budget 
cycle, Congress voiced concern over the Department's overseas basing 
plans. Since then, our global posture strategy has matured. We are now 
in the process of detailed consultation with our allies and Members of 
Congress.'' See Myers, Posture Statement, p. 33.
    12. Michael E. O'Hanlon, Expanding Global Military Capacity for 
Humanitarian Intervention (Washington, DC: Brookings, 2003), pp. 56-57.
    13. Adam Talaber, The Long-Term Implications of Current Defense 
Plans: Summary Update for Fiscal Year 2004 (Washington, DC: 
Congressional Budget Office, July 2003), p. 2.
    14. Allison Percy, Growth in Medical Spending by the Department of 
Defense (Washington, DC: Congressional Budget Office, 2003), pp. 1-2.
    15. See Amy Belasco, Paying for Military Readiness and Upkeep: 
Trends in Operation and Maintenance Spending (Washington, DC: 
Congressional Budget Office, 1997), p. 5; and Lane Pierrot, Budgeting 
for Defense: Maintaining Today's Forces (Washington, DC: Congressional 
Budget Office, 2000), pp. 18-23.
    16. Tom Lantos, ``Military Hardship Duty: Fill the 'Pay Gap' for 
National Guard and Reserves,'' San Francisco Chronicle, June 10, 2003, 
p. 23.
    17. Gregory T. Kiley, The Effects of Aging on the Costs of 
Operating and Maintaining Military Equipment (Washington, Congressional 
Budget Office, 2001). Congressional Budget Office, Paying for Military 
Readiness and Upkeep: Trends in Operation and Maintenance Spending 
(U.S. Congress, 1997).
    18. Some optimists tend to exaggerate the savings from possible 
base closings, however. Wayne Glass, Closing Military Bases: An Interim 
Assessment (Washington, Congressional Budget Office, 1996).
    19. Frances Lussier, Options for Changing the Army's Overseas 
Basing (Washington, DC: Congressional Budget Office, 2004), p. xiv.
    20. See Ellen Breslin-Davidson, Restructuring Military Medical Care 
(Washington, Congressional Budget Office, 1995); Russell Beland, 
Accrual Budgeting for Military Retirees' Health Care (Washington, 
Congressional Budget Office, 2002).
    21. Robert F. Hale, Promoting Efficiency in the Department of 
Defense: Keep Trying, but Be Realistic (Washington, Center for 
Strategic and Budgetary Assessments, 2002).
    22. P.W. Singer, Corporate Warriors: The Rise of the Privatized 
Military Industry (Ithaca, N.Y.: Cornell University Press, 2003).
    23. Dave Ahearn, ``12 Carriers Needed Despite Efficiencies-
Admiral,'' Defense Today, July 9, 2004, p. 1.
    24. Peter A. Diamond and Peter R. Orszag, Saving Social Security: A 
Balanced Approach (Washington, DC: Brookings, 2004), pp. 27-38.

    Chairman Nussle. Thank you, and I thank all our witnesses 
for your testimony.
    In part, what I wanted to be able to accomplish here today 
has been accomplished, and that is to begin a discussion about 
our priorities. I understand the frustration on the part of my 
colleague, Mr. Barrett, who wanted the opportunity to grill one 
of the administration witnesses and appropriately so.
    But what I wanted to do is, as opposed to the--I am not 
going to say this respectfully enough. As opposed to the happy 
talk defense of the budgets that often come from all the 
administration witnesses, whether they be Republican or 
Democrat. I wanted to, particularly 3, 4 years after the 
attacks of September 11, begin a different discussion. I am not 
convinced--well, I am convinced on the size; I mean, we are all 
probably convinced on the size, meaning we think we ought to 
spend a whole lot of money on defense and homeland security. I 
think that was the testimony that you have given us today is 
that, you know, this--in this instance size does matter, and it 
is an important perspective that we have to gain, particularly 
vis-a-vis the rest of the budget.
    But what I have not been convinced about is how we are 
spending it, how well we are spending it, where the priorities 
are. I am a volunteer fireman, I say to my friend, the colonel, 
who had mentioned this about fire departments. I am a volunteer 
fireman, and I understand their interest in getting a new truck 
and being able to claim it is homeland security. I have 
celebrated their victory in getting that new truck, along with 
probably a number of other departments across my district. As I 
am sure my colleagues here on both sides had the opportunity to 
do. I am not convinced that is the best use of homeland 
security dollars from the Federal budget. While that was maybe 
something that needed to be done on the first day of the first 
week of these new threats, I am not convinced that that is the 
ongoing need.
    Tactic versus strategy is a very important conversation, 
discussion, debate that we need to have. I don't see it 
happening; and that is why I wanted to do it, wanted to have 
the hearing in this format, so that we could at least begin the 
discussion.
    I am sure that we won't end it today, but the how much 
versus how well we are spending our money is a debate that I 
think we need to have in all areas. Particularly, homeland 
security and defense, which have received some of the largest 
increases in spending over the last 4 to 5 years. There is no 
question that just prior to September 11 we were holding 
hearings about the fact that the Defense Department was not 
doing a good job with its books, and were wasting a lot of 
dollars, and were not able to account for much of the money 
that was being spent. My bet is that the same could be true of 
the Homeland Security Department today.
    I want all of that being used in the best possible way, and 
Congress needs to have that debate. We won't finish it today; 
there is no question that it is timely. And the how much will 
continue to probably take center stage, but the how well we are 
spending money needs to start taking a growing spotlight.
    So that is the reason for the method behind the hearings 
today. You have done an excellent job of setting the stage. I 
am sure if we let you continue, and even allowed you to have 
interaction among yourselves, this would probably be even more 
interesting. Unfortunately we can only begin that process 
today.
    I have thousands of questions, and yet I don't think it is 
probably worth me trying to get into even one of them at this 
point in time. I know there are other members who want to have 
part in this discussion. So I will pass for now and pick up at 
the very end, and I will yield to Mr. Spratt for any questions 
he might have, or comments.
    Mr. Spratt. Thank you, Mr. Chairman. I will say again I 
think we need administration witnesses, but I commend our 
witnesses because you have come here today and have been very 
provocative and sort of shaken things up and given us a good 
perspective that spans a fair piece of the spectrum. So thank 
you very much for your testimony.
    Let me ask you a question. In the Presidential debate, I 
think it was the first debate, there was at least one thing on 
which both candidates agreed, which Colonel Larsen averred to, 
and that is that the gravest threat facing the United States is 
the threat of terrorists armed with nuclear weapons, even crude 
radiological weapons.
    About 5 years ago, I believe, Howard Baker and Lloyd Cutler 
were the cochairs of a commission that looked into the problem 
of nuclear proliferation, and the threat that the one thing 
that terrorists need to have nuclear capacity is nuclear 
materials, fissile materials, plutonium, and enriched uranium. 
They came back and made a unanimous recommendation that we take 
the amount of money we are spending, which was then about $1 
billion, on cooperative threat reduction, non-Lugar, and triple 
it over a period of several years.
    Today by my calculation we are about where we were 5 years 
ago. We really have not increased that amount of spending at 
all, even though both candidates agree this is the gravest 
threat facing us.
    One way, it seems to me, to pay for it would be to do 
something I know Mr. Gaffney would not agree with, but that 
would be to cut back on the strategic forces, bring them down 
to the level that we have agreed upon in the SORT Treaty with 
the Russians, closer to 2,200 warheads deployed, and generate 
some savings that then would be used to deal strategically with 
the other end of the threat, namely nuclear weapons in the 
hands of the world's most dangerous people.
    Would the whole panel respond to that idea? Let's start 
with Colonel Larsen, since he broached the idea in the first 
place.
    Colonel Larsen. Yes, sir. The idea of focus on delivery 
systems--and in Mr. Gaffney's opening comments he talked about 
new quiet submarines as a means to deliver biological weapons. 
I am telling you, we saw how they delivered biological weapons 
in the U.S. Capitol in October of 2001: They used the U.S. mail 
and there are many ways. So I would worry less about delivery 
systems.
    Now, it is not that I am against missile defense; I think 
it is very important in a theater defense. We have got our 
troops deployed out there; we have to be able to do something 
about SCUDS and other sorts of things that will be coming 
along. But when we are talking about a national missile defense 
system, I think taking a percentage of that money and putting 
it on things that I see as much more of a threat would 
certainly be--as a taxpayer and someone interested in national 
security, I think America will get a far better return on 
investment and be far more secure by what you say. Even a more 
recent study done by the Nuclear Threat Initiative came back 
with the same sorts of recommendations you were talking about.
    The one point I would disagree on, when you talked about 
the radiological dispersal device, that one is out of the bags, 
that one is like biological weapons; I can go to hospitals in 
Washington, DC, and get enough cesium-137 to make a dirty bomb. 
However, that is not going to kill a lot of people. That is 
kind of like a hurricane hitting your town----
    Mr. Spratt. It will make the large areas unhabitable for a 
long time.
    Colonel Larsen. Certainly could be. But the one that I 
worry about the most--and there are lots of threats here, 
chemical plants and whatever, but those two tops ones, they are 
in a class by themselves. And that is weapons-grade, highly 
enriched uranium, and that one--the one that frustrates me, 
sir, that is solvable, there is something to do about that. Do 
not let them get their hands on it; they can enrich it.
    Mr. Spratt. Last year I offered an amendment in the markup 
of the defense authorization bill, a measly $25 million to 
begin an effort. I went over to the telephone and called the 
Administrator Admiral Brooks. Do you support this? Absolutely. 
I will make some telephone calls to support it.
    I went back in the committee, I offered it, had an offset, 
didn't add a dime to the bottom line of the budget. The offset 
I thought was nonobjectionable; didn't get approved. That is a 
piece of low-hanging fruit if I ever saw one. We know the 
threat is there, and for a relatively, relatively small sum of 
money, we could take care of that aspect of the threat. Mr. 
Gaffney.
    Mr. Gaffney. If I may just dissent, I guess, a little bit. 
It is not that there is not a threat here, the question is what 
can you do about the threat? I am all for defending our troops 
against missile attack, I just think that the American people 
expect and deserve to be defended against it as well. I 
consequently wouldn't recommend at this point cutting funding 
from that for these other purposes.
    I am not so much opposed to making changes in our strategic 
forces as I am trying to ensure that we still have them. I 
invite this committee to take a hard look at what is happening 
to the nuclear arsenal of the United States, and it is 
degrading. And the fact that we don't know how much it is 
degrading is a function of not having tested it.
    Congressman Spratt and I have joined each other in debates 
for at least a decade about how rigorous we have to make our 
testing of missile defenses. There can't be an adequately 
rigorous test to ensure that these things actually will work 
the way they are supposed to. And yet the weapons that we have 
in substantial quantity and upon which I continue to believe we 
rely have not been tested in 13 years, and they are changing 
from under us.
    So whether you can actually free up large amounts of money 
by limiting the number that we retain in stockpile or not I 
would leave to others to debate with you, Mr. Spratt; but I 
certainly would suggest to you that we need to be spending what 
it takes to ensure that whatever we hold in stockpile works 
when we need it to work, if God forbid we do, and doesn't work 
when we don't want it to.
    If I may just address your other point, please.
    The problem that I have with a lot of this scrambling 
around trying to prevent materials from falling into bad hands 
is, one, A.Q. Khan has been in the business of supplying this 
stuff to people, the technology, the know-how, and to some 
extent the materials, and people in his network outside of the 
former Soviet Union--we have just heard about North Korea's 
fissile material apparently migrating to Libya. This is going 
on. I am afraid, you know, some of these cats are out of the 
bag.
    I suggest to you that another problem is that the Nuclear 
Nonproliferation Treaty facilitates this problem. One of my 
colleagues has mentioned that we have these research reactors 
all over the place. Well, that is because the deal has been to 
give everybody the nuclear materials and nuclear technology 
they need to have nuclear weapons as long as they promise not 
to have nuclear weapons. And if they lie, they still have all 
of that stuff; and hence, you now see a number of these 
countries in the business all by themselves, again, without 
regard to what they might get from the former Soviet Union.
    Mr. Spratt. Look, you know why that is. In the NPT, the 
Nuclear Nonproliferation Treaty, a grand bargain was struck, 
and countries which said they would forego, foreswear nuclear 
weapons were induced to say so by the representation that they 
would still have nuclear materials so they could have nuclear 
fuel energy, they could do nuclear research, they would not be 
left out of what was a realm of science, they would still have 
that capacity.
    Now, there is a problem there that you just touched upon, 
that Bill Perry and Ashcroft have both addressed it, and the 
President, a month later, addressed it in his speech on 
February 12, 2004, at the War College, and that is a fuel cycle 
has inherent contradiction in it. How you get out of that 
problem is going to take some very deft diplomacy, but really 
we have got 184 signatories to the NPT. It is the most widely-
subscribed-to treaty in the world. Granted, there has been some 
cheating, sometimes with impunity, but it has succeeded, by and 
large, in preventing these nuclear weapons from spreading all 
over the world.
    Mr. Gaffney. I would just say very quickly, it is not 
working in the places where we need it to work most.
    And just on your last question, the danger of putting a lot 
of money into the former Soviet system to safeguard the stocks 
of enriched uranium that could be migrating to some of these 
very dangerous places is we are spending a lot of money on 
better padlocks and fences and security systems, and yet the 
people running those may be part of the problem. How many of 
these people are tied in with the KGB or Mafioso connections 
that are part of the problem?
    Mr. Spratt. Believe me, if you go to Vector or the old 
weapons facilities, chemical weapons facilities and biological 
weapons facilities, in Russia and see what is there today 
compared to what was there before, it used to be one strand of 
barbed wire, today we have got triple concertina, we have got 
constant surveillance. You may say these things are all--can 
all be thwarted, and they can, but it is still vastly superior 
to what was put there before. I mean, you can't deny that.
    Mr. Gaffney. Who has the key, Mr. Spratt? That is the 
question. Who controls those facilities? And if it is in the 
wrong hands, it is still in the wrong hands.
    Mr. Spratt. It is 98 percent better, and there is a 2 
percent risk. That is what I would say to you.
    Mr. O'Hanlon, Colonel Larsen.
    Colonel Larsen. Just one thing. Those research reactors, 
they don't need 90 percent enriched uranium in them. We can 
replace it with 20 percent----
    Mr. Spratt. And it belongs to us.
    Colonel Larsen. And you can't make a bomb out of that.
    Mr. Spratt. So we can reclaim it, bring it back to the 
Savannah River if we have to--that is where most of it comes--
and store it. It does not have to be there.
    Mr. O'Hanlon. Congressman, I would simply add that I think 
one could have a fairly robust stewardship program within the 
Department of Energy (DOE). And you may choose to simply 
rebuild some of these weapons without waiting to have it proven 
to you that they are going bad. It is called engineering-based 
stewardship, which is just rebuild the weapons to original 
specifications----
    Mr. Spratt. That way you keep this generation and the next 
generation of scientists understanding how the weapons work, 
how they are put together from hands-on experience.
    Mr. O'Hanlon. So on that point I suppose I disagree with 
Frank, but I still agree with him that there is not a lot of 
savings to be had here, because just doing that takes a fair 
amount of money. But still you get a few hundred million if 
maybe you shut down or partially consolidate one of the three 
major labs, and that goes some of the way toward the added $2 
billion a year you wanted for non-Lugar.
    In addition, I think we have too many Trident submarines 
and Minuteman missiles still today. I just don't see the need 
for 500 Minuteman and for 14 Trident subs carrying nuclear 
weapons. So I think there is some----
    Mr. Spratt. That is why there is some suggestion in systems 
deployed we have climbed to 6,000, 7,000 warheads. We can scale 
back prudently to the 2,200 level sooner than we committed in 
the SORT Treaty and save some money there that then might be 
deployed, redeployed to the nuclear threat.
    Mr. O'Hanlon. And in addition, I think that we can rethink 
how we are deploying--our ultimate aim point for the SORT 
Treaty. We don't necessarily need the same number of systems 
that the Pentagon has currently proposed. We could field 2,200 
warheads at lower cost than now planned. So in addition to 
doing it more quickly, we can actually find a cheaper way to do 
it, and I would support that. You may be able to free up some 
of those Trident submarines and convert them into conventional 
submarines, partially address the problem Frank mentioned with 
an insufficiently large Navy ship-building budget, a point I 
totally agree with.
    So I think when you look at all of this together, there is 
a way to find a few hundred million in savings here, a few 
hundred million in savings there, maybe clip another billion a 
year off missile defense, which is still well above where 
Ronald Reagan ever had it in budgetary terms, even though the 
administration has come back somewhat.
    I would like to see this current mid-core system fixed and 
deployable and operational, but I don't think we need to be 
spending $8\1/2\ billion a year on missile defense, something 
in the $7s--I think is reasonable. So you cut back a billion 
there, a half billion in DOE, maybe a half billion in your DOD 
operational cost for the Minuteman and the Tridents, and you 
have got the $2 billion that you need for non-Lugar.
    So I think there are ways to do this that don't require 
radical change or unsafe change in our national security 
policy.
    Mr. Carafano. I think the one thing we all agree on is that 
we all agree that for virtually every form of weapon of mass 
destruction, the cow is either out of the barn, or closing the 
barn door is really, really hard. So the question is very 
simple: If your goal is how should I strategically invest my 
money to best prevent catastrophic attacks, then the answer, I 
think, is really relatively simple. First, priority number one 
is you invest in counterterrorism systems, both at seas--
overseas and at home, that break up the networks that might 
want to do this; you go after the bad guys first. That should 
always be your number one funding priority. Number two is you 
fund things like the Proliferation Security Initiative's 
proactive capabilities to go after people that specifically 
might be using these kinds of weapons. And then I think, quite 
frankly, with the money you have left over, you spend on 
Cooperative Threat Reduction. It is your third and lowest 
priority because it is the least payoff for the buck.
    And where does missile defense fit in this in the bag? I 
think, quite frankly--I don't understand why you wouldn't want 
a missile defense system. If you look at the ballistic--I 
wouldn't understand why any country on the planet would not 
want a ballistic defense system. If you look at the 
proliferation of ballistic missile technologies and the 
leverage, both diplomatic and in security terms, that you have 
on the table if you have the capability to defend yourself 
against a ballistic missile threat, it just seems to me the 
prudent component that you would want in any kind of 
combination of counterproliferation machine.
    Mr. Spratt. It assumes they are efficacious, and that is 
the big hurdle, harder than anyone perceived when it was first 
conceptualized by General Graham and others.
    Frank and I have had a long-standing disagreement here, we 
will not tie up the rest of you with our debate, but he did 
mention the problem with electromagnetic pulse, Ballistic 
Missile Defense (BMD), Strategic Defense Initiative (SDI), and 
others came to the conclusion a long time ago, if we were 
assaulted with several hundred warheads at the same time, a big 
wave coming out of a major power against us, and if any of 
those were salvage-fused so that they would explode upon impact 
in the atmosphere, you would have the very kind of 
electromagnetic pulse he is worried about, which, among other 
things, would thwart your further defensive system, it would 
blind your radar, it would make our sensors practically 
useless, and it would render the whole system in the second 
wave, and really halfway through the first wave, useless.
    So there is no full--nobody is even talking today about a 
complete umbrella that would totally project you against 
nuclear systems, against the Chinese today as they are 
equipped, against the North Koreans. Certainly we could do 
that. I am in support of ground-based systems, and I am in 
support of trying to do the ship-based system. I am also a 
skeptic as to whether or not we can win that technology. We 
won't get into that debate today.
    But thank you all for coming in and, as I said earlier, for 
giving us very provocative testimony.
    Chairman Nussle. Mr. Garrett.
    Mr. Garrett. Thank you, Mr. Chairman.
    Mr. Chairman, you started out by saying that normally we 
get a lot of happy talk. I would say that we have gotten no 
happy talk today, quite the opposite, just a lot of ominous and 
dire predictions for the future that maybe perhaps puts a lot 
of our other discussions that we have here on other spending 
programs--and when people say, gee, you can't cut my little 
program and my pet project in my district for this or that, 
maybe it puts all these other things into perspective.
    I just have a couple of questions I would like to run 
through.
    Mr. Gaffney, you made a point of saying this at one point, 
maybe you can just clarify it in a sentence or two, when you 
said that our country is one of the few nuclear powers that is 
not able to produce nuclear weapons. You made a point on that.
    Mr. Gaffney. I think it is the only one at this point.
    It is true that if you go out to one of the nuclear 
laboratories and ask them to hand-build you one, that we have 
some vestigial capability to do that--Randy may be doubling 
that capability if you give him the nuclear materials that he 
says he could use to put one together. But in terms of a 
production capability, we have none, and as far as I know, we 
are the only nuclear power that is true of.
    Mr. Spratt. If the gentleman would yield just a second.
    Now you have talked about building TA-55 at Los Alamos, 
warheads, which is--excuse me, I am sorry, I just wanted to 
make the point--building TA-55 at Los Alamos has a through-pick 
capacity of about 55 warheads a year. And while that may be on 
the low end of what might be needed, with a second shift it 
would probably be augmented, and that is a production 
capability.
    Mr. Gaffney. Yeah. To my knowledge it is not a live, hot 
production capability.
    Mr. Spratt. Oh, it is active today. They have got a full 
shift, they are working warheads, refurbishing warheads.
    Mr. Gaffney. Refurbishing warheads, as you know, is 
different than building new nuclear devices. And this is a 
point I guess I would just come back to you, if I may, on your 
time, sir.
    You know, this idea that we can just sort of muddle 
through, my colleague has suggested rebuilding things to 
existing specifications, that is illegal. It is illegal----
    Mr. Spratt. But look, Frank, let me say this; it is not 
billions of dollars expense so we can better understand nuclear 
explosions----
    Mr. Gaffney. It is faith-based nuclear deterrence, it is 
not science-based.
    Mr. Spratt. Thank you for letting me interrupt.
    Mr. Garrett. No, I appreciate the question, and the 
clarification as well.
    I would like to go back--changing that topic--to the 
homeland security issue, as all of us do represent various 
unique States. I come from the State of New Jersey, which is 
unique from a risk-based assessment. We have, you know, two 
major ports, a couple of international airports, petroleum 
processing plants, petroleum storage plants, chemical 
processing plants, I mean--Amtrak and transit throughout that 
area. Much of the east coast would be closed down as far as 
resources, as far as fuel is concerned if we had a major attack 
in our State, and whereas the rest of the country is not 
elevated, New Jersey was recently elevated in level.
    And from the practical political sense, when we go back to 
our States, such as ours, the question always is, is there 
something that we should be doing down here as members as far 
as changing the entire risk-based assessment of how we handle 
the funding that we get? The chairman very nicely equated it to 
getting a new fire truck, or in some cases just buying new 
hoses in the fire departments. Are we going just down the 
totally wrong road as far as what we have done so far as risk-
based assessment or lack of risk-based assessment in spending 
our dollars?
    Mr. Carafano. Yes, we are. And first of all, I would like 
to vehemently disagree with Mike that I do not think we should 
be spending $5 billion more on homeland security because I 
think right now we are already throwing money at the problem, 
and just adding it doesn't really solve anything.
    But we made a fundamental mistake after 9/11, which is that 
we assumed that the purpose of Federal dollars that would flow 
to State and local governments were for capacity building, and 
we had to increase for capacity to help respond to terrorist 
attacks, and that was an enormously bad strategic choice 
because we can, quite honestly, pour money into that forever. 
And I worked on the Council on Foreign Relations Analysis, and 
we came up with $100 billion in unmet requirements, and that 
was just in preparedness, it did not even include police 
departments. So it is a bottomless pit. So it was a 
fundamentally flawed strategic approach.
    We should really go back and start over, and we should 
start with a fundamental premise: Federal dollars should be 
spent to make all Americans safer; not some, not in New Jersey, 
not in California, but all Americans.
    So what does that mean? I think it really means two things. 
One is the Federal dollars should be there to help build a 
national system that everybody can plug into, private sector, 
State and local, so when we have to respond, we can make the 
best and most sufficient use of all the resources that we have 
throughout the Nation as one brotherhood.
    The second issue is catastrophic terrorism. Catastrophic 
terrorism will achieve the capacity of any State and local 
government to respond. So we do need to have, again, a national 
system that if we can't prevent a catastrophic terrorist 
attack, that the Nation as a whole can respond efficiently and 
effectively to catastrophic terrorism. I think that that really 
throws out the whole notion of a risk- and vulnerability-based 
system and moves to a system which is basically based on 
meeting national strategic needs as opposed to meeting State 
and local needs.
    Colonel Larsen. I really agree with that assessment. We 
will go bankrupt trying to do that. You know, if we buy a 
nuclear-powered aircraft carrier, it makes every American safer 
in terms of national security, but when we buy a new fire truck 
for a small town in New Jersey, it doesn't do anything for the 
people in Dallas or anywhere else. So I think we have to go 
forward with that perspective.
    The regional approaches though, however, I do support, 
exercises and equipment, that when we fund exercises at the 
Federal level, is that it shouldn't be for a certain State or 
district, it should be for the regions to work together. I 
think Mayor Garza in San Antonio has done some great work on 
this; he said, I don't need every fire department to have every 
piece of equipment I would ever want, but I need to know within 
a 200-mile radius where that equipment is, and if I could get 
it in a crisis. And so I think that is a much better approach.
    Mr. O'Hanlon. Congressman, I would just simply add that on 
this point I agree with my colleagues, that the added 
expenditures I think we need in homeland security are not for 
first responders; in fact, I strongly disagree with the Council 
on Foreign Relation's report that proposes $20 billion a year 
more for that area. I think the areas we need more capability 
are things like inspections for containers coming into this 
country, expediting our linking of databases, and use of 
biometric indicators on various kinds of identification, 
thinking about how to better protect airplane cargo holds 
against explosives.
    There are a number of areas that still require additional 
resources, but I would simply add and agree that this is not 
generally a problem where you throw money at the first 
responder community. That is not a very useful way to spend 
homeland security money.
    Colonel Larsen. If I could make one more comment. At the 
Federal level we have got to stop wasting money. TSA----
    Mr. Garrett. Let me write that down----
    Colonel Larsen. TSA has a new program, and I don't like the 
way they are spending my taxpayers' money. Now right after 9/
11--in the Patriot Act it said let's fingerprint all those 
truck drivers out there--I mean, let's check the names of all 
the truck drivers who carry hazardous cargo. Well, that made 
sense right after 9/11 because we knew there were some al Qaeda 
people that went through big truck driver schools. They did not 
find many people, but it was a reasonable response at that 
tactical quick level.
    Now there is a new program that is not directed by the U.S. 
Congress, it came up with the TSA. They want to fingerprint all 
the people who have that little permit to carry hazardous cargo 
in the United States to see if we get fingerprints and they are 
bad people. There are 2.7 million people that have that 
particular license to carry hazardous cargo; TSA estimates it 
is going to be $100 apiece. That is $270 million we are going 
to have on this fingerprint program.
    Now, let me explain to you what hazardous includes: 
fingernail polish remover, paint, Coke syrup, and Listerine. 
Now, is that the best way to be spending $270 million for 
homeland security?
    Mr. Gaffney. Congressman, I guess I just would add one 
point, which may seem off the subject since you are talking 
about the Federal budget here, but the one thing that strikes 
me as going woefully unaddressed is what can we do to enlist 
the American people in a greater level of preparedness, and 
awareness even, of the kinds of threats that we may be facing 
at the homeland security level.
    You know, we have had some fits and starts in this area, 
notably the whole idea of having people provide tips as to 
things that they see that are out of place or suspicious or 
worrisome in their communities. But I have sensed, and I 
suspect each of you have as you go around your constituencies, 
there is a yearning on the part of the public to feel as though 
they have got a role to play, and I think in the area of 
emergency preparedness, particularly of the kind of larger 
catastrophic kind, having the public engaged in understanding 
what their communities are going to have to do--you know, this 
24, this television show that is running now, broadcasting 
about meltdowns in nuclear plants around the country, well, 
there is some plan that is trotted out to go get people out of 
the communities affected. I suggest to you that most of the 
people in this country have not a clue what that plan would be 
if it were to be implemented today. That is a place where I 
think for probably negligible funding something could be done 
that could actually make a material difference in how we will 
respond if, God forbid, one of these unhappy bits of news 
happens.
    Mr. Garrett. Thank you.
    Chairman Nussle. Mr. Baird.
    Mr. Baird. I thank the gentleman.
    One of my challenges, as I look at these budgetary 
projections, is the inaccuracy of projections we have heard in 
the past in this committee, and let me give you some examples.
    In February of 2003, Secretary Wolfowitz said, in quotes, 
Every time we go down on a briefing on the Iraq War, it 
immediately goes down six different branches of what a scenario 
might look like. If we costed every single one of them, we 
could maybe give you a cost range between $10 billion and $100 
billion. Well, we are approximating $200 billion already, and 
the President has got another $80 billion he is asking for.
    So I have a concern that there seems to be this exponential 
growth almost in the reality of some of these costs versus the 
projections. And again, I am sorry the Secretary cannot be 
here; he made a similar kind of statement about the numbers of 
troops we would need. So I would just preface the remarks I am 
going to make with a concern about the validity and accuracy of 
some of the information we receive in this committee from the 
administration.
    Something I did not hear from your remarks, and I 
understand it may be a different budgetary line, but we have, 
already, waiting lists for our veterans when they are coming 
back, waiting lists in terms of who can get seen, etc., and I 
am very concerned about that. Last year in this committee we 
heard testimony that the President's proposed budget was a 
couple billion dollars shy of needs. Myself and Darlene Hooley 
and some others have proposed a $1.3 billion addition to the 
$80 billion proposal by--$82 billion proposal by the President.
    Do you have any comments on the importance of making sure 
we take care of the soldiers? It is fun to talk about all the 
weapons systems and all the gizmos and whatnot and how we need 
them and whatnot, but at some point troops on the ground 
matter, and if the soldiers are not taken care of when they 
come back, we are not going to have troops on the ground in the 
future. Any thoughts about the role of the veterans in this and 
taking care of them today so that the future needs of the 
soldiers can be met?
    Mr. Carafano. Yeah. I think that is a reasonable point. 
This is an all-volunteer force. I think we should strive hard 
to keep it an all-volunteer force. And it is primarily an all-
volunteer force because of economic reasons. People do this not 
just because they are patriotic, but also because they think 
they are getting a fair deal, and I think that that is a 
reasonable cost of doing security.
    As we look forward, where I really see the issue--and I 
think here is a point where Mike and I disagree--is this notion 
about growing the military I really think requires some serious 
debate and discussion, because if you grow the military in a 
volunteer force, basically you are bringing somebody on for 20 
years, which intends all those costs that you talked about, 
veteran costs and everything else. That is an enormous expense, 
which, again, when you are trying to avoid a hollow force, 
modernization, current operations, trained and ready force, 
that is going to put a lot of things in competition.
    My problem with the notion of let's raise the force level 
is we still have a force structure which is still very much 
predicated on the cold war. We have a Reserve component which 
is still very much created and structured to fight World War 
III. We have Active Forces which are still--if you look at the 
structure in Europe, for example--which is still structured for 
the last war. If we just add people to the force--and the 
reason why those things never got dealt with was because they 
were all politically difficult; those were hard choices to make 
about restructuring Europe or Asia or restructuring just 
components, and we just ignored them----
    Mr. Baird. So your point is--I am going to jump in----
    Mr. Carafano. But the point is, very simply, if we just 
increase the size of the force, we are never going to go back 
and fix these inefficiencies, and I think fixing the 
inefficiencies will give us just as much usable force 
structure, guys in the foxhole, as adding in the 20,000 or 
30,000. That, I think, is a big part of the problem of keeping, 
you know, the defense entitlement issue under control is 
keeping the force structure at a reasonable size, and I think 
growing it, particularly growing the Active component, is not 
the right answer.
    Mr. Baird. My concern is that we don't tend to want to pay 
for the commitments we have made to these soldiers, and that we 
are willing to send $82 billion over to the theatre, but when 
the soldiers come back and they need health care, they need 
prosthesis, they need all the other things, we may not have the 
resources available in the real time now when they need it. And 
if we postpone these, I think we will pay greater costs in the 
long run.
    Let me make two other quick comments. One, Mr. Larsen--and 
I think Mr. Gaffney also raised this--Mr. Larsen, you talked 
about just bringing a nuclear weapon into this town. I have for 
several years now, since the night of 9/11, tried to promote 
the issue that this Congress should be taking care of its own 
continuity; in other words, what happens if they do bring that 
nuclear weapon into this town?
    Mr. Gaffney, you observed that people don't know about 
their own evacuation procedures. I would assert that neither do 
we in this body, and we might be considered somewhat of a high 
target.
    Any comments on the potential that someone might actually 
one day do that, bring a nuclear weapon into this town and get 
rid of us very quickly?
    Colonel Larsen. Sir, as a former military officer, I spend 
a lot of time thinking how the enemy would think about doing 
this. This would clearly be my number one target. And the House 
of Representatives, to the best of my knowledge, still does not 
have a plan about how they could quickly reconstitute if we 
lost the majority of it.
    Mr. Baird. That is correct. We have a modified quorum rule 
that says as few as five or six people could constitute a 
Congress, and we have a mandatory 45-day election period; 
assuming it could be done, you would have 45 days with no 
checks and balances. That is the status in this institution 
today, and a very ambiguous Presidential succession line.
    Colonel Larsen. Yes, sir. I certainly think that should be 
addressed.
    Mr. Baird. Thank you, sir. I yield back my time.
    Mr. Gaffney. May I just respond as well, since you 
mentioned me?
    First of all, just on the veterans issue, I am enormously 
admiring of the veterans and people who have served, at great 
costs in many cases, to their country. You have touched a very, 
very important point, though, and that is can we afford the 
price tag associated not just with their service, but their 
postservice situation? I don't envy you in this committee, or, 
frankly, in any other committee of the Congress, the job of 
wrestling with these numbers. They are staggering.
    I have to tell you, with the greatest of respect, that the 
price tag you have just saddled up to--what is it, I think 
$100,000 now for death benefits--may look like it is something 
you can accommodate if the death rates that we incurred stay 
about what we have been incurring, and horrible as those are. 
But God help us if any of the kinds of calamities that we have 
been talking about here take place involving our forces.
    On the second point----
    Mr. Baird. I appreciate that, but it is only $1.4, $1.5 
billion right now, relative to the costs of some of the systems 
that you have advocated.
    Mr. Gaffney. I understand. I am just saying to you, sir, if 
it grows by a factor of 10, which in most wars----
    Mr. Baird. It almost equals the cost of one fighter.
    Mr. Gaffney (continuing). Is what we incur in the cost of 
the battle, it is a staggering sum. Again, I do not begrudge 
the people who have lost their loved ones, I am just saying 
that the economics of this are incredibly important to 
understand.
    I commend you for thinking and worrying about the 
succession issue. Every time we get through an inauguration a 
few blocks from here or a State of the Union Address, I am 
holding my breath because it is such a soft and lucrative 
target.
    I think the kind of work that needs to be done on this, it 
is being done, I gather, sort of piecemeal and episodically; 
but it is one of those things that we really don't want to 
think about, but it is like this EMP attack. One of the 
findings of this Commission was our vulnerability to it invites 
the attack; our inadequate preparation for succession invites 
an attack designed to trigger it.
    Mr. Baird. That is precisely my concern. I thank the 
gentleman.
    I thank the chairman for his indulgence.
    Mr. Garrett [presiding]. Not at all. Thank you.
    Chairman Nussle [presiding]. The gentleman from California.
    Mr. Lungren. Thank you, Mr. Chairman. And I want to thank 
the panelists for their presentations.
    The only reason that I came back is 9/11; I mean, I decided 
to change my life in response to that. One of the concerns I 
have, one of the disappointments that I have had so far being 
in this body--and I love being in this body--is I don't see 
that 9/11 has essentially changed this institution. If you 
would go 3 years and 5 months, whatever it is, after Pearl 
Harbor, it changed the Congress, it changed our defense 
structure, it changed our society.
    Mr. Gaffney, you talked about how the American people are 
waiting, sort of, to be involved in this. I frankly don't find 
that. I find that if you are 3,000 miles away from Ground Zero, 
as my constituents are, it is difficult to understand that we 
are in a war on terrorism. When you hear suggestions that no 
matter what has been done, it has not done enough--that it was 
just serendipitous that we have not had attacks through 9/11, 
that does not encourage people to take it seriously nor to do 
anything.
    One of the things I always suggested when I was involved in 
law enforcement is that you have to show the people that you 
represent that the steps you have taken have borne fruit. Only 
then can you learn from those steps and progress.
    Mr. O'Hanlon, you talked about increasing force structure. 
What we really need is effective force structure. Secretary 
Rumsfeld suggested that we have tens of thousands of men and 
women in uniform who don't do military things, and that in 
order to turn those jobs over to nonmilitary people, we have to 
change the Civil Service system as it affects the Defense 
Department, yet I don't hear anybody talking about that.
    I hear people talking about how it is a fight to try and 
destroy unions. What we should be talking about is how to 
create an effective force structure. If the Secretary of 
Defense comes forward and says, I have identified tens of 
thousands of people in uniform who are not doing military 
things, and the way to change that is to get nonmilitary people 
to fill those roles. In order to have them do that effectively, 
they have to be more flexible than those under the high ground 
Civil Service system, it is in the national interest to do 
that. But we don't talk about that here; we talk about the 
fights between unions, and the administration trying to 
dominate unions.
    If there is to be a changed awareness in this society and 
in this institution, we must begin thinking about things 
differently. I have not seen us think about these things 
differently. There is, at least in my judgment, a lack of 
awareness and appreciation of what we are doing.
    Being on this committee and on the Homeland Security 
Committee, one of the challenges that we have coming up is with 
that structure, that schematic that we are going to place over 
all the funding that makes the most sense, and I am struggling 
with that. And I have heard different things from the four of 
you.
    Let me ask this question and ask your response, and that 
is, it seems to me when we are trying to figure out how we 
husband our resources and place them toward the threat that is 
out there, that we ought to think about the kinds of attacks 
that would do almost permanent damage to the national psyche, 
such that we would be willing to give up our civil liberties?
    I don't want to be on an airplane that is filled with fuel 
and goes into a high-rise, but let me ask this question: If we 
are saying now that through TSA and other things we are 97 
percent protected against that event happening, but the cost of 
moving from 97 percent to 100 percent or 99.9 percent is 10X 
what we have already spent, would it not be wiser for us to 
spend that 10X in dealing with the nuclear and biological 
threat that is out there? Because my thought is that if we lose 
3,000 people, it is going to be a terrible tragedy, it is going 
to shake this Nation. If we have a nuclear or biological attack 
in a major city that kills tens of thousands of people, renders 
the place uninhabitable for months, causes us to make 
excruciating decisions we have never made before, isn't that a 
situation which is more likely to shake the foundations of our 
society and change us from who we are to something else? And if 
that be true, shouldn't we then be focusing our strategy on 
working against those things and, in the event we have a 
terrible tragedy like that, being able to sustain our society 
and have the protections that we won't change it?
    Mr. Carafano. Specifically in DHS--I think it is a great 
question, and the reason why DHS doesn't have a good solution 
of the problem is not a budget issue. This is not a budget 
problem, this is an organizational problem.
    If you have seen the report that the Heritage Foundation 
did in cooperation with the Center for Strategic and 
International Studies--but what we did is we looked at the 
organizational inefficiencies of DHS and the inability to be 
strategic in its thinking and in the way it manages its 
resources, and we found that that was really at the root of a 
lot of the problems of the Department, both in setting 
priorities and being efficient.
    And so I think the answer to your question is not in the 
top line of the budget, the answer to your question is in the 
wiring diagram of DHS, the lack of--for example, I noticed 
Secretary for Policy and Planning that can really do that 
integrating function; the artificial distinctions in the 
system, for example, separating Customs and Border Patrol from 
Immigration and Customs enforcement. I think these kinds of 
organizational issues are the reason why we don't have better 
answers to your questions, not so much the way that--how much 
money is spent in the Department.
    Mr. O'Hanlon. Sir, I agree with your conceptual framework, 
but I would add chemical plants. I think these are extremely 
dangerous as well, at least the 500 to 1,000 that carry the 
most toxic materials within.
    But I also would say, take your example and Randy's example 
of a biological attack. Well, what do you actually do robustly 
to protect against that? Very difficult. Obviously the Congress 
has generously funded Centers for Disease Control and 
Prevention (CDC), National Institutes of Health (NIH), and you 
try to work on antidotes in case the attack occurs; that is a 
necessary piece. But to protect a society from an attack when 
the materials already exist is very hard. And Randy has 
mentioned that we all know of use of the mail, other mechanisms 
like that can distribute this sort of thing very quickly. So it 
is a hard problem to get right.
    In other words, it is true we should focus on the most 
threatening scenarios, but even once you agree to that point, 
it is somewhat difficult to figure out how to limit the problem 
thereafter. A robust way to do this, for example, would be to 
require every large building in this country to have reverse 
overpressure so that there is less of a likelihood of a 
biological agent being distributed through the air circulation 
system. That is a very challenging and economically difficult 
thing to do.
    My colleague at Brookings, Peter Orszag, wants to use the 
insurance market, require people of a certain size 
infrastructure who own that kind of infrastructure to carry 
terrorism insurance, and let the terrorism insurance market 
encourage people, through graduated rate structures, to adopt 
sensible modernization, sensible protection, but not 
legislated, not regulated, not pretend that we can figure out a 
single solution, because it would be hideously expensive.
    Or hospital bed capacity; some people say we should have 
the ability to take in 10,000 victims in every major 
metropolitan area above and beyond the capacity that already 
exists, but building hospital bed capacity is one of the most 
expensive things you can do.
    So I agree with your framework, but even once you establish 
that, the catastrophic attacks should be our greatest worry. It 
is still a very difficult problem; there are a lot of pieces 
you have to look at.
    If I could just add one very quick point on forestructure, 
I will be very quick.
    I agree with your point, I agree with Jim Carafano's point, 
we need--and I agree with Mr. Rumsfeld on this--we do need to 
privatize. Rumsfeld and Schoomaker do have a great plan to 
rebalance the Army, to change a lot of the positions. But even 
if you do that, you are adding people, in my opinion, too 
slowly for the current needs we have. And I think we have to 
also use the mechanism of trying to add more people, not a huge 
number, I am not talking about getting the Army back to its 
cold war size, but another 50,000, in that ballpark, I think 
makes sense. And it is not inordinately expensive compared to 
what we are spending in Iraq to begin with.
    Mr. Gaffney. Congressman Lungren, when I talked about 
public attitudes, obviously that is a function of leadership, 
in part. I sense it when I talk with people about the kinds of 
problems we are focusing on today; there is a response.
    In the absence of that kind of leadership, or when--and I 
am a great supporter of the administration, but I think it has 
done a great disservice when it has essentially suggested to 
the public that what they need to do for the war effort is to 
shop; it is completely inadequate, and I think, in fact, 
something of an insult.
    I will just tell you that if you want to think about 
something that is going to change the psychology of the 
American people, try transforming the society from a 21st 
century one to an 18th century one instantaneously, which is, 
no kidding, what has been found is a distinct possibility; in 
fact, as I said a moment ago, being invited--given our present 
levels of vulnerability.
    So if I were to suggest to you how to apply a schema or 
some level of prioritization, I would certainly say 
understanding this problem and fixing it ranks up there every 
bit as much as does the possibility that one of these nuclear 
weapons takes out a single city, or maybe even a couple of 
cities, or a biological attack affects the region. Those are 
terrible, horrible, scarring possibilities, but this is a 
threat against which we could do something if we act now.
    If we have to do it after the fact, I am not sure what we 
do, to be honest with you. Rebuilding a 21st century society 
without electronics at our beck and call is a truly 
stupefyingly large challenge. So this requires--and I am 
delighted that you have both of these hats. I hope you will 
take this up with Congressman Cox and other members of that 
committee as well.
    Colonel Larsen. Sir, in response to your question, the 
issue of is 80 percent good enough for the screening at the 
airport? You know, in my opinion--there was this big scandal in 
the papers a couple of years ago about how 20 percent of the 
phony knives and guns got through in a test. Well, if I were a 
terrorist, that would tell me that there is an 80 percent 
chance I would get caught; that is not really a lucrative 
target. And then we have sky marshals on airplanes. We now have 
more armed pilots, by the way, than we do sky marshals. And 
then you have passengers like my 80-year-old mother who would 
attack anybody trying to get to the cockpit.
    We have changed since 9/11, OK. So an 80 percent level 
might be adequate in the airport. And I don't want to get to 99 
percent level because it is going to take me about an hour to 
get through screening instead of the 5 minutes that I go 
through now. So I think that is a good point.
    The other one----
    Mr. Lungren. I don't know what airport you are getting 
through in 5 minutes, but----
    Colonel Larsen. Reagan is great. Maybe I fly at the right 
times. Now, I don't know about California, but I bet the 
numbers are even larger. But we did a little study in Texas; 
there are 40,000 nurses in the State of Texas not working in 
health care today. Can you imagine if we put them in a reserve 
corps, like has been so successful in the military, a couple of 
weekends a year, training? So I don't care if it is a hurricane 
or it is a biological attack, one phone call could get you 
40,000 healthcare responders. And you know what? That doesn't 
cost billions of dollars to do it. You said we have got to 
change how we think? Maybe we need a reserve corps for homeland 
security. I think it would be a good investment of my money.
    Mr. Allen. Thank you, Mr. Chairman. Thank you all for being 
here today.
    I wanted to deal with one subject of great concern to the 
area where I come from, and I think the country as a whole, and 
Mr. Gaffney had touched on it, and that is what is happening to 
shipbuilding.
    It is true, I believe, that, as Mr. O'Hanlon said, you can 
deal with a number of planes, you can expand or contract the 
number of planes we have, but at some point ships cost a lot 
more, and we have a very serious industrial-base issue.
    So I have looked at this budget. There are only four ships 
in the President's 2006 budget; there is $5.6 billion, that is 
a third less money, and half the number of ships than Congress 
appropriated last year. And when you look at what has happened 
under the Bush administration, you have got the overall DOD 
budget has gone up by 34 percent since 2001, the procurement 
budget by 25 percent, but new ship construction has gone down 
by 47 percent. And that risk--we are basically risking the Navy 
of the future to--I would say the Navy of the present, but I 
think it is really to the ongoing conflict in Iraq. Independent 
analysts have said for years that without a steady State 
construction rate of 7 to 10 ships a year, you simply can't 
stop the Navy from going down to 200 ships. And this budget 
simply ignores the problem and makes it a lot worse.
    There are zero surface combatants in the 2006 budget the 
first time, zero. Bath Iron Works, in my district, has no ship 
in either 2006 or 2007. So that part of the defense budget, I 
think, is being seriously affected by what is going on in terms 
of the budgeting, and it looks to me as if the Navy and the Air 
Force are being drained to pay for the cost of the conflict in 
Iraq, which is $1 billion or $1.5 billion a week. When you look 
at that number, that is almost--that is virtually a destroyer a 
week. And all of the--I don't intend to reargue Iraq because we 
are there. So if you have comments on that, I would like to 
hear them.
    I did want to just make a comment on some of the 
conversation earlier; two points. One is the money for first 
responders, it is one thing to say we are going to protect the 
country against another attack from Islamist terrorists, but we 
are probably not going to be successful doing that for over the 
next 10 or 20 years. Probably most people think we will get hit 
again at some point.
    How we respond is very significant, and I just want to say 
that the first responder money that has flowed to my State has 
been used to markedly improve the local capacity to communicate 
with each other across municipal lines and county lines and 
across fire and police and EMTs. And it, frankly, I think, has 
improved our capacity to minimize the damage, the injury from 
such an attack.
    And finally I would say this: We can conjure up in our 
minds all sorts of risks; we still remain the strongest country 
on Earth, the strongest militarily. And it does seem to be that 
while we can get our constituents all riled up, that they have 
a core common sense, and their common sense is that at all 
times and all places in the history of the world, there are 
risks, and we cannot simply protect against all of the risks 
that are out there without seriously undermining the 
communities in which we live, without undermining the 
opportunity for people to go ahead and live their lives and get 
the education and the jobs they need.
    This budget, this defense budget, is only part of an 
overall budget, and it has--the overall budget that we are 
responsible for has to reflect the value and interests and 
concerns of people across the whole spectrum of their lives, 
and not just for, you know, all of the threats that are on some 
scale of possibility that we have to deal with.
    Anyway, any comments? I would be glad to hear.
    Mr. Gaffney. Well, I feel your pain, as they say, about the 
shipbuilding program, and particularly what it means for the 
handful of shipyards we still have left, and one of which, of 
course, is Bath Ironworks. It seems as though--at least those 
of us who have addressed this, all agree that left, right or 
center, this is an inadequate shipbuilding program. And more to 
the point, it sets the trajectory or actually continues the 
trajectory toward a wholly deficient inventory of capital 
ships.
    And this is another point I would just urge be thought 
about as you think about the appropriate budget levels here. It 
is not just the numbers of ships that I think are wrong, it is 
probably also going to be the case of the kinds of ships. We 
are increasingly focusing on so-called brownwater ships, and I 
am for being able to fight in brown water, too; it is just that 
I think that as a maritime power, first and foremost, that is 
increasingly finding its ability to use the seas, and to ensure 
that the freedom of navigation that we benefit so much from is 
assured will require us to have a continuing world-class 
bluewater fleet.
    And again, my point, as I said in my testimony, Mr. 
Chairman, is that the object of these budgetary decisions, it 
seems to me, has to be how do you prevent a war, not just 
prevail in it once you get into one. And I can think of few 
things that are more likely to induce a war than the perception 
that we no longer have the ability, especially for many reasons 
that Michael O'Hanlon has talked about, finding ourselves tied 
down, finding ourselves inadequately equipped to deploy ground 
force to places that may go bad, and I think you have to count 
on them going bad in the future. It means that you have to have 
the power projection capabilities of your Navy, and, I would 
argue, of your Air Force, to give you some swing or stop-gap 
capacity, but better yet, to dissuade people from thinking that 
they want to pick a fight with you at the same time that you 
are dealing with Iraq or other contingencies. So I very much 
agree with that.
    And I would add one point on the budget priorities. It 
certainly is true that we face other needs to the national 
budget and resources. The problem with war today is, as you 
all, I know, are aware, asymmetric capabilities, such as those 
we have been talking about today, enable people to do harm to 
us that would have been unimaginable even with conventional 
forces of great size in the past.
    So, we have to be mindful of that reality as we are 
calculating what are we going to do to prevent it from 
happening here. I would just say to you, where I thought you 
were going with this, Mr. Allen, is that, you know, we don't 
want to have this be so great that we compromise our civil 
liberties in pursuit of trying to protect ourselves against 
them.
    I fear if one or more of these bad things eventuates, that 
civil liberties will go over the side in a heartbeat, as the 
public demands greater protection. I think all of us want to 
prevent that from happening.
    Mr. Carafano. Could I offer just one quick suggestion? I 
think we all agree none of us are sanguine about the Department 
of Defense's answer to shipbuilding. Hopefully--we have a 
Quadrennial Defense Review (QDR) coming up. Hopefully the QDR 
will provide better insight or perhaps a better plan on how 
they can deal with this in the future.
    One recommendation that I made elsewhere that--we have a 
paper coming out from Heritage. It might be worth it to go back 
and really rethink this. Maybe it would be worthwhile to go 
back and repeat what we had in the first QDR, which was an 
independent review that was a national defense--it might be 
worthwhile to come back and have a national security review 
that was outside the Department of Defense, which, among its 
requirements, was to provide a second--a second opinion on the 
QDR, and it should be specifically to ask--to address critical 
issues. I certainly think shipbuilding would be a good 
candidate.
    The other thing that we argued, you know, maybe it is time 
to implement something similar in the Homeland Security realm; 
that the Department of Homeland Security should have a 
quadrennial security review.
    One of the things this--I think a one-time national defense 
panel thing might do would be to look at both of those things, 
look at the QDR and look at Homeland Security's QSR, really 
see, you know, do these add up together, and provide a second 
independent assessment to the Congress of kind of where we are 
going in the long range in terms of resources and strategy and 
if there is a good match there.
    Mr. Allen. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Garrett. The gentleman from Texas Mr. Sessions.
    Mr. Sessions. Thank you, Mr. Chairman.
    Somewhat delayed, but it came on there, didn't it? Dan, 
thank you for your help.
    Mr. Chairman, thank you so much for calling this hearing 
today, and, gentlemen, I appreciate not only what you have 
talked about to help us satisfy our goals today, to understand 
more clearly those policy issues related to the budget that we 
need to provide, as well as making sure we look at the future--
future spending as well as the effects on the budget.
    One of the questions that I have is directly related to the 
changes that the--I believe, the President and the Secretary 
have discussed about. I have not seen very succinct goals or 
time frames related to movement of troop activity in Europe as 
well as Korea.
    I am interested in some discussion. I have heard what your 
recommendations are on homeland security, I have heard your 
recommendations about bluewater Navy. I have heard these other 
recommendations, but I have not heard that--specifically as it 
relates to what we should--Members should have in their mind 
about the gravity of this, as well as the implications on the 
budget, positive, negative, bringing people back home, moving 
people around, transferring the assets and resources, those 
sorts of things.
    So I would welcome any opportunity that any of these 
panelists might have to answer that general question about 
bringing back a large number of people to the United States or 
taking them away from Europe and Korea.
    Thank you.
    Mr. O'Hanlon. Thank you, Congressman. I will just quickly 
say that I am a fairly strong supporter of Secretary Rumsfeld's 
thinking on this point. I don't think it is quite as radically 
transformational of a repositioning as he sometimes wants to 
argue, but I think it makes good sense in the two theaters in 
question.
    Just a couple of words on each one. In Korea, the South 
Koreans have gotten a lot stronger conventionally over the 
years. We are all obviously troubled by the North Korean 
nuclear program, as well as the continued amount of money they 
spend on their military. But in conventional terms, I think we 
can view the South Korean ground forces as providing much more 
of the bulwark against initial assault.
    Whether it is two brigades or one brigade of the U.S. Army 
that is present in Korea at the outset of any crisis I don't 
think is nearly as important as the quality of the South Korean 
ground forces and the quality our air power, as well as our 
ability to reinforce rapidly to bring to bear hundreds of 
thousands of troops should war occur. And also removing the 
forces that remain farther south on the peninsula is very good 
alliance management, even though Mr. Rumsfeld hasn't been given 
a lot of credit for his alliance management, diplomacy in 
general, and, in fact, his relations with the South Koreans 
have been fairly mediocre.
    Still in substance I think he is right on this one, that we 
want to get our headquarters out of Seoul. We have an amount of 
territory almost the size of Central Park in downtown Seoul. 
This is just no longer appropriate for the density of that 
city. So I think, again, the logic of his plan is generally 
very sound.
    Going to Germany, you know, we get a pretty good deal in 
Germany. The Germans, like the Japanese, like the Koreans, help 
us with some host nation support. They let us do a lot of 
training. But, of course, the Germans have placed restrictions 
on our training. It is a very densely populated country, 
compared, for example, with much of our country, including your 
State, where there are big open Army bases and more opportunity 
for robust training.
    Most soldiers I know don't mind being in Germany. It is not 
a hardship post, but still it requires them to have a greater 
likelihood of redeploying from one place, let us say in Texas, 
over in Germany, back to New York. Their spouses can't keep 
jobs; their kids have to move around in school.
    The Army, I think, has a good program to try to keep 
people's life in more than one geographic zone for a longer 
period of time, which I support. I think the redeployment from 
Germany can help. So I don't see it as a big money saver. I 
don't see it as a radically transformational strategic concept, 
but I think in regard to both Germany and Korea, it makes 
generally good sense.
    Mr. Sessions. And you believe it is wise that the Secretary 
move forward on these plans?
    Mr. O'Hanlon. Yes, because I think it has to be linked to 
the base closure rounds. So we have to have some sense of what 
we are doing abroad.
    Mr. Sessions. I do agree with that aspect, too. Thank you.
    Colonel Larsen. As a retired military pilot, the one 
comment I would make is the terrible problems of training in 
Germany at--now when we can't fly at night. When we deployed 
the Apaches down to the war in Bosnia, and they had some 
accidents the first day--that helicopter is designed to fly at 
night. They had to train them how to fly at night. That 
helicopter is designed to fly at night and kill tanks, but they 
weren't doing that in Germany. I find that is true for a lot of 
fighter pilots. So the training there is not sufficient from 
that operational perspective.
    Mr. Carafano. I agree with that. I am perhaps just a little 
frustrated that we are not moving faster. There are enormous 
opportunity costs involved in all of this. Every day we delay 
it, we pay for the additional inefficiencies, and we fail to 
gain the benefits of doing that. So I would really think that 
we could move as expeditiously as possible on this. I do agree 
with Mike.
    Also, that moving in the background, it is also a good time 
to do it while we are involved in Iraq, because much as we did 
the drawdown in Europe, that we used that opportunity to make a 
lot of our base realignment decisions overseas and gain the 
efficiencies of not sending the guy back to Schweinfurt if 
eventually he is going to go back to Ft. Hood--anyway, that we 
take the opportunity, while we are in transition in the Army, 
in terms of modularity, while we are in transition in terms of 
moving forces around to meet needs in Iraq and Afghanistan, 
that we use these opportunities to implement whatever force 
structure changes we need to do.
    So we should work--I think those should be on the fast 
track, and I think that would--in the end has actually saved 
money, perhaps more than just the restructuring itself.
    Mr. Gaffney. I would just add very quickly, it seems to me 
that if you can do this in a way that preserves your ability to 
project power quickly, that is the critical thing. I mean, it 
has not always worked brilliantly, and there certainly are 
restrictions. We haven't seen restrictions, I think, on 
deployment so much as on training. But having the ability--and 
I think this is built into the Pentagon's plan--to ensure 
whether you are keeping a skeletal force in Germany or you are 
moving them even farther east, they remain available to you to 
go where you need them on short notice, which is the big 
advantage of having them there, rather than having them based 
in CONUS.
    Mr. Sessions. Good.
    Mr. Gaffney. That and getting their families back.
    Mr. Sessions. I think it has to do not only with the 
quality of life, but the message that we send vis-a-vis the 
relationship with these other countries. But in particular, I 
am concerned about how that frees up, so to speak, the demands 
and the needs that we have from a growing perspective. So I 
appreciate that.
    I yield back.
    Mr. Garrett. The gentleman yields back.
    Mr. Crenshaw.
    Mr. Crenshaw. Could I ask you--I apologize for not being 
here, being in another meeting, but I understand there was a 
discussion about, or at least mention of, the administration's 
budget reducing the number of aircraft carriers from 12 to 11, 
and I heard somebody say, if you build an aircraft carrier, 
that is good for national defense; you buy a fire truck, that 
is not as broad.
    So I guess my question is if, as I understand it, going 
from 12 to 11, which I find a little bit amazing, and we were 
in the middle of Afghanistan and in the middle of Iraq--the 
last time there was a quadrennial defense review, they said we 
need 12 aircraft carriers. Admiral Clark was quoted as saying 
we really need 15, but the budget constraints only allow us to 
have 12. So, it seems clear this is kind of a budget-driven 
decision.
    As I understand it, there were $60 billion in cuts, they 
kind of looked for it in the Department of Defense, and, again, 
as I understand it, it is like a $1.2 billion savings over 5 
years when you get rid of 1 aircraft carrier, go from 12 to 11. 
So it seems to me that that is kind of the smallest amount of 
savings, and yet poses the greatest strategic risk. I mean, as 
we reduce our footprint around the world, it seems to me we 
need more platforms so we don't have to ask people's permission 
to go across their borders, et cetera.
    So I guess my question is, two-fold. One is do you know how 
they arrive at the number of $1.2 billion savings when you 
retire an aircraft carrier? That saves $1.2 billion over 5 
years; I don't know how they get that number. Number two, does 
that strike you, as it does me, it is a small amount of savings 
for a huge impact on our national security and force structure? 
So could you maybe comment on those two questions?
    Mr. Gaffney. Well, I spoke to this in my prepared testimony 
and abbreviated it a little bit, but I would be happy to 
elaborate.
    Obviously, if you do decide that we are going to fight only 
the kinds of wars we are in at the moment from here on out, you 
may tailor your forces somewhat differently than if you are 
going to fight--I hope not, but we might--somebody like China 
in the future.
    It does seem to me, under foreseeable circumstances at 
least, that irrespective of whether you are going to fight, you 
know, the al Qaeda plus state sponsors of terror community, or 
you are going to go after so-called strategic peer competitors, 
you want aircraft carriers. You want the kind of flexibility 
that they offer, and most especially, as I was saying a moment 
ago, the kind of power projection opportunities that they 
afford you.
    As best I can tell, you are absolutely right. This is 
purely driven by the budget. This is not--there is not a 
strategic logic to it. There is not a powerful argument even 
being advanced on the strategic level for it.
    Worse, it sounds as though from, again, the trends that we 
are seeing, it looks as though they think they may get by with 
nine aircraft carrier battle groups in the future, which, as I 
said in my testimony, I think is simply incompatible with the 
kind of global presence and power projection requirements we 
are going to need to have.
    How they arrived at the amount of savings, my sense is that 
the logic of this has gotten somewhat muddled, to put it 
charitably, by some of the changes that the Navy has been 
trying to effect in terms of what used to be called hot 
bunking--they now have a fancier term for it, something 
swapping, I can't remember what it is--but relying on fewer 
days out of service due to remanning a ship, postponing or 
scrapping altogether, in some cases, overhauls and maintenance. 
You can do that for a while, but none of those practices, I 
think, has been done with a view to excessive maintenance or 
excessive manning. They have been done because they have 
traditionally been established to be the kind of activities 
that are required to support these very capital-intensive ships 
and manpower-intensive ships over periods of time.
    So I think I very much agree with the concerns you are 
expressing. I think it is neither penny wise nor pound 
sensible, and I think we will find ourselves, when the next 
thing comes up, whether it is a tsunami or whether it is some 
other act of God or whether it is some conflict, let alone a 
major conflagration, doing what we have done since the 
invention of the carrier, which is asking where are they, and 
why don't we have more.
    Mr. Crenshaw. I guess, too, wouldn't you think--I mean, we 
were talking a lot about assets, et cetera, airplanes. You 
know, you can slow down procurement, build one less airplane 
this year and catch up next year, but if you don't have 12 
aircraft carriers, and you take one out of service, it seems 
like that is fairly irreversible. You don't kind of turn that 
around. So it seems to me we ought to go slow, and I appreciate 
your comments.
    Anybody else have anything they want to say? Sir?
    Mr. O'Hanlon. Yes, sir. Well, I will be the skeptic. 
Although I agree, Congressman, enough with the points you and 
Frank make that I would not want to go to nine myself, but I do 
think we can go to 11. I will say why.
    One is in brief, the Mediterranean theater, I think, is a 
theater we no longer need to worry about having carriers 
deployed in much. We used to. That was one of the drivers for 
15 when Admiral Clark was talking about that kind of number.
    Secondly, even though the Persian Gulf is clearly still a 
dangerous environment, the Navy actually has benefited from the 
overthrow of Hussein in a way the Army and Marine Corps have 
not yet. That theater is now at least temporarily--and I grant 
one has to prognosticate about the, future too, but at least 
temporarily it is more stable.
    Third, I think Admiral Clark's concept of surging carriers 
for crises, for exercises, but not always maintaining the same 
level of forward deployment as we have in the past is generally 
a smart one. It can't go so far for reasons that Frank Gaffney 
just mentioned as to lead you to a very small carrier fleet. 
There are limits on how far you can push that logic. But I 
think there is enough potential there that if you want to get 
some savings to be able to build more ships of differing kinds 
and achieve other purposes.
    And we were talking with Mr. Allen about the lack of 
destroyers and so forth. I think you do have to look for smart 
economies. Now I personally would probably want to keep a 
carrier based in Florida and perhaps put one less in Newport or 
one less in San Diego, in that region, because I do think there 
is a benefit to the diversification of our home porting for 
protecting our fleet. But I still think when I look at the 
numbers, 12 to 11 is something I can live with. Again, there is 
no reason to do it except to save money. That is, in this 
environment, a fairly important reason at least to consider it.
    Mr. Crenshaw. Thank you.
    Mr. Gaffney. Mr. Chairman, could I ask your indulgence just 
on a quick point?
    Mr. Garrett. Sure.
    Mr. Gaffney. I find it very difficult to countenance that 
the area of the Persian Gulf is getting more stable. We are 
looking at an Iran that is becoming more dangerous by the day. 
If we are lucky, we will maintain a stable, peaceable, free and 
pro-Western Iraq as something of a counterweight. It may or may 
not involve our having forces there.
    But what is happening on the Iranian side and what may well 
portend in the Saudi side of the Persian Gulf makes it anything 
but an American lake. And I don't want to say that Mike 
suggested that, but it certainly sounds as though if you are 
not concerned about having American carriers in the Med where 
they can get into that region quickly if they have to, assuming 
the Egyptians will let us come through the canal, or having 
people adequately staffed so that you can--or carriers 
adequately staffed so that you can surge into the Gulf or into 
the Arabian Sea as need be, you know, I think you are making a 
mistake. Frankly, if the CNO were here, I think he would say we 
were making a mistake, if pressed. Other than budgetary 
constraints, I don't think he would do it.
    The other point is just to go back to something Mr. Allen 
said. I am sure you are keenly aware of this. The industrial 
base is in jeopardy. We stop building ships for a year or two, 
and it is not just that the shipyards themselves are in 
trouble, but that entire tier upon tier upon tier of suppliers 
are gone.
    So it is--you ask the question, how fast do you turn around 
a decision to get rid of a carrier? Well, if it is turned 
around by building another one, it is not just going to be the 
6 years or 7 years or 8 years it takes to build one, it is 
going to be going back and requalifying, particularly nuclear 
suppliers, which is a very exacting business, who may not be 
there anymore, especially if compounded by the few number of 
nuclear-powered submarines that we are building.
    Which brings me back just finally to the point that I made 
in my opening remarks. We look, I think, at the moment to be 
unduly reliant upon dubious sources of supply. And we keep 
doing this to very, very important industrial bases like the 
shipbuilding base, and that problem will only become more 
acute. Then a lot of these other issues that we have talked 
about here in the course of the day will sort of fall behind 
the way, because there isn't going to be much you can do about 
it. You can't buy, necessarily, somebody's supply if they are 
not friendly toward you, or they find it inexpedient to give 
you the supply when you need it. You may not be able to ramp up 
your production capability to meet a surge need.
    So these are things that I just entreat this committee, and 
certainly those of you who have other responsibilities on other 
committees to be taking a hard look at as you make these 
important budgetary decisions.
    Mr. Garrett. Thank you. Maybe I will just use the 
prerogative of the Chair, then, to throw out one final question 
for the day, and that is since we are sitting on the Budget 
Committee--and it goes to issues you have raised on that point 
on the past, what we are looking at in the future in the budget 
that we will be considering for the 2006 operating year as far 
as the Pentagon is concerned on so many of the programs that 
you have talked about. My understanding is really began back in 
2004 when someone put pen to paper and said this is what we 
think we need as far as our needs at this point in time, it 
only gets through the process to where we are today, 2 years 
later.
    So going to the overall perspective, as far as reforming 
our budgetary process, reforming the procurement process within 
the Pentagon, how do you address those issues relative to the 
point that Frank raised just right now as well?
    Mr. Gaffney. Well, I guess this falls to me to explain 
myself. Look, you are absolutely right. There are long lead 
times. This quadrennial defense review, for example, is now in 
full gear, but it has been in preparation since the last one 
stopped. Your processes here, you know, are increasingly 
ponderous and have to look out multiple years, not just the one 
immediately at hand.
    I don't think there is any easy answer to this, except to 
say that we have just got to hope that people who we elect are 
available to look over the horizon and anticipate some of the 
problems that are clearly coming, even though perhaps some of 
our leaders don't want to talk about them at the moment, or 
even though it is impolitic to worry about them because they 
are friends of ours in the war on terror, or for some other 
reason.
    But I really think that you are onto something in that 
thinking these things through in a multiyear time frame, 
something I think Jim especially was talking about, the long-
term budget implications of some of our decisions, is critical 
if we are going to maintain the defense we need and avoid 
getting into the kind of death spiral that we have been in the 
past with these things that have the gotten wildly out of sync, 
the threat on the one hand and our budget assignments on the 
other.
    Colonel Larsen. If I could comment on homeland security on 
that. At least we had the mechanism within DOD, we have had for 
a long time, for us to build the 5-year plan, the budget what 
we are going to do. Nothing like that exists for securing our 
American homeland, nothing. So how can we have a strategic 
perspective? As was noted here in the opening remarks, only 
about 50 percent of the funding for homeland security even goes 
to DHS. So who is in charge of protecting this Nation against a 
biological attack, which I think most of us here on this panel 
agree is a rather likely thing in the next 5, 10 years? Who is 
in charge? No one. Who is building the plan? No one.
    Mr. Carafano. I will just throw out an idea that we have 
thrown out before, which is totally heretical, which is perhaps 
the notion of going to a biennial budget cycle and alternating 
the homeland security budget and defense budget so we go to a 
2-year cycle rather than a 1-year cycle, take a little more 
thoughtful look at these issues, spend a little more time on 
oversight, and consider them in alternate years rather than 
trying to have the Congress eat both of them every year.
    Mr. O'Hanlon. I will just add one word, which is whether 
this idea flies or the not, I definitely like Jay's earlier 
idea of a quadrennial review for the Department of Homeland 
Security and all players involved in the homeland security 
mission. I think those reviews really have been very useful in 
the defense community, and we have been doing them now for 
quite a while. They get a little bit old in some ways, but they 
are always useful, and I think the DHS mission definitely needs 
them now.
    Mr. Garrett. Well, gentlemen, I certainly appreciate you 
coming, your time and your testimony. I think someone said in 
their opening remarks that what we deal with, however, as far 
as the defense of this Nation and the security of the people, 
the American people, is first and foremost the responsibility 
of this Congress and this administration, and it makes 
everything else we do pale in comparison.
    I agree with what Members have already said, that we look 
forward when we have someone from the administration to be able 
to come, and certainly for myself at least have highlighted 
some questions that we will be able to bring before the 
administration. So I thank you for that.
    I also would want to say, I ask unanimous consent that 
Members be allowed 7 days to submit statements or questions for 
the record.
    Mr. Garrett. Without objection, we are adjourned.
    [Whereupon, at 12:20 p.m., the committee was adjourned.]

                                  
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