Report text available as:

(PDF provides a complete and accurate display of this text.) Tip?


107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-175

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

     NATIONAL HOMELAND SECURITY AND COMBATING TERRORISM ACT OF 2002

                                _______
                               
                 June 24, 2002.--Ordered to be printed
                                _______
                                

 Mr. Lieberman, from the Committee on Governmental Affairs, submitted 
                             the following

                              R E P O R T

                         [To accompany S. 2452]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 2452) to establish the Department of 
National Homeland Security and the National Office for 
Combating Terrorism, reports favorably thereon with amendments 
and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for Legislation..............................3
III. Discussion of Legislation........................................8
 IV. Legislative History.............................................13
  V. Section-by-Section Analysis.....................................23
 VI. Regulatory Impact...............................................30
VII. CBO Cost Estimate...............................................30
VIII.Additional Views................................................34

 IX. Changes to Existing Law.........................................36

                         I. Purpose and Summary

    The terrorist attacks of September 11, 2001 were a horrific 
wake-up call for the nation. On that beautiful fall day, 
thousands of citizens lost their lives without warning. 
Suddenly, U.S. citizens realized that warfare had changed and 
they were vulnerable as civilians in their home towns, simply 
going about their daily lives. Almost as quickly, many policy 
makers recognized that the government had not changed to meet 
these new threats. The responsibility for protecting the 
nation's citizens and critical assets on U.S. soil was spread 
among dozens of departments and agencies, with no shared 
strategic vision or effective means of coordination.
    On October 8, 2001, President Bush created an Office of 
Homeland Security within the White House to coordinate federal 
programs related to terrorist threats to the United States. 
However, many lawmakers and policy experts immediately 
questioned whether such a position would have sufficient 
authority to make a difference on this critical issue, and 
began to press for stronger alternatives--including a new 
cabinet-level department encompassing key homeland security 
agencies and programs. On October 11, 2001, Senators Lieberman 
and Specterintroduced S. 1534, establishing a Department of 
National Homeland Security. ``I am convinced that protecting our 
homeland requires nothing less than the establishment of a robust, 
cabinet-level Department, and led by a Secretary who has executive 
control over his organization's budget, the ability to deploy personnel 
and resources, and the capacity to make and implement decisions 
immediately,'' Senator Lieberman said introducing the bill.\1\ ``The 
Secretary for Homeland Security would have the rank and power to ensure 
that the security of our homeland remains high on our national agenda, 
and that all necessary resources are made available to that end.'' 
Senator Specter said the legislation was a recognition of the new 
security challenges facing the nation. ``The events of September 11th 
demonstrate that the threats to our security are no longer the same 
threats as we faced immediately after World War II,'' Specter stated. 
``The need to establish the Department of Homeland Security recognizes 
this changed threat.'' \2\
---------------------------------------------------------------------------
    \1\ Statement of Senator Joseph I. Lieberman of Connecticut, 
Congressional Record, October 11, 2001, at S 10647.
    \2\ Senator Arlen Specter, written statement, Governmental Affairs 
Committee, October 12, 2001, at 55. (S. Hrg. 107-212)
---------------------------------------------------------------------------
    By June 2002, President Bush had reached the same 
conclusion. In a televised national address, President Bush 
stated:

          After September 11th, we needed to move quickly, and 
        so I appointed Tom Ridge as my Homeland Security 
        Advisor. As Governor Ridge has worked with all levels 
        of government to prepare a national strategy, and as we 
        have learned more about the plans and capabilities of 
        the terrorist network, we have concluded that our 
        government must be reorganized to deal more effectively 
        with the new threats of the 21st century.\3\
---------------------------------------------------------------------------
    \3\ Remarks by the President in Address to the Nation, June 6, 
2002, found at http://www.whitehouse.gov. (Hereinafter ``Remarks by the 
President in Address to the Nation.'')

    President Bush stated the problems as follows: ``Right now, 
as many as a hundred different government agencies have some 
responsibilities for homeland security, and no one has final 
accountability.'' \4\ But once a new department is created, he 
said, ``[e]mployees of this new agency will come to work every 
morning knowing their most important job is to protect their 
fellow citizens.'' \5\
---------------------------------------------------------------------------
    \4\ Remarks by the President in Address to the Nation.
    \5\ Remarks by the President in Address to the Nation.
---------------------------------------------------------------------------
    S. 2452, The National Homeland Security and Combating 
Terrorism Act of 2002, is a bipartisan bill to create such a 
department and, more broadly, create a permanent and effective 
government structure to keep U.S. citizens and assets safe at 
home. Introduced on May 2, 2002 by Senators Lieberman, Specter 
and Graham, it combines the earlier, October 2001 proposal by 
Senator Lieberman and Senator Specter to create a cabinet-level 
Department of National Homeland Security (S. 1534), and one by 
Senator Graham to create a White House Office on Combating 
Terrorism (S. 1449). The new department would consolidate a 
range of agencies with key homeland security responsibilities 
for preventing, protecting against, and responding to terrorist 
and other threats on U.S. soil. Those agencies include the 
Coast Guard, Customs, the law enforcement programs of the 
Immigration and Naturalization Service (INS), the Federal 
Emergency Management Agency (FEMA), the National Domestic 
Preparedness Office, the National Infrastructure Protection 
Center, portions of the Animal Plant Health Inspection Service 
pertaining to quarantine inspections at points of entry, and 
the Critical Infrastructure Assurance Office at the Commerce 
Department. However, the department would not include all of 
the important federal programs concerning homeland security, 
such as the intelligence agencies, the Department of Defense 
and others. Therefore, the White House terrorism office would 
be responsible for coordinating terrorism policy government-
wide. The White House terrorism director, working with the 
Secretary of Homeland Security, would write a national strategy 
to combat terrorism and the director would review the budgets 
of all the federal terrorism programs.

                II. Background and Need for Legislation


The commissions

    As unimaginable as the September 11 attacks seemed to many, 
in truth they only confirmed vulnerabilities some experts and 
policymakers had already identified. Several expert commissions 
had determined that the United States was at risk for 
international attacks on domestic soil and that the Federal 
government was poorly organized to detect, prevent, or counter 
such attacks. In the aftermath of the September attacks, the 
work of these commissions provided an invaluable starting point 
for understanding the weak links in the nation's homeland 
security and for taking action to strengthen them.
    There was an array of studies and analysis prior to 
September 11, acknowledging the rising threat of international 
terrorism on U.S. soil. For instance, the National Commission 
on Terrorism, chaired by Ambassador L. Paul Bremer III, in June 
2000 warned that international terrorists were increasingly 
seeking to inflict mass casualties, both overseas and within 
the United States.\6\ The report called for increased 
intelligence efforts to head off potential terrorist attacks, 
as well as heightened preparedness measures at home in the 
event that a catastrophic terrorist attack did occur. Two 
other, high-profile commissions produced subsequent reports 
that proved particularly timely and relevant. One of these was 
the United States Commission on National Security/21st Century, 
known as the Hart-Rudman Commission after its two co-chairs, 
former Senators Gary Hart and Warren Rudman. The Hart-Rudman 
Commission was commissioned by the Department of Defense in 
September 1999 to conduct a broad assessment of U.S. security 
threats and preparedness in the new century. The other was the 
Advisory Panel to Assess Domestic Response Capabilities for 
Terrorism Involving Weapons of Mass Destruction, known as the 
Gilmore Commission after its chairman, then-Virginia Gov. James 
Gilmore III. The Gilmore Commission was created in the Fiscal 
1999 Defense Authorization Act and charged with examining 
domestic response capabilities to weapons of mass 
destruction.\7\ The Hart-Rudman and Gilmore commissions reached 
certain common conclusions. Both found that asymmetrical force 
and other dynamics have made conventional warfare against the 
U.S. prohibitive for many would-be attackers and have given 
rise to a new array of threats on U.S. soil--such as cyber or 
biological attacks and attacks on non-military targets. The 
commissions also agreed that the Federal government needed new 
strategies to combat these threats, and new governmental 
structures to effectuate these strategies. It is a measure of 
the challenge, for instance, that policymakers cannot even 
agree how many agencies are involved in homeland security or 
terrorism. One of the more conservative estimates is 40.\8\ 
President Bush has said there are 100 federal agencies with 
homeland security responsibilities.\9\ A White House chart 
depicting the Federal agencies with key homeland security 
duties presents a daunting tangle of programs spread across the 
government. [See Figure 1.]
---------------------------------------------------------------------------
    \6\ ``Countering the Changing Threat of International Terrorism,'' 
Report of the National Commission on Terrorism, pursuant to Public Law 
277, 105th Congress, found at http://www.fas.org/irp/threat/
commission.html.
    \7\ Section 1405 of the National Defense Authorization Act for 
Fiscal Year 1999, Public Law 105-261 (H.R. 3616, 105th Congress, 2d 
Session) (October 17, 1998).
    \8\ ``Combating Terrorism: Selected Challenges and Related 
Recommendations,'' GAO-01-822, September 2001, at 23.
    \9\ Remarks by the President in Address to the Nation.
    
    
    For instance, border security alone involves the work of 
Coast Guard, Customs, INS, Agriculture Department inspectors 
and others, to secure 95,000 miles of shoreline, 5,525 miles of 
border with Canada and 1,989 miles with Mexico.\10\ Every day, 
more than 1.3 million people and $8.8 billion worth of goods 
are processed at entry points.\11\ Yet, the federal government 
does not have effective systems to process and monitor this 
traffic in a credible way. Dr. Stephen Flynn, a former Coast 
Guard officer and an expert on border security issues, has said 
that the existing border security programs have no way to 
filter out the bad traffic from the good: ``This nation 
presently has no credible way to reliably detect and intercept 
illegal and dangerous people and goods intent on entering this 
country. Our border management systems are broken.'' \12\ 
Flynn's assessment is shared by many. A recent Brookings 
Institution report on homeland security endorsed the effort to 
consolidate federal border agencies: ``There may indeed be some 
historical logic to the disparate organizational placement of 
these border agencies. But the current case for the status quo 
is extraordinarily weak. Not a single one of them is central to 
the mission of its cabinet-agency home-not the Customs Service, 
not the INS enforcement arm, not U.S. Department of Agriculture 
quarantine inspection, not the Coast Guard.'' \13\ Indeed, poor 
coordination among federal border agencies has been a concern 
for years, prompting repeated efforts at reform and 
reorganization.\14\
---------------------------------------------------------------------------
    \10\ ``The Department of Homeland Security,'' White House briefing 
book, June 2002 at 9.
    \11\ ``Road Map for National Security: Imperative for Change,'' The 
United States Commission on National Security/21st Century at 16, found 
at http://www.nssg.gov. (Hereinafter ``Road Map for National Security: 
Imperative for Change.'')
    \12\ ``Dr. Stephen Flynn, testimony, Governmental Affairs Committee 
hearing, October 12, 2001, at 29. (S. Hrg. 107-212)
    \13\ ``Protecting the American Homeland,'' Brookings Institution 
Press at 118.
    \14\ See ``Reorganization Proposals for U.S. Border Management 
Agencies,'' Frederick M. Kaiser, Congressional Research Service, 97-974 
GOV (updated July 22, 1999).
---------------------------------------------------------------------------
    The Hart-Rudman and Gilmore panels came to somewhat 
different conclusions about how to address the need for greater 
governmental coordination on homeland security.
    The Hart-Rudman commission, charged with examining national 
security needs in the new century, took a broad view of the 
issue.\15\ Its most dramatic recommendation was to create an 
independent National Homeland Security Agency responsible for 
planning and coordinating an array of federal activities 
related to homeland security that are currently housed in the 
Federal Emergency Management Agency (FEMA), the Coast Guard, 
the Customs Service, and the Border Patrol. The Commission 
reasoned that these agencies were often neglected and 
underfunded in their present locations. Commenting on the 
placement of Coast Guard (in the Department of Transportation), 
Customs (in the Treasury Department) and Border Patrol (in the 
Justice Department), the Hart-Rudman Commission concluded, ``in 
each case, the border defense agency is far from the mainstream 
of its parent department's agenda and consequently receives 
limited attention from the department's senior officials.'' 
\16\ Grouped together in a new homeland security department, 
the agencies might receive needed attention and resources for 
their homeland security responsibilities and other functions: 
``Their individual capabilities will be molded into a stronger 
and more effective system, and this realignment will help 
ensure that sufficient resources are devoted to tasks crucial 
to both public safety and U.S. trade and economic interests.'' 
\17\ The consolidation could also create a more efficient 
system by highlighting, and eliminating, redundancies among 
these agencies. As proposed, these agencies would not be 
restructured so much as reassembled as components of a new 
agency with a new leadership structure. Specifically, the 
leadership of the new department would consist of three 
directorates: Prevention (primarily border security), Critical 
Infrastructure Protection, and Emergency Preparedness and 
Response. Beyond the advantages of consolidation for the 
specific agencies being moved, forging the new department will 
create a cabinet official focused on homeland security--giving 
the issue the consistent attention it warrants within the 
federal government generally.
---------------------------------------------------------------------------
    \15\ The Commission has issued three reports. The Phase I report 
outlines threats to U.S. security in the 21st century, and Phase II 
outlines the need for a new strategy to combat these threats. The Phase 
III report, released in March 2001, outlines a series of organizational 
changes to address the findings of the earlier reports. It is this 
third report, ``Road Map for National Security: Imperative for 
Change,'' that urges creation of a new agency for homeland security.
    \16\ ``Road Map for National Security: Imperative for Change'' at 
15.
    \17\ ``Road Map for National Security: Imperative for Change'' at 
16.
---------------------------------------------------------------------------
    The Gilmore Commission was convened to look at the somewhat 
narrower question of domestic response capabilities to weapons 
of mass destruction.\18\ The report concluded that ``the 
federal government has no coherent, functional national 
strategy for combating terrorism'' and urged the president to 
craft such a strategy within one year. From an organizational 
standpoint, its key recommendation was to create a ``National 
Office for Combating Terrorism'' to formulate and oversee anti-
terrorism strategy and serve as a central resource on the issue 
in the White House. The director of the national office would 
report directly to the President. As outlined by the report, 
this office would have at least five major sections: (1) 
domestic preparedness, (2) intelligence, (3) health and medical 
programs, (4) research, development, testing, and evaluation 
for technologies related to combating terrorism, and (5) 
management and budget. The national office would have authority 
to review federal agency programs and budgets to ensure that 
they comply with the priorities of the national strategy, and 
to weed out duplication. This budget oversight would include a 
certification process for agencies, with disputes ultimately 
resolved by the President. While the proposed White House 
office would have broad policy and budget responsibilities 
regarding terrorism, it would not have direct operational 
control over federal programs in this area. Operational control 
would remain in the federal agencies with existing programs.
---------------------------------------------------------------------------
    \18\ ``The Gilmore Commission has issued three reports, the most 
recent in December 2001.
---------------------------------------------------------------------------
    The General Accounting Office (``GAO'') affirmed the key 
message of these two commissions. As directed by the Armed 
Services Committees in the FY 2001 Defense Authorization bill, 
the GAO reviewed all federal efforts to combat terrorist 
attacks on domestic soil. That report was released in September 
2001, soon after the attacks.\19\ It did not go as far as the 
Hart-Rudman or Gilmore commissions in recommending specific 
organizational changes; however, its findings tracked many of 
the conclusions of those reports. Specifically, the report 
concluded that federal government needs a focal point for 
leadership and coordination of terrorism policy.
---------------------------------------------------------------------------
    \19\ ``Combating Terrorism: Selected Challenges and Related 
Recommendations,'' GAO-01-822, September 2001.
---------------------------------------------------------------------------

Executive Order

    Several weeks after the September 11 attacks, President 
Bush named Pennsylvania Governor Tom Ridge to lead a new White 
House Office of Homeland Security. The mission of the new 
office was ``to develop and coordinate the implementation of a 
comprehensive national strategy to secure the United States 
from terrorist threats or attacks.'' \20\ More specifically, 
the office was to coordinate executive branch efforts to 
``detect, prepare for, prevent, protect against, respond to, 
and recover from terrorist attacks within the United States.'' 
Governor Ridge, as Director of Homeland Security, would be 
``the individual primarily responsible'' for coordinating 
federal efforts in the event of an imminent terrorist threat 
and during and in the immediate aftermath of an attack. The 
Director was also charged with reviewing the budgets of 
programs related to homeland security and certifying whether 
such funding was adequate. Finally, the executive order also 
created a Homeland Security Council, comprised of the 
President, Vice President and an array of cabinet officers, to 
help advise the President on homeland security matters.
---------------------------------------------------------------------------
    \20\ Executive Order 13228, October 8, 2001.
---------------------------------------------------------------------------
    While many in Congress and elsewhere cheered the selection 
of Ridge, many also immediately questioned whether he had been 
given the necessary powers to succeed in his task. Critics of 
the new homeland office noted that Ridge's office had little or 
no operational powers and apparently would be largely dependent 
on detailees borrowed from other agencies. Many argued that 
Ridge would need full budget and operational authority to 
galvanize federal programs concerning homeland security into a 
cohesive team. Ensuring accountability to Congress and the 
public has also been a key concern. Some lawmakers, while not 
proposing a specific reorganization, called for making Ridge's 
job a Senate-confirmed position. The President has maintained 
that Ridge is his personal advisor and, therefore, it would not 
be appropriate for him to testify before Congress. On this 
basis, Ridge declined invitations to appear before 
Congressional panels. Lawmakers have complained that this is 
inappropriate, given Ridge's acknowledged influence over the 
administration's requested funding for homeland security 
initiatives and other key matters. Beyond the issue of 
testimony, some lawmakers and policy experts contended that 
only a statutory position--and one subject to Senate 
confirmation--would carry sufficient political weight and 
permanence to have a real influence on other cabinet 
secretaries.

                     III. Discussion of Legislation

    S. 2452, The National Homeland Security and Combating 
Terrorism Act of 2002, would create a National Department of 
Homeland Security and a White House Office on Combating 
Terrorism. The new department would provide new leadership on a 
range of homeland threats, including terrorism, by 
consolidating a range of federal agencies and programs 
responsible for border security, critical infrastructure 
protection, and emergency preparedness and response. The 
Secretary will also play a critical role as the lead resource 
for and liaison to State and local authorities, as well as 
private sector entities, on the front lines for homeland 
security. The new White House terrorism director would play a 
government-wide coordinating role on terrorism, focusing in 
particular on matters outside the purview of the new Homeland 
Security Secretary such as military and intelligence policy. 
The bill envisions that these two offices would work closely 
together on strategy and budget recommendations related to 
terrorism.
    There is a substantial rationale for these two mutually 
dependant entities. A White House Office never will have a 
significant staff or budget. Such an office must rely on a 
connection to the President for its power and authority, 
which--if the history of White House ``czars'' provides an 
example--may ebb and flow from year to year and administration 
to administration. In contrast, creating a line agency under a 
cabinet secretary assures that substantial budgeting and 
staffing will be focused on homeland security on an ongoing 
basis in a series of areas important to that security, 
regardless of the strength of the White House advisor's office. 
It will help assure a continuing emphasis on this threat area, 
and ensure a Congressional connection on these problems and 
Congressional budgeting prioritization for them. On the other 
hand, a cabinet secretary will not be able to compel co-equal 
cabinet officers in such areas as defense and intelligence, to 
emphasize terrorism threats and coordinate with other federal 
entities. A White House office can be a crucial complement to a 
line agency to assure coordination of government agencies 
outside the Homeland Secretary's direct control. The homeland 
security threat is so broad that both entities appear critical 
for an adequate governmental response.
    Title I of the bill is an expanded version of Senator 
Lieberman's and Senator Specter's earlier proposal (S. 1534) to 
establish a cabinet level Department of National Homeland 
Security, led by a Presidentially appointed, Senate-confirmed 
Secretary. The Secretary will also be a statutory member of the 
National Security Council. The legislation, modeled on the 
recommendations of the Hart-Rudman Commission, combines the 
Coast Guard, Customs, the law enforcement programs of the 
Immigration and Naturalization Service (including Border 
Patrol), FEMA, the National Domestic Preparedness Office and 
the National Infrastructure Protection Center (both now in the 
Justice Department), portions of the Animal Plant Health 
Inspection Service (now in the USDA) pertaining to quarantine 
inspections at points of entry, and the Critical Infrastructure 
Assurance Office (now in Commerce). These agencies and programs 
would be grouped in three directorates: Border and 
Transportation Protection, Critical Infrastructure Protection, 
and Emergency Preparedness and Response. These directorates 
should be leanly staffed, simply providing a means to integrate 
the activities of the department's component agencies and 
programs. The transferred agencies would continue to perform 
their non-security missions, just as they perform their 
homeland security functions from their current locations.
    The directorate of Border and Transportation Protection 
would primarily encompass border security, overseeing the 
combined duties of the Coast Guard, Border Patrol and other INS 
law enforcement programs, Customs, and the border inspection 
programs of the agricultural quarantine service. The 
reorganization would allow for better coordination and 
information-sharing between these agencies, and reflect their 
shared mission as a frontline defense against dangerous people 
or goods entering the U.S. Currently, Stephen Flynn testified, 
``the front-line agencies cannot even effectively communicate 
with each other.'' \21\ This consolidation is in no way 
intended to discourage legal immigration or trade across U.S. 
borders. Immigrants have provided invaluable cultural and 
economic contributions to the nation, while international trade 
is a critical component of national, and global, prosperity. 
Rather, a more cohesive and efficient border system should 
facilitate legal trade and immigration, while simultaneously 
increasing the chances of apprehending dangerous entries of 
people or products. The Coast Guard and Customs would be 
maintained as distinct entities, however, and all of the 
transferred programs and agencies would retain and be required 
to continue their non-security missions. For instance, the 
Coast Guard's search and rescue operations would not be 
diminished. Transferred agencies may also need to maintain 
close ties to related programs within their former parent 
agencies. In particular, the law enforcement pieces transferred 
from INS, for instance, would necessarily need to maintain 
close coordination with the service programs that would remain 
in the Justice Department. This division of INS programs into 
``enforcement'' and ``service'' components tracks an 
administrative reorganization plan that is already underway.
---------------------------------------------------------------------------
    \21\ Stephen Flynn, testimony, Senate Governmental Affairs 
Committee, Oct. 12, 2001 at 30. (S. Hrg. 107-212)
---------------------------------------------------------------------------
    The Critical Infrastructure Protection directorate would 
oversee the critical physical assets and information networks 
of the nation, including efforts to ensure that the government 
has adequate expertise to ensure cyber security. The office 
would also coordinate efforts to protect critical 
infrastructure from electronic or physical attacks. This 
central office would combine several federal programs that are 
currently spread among different agencies: the Critical 
Infrastructure Assurance Office in the Commerce Department; the 
National Infrastructure Protection Center in the FBI (which 
gathers information and provides warnings of cyber attacks); 
and the Information Sharing and Analysis Centers or ISACs, 
which are government-sponsored committees made up of private 
sector experts who share plans and procedures on information 
security in their respective fields amongst themselves and with 
other ISACs and the government. This consolidation should give 
the nation a more focused and coordinated effort on critical 
infrastructure protection. As Frank Cilluffo, a security expert 
at the Center for Strategic and International Studies, 
testified: ``Critical to the Federal government effort is 
having at its apex a single individual or group endowed with 
the requisite powers and responsibilities to make the system 
work.'' Jamie Gorelick, Vice Chair of Fannie Mae and a former 
Justice Department official involved with critical 
infrastructure protection efforts, testified that ``the many 
and varied responsibilities of organizations in this area could 
benefit from clarification to reduce redundancy and turf 
battles. Responsibility for the identification and the planning 
for protection of `key assets' resides in the FBI's NIPC, the 
Commerce Department's CIAO and, as the Defense Department moves 
closer to a homeland security role, likely there as well. Those 
of us who help run key assets need to know with whom to work.'' 
\22\ Gorelick said the private sector is willing to do its part 
in this area, but needs ``coherent, cohesive leadership from 
the government and a clear understanding of who is doing what 
in the government,'' as well as government resources to 
establish public-private networks to help the private sector 
work collaboratively on critical infrastructure protection.
---------------------------------------------------------------------------
    \22\ Gorelick written testimony, Senate Governmental Affairs 
Committee, Oct. 4, 2001. (S. Hrg. 107-258)
---------------------------------------------------------------------------
    The Emergency Preparedness and Response directorate would 
take the lead on preparations and crisis management operations. 
FEMA would be the core of this new directorate, but with 
strengthened capabilities to prepare for as well as respond to 
natural and man-made disasters. The Department would maintain 
FEMA's regional offices and build on its contacts with state 
and local officials to create an effective national network to 
address terrorist threats. It would also include the National 
Domestic Preparedness Office, currently in the Federal Bureau 
of Investigation within the Justice Department. This domestic 
preparedness office was created to help State and local 
jurisdictions prepare for and respond to terrorist attacks 
involving weapons of mass destruction. Under the bill, this 
office would be combined with complementary efforts within FEMA 
under the Emergency Preparedness and Response Directorate. The 
Secretary isalso charged with creating a National Crisis Action 
Center to serve as the focal point for monitoring emergencies and for 
coordinating Federal support for state and local governments and the 
private sector in crises.
    The Department would have a coordinating center intended to 
facilitate ready communication with other Federal departments 
that have homeland security responsibilities. At the 
Secretary's request, each Federal department or agency would 
have to supply one liaison for the center. The Secretary could 
request other representatives, as well as designees from state 
and local government, as needed. The Director of the 
Coordinating Center would work to ensure that law enforcement, 
immigration, and intelligence databases containing information 
relevant to homeland security are compatible.
    The Department will also have an Office of Science and 
Technology to advise the Secretary and to coordinate across the 
department and other agencies' research and development efforts 
related to overall homeland security. Technology must play 
critical role if this country is to enhance homeland security 
without prohibitive costs. Whether the issue is screening 
baggage or shipping containers, creating vaccines for bioterror 
threats, or detecting and thwarting crippling computer viruses, 
scientific research and development is a vital component of 
meeting the challenge of terrorism at home. To ensure the 
department gets off to a quick start on the research and 
development (``R&D;'') front, the legislation creates an 
acceleration fund to promote promising R&D; related to homeland 
security, and authorizes $200 million for the fund in FY 2003. 
The fund can be used to match and leverage R&D; in other 
agencies and industry to encourage R&D; coordination. Two 
interagency working groups will help the Director of the Office 
of Science and Technology set research priorities and 
administer the fund. The first group will ensure interagency 
coordination and develop an R&D; ``roadmap'' for developing key 
technology options. The second will operate at the technologist 
level and include technology working groups organized around 
key threat areas, such as bioterror or cybersecurity. The 
acceleration fund seeks to jumpstart critical technologies 
related to homeland security that are nearly ready for 
development and deployment, but might languish without an 
infusion of money and attention. It is modeled on the approach 
and authorities used by the Defense Advanced Research Projects 
Agency (``DARPA''), which was created after the Russian launch 
of Sputnik to spur U.S. technologies related to national 
security. Like DARPA, the acceleration fund seeks to create a 
speedy and flexible vehicle to promote vital new 
technologies.\23\ The Department will not have its own large 
science bureaucracy, but will house a small, highly-talented 
science team, like DARPA, and it will need the tools to be able 
to encourage existing labs and science agencies to address 
homeland security threats. The fund, the working groups, the 
interagency R&D; coordination function and the technology 
roadmapping process are those tools, and should enable the 
Department to play this critical role.
---------------------------------------------------------------------------
    \23\ The general model for the proposed Office of Science and 
Technology is discussed in more detail on pp. 43-49 in the Winter 2001-
02 issue of ``Issues in Science and Technology'' published by the 
National Academy of Sciences, et al.
---------------------------------------------------------------------------
    Section 105 of the bill also calls upon the Secretary of 
Homeland Security to report back to Congress after one year on 
the need for additional consolidation, such as in the areas of 
border and transportation security.
    Title II tracks previous legislation introduced by Senator 
Graham (S. 1449). It establishes the National Office for 
Combating Terrorism (NOCT) in the White House, which will be 
led by a Presidentially appointed, Senate-confirmed Director, 
who is an adviser to the National Security Council. The 
Director will seek to ensure that the many agencies involved 
with combating terrorism are operating from a common strategy, 
have sufficient resources to their mission, and are not 
duplicating or undermining the efforts of other federal 
agencies. The Director would coordinate the terrorism-related 
work of federal agencies outside the new Department of Homeland 
Security, particularly the intelligence agencies and military 
assets, and help ensure that these agencies interface well with 
the Department. The Director will direct and review the 
development of a comprehensive national assessment of terrorist 
threats; craft, with the Secretary, a comprehensive strategy to 
combat terrorism; coordinate development of a comprehensive 
annual budget to implement the strategy; and exercise budget 
review and decertification authority over programs in the 
terrorism prevention budget.
    Title III of the bill calls for a comprehensive national 
strategy to combat terrorism, to be developed collaboratively 
by the new Secretary of Homeland Security and the Director of 
the White House Office for Combating Terrorism. The Secretary 
will have the lead role on issues of border security, critical 
infrastructure protection, emergency preparation and response, 
and integration with state and local efforts. The Director of 
the NOCT will have overall responsibility for preparing the 
strategy, and will take the lead on strategic planning 
concerning intelligence and military assets, law enforcement, 
and diplomacy. The Director, working with the Secretary, can 
ensure the coordination of critical counter-terrorism areas of 
government outside of the Secretary's direct control. This 
title establishes an interagency council, to be co-chaired by 
the Secretary and Director, to assist with preparation and 
implementation of the strategy. The bill also establishes a 
non-partisan, 9-member panel of outside experts to provide an 
assessment of the terrorism strategy (similar to the National 
Defense Panel that, in 1999, assessed the first Department of 
Defense Quadrennial Defense Review for military planning). In 
the area of counterterrorism, complacency is a constant 
concern, and the panel should help assure an outsider-based, 
``Red Team'' critique of the Strategy on a periodic basis.
    Title IV of the bill seeks to encourage emergency 
preparedness nationwide. The legislation would set up a 
clearinghouse on emergency preparedness in the Department to 
provide a one-stop resource for information about grants and 
other resources on emergency preparedness. It would also create 
a pilot program to support private sector preparedness 
initiatives, and establish the week including September 11 each 
year as National Emergency Preparedness Week, requesting the 
President to so designate it.

                        IV. Legislative History

    S. 2452, the ``National Homeland Security and Combating 
Terrorism Act of 2002,'' was introduced by Senators Lieberman, 
Specter and Graham on May 2, 2002 and referred to the 
Committee. S. 2452 incorporated substantial portions of two 
other bills: S. 1449, which was introduced by Senator Graham 
and others on September 21, 2002, and S. 1534, which was 
introduced by Senators Lieberman and Specter on October 11, 
2001. Both of these bills werealso referred to the Committee.
    In the wake of the September 11, 2001 terrorist attacks, 
the Committee held 14 hearings on homeland security, including 
three (September 21, 2001, October 12, 2001, and April 11, 
2002) which focused specifically on how government can best be 
organized to meet the threat of terrorism on our homeland. The 
other hearings focused on particular homeland security 
concerns, and included consideration of organizational issues. 
Those hearings addressed critical infrastructure protection 
(September 12, 2001, October 4, 2001, and May 8, 2002), airline 
safety (September 25, 2001, November 14, 2001), bioterrorism 
(October 17, 2001), mail safety (October 30 and 31, 2001), port 
security (December 6, 2001), the role of State and local 
government in homeland security (December 11, 2001), rail 
safety (December 13, 2001), and public health preparedness 
(April 18, 2001).

September 21, 2001 hearing

    On September 21, 2001, the committee held a hearing 
entitled, ``Responding to Homeland Threats: Is Our Government 
Organized for the Challenge?'' Witnesses included former 
Senators Gary Hart and Warren Rudman, co-chairs of the United 
States Commission on National Security/21st Century (commonly 
referred to as the Hart-Rudman Commission); then Governor James 
S. Gilmore, III of Virginia, chairman of the Advisory Panel to 
Assess Domestic Response Capabilities for Terrorism Involving 
Weapons of Mass Destruction (commonly referred to as the 
Gilmore Commission); L. Paul Bremer, III, former Ambassador-at-
Large for Counter-Terrorism and a member of the Advisory Panel 
to Assess Domestic Response Capabilities for Terrorism 
Involving Weapons of Mass Destruction; and David M. Walker, 
Comptroller General United States General Accounting Office.
    Senators Hart and Rudman testified concerning the findings 
and recommendations of their commission regarding governmental 
organization. The Hart-Rudman Commission proposed the 
establishment of a National Homeland Security Agency, an 
independent agency whose director would be a member of the 
President's cabinet. It would be responsible for coordinating 
an array of federal activities related to homeland security, 
including the Federal Emergency Management Agency, the Coast 
Guard, the Customs Service, the Border Patrol, and other 
entities which would be transferred to the new organization. It 
would be functionally organized around prevention, protection 
of critical infrastructure, and emergency preparedness and 
response.
    Senator Rudman testified that the Hart-Rudman Commission, 
which included seven Democrats and seven Republicans who worked 
for more than three years, unanimously concluded that the 
single most important issue facing America was how to deal with 
domestic terrorism:

          We reached consensus that an attack on the domestic 
        homeland was not a question of if, but a question of 
        when. And we reached consensus that the nation was and 
        is largely unprepared to respond here at home to such 
        an attack * * * We proposed and still believe that any 
        solution to this problem must address issues of 
        strategy. It must address issues of federal, state and 
        local organization and cooperation. And it must address 
        issues of capacity and cooperation. In general, we said 
        that the United States must replace a fractured, ad hoc 
        approach to homeland security with a sustained, focused 
        approach, emphasized integration of existing agencies 
        and departments rather than wholesale invention, and 
        recapitalize our existing assets and capabilities 
        rather than try to create redundancy.\24\
---------------------------------------------------------------------------
    \24\ Senator Warren Rudman, testimony, Governmental Affairs 
Committee, September 21, 2001, at 7. (S. Hrg. 107-207) (Hereinafter 
``Rudman testimony.'')

    Senator Rudman called on the President and Congress to 
create a new national homeland security agency along the 
outlines of the recommendations in the Hart-Rudman report. He 
testified that transferring of Coast Guard, Customs, and other 
entities into the new agency would be for ``common purpose 
coordination, not bureaucratic consolidation'' and ``each of 
these entities would retain their own distinct identities, 
structures and internal operating procedures.'' \25\
---------------------------------------------------------------------------
    \25\ Rudman testimony at 7.
---------------------------------------------------------------------------
    Senator Gary Hart contrasted the commission's 
recommendations with the coordinator position created by 
President Bush and filled by Governor Ridge: ``If a White House 
office has authority to coordinate, the agencies that it has 
authority to coordinate aren't necessarily accountable to that 
office. They are accountable to their department head, cabinet 
secretary, or whatever.'' \26\ Hart said it was unrealistic to 
think a White House coordinator could effectively manage the 
``almost hopeless dispersal'' of authority on homeland security 
matters among 40 or 50 different agencies.\27\
---------------------------------------------------------------------------
    \26\ Senator Gary Hart, testimony, Governmental Affairs Committee, 
September 21, 2001, at 28. (S. Hrg. 107-207) (Hereinafter ``Hart 
testimony.'')
    \27\ Hart testimony at 11.
---------------------------------------------------------------------------
    Senator Hart further explained the Commission's rationale 
for moving specific agencies into the new homeland security 
agency:

          The reason why I stressed, frankly, this problem with 
        bureaucracy is that those agencies had a different 
        mission. I mean, they're where they are for a different 
        purpose. Border Patrol is in Justice because it's a law 
        enforcement agency, to try to prevent people from 
        illegally entering the country. Customs is in Treasury 
        because its purpose originally was to collect revenues. 
        The Coast Guard regulates incoming and outgoing 
        seaborne traffic, makes rescues and so on, but it--that 
        historic function was a transportation function. Now 
        these are front line defense organizations. It frankly 
        makes little sense for them to be where they are, given 
        their new responsibility. If we are in fact in war, and 
        I believe we are, in a prolonged war, the nature and 
        function of these agencies has changed. So the reason 
        why they are where they are, frankly, makes little 
        sense any more. And to protect that bureaucratic turf, 
        as I've indicated, under these circumstances, is 
        folly.\28\
---------------------------------------------------------------------------
    \28\ Hart testimony at 22.

    Governor Gilmore presented his Commission's proposal to 
create, by statute, a new national office for combating 
terrorism. This office, to be located in the White House, would 
coordinate national terrorism policy and preparedness in the 
executive branch. Governor Gilmore said it would be impossible 
to place all of the agencies important to homeland security in 
one agency, and instead stated that, ``the emphasis needs to be 
on coordination of all agencies as needed, as planned, as part 
of an overall national strategy.'' \29\ He also cited the 
danger that a new agency would be viewed as competing with 
others and warned of the potential for turf battles.
---------------------------------------------------------------------------
    \29\ Governor James Gilmore, testimony, Governmental Affairs 
Committee, September 21, 2001 at 29. (S. Hrg. 107-207)
---------------------------------------------------------------------------
    Ambassador Bremer cited what he called four ``necessary 
attributes'' for the new office, whether it took the form of a 
new cabinet department as recommended by Hart-Rudman, or the 
White House office established by the President: (1) in order 
to have political accountability, the head of the office should 
be appointed by the President and confirmed by the Senate; (2) 
the office should be at the cabinet level, to ensure the 
necessary access and visibility; (3) it should have budgetary 
authority and the ability to design a national strategy and 
certify that agencies budget requests are in compliance with 
it; and (4) finally the office should have a degree of autonomy 
and neutrality, to insulate it from bureaucratic in-fighting.
    The final witness, Comptroller General David Walker, 
testified that the large number of organizations involved in 
homeland security need to have clearly articulated roles, 
responsibilities, and accountability mechanisms. Walker 
stressed the need for coordination not just at the Federal 
level, but also with State and local government, and with the 
not-for-profit and private sector, since much of the critical 
infrastructure at risk is in private hands.
    Walker also testified that the recommendations of the two 
panels are not mutually exclusive. Walker said some agencies 
have evolved such that they no longer fit well in their home 
agencies and might benefit from consolidation with other 
agencies with key homeland security missions. But Walker said 
such a department would never include all relevant agencies, so 
that there would still be a need for an overall coordinator.

October 12, 2001 hearing

    On October 12, 2001, the committee held a second hearing on 
``Legislative Options to Strengthen Homeland Defense.'' The 
hearing focused on two proposals: S. 1534, sponsored by Sen. 
Lieberman and Sen. Specter, to create a Department of National 
Homeland Security, and S.1449, sponsored by Sen. Graham, to 
establish a National Office for Combating Terrorism in the 
White House.
    Eleven witnesses appeared at this hearing, including the 
major sponsors of bills designed to improve the way government 
is organized for homeland defense. The bipartisan group of 
member witnesses included: Senator Bob Graham of Florida, 
Senator Bob Smith of NewHampshire; Senator Arlen Specter of 
Pennsylvania, Congressman Wayne T. Gilchrest of Maryland, Congresswoman 
Jane Harman of California, and Congressman William ``Mac'' Thornberry 
of Texas. These member witnesses all agreed that significant change is 
necessary to overcome endemic turf battles and improve coordination and 
cooperation across government in the effort to combat terrorism. They 
also generally agreed that newly appointed Homeland Security Director 
Tom Ridge did not have sufficient authority to get the job done.
    The non-member witnesses were: former U.S. Representative 
Lee Hamilton, who is now Director of the Woodrow Wilson 
International Center for Scholars and who served on the Hart-
Rudman Commission; General Barry McCaffrey, formerly the head 
of the Office of National Drug Control Policy; General Charles 
Boyd of the Council on Foreign Relations and the Executive 
Director of the Hart-Rudman Commission; Stephen Flynn, Senior 
Fellow with the Council on Foreign Relations, and Thomas 
Stanton of the National Academy of Public Administration.
    Congressman Hamilton testified that terrorism is the number 
one threat to the national security of the United States, and 
this has profound implications for how the government should be 
organized and how governmental resources should be allocated. 
Congressman Hamilton expressed concern that Gov. Ridge did not 
have sufficient authority to succeed. He testified that access 
to the President would not be enough, and ``that position is 
too important to depend upon a personal relationship with the 
President.'' \30\
---------------------------------------------------------------------------
    \30\ Lee Hamilton, testimony, Governmental Affairs Committee, 
October 12, 2001, at 23. (S. Hrg. 107-212)
---------------------------------------------------------------------------
    General McCaffrey applauded the appointment of Governor 
Ridge as well. However, he described several shortcomings with 
the position:

        * * * [I]f you skim-read the Presidential order that 
        set up his effort, there is no mention of the Armed 
        Forces. There is no adviser from the Chairman of the 
        Joint Staff or the Armed Forces on this council. It is 
        a coordinating, not a directing, authority. It does not 
        mention missile defense, cyber warfare, counter-drug, 
        economic warfare, information warfare, civil 
        disturbances, national disasters, or any other aspect 
        except a narrow definition of counterterrorism. There 
        is no mention of coordination with Canada and Mexico in 
        hemispheric security arrangements. He lacks budgetary 
        authority. There will be no unity of effort in 
        supporting exercises, training and directing the 
        responsible use of monies in the current bureaucratic 
        format. More importantly * * * what it lacks is the 
        force of law. We do not have power in the Federal 
        government unless you are established by legal statute 
        * * * In sum, I would argue that notwithstanding this 
        man's superb credentials, clear access to the cabinet 
        and to the senior leadership of Congress, within one 
        year, with a small staff of detailees, with no Federal 
        legislation, with no separate budget, no budget 
        certification, he will be relegated to running the 
        Speaker's Bureau on Counterterrorism Operations. I 
        would argue that would not be what either the Congress 
        or the President wants.\31\
---------------------------------------------------------------------------
    \31\ General Barry McCaffrey, testimony, Governmental Affairs 
Committee, October 12, 2001, at 25. (S. Hrg. 107-212) (Hereinafter 
``McCaffrey testimony.'')

    General Boyd expressed support for melding the two 
approaches represented by the Sen. Graham's proposed 
legislation and the Lieberman-Specter bill. Boyd said a White 
House office could provide strategic integration that would 
complement the operational consolidation of the new homeland 
department.
    Dr. Stephen Flynn testified that porous border management 
has left the U.S. economy tremendously vulnerable to disruption 
by terrorism. Dr. Flynn testified that at any given time there 
are thousands of 40 foot, multi-ton containers moving around 
the country, yet U.S. authorities have no idea what they hold 
and know little about where they are from or where they are 
going. A dangerous shipment could shut down a port and disrupt 
commerce for weeks, he warned. The Canadian border is another 
example. Flynn said that even though Canadian security and 
intelligence services believe there may be as many as 50 
terrorist groups with a foothold in Canada, the vast land and 
water border with Canada was patrolled by only 330 Border 
Patrol agents, supported by one analyst, and equipped with 
radios cannot communicate with local and State police 
authorities. Flynn testified that while trade with Canada has 
climbed fourfold since 1985, the U.S. Customs Service has 700 
inspectors assigned to the northern border, 200 fewer than 20 
years ago. He added, ``routinely one-half of all the primary 
inspection stations along the norther border, from Washington 
to Maine, have no personnel assigned to those stations because 
of staff shortfalls from INS and from Customs.\32\
---------------------------------------------------------------------------
    \32\ Dr. Stephen Flynn, testimony, Governmental Affairs Committee, 
October 12, 2001, at 30. (S. Hrg. 107-212) (Hereinafter ``Flynn 
testimony.'')
---------------------------------------------------------------------------
    Flynn said consolidating the key border agencies would help 
identify security risks. He cited the example of a ship with 
potentially dangerous cargo or crew, scheduled to arrive on the 
same day and in the same port as a tanker with highly volatile 
fuel: the Coast Guard would have some information about the 
hazardous cargo arriving, Customs Service would receive some 
advance notice of cargo manifest information, the INS may or 
may not know much about the crew, depending upon the kind of 
visas the sailors hold, and none of these front-line agencies 
would likely have access to national security intelligence from 
the FBI or the CIA.\33\ Significantly, no single agency would 
have all of the information simultaneously. Also, none of the 
agencies will have sufficient manpower and resources to 
intercept and inspect all of the people, cargo and ships that 
spark their interest as potential security concerns.
---------------------------------------------------------------------------
    \33\ Flynn testimony at 30.
---------------------------------------------------------------------------
    General McCaffrey reinforced Dr. Flynn's assessment of the 
borders:

          We do not have the rule of law and order on the U.S. 
        borders. It is fundamentally broken. If you put your 
        finger on a map anywhere on that border and ask who is 
        in charge of this effort, there is no Federal officer 
        who is charged with integratinginfrastructure, 
intelligence, communication and planning. There is no modality to 
coordinate across that border. If you ask sector commanders, ``who is 
your Mexican counterpart? What is the fax number? What is the telephone 
number? When did you see him last? Show me the map that shows the other 
side of the border, the avenues of approach, none of it exists. It is 
outrageous.'' \34\
---------------------------------------------------------------------------
    \34\ McAffrey testimony at 37.

    Thomas H. Stanton, Chair of the Standing Panel on Executive 
Organization and Management of the National Academy of Public 
Administration (NAPA), agreed with the other witnesses that the 
President's appointment of Governor Ridge was a much needed 
first step, and he indicated his support for legislation along 
the lines of S. 1449 to strengthen the authority of the 
director of the office. Stanton cautioned against having a 
single person serve as both the coordinator and also the head 
of a cabinet department, saying such a dual role would 
inevitably give rise to perceptions of favoring their own 
department at the expense of others. Stanton said that complex 
issues around creation of a Department need to be carefully 
assessed before Congress acts--especially the concern that the 
many non-homeland security functions of these agencies not be 
diminished. If Congress does reorganize in this area, Stanton 
said it might be beneficial to use the Reorganization Act, as 
Senator Thompson suggested, so that the President could make 
the careful considerations and trade-offs necessary to maximize 
the benefits of a given reorganization and minimize the costs.
    Commander Flynn responded to Stanton's concern about the 
non-homeland security functions of critical agencies. He 
contends that these non-security functions are precisely what 
will enable border management agencies to combat terrorism 
because as government personnel conduct normal activities, such 
as the Coast Guard patrolling fishing waters, they can spot 
``aberrant behavior'' that may signal terrorist activity. 
``They are given the mission that while you are out there doing 
your job, you are also on the lookout for bad things happening 
and detecting and intercepting them. You get the best of all 
worlds in my view. It is not an either/or.'' \35\
---------------------------------------------------------------------------
    \35\ Flynn testimony at 39.
---------------------------------------------------------------------------

April 11, 2002 hearing

    On April 11, 2002, the Governmental Affairs Committee held 
a hearing on ``Legislation to Establish a Department of 
National Homeland Security and a White House Office to Combat 
Terrorism.'' This hearing focused primarily on a draft proposal 
by Senators Lieberman, Graham, and Specter, subsequently 
introduced in the Senate, with some modifications, as S. 2452.
    Witnesses included key Senate and House sponsors of the 
draft legislation: Senator Arlen Specter and Senator Bob 
Graham, as well as Congresswoman Jane Harman, Congresswoman 
Ellen Tauscher, and Congressman William ``Mac'' Thornberry. 
These members testified that Ridge did not have sufficient 
authority to be effective, and the draft legislation was 
necessary to create an effective governmental structure to 
promote homeland security. Senator Judd Gregg also testified on 
his legislation (S. 2020) to create a border management agency 
comprised of Coast Guard, Customs, INS law enforcement, and 
certain border programs related to drug interdiction and 
agricultural inspection. Gregg said that because key players in 
homeland security, such as the FBI, State Department, CIA and 
Defense, cannot be pulled into a cabinet-level agency for 
homeland security, he favored taking the lesser step of 
creating an agency to improve efficiency at the borders. He 
stated:

          Probably no element of this entire exercise has less 
        effective coordination now than the management of our 
        borders in the area of protecting ourselves from 
        terrorist actions. We have seen consistently breakdowns 
        in the INS and the Border Patrol. We have seen 
        overlapping responsibility and ineffectiveness from 
        Customs and INS trying to work together. We know that 
        agencies such as the agricultural quarantine efforts 
        and the Coast Guard, which have huge responsibility in 
        this area, are not being coordinated in a systematic 
        manner with the other agencies, such as Border Patrol.* 
        * * Our management of those borders is inefficient and 
        the lines of authority are overlapping and 
        confusing.\36\
---------------------------------------------------------------------------
    \36\ Senator Judd Gregg, testimony, Governmental Affairs Committee, 
April 11, 2002, at 12. (S. Hrg. 107-472)

    Other witnesses were: Senator Warren Rudman, co-chair of 
the Hart-Rudman Commission; Comptroller General David M. 
Walker; Mitchell E. Daniels, Jr., Director of the Office of 
Management and Budget; Phillip Anderson, Senior Fellow and 
Director of the Homeland Security Initiative for the Center for 
Strategic and International Studies (CSIS); I.M. Destler of the 
Center for International and Security Studies, School of Public 
Affairs, University of Maryland; Stephen M. Gross, Chair of the 
Border Trade Alliance; Elaine Kamarck of the John F. Kennedy 
School of Government at Harvard University; and Paul C. Light, 
Vice President and Director, Governmental Studies Program, of 
the Brookings Institute.
    Senator Rudman repeated his calls for a new department of 
homeland security, and cautioned that the nation should not 
focus on airport security to the exclusion of other border 
security issues. He noted that while more money is being spent 
on airport security, he believes that the greater threat to the 
country now is posed by U.S. ports. He testified that, of the 
50,000 containers coming into U.S. ports every day, less than 
one-percent are inspected, creating the risk that chemical, 
biological, or nuclear devices could be brought into the 
country.
    Elaine Kamarck of the John F. Kennedy School of Government 
at Harvard strongly endorsed the proposed new Department. 
Kamarck recommended adding additional functions to the proposed 
department: the new Transportation Security Administration and 
the consular affairs section of the State Department.
    I.M. Destler of the Center for International and Security 
Studies at the University of Maryland, testifying on behalf of 
himself and Ivo Daalder of the Brookings Institute, also 
favored reorganizing government for homeland security, though 
in a more limited fashion than called for in the proposed 
legislation. First, Destler favored legislation to make the 
existing Homeland Security Council and Office statutory 
entities with the Director confirmed by the Senate. He also 
said that rather than creating a homeland security department, 
Congress should create a morelimited border management agency, 
including a broad range of entities currently responsible for 
monitoring people and goods entering the United States.\37\
---------------------------------------------------------------------------
    \37\ I.M. Destler, testimony, Governmental Affairs Committee, April 
11, 2002. (S. Hrg. 107-472)
---------------------------------------------------------------------------
    Paul C. Light, a governmental affairs expert at the 
Brookings Institute, also testified that Ridge's position 
required statutory authority, and said there was also a 
compelling rationale to create a new department for homeland 
security.
    Stephen M. Gross, chair of the Border Trade Alliance, a 
grassroots organization of individuals, entities and businesses 
that conduct cross-border business founded in 1986, strongly 
endorsed some of the consolidation outlined in S. 2452. Gross 
said that his group has firsthand experience with Federal 
agencies along the borders, including the Customs Service, INS, 
and the Border Patrol. He described the problems with these 
agencies:

          Senators, our land border security and trade 
        facilitation is severely lacking. The various Federal 
        inspection service agencies posted along the U.S.-
        Mexico and U.S.-Canada borders are charged with poorly 
        defined and sometimes conflicting missions. Oftentimes, 
        our ports of entry are home to petty squabbles over 
        turf and resources and fall victim to mismanagement. 
        The land border ports are not home to business best 
        practices. At each port of entry, Customs and INS 
        personnel are operating with different missions, 
        despite the fact that Customs and INS are cross- 
        trained in primary inspection lanes. The INS or Customs 
        employee at the port of entry receives incentives to 
        carry out the individual mission of his or her 
        employing agency. There is no incentive to work 
        together or speed legitimate trade and cargo through 
        our ports of entry. Despite recent talks in this post-
        September 11 environment of improving lines of 
        communication at the highest levels in INS and Customs, 
        we rarely see the same spirit of cooperation employed 
        at the ports of entry themselves, where it is needed 
        most.\38\
---------------------------------------------------------------------------
    \38\ Stephen Gross, testimony, Governmental Affairs Committee, 
April 11, 2002, at 45. (S. Hrg. 107-472) (Hereinafter ``Gross 
testimony.'')

    Gross said that realignment as envisioned in the Lieberman-
Specter draft legislation would put one entity in charge of the 
borders, remove a layer of bureaucracy between the ports of 
entry and the coordinator of security efforts, establish 
accountability for border inspection in a single agency, 
eliminate overlap and duplication of efforts, prevent the 
development of redundant support systems, facilitate and 
streamline the processing of legitimate trade and travel, and 
improve enforcement of laws at the borders. Gross said his 
organization's only concern is that increased security not come 
at the expense of trade facilitation. However, Gross said 
security and trade could be compatible if the border functions 
are properly funded. He said, ``with the proper resources, our 
Federal inspection service agencies can quickly weed out those 
individuals who would seek to do us harm while processing the 
legitimate trade and travelers with a reduction, or at the very 
least no increase, in the time the cargo or traveler has to 
spent waiting at the port of entry.'' \39\ Gross also 
recommended that all enforcement functions of the INS, not just 
Border Patrol, be in the new Department in order to end turf 
battles at the ports of entry and ensure that everyone is 
committed to the same goal.
---------------------------------------------------------------------------
    \39\ Gross testimony at 45.
---------------------------------------------------------------------------
    Phil Anderson, senior fellow and director of the Homeland 
Security Initiative at the Center for Strategic and 
International Studies, testified that if enacted, the proposed 
legislation would greatly simplify the management processes and 
unify the efforts of 46 Federal agencies that each have some 
responsibility for homeland security. He noted that effective 
communication and coordination among these disparate agencies 
is extremely complicated and will only get more without 
organizational reforms. However, Anderson questioned the wisdom 
of reorganizing before a comprehensive national strategy was 
developed by the Administration.

Business meeting

    On May 23, 2002, the Committee met to consider S. 2452, the 
National Homeland Security and Combating Terrorism Act, and for 
other purposes. The Committee adopted several amendments en 
bloc, by unanimous consent:
          An amendment by Senator Lieberman calling for the 
        Secretary to report to Congress in one year with 
        recommendations for other functions that might need to 
        be incorporated in the Department of National Homeland 
        Security, giving consideration to issues such as border 
        and transportation security;
          An amendment by Senator Lieberman that requires, 
        within one year of the effective date of the Act, a 
        report from the Secretary outlining proposed steps to 
        consolidate management authority for federal operations 
        at key points of entry into the United States;
          An amendment by Senator Akaka that requires the 
        Director of the Office of Management and Budget to 
        provide management guidance for federal agencies to 
        successfully implement and execute a homeland security 
        strategy. The amendment would require the GAO to submit 
        a report to Congress on the management guidance and the 
        federal agency performance in implementing and 
        executing the strategy;
          An amendment by Senator Durbin that would create, 
        within the Department, the National Clearinghouse for 
        Emergency Preparedness, which would be a one-stop 
        shopping place for information. The amendment directs 
        the clearinghouse to establish a website, office and 
        staff to provide information on federal grants as well 
        as preparedness and awareness tools. The amendment 
        establishes the Emergency Preparedness Enhancement 
        Pilot Program, which would provide matching funds for 
        private businesses and organizations to design 
        evacuation plans and drills, better secure their 
        facilities, deploy innovative emergency preparedness 
        technologies and educate their employees and facilities 
        users. The amendment also would establish a National 
        Emergency Preparedness Week each year during the week 
        of Sept. 11 and require the development of a public 
        awareness campaign that can be implemented at the 
        national, state and local levels;
          An amendment by Senator Levin that requires the 
        Director of the Federal Bureau of Investigation to work 
        with the National Office for Combating Terrorism to 
        ensure it receives ``the relevant information from the 
        Federal Bureau of Investigation related to terrorism 
        and to ensure that such information is made available 
        to the appropriate agencies and to state and local law 
        enforcement officials''; and
          An amendment by Senator Levin that would require the 
        Secretary and the Director to develop, in consultation 
        with the head of each department or agency affected by 
        this act, definitions of the terms ``combating 
        terrorism'' and ``homeland security.'' The definitions 
        would be required to be submitted to Congress within 
        270 days of the date of enactment.
    On that same date, the Committee ordered the bill reported 
by a vote of 7-3. Senators voting in the affirmative were 
Lieberman, Levin, Akaka, Durbin, Carper, Carnahan, and Dayton. 
Senators voting against were Thompson, Cochran and Bennett. 
Additionally several senators requested that their votes be 
recorded by proxy: Senators Torricelli and Cleland voting in 
favor of reporting the bill, Senators Stevens, Voinovich, 
Bunning and Fitzgerald voting against.

                     V. Section-by-Section Analysis


Section 1--Short title; table of contents

Section 2--Defines key terms

           TITLE I--DEPARTMENT OF NATIONAL HOMELAND SECURITY

Section 101--Establishment of the Department of National Homeland 
        Security

    This section establishes the Department of National 
Homeland Security. The legislation establishes the Secretary of 
National Homeland Security as the head of the department, to be 
appointed by the President with the advice and consent of the 
Senate. It charges the Secretary with certain responsibilities. 
The Secretary will:
           Develop policies and plans for the United 
        States to promote homeland security;
           Develop a comprehensive strategy to combat 
        terrorism in accordance with Title III of the act;
           Develop processes to integrate this strategy 
        into the strategies and plans of Federal, State and 
        local departments and agencies;
           Evaluate Federal programs related to 
        homeland security that involve activities of State and 
        local governments;
           Advise the Director of the National Office 
        for Combating Terrorism on the development of an annual 
        federal budget for the strategy to combat terrorism, 
        and have responsibility for portions relating to border 
        security, critical infrastructure protection, emergency 
        preparation and response, and State and local 
        activities;
           Plan, coordinate, and integrate federal 
        activities relating to border security, critical 
        infrastructure protection and emergency preparedness 
        and response, and act as the focal point regarding 
        natural and manmade crises and emergency planning and 
        response;
           Work and coordinate with state and local 
        governments and executive agencies in providing United 
        States homeland security, and communicate with and 
        support state and local officials through the use of 
        regional offices around the nation;
           Provide overall operational planning 
        guidance to executive agencies regarding United States 
        homeland security;
           Conduct exercise and training programs for 
        employees of the department and other involved 
        agencies, and establish effective command and control 
        procedures for the range of potential contingencies 
        regarding United States homeland security, including 
        contingencies that require substantial support of 
        military assets;
           Annually develop a federal response plan for 
        homeland security and emergency preparedness with 
        regard to terrorism and other manmade and natural 
        disasters; and
           Identify and promote technological 
        innovation that will enhance homeland security.
    This section also authorizes the Secretary to establish a 
coordinating center within the department with representatives 
from other federal departments and agencies with homeland 
security responsibilities. Those departments and agencies will 
be required to provide a representative on a permanent or part-
time basis, and the Secretary may request additional federal 
personnel as well as representatives from State and local 
government. This center will be run by a director who will 
ensure that law enforcement, immigration and intelligence 
databases related to homeland security are compatible, while 
also complying with relevant Federal law related to privacy and 
intelligence information.
    The Secretary will be a cabinet-level official and a 
statutory member of the National Security Council. This section 
also establishes a Deputy Secretary of National Homeland 
Security and an Inspector General for the department.

Section 102--Transfer of authorities, functions, personnel and assets 
        to the Department

    This section transfers various authorities, functions, 
personnel and assets that will be part of the Department: the 
Federal Emergency Management Agency, retaining its 10 regional 
offices; the United States Customs Service, which shall be 
maintained as a distinct entity; the law enforcement components 
of the Immigration and Naturalization Service relating to 
Border Patrol, Inspections, Investigations, Intelligence, 
Detention and Removal, and International Affairs; the United 
States Coast Guard, which shall be maintained as a distinct 
entity; the Critical Infrastructure Assurance Office of the 
Department of Commerce; the National Infrastructure Protection 
Center and the National Domestic Preparedness Office of the 
Federal Bureau of Investigation; the portion of the Animal and 
Plant Health Inspection Service of the Department of 
Agriculture that administers laws relating to agricultural 
quarantine inspections at points of entry.

Section 103--Establishment of directorates and office

    This section establishes three directorates within the 
Department.
     The Directorate of Border and Transportation 
Protection will oversee and coordinateUnited States border 
security activities, develop border and maritime security policy, and 
develop and implement international standards for enhanced security in 
transportation nodes.
     The Directorate of Critical Infrastructure 
Protection will: (1) act as the Critical Infrastructure 
Technology, Assurance, and Security Officer of the Department 
to address the nation's vulnerability to electronic or physical 
attacks on critical infrastructure such as utilities and 
transportation nodes; (2) oversee protection of critical 
infrastructure; (3) ensure there are cybersecurity experts 
within the Federal government; (4) enhance information- sharing 
regarding cybersecurity and physical security, propose risk 
management policies and clarify the respective roles of various 
government agencies; (5) coordinate cybersecurity policy issues 
with the Federal Communications Commission; (6) coordinate the 
activities of Information Sharing and Analysis Centers; (7) 
assume responsibilities of the Critical Infrastructure 
Assurance Office; (8) assume the responsibilities of the 
National Infrastructure Protection Center.
     The Directorate for Emergency Preparedness and 
Response will: (1) carry out all emergency preparedness and 
response activities carried out by the Federal Emergency 
Management Agency; (2) assume the responsibilities of the 
National Domestic Preparedness Office; (3) organize and train 
local authorities to respond to emergencies and provide them 
with equipment for detection, protection and decontamination in 
an emergency involving weapons of mass destruction; (4) oversee 
Federal, State and local emergency preparedness training and 
exercise programs and provide Federal assistance for any 
emergency, natural or man-made; (5) create a national Crisis 
Action Center to serve as the focal point for monitoring 
emergencies and coordinating Federal support for State and 
local government and the private sector during crises; (6) 
establish training and equipment standards, provide resource 
grants, and encourage intelligence and information sharing 
among federal agencies, state emergency management officials, 
and local first responders; (7) coordinate and integrate 
operational activities of the Department of Defense, the 
National Guard, and other federal agencies into a federal 
response plan; (8) coordinate private sector activities with 
respect to recovery, consequence management, and planning for 
continuity of services; (9) develop and manage a single 
response system for national incidents in coordination with the 
Department of Justice, Federal Bureau of Investigation, 
Department of Health and Human Services, the Centers for 
Disease Control, and other appropriate federal departments 
agencies; (10) maintain federal asset databases and support up-
to-date state and local databases.
    This section also creates an Office of Science and 
Technology within the Department to advise the Secretary 
regarding research and development efforts and priorities for 
the directorates.

Section 104--Steering group, coordination committee, and acceleration 
        fund

    This section establishes a fund to leverage existing 
research and development and accelerate the deployment of 
technologies that will serve to enhance homeland security; 
establishes a committee and steering group to help coordinate 
and advise on issues relating to homeland security research and 
development and to administer acceleration fund; and 
establishes the responsibilities of the Director of the Office 
of Science and Technology relating to homeland security 
research and development. Specifically:
     Fund--The bill establishes acceleration funding 
for research and development of homeland security technologies 
to accelerate research, development, testing and evaluation of 
critical homeland security technologies and support homeland 
security research and development. It authorizes $200 million 
in fiscal year 2003 for the fund.
     Steering group--The bill establishes a steering 
group within the Office of Science and Technology to provide 
recommendations to the Director and assist the Director in 
establishing priorities and forwarding recommendations on 
homeland security technology to the Secretary. The steering 
group will be composed of senior research and development 
officials from all appropriate federal departments agencies, as 
determined by the Director. At the discretion of the Director, 
the steering group may be composed of subgroups specializing in 
specific homeland security areas such as information technology 
infrastructure, critical infrastructure, interoperability 
issues in communications technology, bioterrorism, or chemical, 
biological, and radiological defense.
     Coordination committee--The bill establishes a 
Homeland Security Science and Technology Coordination Committee 
within the Office of Science and Technology, to be chaired by 
the Director. The coordination committee will be a working 
level group composed of representatives managing relevant 
agency research and development portfolios. The coordination 
committee will facilitate effective communication among 
departments, agencies and other entities of the federal 
government with respect to research and development related to 
homeland security. The committee will identify specific 
technology areas for which the fund will be used to rapidly 
transition homeland security research and development into 
deployed technologies. The focus will be research and 
development projects that address identified homeland security 
vulnerabilities and which, assuming single year funding, can be 
accelerated to the stage of prototyping, evaluating, 
transitioning, or deploying. The committee will administer the 
fund, including soliciting proposals from governmental 
entities, industry, and academia; competitively selecting 
proposals that advance the state of deployed technologies in 
the areas identified for that year; assigning one or more 
program managers to oversee, administer and execute a fund 
project as the agent of the coordination committee; and 
providing methods of funding administration, including grant, 
cooperative agreement, or any other transaction.
     Office of Science and Technology 
responsibilities--This subsection outlines key duties of the 
Director of the Office of Science and Technology. The Director 
will assist the Secretary and other federal officials: assess 
and test homeland security vulnerabilities; evaluate and advise 
on maintaining talent resources in key technology and skill 
areas necessary for homeland security; develop a system to 
share key research and technology developments and 
opportunities among appropriate Federal, State, local and 
private sector entities; and propose risk management strategies 
based on technology developments. The Director will also 
develop and oversee periodic homeland securitytechnology 
demonstrations to improve contact between technology developers, 
vendors and acquisition personnel.

Section 105--Reporting requirements

    This section establishes various reporting requirements for 
the Secretary. Every two years, the Secretary shall submit to 
Congress a report assessing the resources and requirements 
regarding border security and emergency preparedness issues, 
and certifying the preparedness of the Untied States to respond 
to various natural and man-made crises. Within one year of the 
effective date, the Secretary shall submit a report assessing 
progress in implementing Title I and recommending any 
conforming changes in law that are necessary.
    Also within one year, the Secretary shall report to 
Congress recommending additional functions or elements that 
need to be incorporated in the Department, including such areas 
as border and transportation security. This section also 
requires the Secretary to submit to Congress, within one year, 
a report outlining proposals to consolidate management 
authority for Federal operations at key points of entry into 
the United States. Additionally, the Secretary and Director are 
required to consult with affected departments and agencies to 
develop definitions for ``combating terrorism'' and ``homeland 
security'' for purposes of this Act, and submit a report to 
Congress on these definitions within 270 days.

Section 106--Planning, programming and budgeting process

    This section directs the Secretary to establish sound 
planning, programming, budgeting and financial activities by 
the Department.

Section 107--Environmental protection, safety and health requirements

    This section requires that the Department comply with 
applicable environmental, safety and health statutes and 
requirements.

Section 108--Savings provisions

    This section provides for the continuing effect of legal 
documents, arrangements and proceedings for functions that are 
transferred to the department of national homeland security. It 
provides interim authority for compensation and expenses of any 
officer or employee under this title until such time as funds 
for that purpose are otherwise available. The provision also 
provides for the continuing effect of certain civil service 
protections under 5 U.S.C. title 71 (federal service labor-
management relations statute) for employees or offices 
transferred to the new department, and specifies that offices 
of, and employees transferred to, the department may be 
excluded from these provisions in the interest of national 
security only in certain instances where primary job duties are 
directly related to terrorism investigations. This section also 
specifies that the transfer of authorities, functions, 
personnel and assets to the new Department shall not be 
construed to affect the authorities of the Director of Central 
Intelligence, the Secretary of Defense, or the heads of 
departments and agencies within the intelligence community 
where those authorities, functions, personnel or assets are 
engaged in intelligence activities as defined in the National 
Security Act of 1947.

           TITLE II--NATIONAL OFFICE FOR COMBATING TERRORISM

Section 201--National Office for Combating Terrorism

    This section establishes a terrorism office within the 
Executive Office of the President, to be run by a Director who 
will be appointed by the President with advice and consent of 
the Senate. The responsibilities of the Director will include:
          (1) develop national objectives and policies for 
        combating terrorism;
          (2) direct and review the development of a 
        comprehensive national assessment of terrorist threats 
        and vulnerabilities to those threats, to be conducted 
        by heads of the relevant Federal agencies;
          (3) develop, with the Secretary of National Homeland 
        Security, a national strategy for combating terrorism 
        under Title III;
          (4) coordinate, oversee and evaluate implementation 
        and execution of the Strategy;
          (5) coordinate the development of a comprehensive 
        annual budget for programs and activities under the 
        Strategy;
          (6) exercise budget certification authority for 
        Federal terrorism prevention response agencies in 
        accordance with section 202;
          (7) serve as an adviser to the National Security 
        Council; and
          (8) work with the Director of the Federal Bureau of 
        Investigation to ensure that the Director receives 
        relevant information related to terrorism from the FBI, 
        and that such information is made available to 
        appropriate Federal agencies and State and local law 
        enforcement officials.

Section 202--Funding for strategy programs and activities

    This section establishes a process for the Director to 
review the proposed budgets for federal programs under the 
Strategy. The Director will, in consultation with the Director 
of the Office of Management and Budget and the Secretary of 
National Homeland Security, identify programs that contribute 
to the Strategy, and provide advice to the heads of the 
executive departments and agencies on the amount and use of 
these programs through budget certification procedures and the 
development of a consolidated budget for the Strategy.
    Specifically, the heads of these departments and agencies 
must submit their terrorism-related budget to the Director 
before they are submitted to the Office of Management and 
Budget. The Director will review each proposed budget and 
notify the head of the agency if it is adequate to permit 
implementation of the goals of the Strategy for that year. If 
the Director finds the proposed budget inadequate, the Director 
will provide a statement of the funding and any initiatives 
that would be adequate to achieve the goals of the Strategy. An 
agency head that receives such notice shall incorporate the 
proposed funding, and any initiatives, in its submissions to 
the Office of Management and Budget. The agency head will also 
submit a summary of modifications pursuant to the Director's 
certification process and an assessment of the effect of such 
changes on the agency's capacity to perform its non-terrorism 
related responsibilities. The Director will review the budget 
submissions to OMB and may decertify any proposals that do not 
incorporate the proposed funding or initiatives previously 
advised by the National Office on Combating Terrorism. The 
Director will provide Congress with notice of any such 
decertification.
    Each year, the Director will, in consultation with the 
Secretary of National Homeland Security and the head of each 
Federal terrorism prevention and response agency, develop a 
consolidated proposed budget for all programs and activities 
under the Strategy for that fiscal year.

 TITLE III--NATIONAL STRATEGY FOR COMBATING TERRORISM AND THE HOMELAND 
                           SECURITY RESPONSE

Section 301--Strategy

    This section directs the Secretary and Director to develop 
the national strategy for combating terrorism and homeland 
security response for the detection, prevention, protection, 
response and recovery necessary to counter terrorist threats. 
The Secretary has responsibility for portions of the Strategy 
addressing border security, critical infrastructure protection, 
emergency preparation and response, and integrating state and 
local efforts with activities of the Federal government. The 
Director has overall responsibility for the development of the 
Strategy, and particularly for those portions addressing 
intelligence, military assets, law enforcement and diplomacy. 
The Strategy will include: (1) policies and procedures to 
maximize the collection, translation, analysis, exploitation 
and dissemination of information related to combating terrorism 
and homeland security response throughout the Federal 
government and with State and local authorities; (2) plans for 
countering chemical, biological, radiological, nuclear and 
explosives, and cyber threats; (3) plans for improving the 
resources of, coordination among, and effectiveness of health 
and medical sectors for detecting and responding to terrorist 
attacks on homeland; (4) specific measures to enhance 
cooperative efforts between the public and private sectors in 
protecting against terrorist attacks; (5) review of measures 
needed to enhance transportation security with respect to 
potential terrorist attacks; and (6) other critical areas.
    This section also establishes the National Combating 
Terrorism and Homeland Security Response Council to assist with 
preparation and implementation of the Strategy. Members of the 
Council will be the heads of federal terrorism prevention and 
response agencies or their designees. The Secretary and 
Director will co-chair the Council, which will meet at their 
direction.

Section 302--Management guidance for strategy implementation

    This section directs the Office of Management and Budget, 
in consultation with the Secretary and the Director, to provide 
management guidance for Federal agencies to successfully 
implement the Strategy, and to report to Congress on these 
efforts. It also requires the General Accounting Office to 
evaluate the management guidance and agency performance in 
implementing the Strategy.

Section 303--National Combating Terrorism Strategy Panel

    This section establishes a nonpartisan, independent panel 
to conduct an assessment of strategy as well as an independent, 
alternative assessment of measures required to combat 
terrorism, including homeland security measures. The panel will 
prepare a preliminary report no later than July 1, 2004, with a 
final report by December 1, 2004 and every four years 
thereafter.

         TITLE IV--NATIONAL EMERGENCY PREPAREDNESS ENHANCEMENT

Section 401--Short title

Section 402--Preparedness information and education

    This section establishes a National Clearinghouse on 
Emergency Preparedness within the Department to provide a 
central resource for information about grants and other 
resources on emergency preparedness. The clearinghouse would 
also develop a public awareness campaign on emergency 
preparedness.

Section 403--Pilot program

    This section would create a pilot program to support 
private sector preparedness initiatives, such as developing 
evacuation plans and drills, improving security measures and 
preparedness technologies, and educating employees and 
customers. The bill authorizes $5 million annually in fiscal 
years 2003 through 2005 for these cost share grants.

Section 404--Designation of National Emergency Preparedness Week

    This section establishes each week that includes September 
11 as ``National Emergency Preparedness Week'' and requests the 
President to designate it as such. In conjunction with this 
week, Federal agency heads shall coordinate with the Department 
to conduct educational activities for the private sector and 
general public about emergency preparedness resources.

                        TITLE V--EFFECTIVE DATE

Section 501--Effective date

    This section specifies that the Act shall take effect 180 
days after the date of enactment.

                         VI. Regulatory Impact

    Paragraph 11(b)(1) of the Standing Rules of the Senate 
requires that each report accompanying a bill evaluate ``the 
regulatory impact which would be incurred in carrying out this 
bill.''
    The enactment of this legislation will not have significant 
regulatory impact.

                         VII. CBO Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 17, 2002.
Hon. Joseph I. Lieberman,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2452, the National 
Homeland Security and Combating Terrorism Act of 2002.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 2452--National Homeland Security and Combating Terrorism Act of 2002

    Summary: S. 2452 would establish a new cabinet department, 
the Department of National Homeland Security, to plan, 
coordinate, and integrate the government's activities relating 
to homeland security, including border security, the protection 
of critical infrastructure, and emergency preparedness. The 
legislation would combine several existing agencies to form the 
new department. S. 2452 also would establish a National Office 
for Combating Terrorism within the Executive Office of the 
President to coordinate threat assessments, to craft and 
oversee a National Strategy to Combat Terrorism, and to plan 
and coordinate the budget to combat terrorism. Finally, the 
legislation would authorize the appropriation of $200 million 
for fiscal year 2003 to develop technology to combat terrorism 
and $5 million annually over the 2003-2005 period for emergency 
preparedness pilot programs.
    CBO estimates that implementing S. 2452 would cost about 
$1.1 billion over the 2003-2007 period, assuming appropriation 
of the necessary amounts. Enacting S. 2452 would not affect 
direct spending or receipts, so pay-as-you-go procedures would 
not apply. S. 2452 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA) and would not affect the budgets of state, local, or 
tribal governments.
    Estimated cost to the Federal Government: The following 
table summarizes the estimated budgetary impact of S. 2452. The 
table shows estimated costs under the bill, as compared to the 
funding for the affected agencies under current law projected 
in the CBO baseline--that is, the 2002 appropriation adjusted 
for anticipated inflation in succeeding years. The legislation 
would combine several existing agencies to form the new 
department, including:
         The Federal Emergency Management Agency 
        (FEMA);
         The U.S. Customs Service;
         The U.S. Coast Guard;
         The Department of Commerce's Critical 
        Infrastructure Assurance Office;
         The Federal Bureau of Investigations's 
        National Infrastructure Protection Center and National 
        Preparedness Office;
         The Immigration and Naturalization Service's 
        Border Patrol and other enforcement activities; and
         The border offices of the Department of 
        Agriculture's Animal, Plant and Health Inspection 
        Service.
    The table also shows, as a memorandum item, estimated 
direct spending by the new agency over the 2002-2007 period, 
which would not be affected by the bill. The costs of this 
legislation fall within budget functions 050 (national 
defense), 350 (agriculture), 370 (commerce and housing credit), 
450 (community and regional development), 750 (administration 
of justice), and 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                     -----------------------------------------------------------
                                                        2002      2003      2004      2005      2006      2007
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION
Spending by affected agencies under current law:
    Estimated authorization level \1\...............    19,427    20,003    20,534    21,076    21,625    22,200
    Estimated outlays...............................    16,279    17,163    17,943    19,485    20,671    21,652
Proposed changes:
    New Personnel, offices, and programs:
        Estimated authorization level...............         0        79       204       208       212       216
        Estimated outlays...........................         0        68       185       207       211       215
    Acceleration fund:
        Authorization level.........................         0       200         0         0         0         0
        Estimated outlays...........................         0       120        60        20         0         0
    Emergency preparedness pilot program:
        Authorization level.........................         0         5         5         5         0         0
        Estimated outlays...........................         0         5         5         5         0         0
    Total:
        Estimated authorization level...............         0       284       209       213       212       216
        Estimated outlays...........................         0       193       250       232       211       215
Spending under S. 2452:
    Estimated authorization level...................    19,427    10,287    20,743    21,289    21,837    22,416
    Estimated outlays...............................    16,279    17,356    18,193    19,717    20,882    21,867
                     MEMORANDUM
Direct spending by affected agencies under current
 law and under S. 2452 \2\
    Estimated budget authority......................       416       509     1,731     1,878     1,945     2,130
    Estimated outlays...............................       305       437     1,692     1,800     1,853     1,912
----------------------------------------------------------------------------------------------------------------
\1\ The 2002 level is the amount appropriated for that year for agencies that would be combined to form the
  Department of National Homeland Security, as well as the National Office for Combining Terrorism. The
  estimated authorization levels for 2003 through 2007 are CBO baseline estimates that adjust the amounts
  appropriated for 2002 for anticipated inflation.
\2\ CBO estimates that the level of direct spending of agencies that would be combined to form the new
  department would not be changed by enacting S. 2452.

Basis of estimate

    CBO estimates that implementing the legislation would add 
about $1.1 billion to the costs of the affected agencies over 
the 2003-2007 period. For this estimate, CBO assumes that S. 
2452 will be enacted by the beginning of fiscal year 2003 and 
that the necessary funds will be appropriated for each fiscal 
year.
            New personnel, offices, and programs
    S. 2452 would establish a new cabinet agency, the 
Department of National Homeland Security, and the National 
Office for Combating Terrorism within the Executive Office of 
the President. Most of the functions that would be performed by 
the proposed department are already performed by existing 
offices within the agencies that would be incorporated into the 
Department of National Homeland Security. CBO expects that, 
under S. 2452, most activities would be transferred to the new 
department without significantly affecting the costs that would 
be expected under current law.
    CBO expects that creating a new cabinet-level department 
would require additional resources to perform certain 
administrative functions, including new positions to staff the 
offices of the Inspector General, general counsel, budget, the 
Congressional affairs for the new department. Based on the 
administrative costs the Department of Justice and 
otherdepartments, CBO estimates that it would cost about $200 million 
annually to provide the centralized leadership, coordination, and 
support services for the Department of National Homeland Security. This 
represents about 1 percent of the new department's budget. Personnel 
and budgets to help perform these functions also would be transferred 
to the new department from FEMA, the Coast Guard, and the Customs 
Service. We expect the new departmental staff would be hired over the 
first two years following enactment of the legislation. This estimate 
assumes that the 6,500 employees currently working in the Washington, 
D.C. area for the agencies that would be combined to form the new 
department are not relocated to a central location.
    S. 2452 also would authorize committees, councils, and 
panels to support and advise the President, the Department of 
National Homeland Security, and the National Office for 
Combating Terrorism. The legislation also would authorize the 
establishment of offices to coordinate and disseminate 
information related to homeland security. CBO estimates that 
those functions would require approximately 30 new positions at 
a cost of about $4 million annually.
    In addition, the bill would establish a National Office for 
Combating Terrorism within the Executive Office of the 
President. The new office would be similar, but not identical 
to the current Office of Homeland Security. For this estimate, 
CBO assumes the new office would take over the functions of the 
existing Office of Homeland Security and that the costs of this 
office would be similar to those that would be incurred under 
current law. Based on the costs of the current Office of 
Homeland Security, CBO estimates that the new office would cost 
approximately $27 million annually, though that sum is not 
included as an added cost of S. 2452.
            Acceleration fund
    S. 2452 would authorize the appropriation of $200 million 
in fiscal year 2003 to accelerate research, development, and 
testing of technologies to enhance homeland security. CBO 
estimates that implementing this provision would cost $200 
million over the 2003-2005 period.
            Pilot program
    S. 2452 would authorize the appropriation of $5 million 
annually over the 2003-2005 period for a National Clearinghouse 
on Emergency Preparedness in the Department for National 
Homeland Security. The clearinghouse would award grants to 
private entities to pay for the federal share of the cost of 
improving emergency preparedness. Grants would be awarded 
awareness campaigns. CBO estimates that implementing this 
section would increase discretionary spending by $5 million 
annually over the 2003-2005 period, assuming appropriation of 
the authorized amounts.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. Although 
the legislation would affect programs involving direct 
spending, such as the Immigration and Naturalization Service's 
immigration fees, the U.S. Coast Guard's boat safety grants, 
and the Animal and Plant Health Inspection service's animal 
quarantine inspection fees, CBO estimates that enacting S. 2452 
would have no effect on direct spending or receipts because the 
legislation would not change any of those programs.
    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-secto mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal costs: Matthew Pickford and 
Mark Grabowicz; impact on state, local, and tribal governments: 
Susan Sieg Tompkins; impact on the private sector: Paige Piper/
Bach.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                         VIII. Additional Views

     ADDITIONAL VIEWS OF SENATORS THOMPSON, VOINOVICH, AND BUNNING

    On May 22, 2002, the Committee on Governmental Affairs 
voted to report S. 2452, as amended. We voted against reporting 
S. 2452 favorably because we had come to the conclusion, in the 
absence of any proposal from the President, that a coordinator 
within the White House was the best framework for organizing 
our federal government's homeland security efforts. We were 
concerned that no agency could bring within its purview all the 
components needed to address successfully all of our homeland 
security challenges. We also opposed the legislation because 
President Bush had not had an opportunity to present his 
proposals for reorganizing the federal government to address 
the threats to our nation. Since the Committee's vote, however, 
the President has now offered his own recommendations for 
reorganizing the federal government to address our homeland 
security needs.
    Recognizing that it had taken a long time for the 
government to develop along the dysfunctional lines that were 
revealed on September 11, 2001, we urged that Committee to hold 
off for a short while to allow the President's views to be 
considered. We were particularly concerned that during a period 
of stress and difficulty in responding initially to the scope 
of the attacks on our nation and in developing our strategic 
and tactical response, the administration could not focus 
adequately on a broad government reorganization. It took some 
time for the administration to begin to examine the structures 
needed to tackle the threat over the long term.
    In the days following September 11, it became clear that 
the federal government needed to be reorganized in order to 
effectively protect our country. When President Bush created 
the Office of Homeland Security last fall, he instructed its 
director, Governor Tom Ridge, to conduct a comprehensive review 
of the federal government's efforts to protect the American 
homeland. Over the last nine months, the President's Office of 
Homeland Security closely examined every facet of our homeland 
security effort. It considered numerous homeland security 
organizational proposals that emerged from outside studies, 
commissions, and Members of Congress. On several occasions 
during this period, the President emphasized that the structure 
for organizing and overseeing homeland security was evolving as 
its analysis of the threats and the government's ability to 
address them developed.
    Indeed, in testimony before the Governmental Affairs 
Committee on April 11, 2002, Office of Management and Budget 
Director Mitchell Daniels implied that the Administration 
intended to complete its review and offer recommendations for 
Executive Branch reorganization in a matter of weeks. Director 
Daniels testified that all options were being considered, 
including the creation of a new department combining different 
agencies.
    While the Administration was conducting its review, the 
Governmental Affairs Committee held more than a dozen hearings 
on homeland security. We are confident that these hearings 
contributed a great deal to the debate and the President's 
consideration of the issues. During these hearings, we 
expressed support for the Administration's decision to examine 
closely the issues involved and carefully deliberate on an 
appropriate course of action. We believed that it was important 
for us to understand the issues at hand fully before beginning 
the reorganization process. We also repeatedly expressed our 
view that Presidential participation and leadership was 
essential to any Executive Branch reorganization for passage. 
Even the most modest reorganization plan would require the 
Administration and the Congress to work together.
    The bill reported by the Committee was a good first step. 
We can, however, be certain that the President's 
recommendations would have contributed to our deliberations. 
For example, while there are many elements in common between 
the President's proposal and S. 2452, the bill approved by the 
Committee does not sweep into the new agency a number of 
components that the President's proposal would incorporate into 
a new Department of Homeland Security; some of these components 
were not fully considered for inclusion in the new agency 
before the President's plan was released.
    The Committee now has an opportunity to work closely with 
the Administration to craft legislation that will reorganize 
the federal government to protect the American people. The 
President has repeatedly expressed his willingness to work with 
Congress and the Committee on his reorganization proposal. We 
are confident the Committee will not move forward and work in a 
constructive manner with the President and his Administration.

                                   George V. Voinovich.
                                   Jim Bunning.
                                   Fred Thompson.

                      IX. Changes to Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 2452 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

                           UNITED STATES CODE

TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

           *       *       *       *       *       *       *


SEC. 101. EXECUTIVE DEPARTMENTS

    The Executive Departments are:

           *       *       *       *       *       *       *

          The Department of Homeland Security.

           *       *       *       *       *       *       *


SEC. 5312. POSITIONS AT LEVEL I

    Level I of the Executive Schedule applies to the following 
positions for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:

           *       *       *       *       *       *       *

          Secretary of National Homeland Security.
          Director of the National Office for Combating 
        Terrorism.

SEC. 5313. POSITIONS AT LEVEL II

    Level II of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:

           *       *       *       *       *       *       *

          Deputy Secretary of National Homeland Security.

           *       *       *       *       *       *       *


                           TITLE 5--APPENDIX

                     INSPECTOR GENERAL ACT OF 1978

SEC. 11. DEFINITIONS

    As used in this Act--
          (1) the term ``head of the establishment: means the 
        Secretary of Agriculture, Commerce, Defense, Education, 
        Energy, Health and Human Services, Housing and Urban 
        Development, the Interior, Labor, National Homeland 
        Security, State, Transportation, or the Treasury; the 
        Attorney General; the Administrator of the Agency for 
        International Development, Environmental Protection, 
        General Services, National Aeronautics and Space, Small 
        Business, or Veterans' Affairs; the Director of the 
        Federal Emergency Management Agency, or the Office of 
        Personnel Management; the Chairman of the Nuclear 
        Regulatory Commission or the Railroad Retirement Board; 
        the Chairperson of the Thrift Depositor Protection 
        Oversight Board; the Chief Executive Officer of the 
        Corporation for National and Community Service; 
        (FOOTNOTE 1) the Administrator of the Community 
        Development Financial Institutions Fund; and (FOOTNOTE 
        2) the chief executive officer of the Resolution Trust 
        Corporation; and (FOOTNOTE 2) the Chairperson of the 
        Federal Deposit Insurance Corporation; the Commissioner 
        of Social Security, Social Security Administration; or 
        the Board of Directors of the Tennessee Valley 
        Authority; as the case may be;
    (FOOTNOTE 1) So in original.
    (FOOTNOTE 2) So in original. The word ``and'' probably 
should not appear.
          (2) the term ``establishment'' means the Department 
        of Agriculture, Commerce, Defense, Education, Energy, 
        Health and Human Services, Housing and Urban 
        Development, the Interior, Justice, Labor, National 
        Homeland Security, State, Transportation, or the 
        Treasury; the Agency for International Development, the 
        Community Development Financial Institutions Fund, the 
        Environmental Protection Agency, the Federal Emergency 
        Management Agency, the General Services Administration, 
        the National Aeronautics and Space Administration, the 
        Nuclear Regulatory Commission, the Office of Personnel 
        Management, the Railroad Retirement Board, the 
        Resolution Trust Corporation, the Federal Deposit 
        Insurance Corporation, the Small Business 
        Administration, the Corporation for National and 
        Community Service, or (FOOTNOTE 3) the Veterans' 
        Administration, the Social Security Administration, or 
        the Tennessee Valley Authority; as the case may be;
    (FOOTNOTE 3) So in original. The word ``or'' probably 
should not appear.

           *       *       *       *       *       *       *


TITLE 50--WAR AND NATIONAL DEFENSE

           *       *       *       *       *       *       *


SEC. 402. NATIONAL SECURITY COUNCIL

    (a) Establishment; presiding officer; functions; 
composition

           *       *       *       *       *       *       *

    (1) * * *
    (2) * * *
    (3) * * *
    (4) * * *
    (5) [the Director for Mutual Security;] the Secretary of 
National Homeland Security; and
    (6) [the Chairman of the National Security Resources Board; 
and] each Secretary or Under Secretary of such other executive 
department, or of a military department, as the President shall 
designate.
    [(7) the Secretaries and Under Secretaries of other 
executive departments and of the military departments, the 
Chairman of the Munitions Board, when appointed by the 
President by and with the advice and consent of the Senate, to 
serve at his pleasure.]

           *       *       *       *       *       *       *