Copyright 2002 Federal News Service, Inc.  
Federal News Service
September 10, 2002 Tuesday
SECTION: CAPITOL HILL HEARING

LENGTH: 18983 words

HEADLINE: HEARING OF THE SENATE COMMERCE, SCIENCE AND TRANSPORTATION COMMITTEE
 
SUBJECT: STATUS OF AVIATION SECURITY
 
CHAIRED BY: SENATOR ERNEST "FRITZ" HOLLINGS (D-SC)
 
LOCATION: ROOM 253, RUSSELL SENATE OFFICE BUILDING, WASHINGTON, D.C.

WITNESSES: ADMIRAL JAMES LOY, ACTING DIRECTOR, TRANSPORTATION SECURITY ADMINISTRATION
 


BODY:
SEN. HOLDINGS: The committee will please come to order.

Welcome, Admiral Loy. "Shalom"; peace. I am enthused about your appointment, because it gets us to where we'd hope (sic) we were last fall and before Christmas, when we passed the airline-security measure, we provided the money and, without even a hearing, we went forward the administration's choice. As an administrator, that has not worked out. And in that interim, we've had a veritable fistfight in the newspapers -- headlines, stories, deadlines. And the purpose, as far as this senator is concerned, for the hearing here today now is to settle down, stop all the releases and testify to one thing: what you want out of this committee.

I want to make a copy of a letter I wrote on August the 1st, to give you a month; you'd just come on board back in July. And in that letter, we outlined 10 or 12 questions that the members of the committee were all concerned about, give you a month to review it, to provide your answers. And we have that letter of August the 1st and your answer here today. And we'll make both of those a part of the record.

Now other than that, we'll go down those items in detail. But most of all, don't please, a week from now, a month from now, say, "We want this from the Congress," because you've got your opportunity here to put us on the spot. We got to start working together and get it done. It can be done. We got a Coast Guard fellow up at Logan Airport who's done it. And that was one of the toughest ones of all. And he -- going to meet all the deadlines, got all the security, got all the equipment and everything else -- not got all the releases and news stories about how impossible it is, "We're not talking" and all of that nonsense.

And as the Coast Guard admiral having worked with this committee, and commandant, we know your track record, and that's why I'm enthused.

I yield to my ranking member.

SEN. JOHN MCCAIN (R-AZ): Thank you very much, Mr. Chairman, and thank you for holding this hearing. It's an important one.

And tomorrow, as we all know, marks one year since terrorists used our air transportation system to viciously attack our nation. It's highly appropriate we take this opportunity to review the current state of aviation security and determine what progress is being made in meeting the critical deadlines that Congress set down nearly 10 months ago to promote the security of the public.

While I believe that aviation security is better than it was a year ago, there are still many reasons for us to be concerned. Obviously, we still face a ruthless and determined enemy. Terrorists have repeatedly target (sic) aviation in the past, and there's little reason to assume it will not be used again in the future.

Congress reacted swiftly to the events of last year by passing a landmark aviation security bill. Although the new law addressed many of the security concerns directly associated with the events of September 11th, we also took steps to deal with a wide variety of other matters, including issues that were long overdue for attention. For example, despite the fact that Congress required the deployment of explosive-detection systems at airports many years ago, little progress has been made prior to the attack. Far too many important initiatives in the past have languished in bureaucratic limbo. Therefore, we imposed hard deadlines, to make sure that our directive would be implemented by the TSA.

At our last hearing, in July, Secretary Mineta and Admiral Loy testified that the TSA would have to reassess its ability to meet certain statutory mandates in light of budget constraints and logistical difficulties associated with some projects. In Monday's USA Today, Admiral Loy indicated that TSA expects to, quote, "come close," unquote, to meeting the deadlines. That may be good enough for USA Today, Mr. Loy. It's not good enough for this committee.

I think we need to know -- now here we are, two and a half -- three and a half months away from the deadline. I think that we and the American people, but also the people who are running the airports in America, need to know what deadlines we're going to meet, what deadlines we're not going to meet.

I would also remind you that -- not you specifically, but Senator Hollings and I worked very closely with the secretary of Transportation and other administration officials when we developed the legislation.

As I remember, Mr. Chairman, nothing was written into law that didn't have the total and complete agreement of the administration. So it's not as if we took off on our own and decided we would impose these deadlines. These were agreements we made with Secretary Mineta, Assistant Secretary Jackson, and other administration officials. That's why we're a little disappointed when we see the kind of lack of response on this issue.

So I hope that we can get some predictable goals and predictable time lines for particularly a lot of the major airports in American -- McCarron Airport, Phoenix Sky Harbor, Kennedy -- some of the major -- O'Hare -- some of the major airports in America, without some firm guidelines and without -- probably without some delays, would experience very significant difficulties in operating. At the same time, we don't want to just put everything off indefinitely.

I guess, finally, Admiral, I'd like to thank you for your willingness to serve, as I mentioned to you before. But I think we've got to have better communications between TSA, the secretary of Transportation, the administration, and members of Congress. Quite often when someone experiences some unconscionable delay or difficulty or problem, they don't come to you, they come to us because we're their elected representatives. And we'd like to be better informed and better prepared to respond to many of the questions and comments they have.

Finally, finally, Admiral Loy, I hope that you are doing everything in your power to examine the enormous technological capabilities that are out there that can be adopted and implemented -- sensors, detection devices, video cameras. I mean, there are tremendous things -- I am approached frequently by people who have proposals implementing the use of existing technology that could cut down, perhaps, on this 50,000 new employees that we're going to have to hire. I hope you can assure the committee today that you are examining every type of technology. I've been briefed by people who say that you can have technology that from the day that the -- from the moment that the car pulls up and the passenger gets out, that individual can be tracked all the way into the airplane until it takes off.

It seems to me that we're not going to do it with people as much as we are going to be able to do it with technology. So I hope you're devoting a fair amount of your time on that very important aspect because I don't see how we can truly secure our airports without the extensive use -- and I understand sometimes expensive -- use of technology.

I thank you, Mr. Chairman. I thank you for holding this hearing. And I hope that from this hearing we can get a lot more information as to exactly what your plans are in the future, recognizing that you are still relatively new in the job. And again, I thank you for your willingness to serve in this very important and challenging position.

Thank you, Mr. Chairman.

SEN. HOLLINGS: Thank you.

Senator Carnahan?

SEN. JEAN CARNAHAN (D-MO): Thank you, Mr. Chairman. Thank you for conducting today's hearing. On the anniversary eve of the September the 11th attacks, it's appropriate that we focus our attention on aviation security. Today's hearings give us an opportunity to examine the improvements that have been made in the year since September 11th, and also to consider the challenges that remain.

I was interested to see a recent report detailing some undercover airport security tests conducted by CBS News. While the tests raised some concerns about the reliability of passenger screenings, it also highlighted something very noteworthy. One of the airports that passed the CBS test with flying colors was in Baltimore, which was the first airport in the nation to federalize all of its passenger checkpoint screeners. The success of the federal screeners in Baltimore is encouraging, particularly because screeners at that same airport failed the same test six months ago, before the screeners were federalized.

The success of the federal screeners may be attributable to better training, to the hiring of more qualified personnel, or to some other factors, but it remains a good sign. For whatever reason, I hope that the deployment of trained federal screeners in airports throughout the country will further enhance our nation's aviation security. That was certainly our intention when we passed the Aviation and Transportation Security Act last year. I hope that the TSA is on schedule to meet the November 19th deadline for hiring federal screeners.

And I am pleased, Admiral Loy, that you are appearing here today before this committee, and I look forward to your testimony.

ADM. LOY: Thank you.

SEN. HOLLINGS: Thank you.

Senator Wyden?

SEN. RON WYDEN (D-OR): Thank you, Mr. Chairman. I appreciate all your leadership on this issue, Mr. Chairman, and holding this important hearing.

And Admiral Loy, let me be clear: It seems to me that on the eve of September 11th, to send the message that key airline-security deadlines are going to be set aside I think would be tremendously unfortunate. I think the public has particularly been looking at these reports in the last few weeks that indicate that the TSA has been drowning in paper and organizational charts and, I gather, a debate even about the TSA, you know, logo.

And I what I hope today is that you will articulate a strategy for addressing the key priorities -- making sure that the deadlines are met, dealing with the fact that screeners have let weapons through the checkpoints at disturbingly high rates. I intend to ask you about these reports with respect to air marshals resigning. I'm very concerned about that because, again, it's part of the message that's being sent to the public. I mean, the public, particularly this week, is going to be zeroing in on whether these key priorities are being met, and they want to see that we're doing that, rather than wallowing around in some sort of discussion about organizational charts that seem much less important.

Last point I wanted to mention deals with the technology issue that Senator McCain was talking about. I chair the subcommittee with the support of Chairman Hollings here on Science and Technology. And I am just amazed at the number of entrepreneurs and leaders in this country who have innovative ideas. They have been traipsing all over Washington trying to get people to respond to these proposals. In the homeland security legislation, I was able, with the support of Senator Lieberman, to get included a sort of one-stop process -- a test bed and a one-stop process for these innovative ideas with respect to technology. I hope that you will follow up on that, and I hope that we will move forward with the Homeland Security Agency. But when we do, we have go to have you be proactive with respect to tapping this technological treasure trove that exists in this country. And it has not been used to date.

Thank you, Mr. Chairman.

SEN. HOLLINGS: Senator Ensign.

SEN. JOHN ENSIGN (R-WV): Thank you, Mr. Chairman. I think this is a very timely hearing, indeed.

And thank you, Admiral Loy, for coming to testify today. We had a great meting in our office last week, and I was very encouraged -- to let the rest of the committee know, I was very encouraged by some of the things that talked to us about. One was that not only is the TSA very, very concerned about if the deadlines physically cannot be met, like at McCarron Airport -- they don't -- a power substation will not be ready to be online probably for three to four months after December 31st, so the machines are on the ground; they can't even plug them in. Admiral Loy wants to make sure that McCarron, as the other airports that physically may not be able to make the deadline -- that those airports don't become then a target because they maybe didn't meet the deadline.

And other measures will be brought in, and I'm looking forward to hearing on the record the types of things that the TSA is going to do to make sure that the bags are screened, maybe not by the EDS system immediately, but at least a hundred percent of the bags will be screened.

But the other thing that I was encouraged by was the commitment by the TSA -- and once again, I want to hear more about that today -- is the commitment by the -- by yourself and the TSA recognizing that we cannot at the same time hurt customer service.

Business travel now is down 15 percent over a year ago with the airlines, and we know that -- how important the airlines are to our economy. And we know that to eke out that last little bit of security, which -- we can never make things a hundred percent safe; we know that -- just like our roads, we have a certain amount of risk when we all get into our cars. We cannot afford, as a country, to let the terrorists win by destroying our airline industry at the same time. And so I was encouraged that they want to put enough resources and the proper technologies, taking advantage of some of the things that we have today, to put enough personnel and the right types of things into place so that the customer has a safe airplane to ride on, but they also get through the airport in a minimal amount of time, so that it doesn't become a discouragement to fly on vacation, to go on business trips, to do whatever else is necessary.

So I was encouraged, but I also want to not just, you know, hear the words; we want to see put into action the types of things that we talked about in the office the other day. So I'm looking forward to your testimony today.

And thank you, Mr. Chairman, for holding this hearing.

SEN. HOLLINGS: Thank you.

Senator Hutchison.

SEN. KAY BAILEY HUTCHISON (R-TX): Thank you, Mr. Chairman. I'm very pleased that we are having this hearing to try to deal with all of the issues that we need to streamline and improve on since the legislation that we passed to try to address the aviation security in our country.

If anyone says that we are not safer today than we were on September 12th of last year, they are not traveling, and they are not being fair, and they're not being honest. We are safer. The measures that have been taken have made a difference. I have gone through airports now that have the complete federal system and screeners. I can you tell the professionalism is better. So I'm very pleased about that.

However, I think it is important for us to address all of these issues together. And Mr. Chairman, that's why I'm pleased that you're holding this year and that we will have a bill that will try to address each issue that is as yet unmet.

On the issue of airports and the deadline, it would be ludicrous to change the deadline for a year or two years out for every airport, even when the vast majority can make the deadline.

We need to make every airport as safe as we can, and if there need to be waivers for certain airports -- and I know that DFW Airport will need some help, McCarron in Las Vegas certainly will, there are others -- we can grant waivers, and I think that has been your idea. It's your, I think, originality and creativity in saying let's winnow down the problems and let's make sure that we keep the heat on for the most security that we can have, where it can be done. So I think that is the right approach.

I also think it is very important for us to address cargo. If we spend billions of dollars and we inconvenience passengers, which they have been very patient about being, the idea that we wouldn't have some increase in cargo security in the belly of that airplane is outrageous. And if we pass a bill that doesn't have cargo in it, Mr. Chairman, I can't accept that. I will not accept that we don't deal with the whole thing at once, because we can. I'm not saying that we want to curb the ability to ship cargo. We want cargo on our passenger flights. That could keep the airlines afloat. But we can have a trusted shipper program. We can have security clearances for the people who handling cargo, just as we do for people who are handling baggage. Just as Senator McCain mentioned, we have a lot of technology available to us that can certainly be improved.

So the bottom line is, I think we need to address this in a comprehensive way. We need to deal with cargo. We need to deal with the airports separately who have a problem and not grant automatic deadline increases to every airport just because a few can't. And I just think we are the responsible party for assuring that the TSA is doing everything it can. Having said that, you've been on board a very short time. I appreciate the enthusiasm with which you are meeting your challenge. It is necessary, and we appreciate that, and we are going to work with you. But there is no way that all of us, who are representing the traveling public and traveling ourselves, would in any way try to all of a sudden let up on the very focus that we have on aviation security.

Thank you, Mr. Chairman.

SEN. HOLLINGS: Thank you.

Senator Allen?

SEN. GEORGE ALLEN (R-VA): Thanks, Mr. Chairman, for having this very timely hearing. And I thank Admiral Loy for coming before us.

As you know, Admiral, this has been a tumultuous year. Congress has passed sweeping, comprehensive legislation dealing with transportation security, and created a new agency.

While I recognize you're new on the job, it's not as if there's only one person. Mr. Magaw was not the only one who was in charge and doing things. And so some progress has been made. And in fact, we've passed additional legislation on an amendment just a few days ago having to do with arming pilots on airplanes.

I agree with Senator Hutchison that with some of the concerns -- and there are legitimate concerns -- the bottom line is what we need to understand is that our air travel is more safe now. Is it as safe as it ought to be? No. But it is safer. And we're making progress. And as we're on the eve of the anniversary of these vile attacks, let's not turn on one another; let's work constructively together. If certain deadlines can't be made and met, let's see what can be done to get it as quickly as possible. I think it's taken strong leadership from the legislative branch, from the Bush administration. And we're also safer thanks to the patience and the vigilance of travelers.

The TSA obviously faces very daunting tasks of further enhancing security while not compromising the convenience of air travel. Even prior to September 11th, business travel was down. And that was a function of the economy, not terrorism. Since then, business travel has dropped even more because of the economy, but I'll tell you another reason why travel for all people is diminished, and it's the inconvenience. People do not care to just dawdle in, in their view, mindless reasons for that wait time. And that needs to -- that's why all of this convenience needs to be refined.

As alluded to be Senator McCain, I think many of the answers here can be solved through the deployment of cutting-edge technology. And that will help a great deal. And in fact, I think technological advice -- devices are the key to the economic viability of the aviation industry. So Admiral Loy, I look forward to hearing your innovative ideas: how we're going to get things done, how we can deploy and acquire and utilize new and better technology to improve not only the security but also the convenience, which I think is essential for transportation and that very strong part of our economy.

Thank you, Mr. Chairman.

SEN. HOLLINGS: Very good. Thank you.

Senator Boxer.

SEN. BARBARA BOXER (D-CA): Mr. Chairman, I'd like to put my statement in the record and just take two, three minutes of the committee's time to summarize. Thank you.

Admiral, thank you very much for your hard work. I have to compliment you, that you have been very responsive to the -- our concerns and taking calls. And I really appreciate it. And I also want to say that the TSA people that I met out in the field in August at four major airports -- I thought they were top-notch.

ADM. LOY: Thank you, ma'am.

SEN. BOXER: And I want to report to the committee that, with the approval of the chairman and the ranking member, I held a field hearing in Los Angeles Airport in August. And very quickly I want to talk about four things. The slippage of the date where we're supposed to be detecting bombs in the baggage that goes in the cargo -- out of my four airports that were there -- Los Angeles, Sacramento, San Diego, and San Francisco -- only one of the airports said, "We're going to make it.

It's going to be great." And the others all complained and whined and whined and everything else. The TSA people said -- agreed with me, and with lots of others on this committee, don't slip the date. I think it is absolutely crucial to keep to this date and deal with it, as Senator Hutchison said, on an airport-by-airport basis. And we should know why they can't meet it.

But it seems to me -- and I said it then, and I'll repeat it -- if we can send our troops half way around the world, take these smart bombs, put them in these little caves and get after the bad guys and be so victorious, we can check a bag that's standing at our feet for a bomb. And I really believe that. And I think it just would be absurd, I think, to slip the date. My opinion.

Secondly, the screening points, we were very upset because TSA's own tests showed in some of my airports 40 percent of the contraband was getting through. Now we have the Daily News, they went out there, 11 airports, they slipped through razor blades and box cutters and the rest. So clearly, we're still not doing what we have to do. It's perhaps better at some airports, but it's not good yet.

We've touched on the trusted traveler program. I think your people, Admiral, were very much -- showed that they were very interested in that. I think that's going to solve a lot of our problems. And we won't get into too many details here, but I hope we will.

Lastly, we looked at -- we had a little high-tech demonstration. We had companies there showing the Kevlar material that should be used on the doors in some of these new planes that you can't -- those doors, Mr. Chairman, would do what you want. I mean, you could not get through those doors. And that material also -- and this is crucial -- could be used to hold the baggage, Admiral Loy, for a very inexpensive price, compared to the damage you would have; hold the bags, and then, if there was, God forbid, an explosion, it would contain the explosion, it wouldn't bring down the plane. And also, how to get better IDs. We need to check people's IDs, and there are these machines that do it in a minute. So that's the substance of what I learned.

And thank you very much, Mr. Chairman.

SEN. HOLLINGS: Thank you very much.

Senator Cleland?

SEN. MAX CLELAND (D-GA): Admiral Loy, thank you very much for taking on this tremendous responsibility. May I just say that I come from a state that has the busiest airport in the world, some 200,000 passengers a day go through Hartsfield. And we thank you very much for you coming down to Hartsfield and visiting with Ben DeCosta, the airport manager there.

So whatever happens in the world of the airline industry, whatever happens in the world of airports in America, happens in great spades to Hartsfield.

So we look forward to your testimony and how we work this problem of increased security, but also increased customer convenience.

When I supported the airline security legislation and co-authored it, I thought that professionalizing the screeners was an answer to enhance security and also customer convenience. And also I did support the idea of checking bags that went into the hull of an aircraft.

So -- and in many ways, we've thrown our hat over the wall; we just now have to go get it. And we look forward to your testimony as to how we do that.

Thank you very much, Mr. Chairman.

SEN. HOLLINGS: Thank you.

Senator Brownback.

SEN. SAM BROWNBACK (R-KS): Thank you, Mr.Chairman, and thank you for holding the hearing.

Thank you, Admiral Loy, for being here and to testify.

I want my full statement entered into the record.

SEN. HOLLINGS: Right.

SEN. BROWNBACK: Admiral, I want to just -- I want to add my two cents' worth on to -- several comments have been made so far about the importance of the job and being able to do it, providing security along with not hassling people. And I do hope we're looking at ways that the things that we're doing are adding to security and not just adding to people's hassle factors, because it seems like sometimes when I'm going through airports, I wonder -- I've been inspected -- and this wasn't -- this was before TSA was in position at this particular airport -- but myself, my own bag, four times, coming through. And I wonder if that really added to the security or not.

Now maybe I just look like a character that you ought to inspect four times. I don't know. And that can be a problem.

But it seemed like right after September 11th we just launched into a lot of security items that really probably didn't make a whole lot of sense, if you really were to thoroughly think about it and try to be very efficient. And I hope that you continue to look at efficiencies and effectiveness with this as well, so that we can make sure that people are traveling, traveling safely, but not hassled as much.

A second and narrower item that I would hope you would look at are some of the airports in my state -- one that's the major supporter for my state but actually serve -- is in Missouri is KCI. They've had some questions about working with your organization, that you provided them input for what they need to do on an interim basis but not permanent solutions. And they're looking at investing hundreds of thousands, possibly millions of dollars to do something. And they don't want just an interim solution. They want to make sure that what they're putting forward is a permanent solution when they put forward this amount of funding.

And they've, you know, contacted us -- I'm sure they've contacted Senator Carnahan as well -- to get a response. And I know your organization's just getting up and going, but they've not been able, then, to get -- okay, here's the permanent solution, so that if you do invest these dollars, this is what we will agree to you is what you're required to do.

You're just up and going, new. I can understand some difficulties with that, but I think you can also understand what these airports are going through as they're trying to meet a very rapid, aggressive deadline.

And I'd hope you could work specifically with those airports as well.

Thank you, Mr. Chairman.

SEN. HOLLINGS: Thank you.

Senator Rockefeller.

SEN. JOHN D. ROCKEFELLER, IV (D-VA): Thank you, Mr. Chairman.

Admiral Loy, I welcome you and I'm very happy about the work that you're doing.

I don't know know how many others there are on the committee or not, and it's not really of great concern to me. I'm not one of those who think that dates overrule doing the job well. I perfectly well understand that if you sort of eliminate all dates, it sends a bad signal. I think it sends an even worse signal if we try to meet dates and do the job poorly.

Now, we've got both the screeners and the EDS -- you know, the tracer devices. I am extremely interested of the inefficiency of the trace system in terms of its taking probably about four times as much time to do per bag as the EDS. On the other hand, I also understand the problem of costs and the problem of getting into smaller airports -- the weight, the cost of the machine, much less of the installation thereof, much less the fact that it might go right through the floor into the basement.

So I'm interested in the how, where, when, how much aspect of this. But above all, I'm interested in making sure that our airports are really secure when we do them and that we don't fool either each other or the American public when talking about, you know, if it isn't done by a certain mandatory date, therefore all Americans must lose confidence because it hasn't been done. Well, we set the dates. We're not experts. I was on the conference committee. We set the dates for -- you know, for discipline and impetus. We didn't set them for all-time excellence of knowledge of what it would take. You have that, your people have that. And so I'm interested in where you see that mix is and how you think you could best handle it.

Mr. Chairman, I thank you.

SEN. HOLLINGS: Thank you.

Senator Breaux?

SEN. JOHN BREAUX (D-LA): Just very briefly, Mr. Chairman. Thank you for having the hearing. I don't think we could have a better person at the helm of this ship than Admiral Loy. And I think most of our members also feel the same way.

Admiral, I don't think I possess a single piece of clothing that has not been seen by an airport screener; I mean, like every time I go through. It must be the way we make our reservations or something. A lot of it's one-way tickets and made the same day of the travel. And I'd be interested in having your thoughts about this concept of trying to have a program I guess for regular travelers who sort of are prescreened or something like that.

I think an awful lot of Americans -- and not just members of Congress but the traveling public who have some type of a prior screening would be able to not have to delay the line so that you can do the work in the most efficient fashion. I'd be interested in your comments on that.

Thank you, Mr. Chairman.

SEN. HOLLINGS: Thank you.

Senator Nelson.

SEN. BILL NELSON (D-FL): Mr. Chairman, I'm sure it's been said here before: There has to be a more efficient way to approach this whole problem. As most of us, we fly at the last minute, and we have a one-way ticket. And most of us get searched. And that's just time that they're not spending trying to find the bad guys. And thank you for calling the hearing.

SEN. HOLLINGS: Thank you.

Admiral Loy, we have your full statement. It'll be included in the record. And I, for one, have welcomed these opening statements, because Admiral, you get the concern of the committee members firsthand. And you the only witness now here today. Let's hear from you what you need from us.

ADM. LOY: Thank you very much, Mr. Chairman.

And I would almost like to just go back to the notes that I took as I listened to each of you make your opening comments. I think I'd like to defer that and interchange with questions. But clearly, the things that are on your mind are the things that are on my mind.

Mr. Chairman, I will make a comment about your personal opening statement, because I think one of the most important things that I, too, would like to get out of this hearing is a commitment with each other to step forward together and pull on the same harness together, rather than what has appeared to have been an unfortunate set of exchanges that just don't get us anywhere and don't make any progress. It's always a great personal privilege, Mr. Chairman, to be called before the United States Senate. And it is my particular honor to speak with you this day on the brink of our nation's historic anniversary of September 11. This has been a year of heroes and healing, of actions and reactions, of perseverance and of patriotism.

Last night I attended the second Concert for America. It was a rush of patriotism and celebration and mourning. And Renee Fleming, the noted opera star, sang a very familiar refrain for all of us: "Walk on with hope in your heart, and you'll never walk alone," she said. Not being alone is about overcoming fear. And fear is lonely, and we all experienced it in this past year. The evil ones inserted it into our routine lives. And our challenge together as legislator and executive is to translate fear back into confidence for the American people. And at TSA, we are now keenly aware that the evil ones tried to take away mobility from Americans, and I would offer that that's always been one of our inalienable rights.

Our goal at TSA is to restore mobility to Americans, to restore confidence in our transportation system. And I have been there a short seven weeks and find a workforce dedicated to that goal -- good people, Mr. Chairman, working as hard as I've every watched anyone work, and doing so in a fishbowl, where their every move is examined very closely and very quickly.

I was proud to serve this country in uniform for 42 years, and I'm equally proud to help this team tackle the assignments defined by Congress and the president, and to build programs and systems that will make us all proud. And just as this was the case in uniform, we need help from many quarters to accomplish this work. Stakeholders must make their contributions -- and I've heard many of you say that this morning. Employees must give more than they ever thought they had to give. Trade associations must cooperate. And the Congress must help us stand tall. And I want my last years of public service to be as rewarding as those first 42, and the only way that's going to happen is to build the bridges of understanding among those aforementioned players that will optimize our mutual efforts to serve our country.

Good timing is critical, and I can't think of a better time to tell you about the progress of TSA. Secretary Mineta told me that my job was to lead TSA to provide world-class security and world-class customer service. To begin, I want to offer a leadership approach to this committee. TSA will heretofore conduct all business under this particular modus operandi.

First, our communications, mentioned by many of you, whether by phone, by letter, or by face-to-face meeting, will be forthcoming, it will be ladened with accuracy and timeliness. All policy processes now include gathering input from impacted stakeholders. I intend to continue to establish and maintain critical stakeholder relationships, and have incorporated the concept of stakeholder outreach and collaboration into the working culture of this new organization, especially at headquarters and, of course, in the field.

Next, TSA will work under a technically savvy performance management information system. We want very much to take advantage of every one of those technological advances that you've mentioned. All our employees are accountable for their actions, and their results are compared against expectations that I've offered them. Performance assessment will assist us in best use of the taxpayers' dollars and managing our human resources, working within our budget, researching and developing our technology, and setting policy in process.

Thirdly, we will never assume we've got the job done. Continuous improvement will be ingrained in all that we do. We will always be better tomorrow than we are today. Well, these principles will require excellence in listening and sensitivity to concerns from the public, from our partners in aviation, and in other transportation modes, and from those members of our congressional conscience.

As of this week, 25 of our 50 states now have federal screeners in a total of nearly 100 airports. TSA has announced 145 federal security directors responsible for over 380 of our nation's 429 airports. We have about 700 people in our headquarters staff, a mere 3 percent of our organization. And I'd like to show you two quick screens reflecting both screeners' and airports' progress.

Much has been said in the press and elsewhere as to whether or not we will even remotely approach these deadlines that have been set by the Congress. I want you all to know that we take those deadlines very seriously, and these are just two depictions of the workforce first, and airports second, associated with that progress. By the end of this week, we will have hired nearly 32,000 screeners.

And I'm confident that we will meet the November 19 deadline for federalizing passenger screening. And I'm particularly thankful for the comments made by several of the members with respect to their experience with those federalized screened checkpoints.

We are working to reduce the so-called hassle factor that Senator Ensign mentions. The long-standing two questions have gone away. Passengers can now carry certain beverage cups through security checkpoints. No one will be asked to drink or eat from a container to prove that it's okay. We're working with airports and airlines of streaming checkpoint configurations and processes. We're reaching out to better communicate to travelers on how best to prepare for airport security. I'm absolutely convinced if people's expectations are met, they will then be less hassled by what it is they encounter actually at an airport. With feedback from our stakeholders, I am committed to lowering those hassles and raising the security and customer service. This common-sense approach is alive and well, and I will make it thrive in TSA.

You might be surprised to see the inventory of items intercepted. This slide offers just a couple of notions of things that we have taken from checkpoint-screening processes over the course of the last several months. You might focus in on one number there: 25,000 box cutters picked up through airport screening at our airports since the tragedies of last September. This offers to me a challenge of both education to the traveling American public as to what it is they can and cannot bring to through the airport, but it also continues to offer us a challenge of enforcement.

I have a few important requests for your consideration. We were disappointed with the reduced funding of the recent supplemental appropriations. However, we have moved quickly to review our budget and to scrub our business plan. Some real one-time savings were identified, and some items were rolled forward into fiscal year 2003. Staffing models were scrubbed for efficiency and real need. Checkpoint-model adjustments are reflected in a handout that we've provided to you and on this slide. Very difficult to see; perhaps it would be easier if we -- I think we brought a posterboard model of it, but if you could just refer to what is in your handout, that would probably be fine. There are a large-checkpoint model and a small- checkpoint model, and you can see there that we have identified in both of those cases positions that had been designed into the checkpoints early that we really don't think we need, in terms of efficiency and effectiveness. Those are multiple-thousand-position savings that are about the business of designing into our business plan.

Decisions were taken on the basis of much better information in the results of this business-plan review than was available six months ago, when they were estimated. As a result of all of this and looking very carefully at the budgets for both '02 and '03, the president has approved and sent forward to the Congress a $546-million budget amendment. I request your support as the committees finalize TSA's FY '03 appropriation. Our success simply depends on fully funding this current plan. That support should also include reconsidering the limit of 45,000 full-time employees imposed by the supplemental. Obviously, look at the appropriations request for '03, and I'm happy to answer any questions about that in the Q&A.

And lastly, I'm very concerned about cash flow in the first quarter of fiscal year '03. Our deadlines are focused early in that fiscal year, and any lengthy continuing resolution would be severely limiting in our ability to meet those goals if the normal processes were followed. I would seek your support for a customized CR if there must be one for the Transportation appropriation this year.

Let me mention briefly three controversial issues and then take your questions.

First, deadlines, which virtually every one of you has mentioned. It should be noted that TSA has met every deadline in the Aviation Transportation Security Act up to this date. Again, a line diagram in your handout shows those deadlines met.

The next important one is the November 19 deadline for passenger checkpoint screening. It will also be met.

The December 31 deadline for baggage screening will be met in 90- plus percent of those 429 commercial airports. There are some among the balance where lost time, lost budget and very, very real engineering challenges make it virtually impossible to make that deadline.

I want to work with the Congress to find the right approach to dealing with those airports. At the very least, they will have a robust interim system of inspection while a final solution, probably in-line EDS, is completed. And again, I will be happy to elaborate during the questions and answers.

Second, federal air marshals. Much has been written about our federal air marshal program, and I'm sure you've watched my exchange with USA Today. I've personally briefed Senators Boxer and Burns and would be delighted to do the same privately for any committee member, with the chairman's permission, or with committee as a whole, if you would so choose.

Suffice it to say here that this is an enormous success story for this organization. Coming from where we are -- from where we were to where we are today, I do not sit here and suggest that we have come everywhere that we need to come, in terms of numbers of federal air marshals deployed and flying on those critical long-distance routes that are the part of the concern that prompted ATSA to begin with. But I will say here that there is an unprecedented number of extraordinarily dedicated and well-trained professionals providing security aboard U.S. airliners. Their morale is superb, and I am proud of them and their services, and all Americans should be as well.

Lastly, guns in the cockpit. Although I certainly recognize numbers when see them -- and 87 to 6 is a pretty significant number -- I recognize, as a result, the overwhelming congressional support for arming pilots. But I must ask that you carefully consider the concerns that I offered in a letter to Senator Hollings late last week. There are issues here about cost and liability, international jurisdiction and other such things. And I ask again that we work together, perhaps with the conferees, on this proposal. How this program is implemented is critical to aviation. And again, I'll gladly elaborate in Q&A.

Tomorrow is the first anniversary of arguably the worst day in American history since Pearl Harbor. Survivors of the USS Arizona still have their ashes lowered into the muzzle of those great guns in that great ship to join their shipmates left behind 60 years ago. Equally emotional stories are being told about the World Trade Center, the Pentagon and the field in Pennsylvania. Our challenge is rise above the din and with cold efficiency focus on our assignment to turn fear back into confidence.

A great article in Newsweek this week grades our efforts so far. It gives aviation security an A, unlike the report in the Washington Post this morning.

But despite the well-chronicled fits and starts, the author of that Newsweek article predicts that we will end up meeting our deadlines at most airports and will ultimately be praised as a rare model of government efficiency that truly works. And I'm here to tell you this morning that description is precisely my goal. I need and look forward to your constructive criticisms. I welcome always your great ideas and support.

Thank you for listening. And I'm prepared to answer your questions.

SEN. HOLLINGS: Very good, Admiral. That's a breath of fresh air.

Getting right to the point of guns in the cockpit, of course they overwhelmingly approved that approach on last Thursday. With respect to the approach of the administration -- because I've got hope in that the administration has got a vote -- I have yet to be able to persuade that the entire thrust of the plan for the cockpit door staying closed in flight is to change over from the pilot being responsible for law and order to having a higher responsibility; namely, for making certain that plane is not used as a weapon of mass destruction. And with that in mind, with that in mind, we don't have to worry about the cost and all of that kind of thing; it's whether or not you've got the right policy.

And incidentally, you don't have to have a pilot program to determine the right policy. We've got a 30-year pilot program of success in the El Al airlines. Never a hijacking. I know I can be politically incorrect in profiling and everything else like that, but we want it known and almost a sign, rather than "Welcome to Reagan National," just put a sign at every one of these major airports, "Try to hijack, and go to jail," and put it in all the languages necessary so they understand it, because that's what they know. That's why they shoot at the ticket counter of El Al, they don't try to hijack a plane, because they know it's not going to work.

And that's what the pilots in America have got to understand. There's a greater responsibility. Yes, I'd like to have a gun if I'm going to have to try to win the fight on the plane, but you've got to win a bigger fight, specifically, not have to have all of these F-16s flying around above you ready to shoot you down. You talked about fear. You started immediately with the fear. With respect to Reagan National, you don't have to worry about taking off from Reagan National and running into the White House. With respect to -- I'm a good witness because I travel every week on those planes, and they say for 30 minutes before and 30 minutes after take-off and before landing, you can't get out of your seat. That's fear?? and they wonder what's going on and everything else. You don't have to worry about a commercial airliner going into a nuclear power plant. And all with one rule that's tried and true: Never open that cockpit door in flight.

So we can reconcile that in conference. Let them have the pistols and everything else until they get that secure cockpit door, but you don't want to have a responsibility for opening that door if you've got the pistol and somebody's crying outside, namely, "Open the door, he's choking me, he's killing me" or whatever it is. You don't have that responsibility. You've got the responsibility to go to the ground and law enforcement meets them.

Having said that, let's get really to the needs that you have as the administrator, you say on reduced funding.

Is it the case that you've got $4.8 billion and you now are looking for $546 million more -- is that right? -- for the $5.34 billion? I want to make sure that this committee authorizes and we follow through and you get the money, and particularly, like you say, if we're going to have a continuing resolution, we take care of you in that first quarter, because there's no use to have a good man take over this thing and then not support you. So that's my idea, is to support you in every way possible.

What do you need?

ADM. LOY: Yes, sir. The request of $4.8 billion, that was originally part of the president's request in '03, plus the $536 million in the budget amendment that was sent up just last week, is the required amount for us to deal with what we need to deal with, Mr. Chairman.

SEN. HOLLINGS: All right. And what with respect to the exceptions? What recommendation do you have for the committee? You got into this with Senator Ensign, which was a good thing, so we be realistic. I mean, we can't get the impossible. But let's get to the point there. What approach do you suggest? That we make just exceptions as need be on, say, ad hoc, so to speak?

ADM. LOY: Yes, sir. I think my views are very, very consistent with what I've heard from many of the members this morning. I do not think we should in any kind of blanket manner eliminate the current deadline. The current deadline offers us the focus that you intended, as I heard Senator Rockefeller mention when he was in the conference.

But there are very legitimate -- I have gone to many of these airports over the course of the last five weeks. I have visited West Coast airports -- those that Senator Boxer just mentioned, including SEA-TAC up in Seattle. I have gone to New York. I've gone to Logan. I am enormously appreciative of what Logan is doing in terms of taking a lead and saying, "Yeah, we can meet these deadlines. We're a Category X airport, and we are going to -- we're going to take $140 million that has been offered us by the Massachusetts Port Authority and step out and make it happen."

But on the other hand, I find in a number of these airports, something considerably less than 10 percent of the total, a legitimate set of engineering challenges that I don't believe it would be right for us to force interim solutions that would dominate their lobbies -- literally expel the passengers for the sake of ETD equipment that would have to be forced into the lobbies as a means of meeting the deadline. It does go to customer service and the efficiency of security, and I don't want those lines to be out in the parking lot and down the street.

So I am of the mind that we hold on to the deadline, that we shape the legislation in such a fashion that it offers the undersecretary or the secretary of Transportation, as you deem appropriate, the authority to grant extensions to those very few numbers of airports where these circumstances exist, and that we do so attendant to two things: one, an absolute endgame with each and every one of those airports that we have, designed by, say, the 1st of December; and secondly, that there is an interim mitigation strategy so that we don't put concentric circles around those airports and offer them as paths of least resistance to any terrorist or anyone else.

I think that notion of holding the deadline on -- holding on to the deadline for the 90 percent that can get there; identifying specifically those airports that cannot; an individual negotiation with myself and my staff with each and every one of those keyed to an extension of that deadline for them individually down the road.

SEN. HOLLINGS: If the cockpit doors are to remain secure, the flight attendants really are the first line of defense, so to speak. What training schedules or needs do you have from the committee to have them properly trained?

ADM. LOY: As the legislation called for, Mr. Chairman, the airlines have been tasked with providing training. We have designed a training curriculum and offered it to each of the airlines so that there is a standard set of training elements going on across the country.

Much of that training has already been conducted. So as it relates to more needs from the committee about that training, I think we have what we need, sir.

SEN. HOLLINGS: Senator McCain.

SEN. MCCAIN: To follow up in Senator Hollings' questioning: How many airports are going to be affected by this perhaps a negotiated extension on the explosive-detection systems' installation and deployment?

ADM. LOY: Senator McCain, we have pretty good assessment information on about 21 or (twenty-)two at the moment, and my guess is that that could climb to as many as 30 or 35 -- but certainly less than 10 percent of our total.

SEN. MCCAIN: But when you look at the size of the airports, it is -- a significant number of passengers pass through those.

ADM. LOY: The emplanement numbers are absolutely significant; yes, sir. It is not 10 percent of the passenger load; you're absolutely right.

SEN. MCCAIN: The DOT IG reported that Boeing was to have completed 266 airport site assessments by the end of August. How many site assessments have been completed?

ADM. LOY: I don't have that number --

SEN. MCCAIN: Roughly.

ADM. LOY: -- but I can get it for you, sir. Boeing --

SEN. MCCAIN: Not many, is it?

ADM. LOY: I'm sorry?

SEN. MCCAIN: It's not many, is it?

ADM. LOY: Boeing is behind with respect to those assessments.

SEN. MCCAIN: Then look at somebody else to do those assessments. Boeing has had their chance.

ADM. LOY: I will do that, sir.

SEN. MCCAIN: How will those delays affect the schedule to meet the screening-checked-baggage deadline? If you don't have an assessment, it would be very hard to meet the deadline, it seems to me.

ADM. LOY: We are making significant progress. Just this past weekend, Senator McCain, a team of TSA and Boeing executors got together with their engineers and approved 50 of those assessments just on Saturday and Sunday. And they have probably another 25 or 30 over the course of the first two days this week. So the process of having reached the point of final-assessment judgments is right with us. It goes very much, sir, to the nature of the chart that I showed with the steep incline towards the end of the period here. And that is by design, not by accident.

SEN. MCCAIN: TSA has cited 1,100 EDS and 6,000 ETD machines to be procured in order to meet the deadline. How many machines remain to be ordered?

ADM. LOY: We're at about 1,025 on the EDS, Senator McCain, so we leave about 75. We think we'll probably push about 50 of those 75 into the first quarter, fiscal '03. But the wherewithal to do so is contingent on the budget amendment being included in the final appropriation.

SEN. MCCAIN: What about ETD?

ADM. LOY: There's no problem with ETD, sir. I don't know precisely what the order number is; I can get that for you for the record. But we have no problems in either a supply chain or the availability of ETD.

SEN. MCCAIN: The airline people have been to see me on several occasions. As you know, the airlines are in great financial difficulty. It's certainly common knowledge. They are concerned about assuming, increasing amount of costs in -- to pay for many of these security requirements. What's your view of that issue?

ADM. LOY: Senator, I believe there is a burden on all of the stakeholders to be contributory to the solution that we have at the other end of the day. The same thing exists in our ports. The same thing exists in many of our terrestrial modes of transportation, as well. I think most of the burden, though, with respect to the ETD/EDS installation, as well as the checkpoint reconfiguration, is being borne by TSA, the federal government and the airports, as opposed to the airlines.

SEN. MCCAIN: The airlines claim that they are assuming significant costs.

Do you agree with that?

ADM. LOY: The assumption of costs is, of course, as you know, an issue. Somewhere between the $750 million figure that was offered forward as the original airline contribution to security in the past, which was to be continued, there are those who would revise that estimate from the airline community downward considerably. And I think we need to be very conscious and careful of making certain that all of the stakeholders at the table meet their obligations with respect to partial funding.

SEN. MCCAIN: How many airports now are fully federalized? Three?

ADM. LOY: We are in about a hundred, sir, and I think --

SEN. MCCAIN: I mean fully federalized employees.

ADM. LOY: Fully federalized -- I think there's probably only a handful. The focus, of course --

SEN. MCCAIN: One of them is Baltimore, BWI?

ADM. LOY: Only at the checkpoint, sir, for passenger screening.

SEN. MCCAIN: And you have information that would lead one to assume or conclude that this has been successful -- federalizing these employees?

ADM. LOY: We have had considerable evidence that that's the case, Senator McCain.

SEN. MCCAIN: In what respect?

ADM. LOY: Well, first of all, we have -- one of the advantages of a --

SEN. MCCAIN: The reason why I ask this question -- as you know, it was a matter of great contention at the time that we passed this legislation, and I'd be interested in your preliminary assessment.

ADM. LOY: Yes, sir. We owe the Congress what I'd call the metrics and the reports therefrom, on the basis of a federalized system versus a third-party screener basic system of the past. And we have, as a result of being a brand-new organization, the opportunity to inculcate performance-based management and leadership as a threshold level in this organization. We have done that. So we are already beginning to get those kind of metrics from BWI, from Mobile, from Louisville, from those other airports where -- we got into early. And the evidence is pretty overwhelming that if you spend a hundred hours training a screener to do their job well, including the attitudinal end of what they do, as opposed to the five to six hours that was the average in the past, you will get an increasingly professional product on the job.

SEN. MCCAIN: So you believe that federalization of the employees was a good thing to do.

ADM. LOY: I do so at this point, yes, sir.

Now we still, as you know, will have five experiments, including Kansas City, Senator Brownback, and San Francisco and Rochester, Tupelo, Mississippi -- and there's one other -- where we will continue to press third-party screening as an option, because, as you recall, the law also offers, two years down the road, an opportunity for airport directors to reconsider the notion of federalized screeners.

SEN. MCCAIN: I thank you.

ADM. LOY: Thank you.

SEN. MCCAIN: Thank you, Mr. Chairman. Thank you, Admiral.

SEN. HOLLINGS: Senator Wyden.

SEN. WYDEN: Thank you, Mr. Chairman. Thank you, Admiral Loy, for a very thoughtful opening presentation.

Let me begin by asking you about the consequences of poor performance. I've been very troubled by the fact that we've gotten these reports now for months that airports -- 30 to 40 percent of the time weapons, for example, get through the checkpoints. Just last weekend, over Labor Day, numerous news organizations, organizations all across the country, were going through these exercises where they got knives and the like through.

Could you tell me what is being done to deal with the consequences of poor performance, and spell out particularly how there is going to be new accountability, so that when there is performance, there are changes made?

ADM. LOY: Yes, sir. The anecdotes that you describe, of course, are -- make my stomach churn as well and keep me up at nights.

The reality is, on the other hand, there have been numerous occasions where news media have made an effort -- illegal, by the way, I might add -- to attempt to introduce weapons or knives or whatever it might be into the system, where they have been intercepted and confiscated as a result. And obviously we don't often see very much of that in the press.

What I can tell you is that, for example, we had an unfortunate incident two weeks ago, where a young woman was carrying a .357 magnum, came out of Atlanta into Philadelphia, going on to a small town in eastern Maryland. The screening process missed that weapon in Atlanta on the way out but got it in Philadelphia as she attempted to reboard from the public area in the Philadelphia airport.

What had occurred, interestingly enough, in Atlanta was that the screener had -- actually saw something that, I forget whether it was he or she didn't like on the screen, called her supervisor over to validate it; the supervisor said, "It doesn't look quite right, I'm going to hand-check this bag," hand-checked the bag, and the weapon got through. That supervisor is no longer working, and the accountability end for the screener was reinforced as her having done exactly the right thing and her supervisor having been found to have been lax.

So the first order of business is to provide some kind of remedial training opportunity that can gain a focus on what broke down, build the skill set and, as necessary, not only deal with that individual who had a problem, but build that back into the training curriculum for all.

SEN. WYDEN: How many airports are under extra monitoring? I was under the impression that there was going to be an effort to really zero in on the airports where there were problems. I want to know if that's correct this morning, and particularly, how many airports would be subject to this extra monitoring to make sure that there's follow- up so that the holes get plugged.

ADM. LOY: Senator Wyden, I'll have to get back to you with the number. But what we have is a --

SEN. WYDEN: Is it a significant number that are getting extra monitoring?

ADM. LOY: We paid very close attention to the press report of several weeks and months ago, and the inspection staff that is, in fact, just forming and coming of age, if you will, like every other element of the TSA organization, has been about the business -- in conjunction, I might add, with the inspector general of the department, who has been cooperating extraordinarily well -- to help us design the right kind of review and oversight monitoring things that need to be going on.

SEN. WYDEN: Let me ask you a money question. The inspector general reported that the screening companies jacked up the rates when your agency started paying the bills. Now, maybe that's all right if we're actually getting better performance, but given the fact that we're having this budget debate, it seems to me critically important that the agency is monitoring the screening contractors to see where the money is going. Do you-all have a program under way to watchdog these screening companies?

ADM. LOY: Absolutely we do, sir. Part of the IG's initial review of those third-party contracts included the recommendation that we reach out to a third-party accountant, if you will, to aid us in the process of oversight, and so we have reached the DCMA and DCAA and engaged them so as to help us definitize those contracts and watch very, very carefully the data flow that's associated with them.

So we did pay a little more, as you know, at the beginning because it was important for us to incentivize those contractors to stay on the job until the federalization process could take place. The other reality there is, when the federalization process takes place, aside from the five -- aside from the five pilots that we will continue to run with third-part-party screeners, we will have that problem behind us.

SEN. WYDEN: What were the most important changes that you put in place when you took over?

I mean, it was clear there was a reason that you were installed. And I'd like to know what changed when you got there, what were the specific policies that were altered.

ADM. LOY: Well, sir, I think first of all the secretary made it very clear to me on the occasion of asking me to take the job what he was expecting out of the job. So the first order of business I think was a new way to do business, if you want to refer to it in that fashion, new in the sense of public/private relationships, new in the sense of focusing on the customer service piece equally with respect to world class as we were focusing on world-class security from the very beginning.

I come from an organization, Senator Wyden, as you know, that for the last, oh, five, six, eight, ten years has made a huge difference in its performance based on public/private partnerships. If you go ask Tom Allegretti, the president of the American Waterways Operators, what's the difference between the AWO in the past in its Coast Guard relationship in the last five to seven years, I believe he would tell you that we have found a way to get together on policy generation issues and performance issues in such a fashion that we hold deeply to our regulatory responsibilities, we the Coast Guard -- it's hard for me not to say that -- and they, the impacted industries, gain performance as a result.

I want to bring that to this organization as well, and we have -- I've traveled extensively. I've gone to 15 or 20 airports. I've dealt with the airport directors, the airline executives. I've met several times with Carol Hallet at ATA, with Chip Barkley over at AAAE. I've met with the pilots associations. I've met with all the trade associations and I've met with all the senior staff of the respective committees here on the Hill and on those occasions where the recess allowed with the members and senators as well.

So my notion there is that we have to engage in a partnership to get this job done together.

The second thing I guess I've brought or tried to bring to the table is an emphasis on strategic planning. I can tell you, sir, that for the course of the first seven or eight months of this organization they have been wrapped around the axle of the inbox, you know, the daily terror has been the inbox and the ability to sit back and say to ourselves, "What do we want this organization to be for America, what did the Congress really have in mind that they wanted this organization to do for America and what should we be doing five years from now when these deadlines are behind us and we, in fact, have in place a new security paradigm for the country," not only in airports, by the way, but for the rest of the transportation system.

So I've tried to focus on what I always have called the precious few, and the precious few for the moment are 1119, 1231, the CAPS 2 program, which will enable us to do infinitely better as it relates to identifying selects at airports, including a frequent or registered traveler program as we're calling it at the moment, and then, of course, these outreach trips have offered me a chance to learn about this new industry. When I walked aboard I was a sailor and I used to tell aviation jokes and I'm not allowed to do that anymore because, first of all, Senator McCain would be all over me but beyond that the notion of learning this new industry and all the inside subtle relationships about airlines and trade associations and airports and how they have dealt with the FAA in the past.

So that's an offhanded approach to your question, sir.

SEN. WYDEN: Thank you, Mr. Chairman.

SEN. HOLLINGS: Senator Ensign.

SEN. JOHN ENSIGN (R-NV): Thank you, Mr. Chairman.

Just to get on the record, what we had in our meeting last week in my office, you had talked about not making basically a target around these 20 to 30 airports, whatever it turns out to be, that can't meet, physically cannot meet the deadline. Could you describe some of the -- use McCarran as an example. Describe some of the things to make sure that we meet your two goals -- one is that we screen all the bags and two is that we don't hurt customer service -- the type of resources that are going to be necessary like at an airport in Las Vegas.

ADM. LOY: Yes, sir. I think what I've referred to as a mitigation strategy associated with gaining the functional accomplishment but waiting for the final solution in terms of what most likely will be an inline EDS solution for those airports, there's a menu of things that we will surge to the respective airports where appropriate. It may be additional ETD. It may be hand checks. It may be canine patrols. It may be positive passenger bag match. There is that inventory of tools of the trade that we would just have to surge in greater quantities to not only meet the goal of baggage inspection but also to make certain that doing that did not end up with -- you know, it's that fine balance between customer service and getting the job done and we have to get the job done and also balance the customer service accordingly. So we would surge those things to the airports in question in such fashion as to do that.

SEN. ENSIGN: Obviously southern Nevada is very tourism dependent. That airport is critical to the economy of our state, as it is to the economies all across our country. Do you have the adequate resources to put those extra resources in places like the Las Vegas airport?

ADM. LOY: With the budget that we have offered forward as an amendment to the fiscal '03 request, we think we will be able to do that. I must also say, however, that all of the assessments are not finished and I would be remiss if I ever gave this committee or any other committee an absolute guarantee until we have all the cards face up on the table, if you will. But we do believe that we will, as necessary, reshape the inventory of the 1,100 EDS machines that Senator McCain asked me about and the 6,000 ETD to make it right across the country.

SEN. ENSIGN: And then lastly, your commitment was that we were not going to have the lines that at least the studies have indicated, preliminary studies have indicated that at McCarran that your goal is not, that 10-minute rule that you had talked about with the screening of the passengers, that that is, in effect, what your goal is and that you said that you would absolutely make sure that that is met, for instance at McCarran Airport?

ADM. LOY: Yes, sir. That remains so. That's the direction I was given by my boss.

SEN. ENSIGN: Thank you, Mr. Chairman.

SEN. HOLLINGS: Thank you.

Senator Hutchinson?

SEN. KAY BAILEY HUTCHINSON (R-TX): Thank you, Mr. Chairman.

Admiral Loy, do you support the Trusted Traveler Program?

ADM. LOY: I do indeed. I am disappointed that one of the elements in the language of the supplemental sort of pulled the rug out from under the funding of the Transportation Workers Identity Card because I had always imagined that, and I believe the organization had always imagined that to be sort of a foundation block from which we cold grow a registered traveler program. I've sort of discounted the use of a Trusted Traveler Program because the opposite that suggests we don't trust all the other players.

So I have visited a plant down in Corbin, Kentucky where INS is currently having its new sort of family of Green Cards made. There are laser cards and chip cards and all kinds of better ways for us to be doing business. I absolutely endorse the notion of a Trusted traveler Program at the other end of the day and I think it has to be hooked up with this second generation of the Computer Assisted Passenger Screening System that we currently have in place. Unfortunately, I probably should go to a closed hearing to talk that over and I'm happy to do that for the chairman and anyone else who would like to do it, but the connection is very real, yes, ma'am.

SEN. HUTCHINSON: Was the supplemental the 5 billion that was not declared as an emergency or what was in the supplemental that --

ADM. LOY: Just I was directed not to spend another nickel basically on the Transportation Worker Identification Card. I think that primarily came from Chairman Rogers over in the House Appropriations Committee and his notion was very straightforward. He understood that we were aligning our effort up with the new DOD military identification card issuing process and he wanted to make sure that he had a chance to speak with me about the strengths of that program as opposed to the strengths of others, the difference between lasers and chip cards, et cetera, so that what we do is produce for this purpose the functionality that ought to be there at the other end of the day. So I have had a great conversation with Chairman Rogers and look forward to continuing to work with him.

SEN. HUTCHINSON: So we can look forward -- well, I think it's essential that we do move forward. One of the disagreements I had with your predecessor was this known traveler concept, because I think it can expedite the whole operation of this security effort if we do that, and segue into cargo. I think we need a very firm known shipper program and I think today the qualifications to be a known shipper are quite lax and I would like to ask you what are the qualifications and what are you doing about it?

ADM. LOY: I agree, Senator Hutchinson. Both you and Senator Snowe have introduced legislation associated with cargo as an issue and it is absolutely an imperative that we spend focused attention on getting a better approach to cargo. We have strengthened the known shipper program from what it used to be, but I do believe that it's still simply not enough. I think your notions of technological monitoring and advances, your notions in your bill of supply chain audits make great sense in terms of ways in which we can bring strength to a cargo focus, in addition to the passenger focus that has been, of course, by decree in ATSA the 100 percent mandate with a date certain, that sure prioritized things for TSA in terms of what it should be putting its emphasis on at the beginning. But we must reach to general aviation aircraft better, we must reach to cargo better and, frankly, I look forward to working with you, Senator Hutchinson, on the language in your bill.

SEN. HUTCHINSON: Are you taking steps under the Trade Promotion Bill to screen and evaluate cargo, whether it's coming into our out of the United States?

ADM. LOY: I need to get back to you with a better answer than I'd be able to give you on that.

SEN. HUTCHINSON: There is a requirement in that bill, which would be helpful. It doesn't include the interstate commerce, which, of course, is clearly important as well. Twenty-two percent of cargo is on passenger planes, and as I said earlier I want to continue that and build on it, because I want to make the airlines have every opportunity for revenue that they can.

ADM. LOY: And Oklahoma City, as we all know, was domestic terrorism.

SEN. HUTCHINSON: Yes.

SEN. HOLLINGS: If the Senator will yield just a minute, our clock is not working. We're already halfway through a roll call that's going on right now. So excuse me for interrupting.

SEN. HUTCHINSON: Mr. Chairman, if I could just finish then, I would just like to ask Admiral Loy to look at the Trade Promotion Bill that was signed and I'd like a report in writing or an answer in writing on that.

But let me just ask you if you support the basic concept in my bill, which is the chain of custody being established, the system for certifying known shippers with an encrypted identifier that can't be tampered with and then inspections as things go on board?

ADM. LOY: Absolutely. I spent the last eight months in uniform designing the maritime security plan for America, and when we focused on containers, for example, that's precisely those elements, the chain of custody associated with products or cargo inside a container and, if you will, from its point of being packed and sealed I use the phrase in-transit transparency such that through the course of the time it left that manufacturing plant, wherever it was, and ended up wherever it was going, we knew whether or not it had been violated, whether that cargo container had been opened or not. That was a goal that absolutely needed to be there and I sense that's the same thing that you're describing in your bill.

SEN. HUTCHINSON: Absolutely. Well, Mr. Chairman, I thank you. I think that our comprehensive bill addressing all of these issues must include cargo or we will have one gaping hole in our system, which we don't need, because I think you're doing a credible job. So, Mr. Chairman, thank you.

SEN. HOLLINGS: We're going to have to I guess suspend for a few minutes, otherwise, Senator Snowe, she didn't even get an opening statement. Do you want to ask some questions and then we'll suspend for the roll call? Brownback is next in order and then Allen. Excuse me, Allen, excuse me. George, you go ahead. I'm sorry. Yeah.

SEN. GEORGE ALLEN (R-VA): Thank you, Senator Snowe.

Very quickly, Admiral Loy, I've been increasingly concerned. We've been patient on Reagan National Airport. As you know, we're a year now from the tragic events. General aviation is still shut down there. Back in May Secretary Mineta said it would be opened. I even brought it up with Ms. Blakey last week, the new FAA administrator.

I'd like to ask you, Admiral Loy, is there a plan, currently a plan, to reopen Reagan National Airport to general aviation? And, if not, what is the timetable for developing such a plan?

ADM. LOY: Senator Allen, this is where we are. There's no change since we last reported in July to you from this particular table, when both Secretary Mineta and Secretary Jackson and I testified then. There is a regulation that has been developed. It is on hand.

But the reality of what happened in terms of threat assessments in the months of late May and through the course of June just sort of unfortunately interrupted whatever might have been a plan of intent. And I understand what you say when you say plan, and that's what I'm trying to react to and respond to.

I think it would be a very good thing, sir, if we had an opportunity to brief you privately with respect to the threat analysis on which we're basing our actions. And, of course, it is not just TSA but many other federal agencies that are involved. With your permission, Mr. Chairman, I'd like to try to do that.

SEN. ALLEN: Well, I look forward to having that private meeting. I can understand why you cannot divulge, I suppose, some of these matters. But I would like to see a plan developed that meets all the security needs. And I think that the general aviation community would be willing to go through those elaborate gold-plated, hyper-security requirements for general aviation.

Reagan National has put in specific requirements on commercial aviation for understandable reasons. It was accepted in the phased-in reopening for many, many months -- (inaudible) -- for commercial. And that same sort of an attitude and approach probably needs to be taken for general aviation.

ADM. LOY: Sir, you have been an eloquent spokesman on this, as has Delegate Norton. And I would just like to have the opportunity to brief you in private, sir.

SEN. ALLEN: Will do. Thank you. I know we're short on time, Mr. Chairman.

SEN. HOLLINGS: Yes. Senator Snowe.

SEN. OLYMPIA SNOWE (R-ME): Thank you, Mr. Chairman, for giving me this opportunity. And, very quickly, Admiral Loy, I want to welcome you. And I commend you for the can-do spirit that you're bringing to this position, which is obviously something that's so critical to this country.

And I also thank you for really expressing the sentiment of moving heaven and earth to meet all the deadlines. I think that is important. I don't think it's an option to fall short, you know, of our target if at all possible. I know there will be some extenuating circumstances.

But, above and beyond that, I think we can't, you know, express a vacillating message. And you're certainly not in this instance, and we certainly appreciate that. I do believe that we've created strong foundations for enhancements to the status quo from where we were a year ago, and tragically what occurred a year ago tomorrow.

Let me ask you several questions. I was in Portland, Maine, yesterday and I visited with the airport security official, the director of federal security from TSA, Bob Dyer, and the jetport manager in Transportation. And I'm pleased to announce that they're federalizing their security workforce. They're rolling it out today.

ADM. LOY: Yes, today.

SEN. SNOWE: And that really is commendable, because Maine's two largest airports are one of 82 out of the 429 that have met the deadline of November 19th, two months ahead of time for doing so. So I'm very pleased with that record.

And I'm also impressed with the relationship that exists between the director of security and the airport, and I just want to say that here. I was very impressed with the cooperative teamwork and attitude that was displayed yesterday in your efforts to resolve all the challenges that obviously are out there, and I just want to give that report to you.

Could you -- you mentioned the Washington Post grading by experts here. Is there any truth to the statement that airport security has not been substantially changed because, as one person said, airlines have exerted a tremendous amount of pressure not to implement security? Is that true?

ADM. LOY: My instincts, as I've gone around -- this is a very competitive industry; there's no doubt about that. But I have visited up to 20 airports at this point, and every airline station manager, every airport director, has been willing to come to the table and meet us more than halfway as it related to designing the game plan that would be appropriate for that airport. So I've put very little faith in that particular report. I'd much rather read Newsweek this week, which is -- (laughter) -- which is giving us an A instead of whatever you found in the Post this morning.

SEN. SNOWE: It's not a sentiment that you see in --

ADM. LOY: No, ma'am. Carol Hallett, representing all the major airlines, the trade associations, representing the charter services, the smaller airlines -- I have touched base with each and every one of them. I have given them my card, which has my e-mail and phone number, told them to call me directly. We have made excellent progress with the relationships that I think will allow us to go forward.

Now, that's not to mask very serious challenges and very expensive challenges that we all have in front of us. And as the chairman mentioned before, you know, the industry is on very tight margins right now as it relates to survival, really. And our goal is to bolster the robustness of our aviation industry across the board -- airports, airlines, and, of course, most importantly, the security of the traveling public.

SEN. SNOWE: And I also want to reinforce what Senator Hutchison mentioned about air cargo.

ADM. LOY: Yes, ma'am.

SEN. SNOWE: Because 22 percent of all cargo is shipped on passenger plans, it is a gaping loophole. And I hope that we can move quickly to develop a plan.

ADM. LOY: Part of our focus in the budget amendment is an interestingly small amount, but just so we can focus on the postal cargo, which is an enormous revenue loss to the airlines at the moment. We believe we have really sorted this pretty well, we think, and we believe the right answer may very well be canines, of all things.

And so we have asked for a specific amount of money to enhance the canine program that would allow us to deal with the Postal Service straightforwardly and reintroduce postal cargo back into the belly of those aircraft, because that's a huge good step forward for the airlines.

SEN. SNOWE: Thank you very much, Admiral. Thank you, Mr. Chairman.

SEN. HOLLINGS: Thank you. The committee will be at ease, Admiral, if you don't mind sticking with us, because Senator Brownback and some others are coming back after the roll call.

ADM. LOY: All right, sir.

(Recess.)

SEN. HOLLINGS: The committee will come to order. Senator Brownback.

SEN. SAM BROWNBACK (R-KS): Thank you very much, Mr. Chairman. Admiral Loy, thank you for staying here through all of this. I want to ask a couple of questions that people regularly ask me. So they may not make a whole lot of sense and they may not be great illuminators, but it's just questions that people ask me often.

ADM. LOY: Yes, sir.

SEN. BROWNBACK: I've had gentlemen say to me -- and this is a pretty typical example -- say, "Look, I see them examining a 72-year- old grandmotherly-looking person, doing a full search on her, at the same time I saw them let through in this same flight four young men that were traveling together, and were obviously traveling together. And they were inspecting and going through a full search for this one lady, who I really doubted was going to try to do something on this plane, and yet let through these four gentlemen that were traveling together, were younger. If you were looking and just kind of think through the situation, you'd say that's a much higher security risk than this 72-year-old grandmotherly-looking lady is."

How are you dealing with this? Do you think you're adequately getting at the people that are actually the high-risk individuals that are getting on planes?

ADM. LOY: Senator Brownback, I'm very concerned about that as an element of the so-called hassle factor, that just we have to do better. The answer is in the replacement of what is currently the computer-assisted passenger-screening system that selects selectees.

And there's a rule-based system whereby if you, quote, "violate the rules" -- and unfortunately many of the rules have been compromised in terms of public knowledge -- you get labeled a selectee, whether you're that blue-haired grandma or, you know, the infant in the stroller. And the challenge for us is to expedite and accelerate the replacement of CAPS I with CAPS II. It is my single most important R&D investment that we have to make.

Secretary Jackson, Secretary Mineta and I have been working very hard on this already to lay the groundwork for learning the things that we need to learn to accelerate the replacement of CAPS I. When that newer system is there, it will have two features that I can talk about publicly. And, again, this is one of those things, Mr. Chairman, that only to some point can I talk about them publicly, and I'd be delighted, Senator Brownback, to do something privately for you.

But the two things are this. We have to have an absolute firm feel for the identity of the individual that we're talking about, whether it's the grandmother or whether it's one of the foursome that is walking towards a checkpoint. That means that we have to go from sort of a name-only identity system to one that meets what I'll call law enforcement specifications.

In other words, your ticket to come back to Washington probably said, "Brownback, comma, initial." And that is sufficient to have you buy an airplane ticket. And as a result, then, of only the screening process at the checkpoint, where, if, in fact, you violated the rules, one of those compromised rules, you became a selectee. And as Senator Breaux suggests, every piece of clothing that he owns has now been investigated many times by screeners along the way.

One hundred percent identification is critical to the new system, but it has to be one that does not impose privacy violations on the traveling public. The second piece, then, is, once you know for sure who the individual is, what are we bouncing it against? What are we comparing it to in the way of sophisticated lists of concern to the United States of America, whether they are forthcoming from the joint terrorist tracking task force or the FBI or Interpol or our own watch list or no-fly list? How robust is the process by which we are comparing the individual, now that we know for sure who he or she is, against that list?

When we are able to do that -- and the technology is one of those things that we should take advantage of immediately, because the technology is there for us right now; we can do those kind of lists millions of times with a less-than-three-second turnaround, once we have developed, you know, the engagement effort that we need to for that particular process.

So I would like to think that within the balance of this calendar year and on into the early part of the next calendar year, we will have built that portion of our new system. You might have seen this discussed pretty thoroughly with a very, very good article on Tuesday of last week in the Washington Post when they ran a trio of articles on aviation security generally. The second one was about the CAPS II system.

And I would seek the support of the committee to enable us to get the resources necessary to get that done quickly, because once we do, we will then not be looking at, you know, blue-haired grandmothers and infants in the strollers.

SEN. BROWNBACK: Well, and I would hope that you would, in your training that you're providing to individuals and guidelines that you're giving to the private companies, would urge them to be able to also review subjective situations that they're in. I mean, if you have four young males that are traveling together in a plane that looks suspicious, but none of them clicks off in the computer system --

ADM. LOY: Yes, sir.

SEN. BROWNBACK: -- do they receive training and authorization to be able to check into a situation like that?

ADM. LOY: The process of where the TSA takes over that effort is at the checkpoint where they have already normally gone through the airline-driven process of being identified as a selectee. So as the "selectee," quote/unquote, identified on the boarding pass shows up at the checkpoint, that TSA employee in the future or even a third-party screener of today, you know, the decision has already been made for them to do what they're supposed to do next.

Now, I would say, especially because of the inordinate imbalance between the CAPS I process as it impacts smaller airlines, as compared to the larger airlines, we have already seen some significant discontinuities in the data there. We should be able to -- in the time between CAPS I and CAPS II, we need to do a better job of providing guidance, as you just described, so some good human judgment is entered into the system.

SEN. BROWNBACK: The second thing I get asked a lot about is dropping off and picking up passengers. And I don't know if you have control over this particular situation or have any input, but this constantly having people circle around airports I really question. Are we really gaining anything security-wise or not with that?

ADM. LOY: Sir, what I have asked for is a review of rules that have been put in place, especially those that were sort of put in place just since 9/11, almost impulsively in the immediate aftermath of 9/11, and even those like the two-questions rule, which we have eliminated as of two weeks ago.

I'm bringing each of them sort of one at a time onto my desk, really thoroughly reviewing them and saying to ourselves, "Is this adding to security? Is this adding to the hassle of the American traveling public? And what's the balance that we've reached here in terms of whether the rule, as specified when we put it out, can be tailored to make sense in the security environment that we find ourselves in a bit later?"

Now, that has nothing to do with failing to continue to recognize the legitimacy of the threat, as Senator McCain mentioned in his opening statement. That is for real. Every morning at 7:15 to 8:00 I am looking at that material and being briefed. So the legitimacy of the threat is absolutely still there.

But we can bring onto the table and reconsider things that were imposed in the past, and we've done that already. Part of this was not carrying a cup of coffee through the mag. And now, when we know we can do that safely with paper cups and with polystyrene cups, we've allowed that to now be part of a revised rule.

The two questions has been brought onto the table, considered, and found to be not a contributor to security, so we've eliminated that. And we're looking at the 300-foot rule for airports, which is the one you're describing about whether you're continuing to circle or not. And there are three or four others.

And frankly, as you experience, sir, whatever you experience at the airport, I would be delighted if you would let me know what you consider to be a less-than-thoughtful rule and maybe one not contributing to our security, and let me bring that one on the table, too.

SEN. BROWNBACK: I appreciate that you're looking at those, and Godspeed. As I look at it, the area I still get concerned about is checked luggage as much as anything right now. To me, that's still the area that -- I want us to expedite some of these others, because I look at it and I just really question whether we're getting much. But that checked luggage area, that one still causes me great concern. Are we getting --

ADM. LOY: When you're putting both the passenger and the baggage in the air compartment together, that should be the one that gives us the greatest pause.

SEN. BROWNBACK: And we've got people willing to attack us. They don't care if they die in the process, too.

ADM. LOY: Absolutely.

SEN. BROWNBACK: So that increases their options for destruction.

ADM. LOY: Yes, sir.

SEN. BROWNBACK: And so it's not just enough to put the bag with the person anymore. I mean, we've got to get through what's in that bag when they check it at the airport.

ADM. LOY: Sir, it goes right back to Senator Hollings' concerns with respect to the impenetrable cockpit door.

SEN. BROWNBACK: Thank you. Thank you, Mr. Chairman.

SEN. HOLLINGS: Senator Fitzgerald.

SEN. PETER FITZGERALD (R-IL): Thank you, Mr. Chairman. And Admiral Loy, thank you for being here. I have to apologize; I have a cold, and I sound worse than I actually feel. But please bear with me.

I noticed in your opening remarks you talked about your intent to implement a trusted-traveler program, which you would like to call a registered-traveler program. And I guess I wanted to talk to you about that. I think that's very important if we want to save commercial aviation in this country. Our airlines are continuing to suffer with diminished revenues and declining number of passengers. And I suspect a large part of it is the hassle factor that people perceive at our nation's airports.

Do you have a deadline in mind? I know you have a lot of other things you've got to accomplish, first among them being scanning all the bags by December 31st that go into the planes. And it is appropriate that you focus on that. But do you have a deadline in mind for implementing a trusted-traveler program?

ADM. LOY: Senator Fitzgerald, if I have -- I don't have a date certain in my mind, but I certainly have an ASAP kind of notion to making it happen. Before you came, we discussed it a little bit earlier, and one of the things that I pointed out was that the language in the supplemental tells me to no longer fund the development of a transportation workers identification card, which was the beginning -- the foundation step, if you will --

SEN. FITZGERALD: Did anybody tell you the reason when they just denied you the funds, the Appropriations Committee? Did they tell you why?

ADM. LOY: I have some insights into that, sir, and I'm working very hard with Chairman Rogers, because he, most of all, has the well- being of our country at heart. And at the other end of that conversation, we're going to work very strongly together.

His concern was that we were marrying up with the DOD ID card implementation process. He wanted to make sure that the difference between a chip card and a laser card was well understood, and that we could press forward together on designing what would be -- the card that had the functionality we really needed for not only transportation workers as an ID card and an access control card, but also one that could grow into a registered or trusted traveler program as well.

SEN. FITZGERALD: So what do you envision for a registered traveler program? That a registered traveler would have some kind of special ID card that would be --

ADM. LOY: It may, sir, even be just a number in the registry, such that at the same time you make a reservation -- you know, if you are giving them your frequently flyer number, if you are able to give the reservation agent your trusted or registered traveler number, that there would be a window inside the software of our new computer- assisted passenger screening system that would recognize the validity, if you will, of a trusted traveler, and incorporate that right into the incentives necessary to --

SEN. FITZGERALD: Now, how would you envision getting these trusted travelers into the secure areas more quickly? Would there be a special checkpoint for them? And how would you know that that wouldn't get more jammed up? Because, as you point out, many of the travelers in our airports are frequent flyers also. So --

ADM. LOY: Yes, sir.

SEN. FITZGERALD: Two issues. One, how do you become a member of the registered traveler community, so to speak, and that would all be about adequate criminal background checks and the legitimacy of what the inventory of things would be that would enable you to become one. And then, secondly, what is it -- you know, now that you have been incentivized to become one, what is the reward so to speak as it relates to the security system that you deal with at the airport.

First of all, we should not put it in our minds that we eliminate screening for those folks. Rather, in the same fashion that we were trying to design a notion about containers coming into the country, where we could identify maybe the large volume of the good guys and while whether it's known shipper programs or whatever becomes the combined Coast Guard-Customs effort in that regard, we want to be able to identify the good guys so that the small number of resources that we do have can be concentrated on the ones we don't know completely. And in the same fashion in our airports we would think that a registered traveler program should be incentivized to be expedited through the security paradigm at the airport, because they travel so frequently. And that in and of itself becomes a reduction in the total wait time for everybody that's in line at that airport. And, sir, I might add we might -- we must have in mind that we have to expand this to passenger cruise ship terminals, to potentially railroad stations and bus terminals, or whatever else. We can't see this as just an airport aviation industry issue. It has to be the full transportation system that we serve.

SEN. FITZGERALD: So there's a lot -- it's really just a concept now, and we really don't know how this would be implemented. I mean, there's no clear --

ADM. LOY: There are some -- there are some very, very bright folks that traveled with me -- I being not among them -- in this particular instance to this plant down in Corbin, Kentucky, which is now making the new family of green cards for INS. A combination of a company known -- SCI Technologies, DataTrac and the INS have an installation there serving that particular federal agency with the issuance and creation of their new ID cards. Learned an awful lot while we were down there and, as I say, we need to recalibrate our jump-start now that we have been zeroed out with respect to funding on the transportation workers identification card.

SEN. FITZGERALD: With respect to the next generation of explosive detection equipment, you mentioned that in your opening remarks. What is on the horizon? Is there any -- is it a matter of us pouring more money to come up with a next generation, or is -- can we already discern the next generation explosive detection equipment, and will it -- how much better and faster will it be than what we are currently using?

ADM. LOY: Yes, sir. We certainly -- I think there are two priorities in what I would call our R&D tend of TSA at the moment, in addition to the issues like the blast-resistant containers for baggage in the bellies of the wide bodies. But there's a number of other ones. I don't want to discount those as being unimportant. They are very important. But the two that I think are overwhelming are attached to this second generation computer-assisted passenger screening system and whatever is the next generation of explosives detection equipment. We think that's -- we see -- and we have looked very hard, Senator Fitzgerald, and we do not see anything out there before the three-to-five-year horizon. But we absolutely must be investing today so that if in fact the three-to-five-year horizon is the right answer that we will be ready to replace either the ETD systems and their attendant dependence on people -- that is, an enormously expensive people tail associated with the ETDs, or these huge cumbersome EDS systems that we are stuck with, as the two legitimate, for all the right reasons, pieces of equipment that we can be designing today, or designing into our airports today.

So there's pulse fast neutron analysis technology out there, which we hope is promising. There is a variety of different activities that are being undertaken by our technical center up in Atlantic City to continue to explore. We have visited virtually every European nation to check what they are doing with respect to anything that might be imminent. Sadly, I can't report to you today, sir, that we see something obvious as the next generation of EDS. We must make the R&D investment to identify that.

SEN. FITZGERALD: And finally, if the chairman would indulge me -- I see my red light is on -- but --

SEN. HOLLINGS: Go ahead.

SEN. FITZGERALD: -- and forgive me if I should know the answer to this, but our commercial air passenger aircraft in this country, they also carry a lot of freight cargo, is that not correct?

ADM. LOY: Yes, sir.

SEN. FITZGERALD: Is that freight cargo examined in any way, and did our bill address that issue?

ADM. LOY: The bill identified cargo as an issue but it was pretty clear that the prioritization within the bill was with this 100 percent mandate and date certain on the two things of passenger checkpoint screening, and as you said baggage screening. We had a good conversation with both Senator Snowe and Senator Hutchison, each of which has introduced legislation about cargo in aircraft. This legislation has really excellent notions about it in terms of the whole idea of technological monitoring, the whole idea of supply chain management -- so that you are able to trace what you put in a box or what you put in a container, or what you put in a whatever, and sealed it, that it was untampered with by the time it got to the --

SEN. FITZGERALD: Can I stop you right there?

ADM. LOY: Sure.

SEN. FITZGERALD: We are not doing any checking --

ADM. LOY: We are not doing what we need to do on that. That's correct, sir.

SEN. FITZGERALD: And on December 31st, and going into next year, freight cargo on airplanes will continue to be unexamined?

ADM. LOY: We have a protocol in place, sir. It's not as if we are doing nothing. We have a protocol in place that requires a security profile. You know, we require somebody to be responsible for all of that that is dealing with it. We have eliminated postal cargo, for example, only up to the 16 ounce idea. And we are trying very hard to find out how we reintroduce postal cargo into the aircraft, because that's a very serious revenue source for the airlines. So we are doing some things. I am just suggesting that cargo is an area that we have to spend more attention to, and we need the resources to do that.

SEN. FITZGERALD: But I guess the message for the American public would be, even after all the passengers' bags are being scanned, they shouldn't feel too good about things in the air because there's cargo probably on the plane that they are flying on that hasn't been scanned.

ADM. LOY: If it is an aircraft that is greater than 95,000 pounds at certified take-off weight, it absolutely has been screened.

SEN. FITZGERALD: Okay. Now, what kind of planes are going to be of greater than 95,000 pounds? Would a 737?

ADM. LOY: Yes, sir.

SEN. FITZGERALD: Okay, so anything -- how about a 727?

ADM. LOY: It's the window below that that does not require the screening of passengers and baggage. And --

SEN. FITZGERALD: Well, it seems to me that that's troubling. We have a gap here that we somehow need to address, and it's a thorny issue, because that freight cargo is an important source of revenue for the airlines.

ADM. LOY: It is a challenge, sir, and you are absolutely right.

SEN. FITZGERALD: Well, let me compliment you. You have been on the job seven weeks, and you bring a lot of, I can tell, a lot of determination, and you are enthused about your job, and I can sense that from your testimony, and I think you are a very good person to be in charge of this. I don't envy you though, because it's a real monumental challenge that faces your administration. But thank you for the good work you've done thus far, and good luck on implementing the obligations you have under the act we passed last year. And, Mr. Chairman, I want to thank you for holding this hearing.

SEN. HOLLINGS: Thank you very, very much, Senator.

Admiral Loy, with respect to the registered traveler program, just as these things come to mind, there was Intellicheck (sp)-- it was a card that had on the magnetic tape part the fingerprint or some other identification. They have already contracted -- been contracting with the government in some agency. I'm like every other senator -- everybody keeps coming in trying to sell you some equipment and everything else, so I hope you just got a little task force that's looking at all of this, because you can't spend time meeting with all of those folks. But look at that one too, I think. It looks -- since they are already doing work with the government --

ADM. LOY: Sure.

SEN. HOLLINGS: And it impressed me. We can look at that one.

ADM. LOY: Yes, sir.

SEN. HOLLINGS: With respect to the roll call now on what you need, you need the supplemental, 546, to get up to that figure. We have got to remove -- well, those -- at 45,000, limitation on screeners and personnel, that was just in the appropriation bill. So I think that will expire, because -- at the end of this month. It's not for 2003, is it? In other words, you've got -- what was it, 30,000 passenger screeners and 22,000 baggage screeners, for 52,000, and it's really going to be more than that, isn't it?

ADM. LOY: We -- it's likely to be more than that, when you consider that the FAM program and others are part of that total inventory in the organization. Thanks for the opportunity to just mention a word or two on that, Mr. Chairman. I think we'll be just fine through November-ish, or into sort of maybe even early December with that 45,000 limit. But it will not be replaced until there is an appropriation that replaces it, if in fact that occurs. And that's enormously important for us to deal with.

I think there was justifiable concern on the part of members of the Congress that they had inadequate feedback from us in terms of what was really needed in the way of that body count, if you will. And that's why I wanted to bring those slides and let you understand that we have really scrubbed those sort of checkpoint models, eliminated positions that we didn't think were appropriate, and we will have a good report for you, sir, on that, so you can feel comfortable that what we are asking for is what's actually needed. figure was established, when the Congress first thought about screening, it was about passenger checkpoints. And then when the subsequent additions of baggage screening were added, the numbers sort of never went adjusted from 33 (thousand). We planted this 33,000 number in our minds, and then when we added the notion of gate screening, which I frankly want to eliminate, and the notion of baggage screening, that's when the numbers began to climb, and there was an inadequate exchange of information I believe back and forth.

So as you review the appropriation request for '03, I would like to work the committee and with the appropriators of course to get the right number. It's going to be more than 45,000.

SEN. HOLLINGS: Right. And on that score, and also with the registered traveler program, with Chairman Rogers over on the House side -- I worked with him over the years -- he's good to work with, and if you have got any difficulty there, let me know, because I'll be glad to work with him on his concerns. He's outstanding.

ADM. LOY: He truly is, sir.

SEN. HOLLINGS: Yes, sir. With respect now your other caps -- and we don't -- we've been giving each other kudos all morning -- we flunked the course on port security. We flunked the course on rail security. We passed the rail security bill, and we have an Amtrak bill with real security provisions. The real security section was before Christmas. We hadn't even called it for a debate. Get on the administration, because they've got holds on the Republican side. I've got to get Senator Fitzgerald to get on them or something. I need to get something moving -- no kidding. We haven't done anything. Amtrak we just give it conversation, but we haven't stabilized it. Otherwise on the ports, you and I have been down -- we have had hearings with the Coast Guard. All the port officials -- your Coast Guard have been having various meetings, trying to devise a plan, but they don't settle on a final plan of port security until they hear from Washington. They don't want to get it all together and get halfway done and then Washington comes out and says, oh, no, you have got to do it this way. And that bill is being held up over on the House side for money. I've gone back and forth, and what they don't want to do is pay for it. I am sure nobody wants to pay -- I'll go with a user fee, I'll go with a tax -- we'll go any which way the administration wants to go, but you have got to pay for it. And that's still in conference. And that port security bill was passed 100 to nothing -- all the Republicans, all the senators, voted for that -- before Christmas.

ADM. LOY: Yes, sir.

SEN. HOLLINGS: And this is September. And we're all saying, Look at what we have done for the airlines and everything else like that, but that's how bin Laden blew up both Dar es Salaam and Nairobi. It was his ship that went into Mombassa at the port of Kenya. And he can come into Philadelphia and blow up that tank farm, and the Eastern seaboard would be closed down for a year. You and I know that --

ADM. LOY: Yes, sir.

SEN. HOLLINGS: -- because you've been in the maritime. So -- and we don't say anything about it. And that's why we don't have the baggage blow up. I mean, why blow up baggage in one plane when they can go for something big? This crowd is serious. They are suicidal. And they are not going to go for a little bag blowing up -- I am not worried about that. I am worried about just that, a ship being overtaken -- any kind of regular oil tanker coming in and going in and blowing up a tank farm in Houston or Philadelphia or some other big place like that. That's their mind-set, and we have got to be able to get ready for it, and we haven't done it. And you can get on them, because you know it better than anybody that particular part.

I know Senator Smith and others had to leave. They had several other conflicting hearings here this morning. Yes, Senator Fitzgerald -- we are going to keep the record open for those questions by the senators and the committee. Excuse me. Senator Fitzgerald.

SEN. FITZGERALD: I just have one final question. I know that the Transportation Security Administration has announced its intention to do away with those 16-year-old questions that they ask you at the airport: "Have all the bags been under your control?" -- and so forth. Do you have a timeframe for that? They're still asking those questions last time I was at the airport. So --

ADM. LOY: It's done, sir. So I will follow up with the respect airlines. We --

SEN. FITZGERALD: Do you think it's just --

ADM. LOY: Did that two weeks ago.

SEN. FITZGERALD: Oh, okay, okay. But probably the employees who have been doing it the last 16 years are just maybe just doing it by rote. But they don't have to anymore?

ADM. LOY: That's correct. We eliminated that requirement. And there's a real practical tone to that as well. If you're standing in a line of 30 people or 40 people and each time that question is asked of the individual in front of you -- you know, the law of aggregate numbers tends to add up and say the guy at the tail end of the line has wasted another X number of minutes -- whatever it takes, 15 seconds to ask those questions, or whatever. So, yes, sir, that's behind us. And, as I indicated earlier, also we are bringing all those "rules," quote/unquote, onto the table, and examining them closely, and validating those that contribute to security, but looking at that sort of through the prism of customer service at the same time.

SEN. FITZGERALD: Okay. Well, I congratulate you for doing away with those questions. Obviously a terrorist is not going to answer those questions wrong. And, just out of curiosity, how many people answered those questions wrong?

ADM. LOY: Sort of anecdotally every once in awhile there would be some virtuous person who would come there and insist that, yes, that bag -- I set it down when I went to lunch or whatever -- and they were even being talked into giving the right answer. So -- (laughter) -- it was a bad scene and long now gone, we hope.

SEN. FITZGERALD: Okay. Well, thank you very much, admiral.

SEN. HOLLINGS: And finally, along those same lines, Admiral Loy -- and I see it every time I board to come back on Monday -- you go through the check down there in Charleston and then you can see the spot checks on either side. There's a team of four here, and a team of four on the other side at the Delta counter. I'm over at the USAir. And they're just sitting around shooting the bull, and waiting for another boarding. And then they open a couple of bags, and that's a waste. Get another machine and facilitate, accelerate the actual check. If you had another machine that eight personnel, you could cut half of them out and just use the four with another machine and save the money.

ADM. LOY: Yes, sir. Technology is part of the answer. And as I again tried to show, the reductions that we have scrubbed out of the checkpoint standard model --

SEN. HOLLINGS: Scrub Charleston for me. (Laughter.)

ADM. LOY: I will do that.

SEN. HOLLINGS: Thank you very much. And the committee is really indebted to you. And let us know up ahead anything. The committee will be recess subject to the call of the chair.

ADM. LOY: Thank you, Mr. Chairman.

END

LOAD-DATE: October 1, 2002