district budget, their school budget -- >> so the combination a normal district would take plus payment in lieu of taxes, the impact aid money we give? >> right. this would happen now. this is not down the road. >> on another issue, i'm going to ask an omb question here, mr. werfel. and we told you we might ask about this. i've got some correspondence year from usda, the committee that senator pryor and i will be working on, the ag committee on questions about on site inspectors, which if they don't show up at a meat processing facility, that facility can't open. other kinds of food processing, fda can come i occasionally, and that doesn't really implement, doesn't really impact whether that plant can be open or not. but if the usda inspector doesn't show up, the plant can't

open. is there any way to prioritize those kind of individuals showing up so 100 other workers or 1000 other workers can show up that day? >> unfortunately, i don't think there is, senator. the way the budget is structured for the food safety inspection service at usda come is that 80% of their total funding spent on salaries and benefits for front-line personnel that are doing the very inspections you refer to. so it becomes a math asia ultimately. they're going to get a certain amount of budget come if we have is the question, will be canceled and there's no way in which to find other sources of funds because 88% of entire budget are those very people that need to be at those needs plans doing that inspection to keep them open. so this is one of the very tangible and clear and significant bags of sequester is that this division within usda will not be able to make its core mission, sending inspectors to these locations, and,

therefore, under appropriate laws and regulations they will be stoppages of work within those areas. so it's a very serious concern. >> that's one of the questions we'll be asking, chairman, is how do you prioritize the core mission and the legal requirement to be at that perdue facility or that whatever packing facility, and we will be asking that. >> thank you, thank you so much for your leadership. i couldn't think of a better person to be in that chair to help us address the challenges that are ahead of us and i look forward to doing my part to work with you and the ranking member. one of my colleagues last week made an observation, and i think it's worth repeating today, when he said offering up flexibility, which is what some of my colleagues are offering to deal with the sequester, is like giving the passengers of the titanic an option after they hit the iceberg as to what level or

deck they would like to relocate. and i think that's very apt. number two, i do think our committee would be well advise to deal in reality. we've mentioned that word several times, the reality of the situation. why is it not, to some of my colleagues on the other side, will acknowledge the reality that the revenues coming into the federal government are the lowest level since president eisenhower was the president. what is it about that reality that the other side of the aisle will not embrace? is it that they don't believe the fact? do they disagree with that fact? do they have some other facts to put on the table? because if they do, i will listen to that. i've not heard anyone question

that. so that is a fact i would like to start with, because it helps us to frame the debate which is, we cannot rearrange the passengers on the titanic and suggests that we're doing anybody a favor. we have to bring more revenue, 600 million to my friend in missouri, 600 billion is not enough. with a $4 trillion problem. we have already put cuts, cuts to spending that some people think is too high, i'll agree that it is in some areas. we've already done 1.2 trillion. do the other side expect us to do -- what is that? to point a trillion more? what revenues are going to come? that is the solution we're looking for. let me ask the question to secretary napolitano. because the same ones that argue

for no new revenue also come to my committee and demand that a double the number of border agents and homeland security budget. so i have done that. i have doubled the number of border agents from 9000, the 21,000. we have built 651 miles of fence, which is one-third of the southern border, which is 2000 miles. that's not counting the canadian border, the eastern border with all the ports, the western border. this is a land border. we've apprehended 120 million -- 1.2 million illegal it's coming across the border. it's down to 3.6. we've added money after request of members to do this, and now the same members won't help us find additional money. so secretary napolitano, lisa can tell us what is going to happen along our southern border. because you would governor of

arizona can you should know is this a question goes into effect. >> well, in fact i'm having a little bit of an out of body experience because yesterday i was before the senate judiciary committee on immigration reform and there was a lot of pressing about why we are doing more of the border. plain fact of matter is the administration is that record amounts of resources at the border. as someone who comes from the border i can say that used to be sustained and built upon. i can tell you that under sequester our calculations are that we will lose hours including overtime, 5000 border patrol agents over the next year, out of the 21,800 that we actually have boots on the ground in terms of staffing of the actual ports of entry, we will be looking at reductions of, well, furloughs of 12 to 14 days for every port officer working on a port. we're going to be looking at not

being able to assess in the technology that is so important to make the most out of the boots on the ground we have at the border. so we are looking at longer wait times, less security between ports of entry, and the third part is that ice which does interior enforcement will not be able to meet even if congressionally mandated level of dissension bids. >> which is 34,000 which is mandated by congress. my next question you have to answer in writing because i 10 seconds. for louisiana this is important but also new york, california and other places. international travel is a driver of our economy, bringing jobs to america. if we can up with the right number of customs, for customs and tsa and moving people through the lines, that is going to have a terrible impact on our ability to create jobs, good paying jobs for hospitality, international trade. i'm going to leave the question

their and ask you to answer it in writing, how states like louisiana, new york, california and others will be affected at that turn. >> i can do that with decision. >> thank you. >> i'm going to now turn to senator boozman, but before do, a couple of -- excuse me -- administrative things. questions are coming up about the 2014 appropriations. i just want to say this about our committee that i discussed with senator shelby. we want to do with sequester. we also want to deal with the issues of the c.r. versus omnibus. we don't want a government shutdown. we are looking, we are working with our house counterparts on this. so we don't want that either. also, when the president budget, i'm asking my subcommittee chairs and my ranking members to move out swiftly and smartly to begin their hearings.

this committee, the administration is late in cementing its budget, it's going to meet its prime line of holding hearings and being ready for markup in late spring and on the floor this summer. we are in this committee willing to make every effort to have a regular order and follow the traditions of calendar to do that. so 2014 will have real hearings, we're going to have real debate, real discussions and a regular order. and i want to thank senator shelby for the wave we are working to meet this -- to make this work. senator boozman? >> thank you, madam chairman, it's good to be a. mr. warfel, i think i'm correct in stating that the veterans administration -- >> usurer microphone. it's hard to you, sir.

>> okay. that's better. that's how it is when you're the low man on the totem pole. [laughter] not much equipment spill or the shortest person in the room a. [laughter] >> we appreciate you all being here. again, the house has acted a couple of times. it's in a couple bills over. senate hasn't acted as the president has an active. and with the timeframe we've got going forward it appears that at least for a short period we are going to have to work through this. so what i'd like to do is just ask about a couple things come again a lot of veterans families have contacted us. they are concerned. so for the record, can you tell us the veterans benefits will not be affected, mr. warfel? >> for those that are funded through the department of veterans affairs, they are

explicitly exempt under the law. but there are certain of veterans services that are funded out of other agencies that would not be exempt and would be effective. >> soviet hospitals, things like that? >> that would all be exempt under sequester. >> very good. mr. carter in your testimony you mentioned dod is invested to reduce the pot problem of the 3 billion-dollar shortfall. can you give us perhaps some ways that you hope to avoid the problem being there, how are you going to make up for the $3 billion? what are the -- >> we are looking at it. we would like to avoid that two or $3 billion shortfall, causing us to have to stop giving care in the last month or so of the year. i'm going to get back to you in writing because it's very complicated, and quite honestly

we have a find a way to do it legally yet. but we're working on it. whatever we do we want to be legal. so if i may i like to get back to you on that but we are working on it because we understand the gravity of the problem. >> i appreciate that but i think everyone on the committee, you know, that would be something we would be very, very concerned about. so, mr. warfel, in the past when budget years were tight the faa has proposed reductions in contract towers and flight service station, other services to small cities and rural areas. would you implement these type of reductions -- are these the type of reductions we're going to see as result of sequestration that would perhaps disproportionately affect rural america versus urban america? >> i think there's definitely risks with respect to faa, and i'm glad you raised the question. faa's going to face a cut of

roughly $600 million under sequester. a vast majority of the 47,000 employees will be furloughed for one day per pay period for the rest of the year. as importantly this will reduce air traffic levels across the country causing delays and disruption for all travelers. to your question, it's my understanding that yes, there will be a curtailment of service at low i could airports which typically reside in rural locations. so they will be impacted and feel the affect of the sequester. >> mr. carter, you mentioned that the air force plans to get facilities maintenance, projects by about half, including cuts to 189 projects at 55 installations in 26 states. do you have a list of -- >> absolutely i can provide you with that, that level of detail. the numbers are correct and i can give you exactly -- it's

basically everywhere. >> very good. one of things i'm concerned about, the air force, if we do go into sequestration, i've heard that they may have to reduce their flying hours by as much as 18%, and very quickly, can you tell us how that is going to affect the airworthiness of our pilots? because the reality is that this actually could mean a 30% reduction moving forward, when you're backing up. >> no question, flying hours, i mentioned earlier, steeply decline. what that means is two things. first, is the units are, except for afghanistan which will protect anybody is going from afghanistan, they are trained. >> so if you prioritize -- that's going to make the other

-- [talking over each other] >> which means they're not going to be ready. that's a real national security. and if you play this out, when pilots, if proficiency declined to a certain extent, it takes a while to get them back. and so you'll see that in our carrier air wings. you will see it through out the air force. and this is why short-term disruption is long-term harm. that's why you really need some long-term solution here, not someone who just moved -- >> thank you. thank you, madam chairman. spent the next speaker, question or will be -- not here. we now go to senator shaheen and then senator moran, followed by johanne, senator pryor, senator alexander, senator merkley. >> thank you very much, chairman kohl ski.

i'm very pleased to be up to serve on this committee with you and ranking member shelby, and i'm particularly pleased to hear you talk about the effort to return to rig or in terms of our budgeting process. i think that's very important for the senate. for all of our panelists, thank you very much for being here and for the work that you've done to date, because as the congress we've been unable to deal with this country's debt and deficit. and i was impressed and pleased to hear all of you talk about, in your remarks, the fact that these automatic cuts that are going to go into effect aren't just going to affect government jobs and government programs, but they're going to fix private sector jobs and private sector efforts to put people back to work in this country. so that they're going to have an impact on businesses, on families, on the jobs that we

are creating. and ultimately they will have an impact on economic activity in this country. i'm sure all of this, you refer to this, secretary carter, in your remarks, that the fourth quarter activity last year our declining economic activity for the first time since 2009. do because of the reduction in public spending. economists just that was concerned about the sequester. cbo estimates that we're going to see a loss of up to 1.4 million jobs if the sequester goes into effect. senator feinstein refer to the george mason study, which suggest we will lose 2 million jobs, and million on the defense side and a million on the domestic side of the budget if we don't deal with this. senator blunt, you referred to the comprehensive effort to address the sequester. when i think about the comprehensive effort to address

our debt and deficit, i do think it's got to be balanced, that we need to look at the domestic side and the defense side and spending do i think that's appropriate i think we need to look at mandatory programs, and dito do think we need to look at revenue. that we need to solve this problem for the long-term. we would not, as families, run our family budgets this with the we would not run our businesses this way and we should not run the government this way. it's a detriment to all of the good taxpayers across this country. and, mr. werfel, one of the things i think we've not talked about is the cost of what we are doing right now in terms of the sequester. and i wonder if you could do this any kind of an estimate on what it's costing us to try and plan for the sequester, and if it goes into effect, what some of those costs might be? >> well, thank you for the question. i don't have specific cost

estimate. i can tell you that, that i'm taking a lot of the central coordinating role across government and planning for sequester. i have a sense of the impact that it's having as many agencies, and my colleagues on the panel can certainly speak to it. it is enormously disruptive to agency operations. you hear stories of people called into meetings from doing the day-to-day mission-critical work that they're supposed to be doing, to be pulled into a meeting to discuss how to plan for this contingency, which was never meant to occur, and, and at the end of the day our plan is going to fall short, mitigating its many harmful impacts. >> let me ask you, secretary carter, because before the senate armed services committee earlier this week, you talk about some of the costs of the sequester that will have a real

long-term impact in terms of shipbuilding, for example. so can you speak to some of those costs? >> yes. unit costs will go up in every program affected by sequester, and we can provide you those numbers, whether the joint strike fighter, so at the very moment that we're trying to be parsimonious with the taxpayer's dollar, that's what this whole hearing is about, we are wasting it by forcing our industry partners to behave in an economically inefficient way. and that's very frustrating. real phenomena. >> and secretary donovan, one of the things that the office of inspector general on federal housing administration's program has recovered up one and a half billion dollars and been able to put those dollars to better use. can you talk about how that inspector general's program

might be affected by the sequester? >> this is a great point because it isn't just the internal cost to the agency. it's the return on investment, if you will, of the dollars we're spending and this indiscriminate cut doesn't take and affect where we are saving money by continuing to invest in certain things. our inspector generals, their funding would be reduced just as it would in any other program. this past year alone we have recovered over a billion dollars from fha lenders that were not making loans according to our standards. and having to reduce both our own oversight, as was the inspector general losing critical staff doing that kind of work will lead to even greater losses to taxpayers and we are gaining by making these cuts. on a similar note, with veterans, we know that battle and we save lives by getting veterans off the street, but, in fact, would reduce costs from emergency rooms, from shelters, from prisons, from whole range of other institutions by

investing. we save more money by housing and homeless veteran than we do in the cost of housing them, simply because of those savings. >> thank you. thank you, madam chairman. >> [inaudible] >> also i understand you are going to be the new ranking member. is that right? >> madam chair, i look forward to the opportunity and it is true. i reached out to senator harkin and you the last few weeks expressing my desire that we have a good committee operation. i congratulate you on your chairmanship, and delighted to hear your suggestion, perhaps more than a suggestion that we're going to operate under regular order. i've been asked what i like the on this committee and i answer yes, it is a great committee and i look forward to your tenacity to see that we do that and i look forward to working with y you. >> thank you. >> first of all, in that regard i look forward to the hearings in which we get to the point in

which we are talking about the appropriations process, the budget is passed and we don't our work. i look forward addressing the issues of spending in a long-term setting rather than a matter of a few months in which sequestration will apply. i need to start, madam secretary, as you as you might expect. i don't think in the two plus years that i've been a member of this committee for the homeland security committee or the subcommittee on homeland security that we ever had you in front of us, and you and i have not talked about the topic of the national bioscience and growth facility. i was really reluctant to do that today, budget giving no option because our time is up. and lets you release the funding that they had funding within the next, the contract expire. and so the last time we're together, september i and decemr study, you indicate it was now time to cut bait. you took a very significant step and authorized the transfer of

real estate from the state of kansas to the federal government, -- around to allow the transfer of the land so that this facility could be built. and you have the authority once again to take another step, which is to release the $40 billion this congress has appropriated to meet the state's funding to complete the central utility pad. and i'm anxious to know if you're ready to fish or cut bait? >> sir, we've been working very closely with the state of kansas on that, and as you know that increase their own participati participation. i view it as a huge security need. it's also a huge need for our agricultural industry. with respect to moving forward, i'm very well aware of the contract issue. i might say this perfectly illustrates the problem we're

all in. i'm trying to work with the congress to build a level for agora facility in kansas but it's a big investment. it will take some years to construct but the country really needs it. it is virtually impossible to do a long-term capital budget when we have a 12 budget, we don't have a '13 budget really, and who knows what will happen with 14, then in the middle of this is the threat of sequester. so i would have to echo secretary carter here, that we are making all of these things more difficult, more expensive, and at the risk of really encouraging risk, or greater risk to the nation. but i'm well aware of the tough issue. i had a call with the governor of kansas this evening. we will be working through this,

but you have made it almost impossible to manage this department. >> i assume it's the universal you, madam secretary, not the specific you have made it nearly impossible to work with? >> that's right. and i would not want to single you out, that is correct. >> thank you. well, let me again stress the imports. i'm glad in the of your conversation with our governor, but the money is appropriated in your, within your realm of releasing those dollars come and again would ask you to do that. >> if i might, senator, yes its appropriated but what do we do with the out years now? that's the uncertainty. >> and that's been an issue which will rely upon congress to triple its operation to fund a facility which we believe is important. i'm not critical of the administration in this regard any more than i'm critical of congress. it's embarrassing and so me circumstances in which we don't

do our work, don't pass a budget, don't to appropriation bills, continue to pass continuing resolutions. again, i asked to be a member of this committee. i think that's important work to do, and i'm so pleased that our new chair is tenacious as she is to make certain that this is a process at russia as a cynic applies with. our responsibilities, and we want to make it more easy for you to help us accomplish the goals that -- by doing our jobs. and so there s no -- that you, i'm just and is all of us, and it is well past time for this congress to function regard to appropriations process. and 18 seconds i have left, let me ask, i guess i would focus on nih, so perhaps you, mr. werfel. the impact of sequestration on nih. i believe that medical resources

significant important, help save lives and reduce the cost of health care. one of the things i think would be significant discretion at nih for how it handles sequestration in the sense that much of the money goes there and is provided in grants elsewhere, the question i want to zero in on is, will that money be used internally for research projects at nih? if there's a reduction in spending will be reduction come in an equal fashion, or how will they be divided between research done at nih or the 80 plus% of the research that's done across the country i universities and research facilities? >> senator, i'm not sur sure the exact bounds but i will say it's my understanding that mh as result of the sequester will have to issue hundreds of fewer awards that will have spiral impact that will delay were, jeopardizing thousands of jobs,

placing prior-year investments at risk, and ultimately, the bottom line is setting up work on chronic illness and disease. so while i'm not aware of the exact split, and we can get that information for you, i think the important point is that nih and research and innovation is an important area. it's also significant impact of your. >> well, i appreciate the sentiments and concerns about the. i am still interested in and to to the question about nih, which seems to me would have more flexibility to determine how that would occur, i'd like to know what the plan is. i would also encourage you to provide the committee, or me, with the $4 trillion plan which he responded to to senator coats question. we'll be glad to know what the president's plan is with regards to the $4 trillion. >> the plan has been provided on multiple occasions. it's in the president's 2013 budget. it was provided back to the joint committee when it existed. it's my understanding the president in terms of ongoing negotiations and work with congress