>> is. >> as a partner to develop a more resilient nation. to make advancements of all cases of the disaster psycho mitigation and a long-term recovery are a cost. many of the of functions that the month of phil's could be a more cost-effective manner when dash manner to invest in the infrastructure necessary to achieve this goal.

we should realize ousted the efforts to encourage adoption nationwide. while many stakeholders approach the issue differently we all have a common goal as the officials private sector business leaders and committee probers we have a role to play to reduce the cost of disaster i appreciate the opportunity to testify with any questions you may have. >> good morning. think you're traveling this important hearing today for solutions to controlling the in increased cost of natural disasters provided senior vice president of catastrophe risk management at travelers insurance and i am testifying today on behalf of the build strong coalition dedicated to reducing him in economic losses from natural disasters one of the largest

property-casualty companies in the west to provide the private sector expertise with its own risk of a natural disaster but first they get to the chairman and members of the subcommittee for their continued leadership of a series of round tables on this topic beginning in january of last year to debut i'll line three major takeaways and before i do that the main question is what actionable steps can they take to mitigate risk for communities across america to reduce the losses from natural disasters? >> the first tappet -- take away by every measure it is increasing at an unsustainable path. showing that exploding disasters a last 60 years

increasing from 6% in 1955 up that 77% in 2015. the second take away from the second round table to undertake loss prevention measures before a disaster occurs. with all the hazard mitigation council for every dollar spent on saves approximately $4 of post disaster relief cost $1 increase resumed at one dash reduces disaster dollars by $6 is compelling evidence the federal government is fostering shortsighted behavior through individual holders to state and local governments and then to replace them with the

incentives from all parties involved the federal government would benefit by the cost share in states would benefit to alleviate the budget constraints in families would benefit by a personal disaster cost with today's the local economies and would benefit for assistance to recover more quickly after an event the question remains what specific action in keeton congress take? based on the latest from the insurance institute of those and others conduct building performance standards to stimulate disaster conditions in controlled environments they demonstrate that statewide adoption read of building codes can reduce long-term risk studies conducted in

the wake of major disasters also supports this finding. another fact, at least 25 percent of all businesses close down for 24 hours or more never rials -- reopened that is staggering think of a loss of jobs also stronger building codes will reduce with damage of hurricane katrina by 80 percent so thank you for your leadership and i am pleased to report the core principles from this report have been turned into legislation the national mitigation investment act to provide a powerful incentive for states to adopt statewide building codes to offer a first of its kind of competitive grant programs to building code enforcement. the legislation provision

authorized by the chairman of the rising congress to look at the first comprehensive assessment of federal disaster spending in over 20 years. congressional leaders and policy experts all agree strong building codes would provide life and cost saving benefits their junior colleagues to support the national mitigation investment act to mitigate the different exploding cost. i applied you for your efforts the key for taking up this issue i am happy to answer any questions. >> fakes for your testimony. please proceed. >> chairman, ranking member and members of the said committee they for the opportunity to provide testimony to reduce the cost of natural disaster. and director professional

development from indiana university at indianapolis and has the mission to bring community expertise to make a strong and resilience community i'm here of the chairman will take mitigation counsel to introduce and a new and unique approach we have proposed for private property owners throughout the united states. congress has established the science is through 1974 to serve as the authoritative source in to achieve the mission is to has established building industry experts to examine the develop tools and technologies and practices for identified needs the institute in the litigation counsel had been focused on opportunities to advance resilience with the most cost-effective approaches to reduce the impact of natural

as well as man-made disasters. there are numerous efforts from building codes a human standards scientific studies of best practices and definitions of resilience that we find hazard mitigation is incomplete. not to say they haven't any effective in but to show the implemented mitigation strategies save on the order of $4 every dollar spent. currently we're discussing a project to revisit this study to expand to all federal programs and building codes that mitigation provide to the public sector recognizing the significant benefits the limited funding available for a response and recovery with the anticipated

increase a new approach is necessary. the most cost-effective manner is an integrated set of public-private hybrid programs to capture opportunities available to mortgage and equity real estate grants and regulations and enhanced building codes the focus of leveraging public-private sector opportunities is called incentive the station it calls for implant consensus in leadership from the block a broad spectrum of stakeholders the economic process that needs to be developed and coordinated to make that part of the economic fabric of for dissidence to lenders and foundations as well as forward thinking committees and agencies and important decision makers including the waters in a business understand nativities they

jointly published in developed a white paper based on public and private information for a catalog of programs of different hazards for stakeholders to evaluate then modify or expand incentives. they need to be tailored and divide a brazilian strategy and incentivizing bed means to monetize the benefits for risk mitigation as the ordinary course of business in stakeholders' needs confidence to achieve resilience to justify a result in its -- resilience. they will not take these investments just because it

is sensible but economically prudent in written testimony there is many opportunities for action i offer a few recommendations year. every federal dollar associate with construction infrastructure in community development must be a requirement that building codes must be reached or exceeded the federal agency should examine all programs to identify opportunities to support resilience and finally they should require mitigation. thanks for the opportunity to testify today please consider the national building institute looking forward to your challenges of the environment. >> ince for your testimony and will begin the questions. five minutes for each member and additional questions following the first-round we will have additional rounds

as needed. deputy administrator, why are the big disasters costing so much money and what is driving this change and i would like to hear your thoughts on that. >> the biggest challenge is the continued movement of populations into higher urban areas that were developed from historical perspective along rivers were flooding or coastline's four major storms and earthquakes but the reality of people moving to the city is one that we will face for the foreseeable future and that only increases but it has gone up steadily over time for recovery cost as they continue to go what.

the only solution for those future states that we looked at in terms of culverts and bridge's outer better maintained with the infrastructure that needs to be there built to a standard that allows for the potential of future disasters to be minimized. >> just to add to that cleared the average home size has increased by 1,000 square feet. at the wing of the comment more and more moving to higher risk on top of that we see with our statistics if you grow in an area of for a building codes to see that in the claims data where we should not see claims we see claims there is a better way forward and

we see that for states like florida at that have very good adoption of building codes the study show how much it has benefited. >> i concur with both and i would add that over time there has been a better understanding of what is available after those types of disasters we're fully recognizing that we can use a federal, state, and local dollars also there is an additional cost on the administrative oversight to affect the recovery and mitigation that can spread into decades so the cost also add to the higher cost. >> we continue to seek new disaster aid programs they

all seem to have different rules but do not see well coordinated or focused on obtaining the best outcomes. don't fema programs contain stricter requirements and eligibility use and cost effectiveness and are you aware of other agency disaster programs? is this something congress should take a look at that we can streamline these programs to ensure they are cost-effective? even if you're absolutely correct with stringent codes to qualify for federal dollars and as we pointed out that often take a great deal of oversight to ensure they are effectively implemented. i can speak to the sandy legislation there was a requirement to capture all the for agencies including federal transit.

we had a more complete understanding of the different investments of recovery we're going and i will tell you that the sheer for the first time administration past left federal flood risk manager and standards that require every agency for every federal dollar invested in recovery to meet a standard for the first time to include the department of defense as well as other agencies and there are activities to ensure that we build to vice standard could that captured cost is not something we currently do. >> ranking member carson. >> in terms of community by ian there are reports that are released about the rising cost of disaster benefits of mitigation but

congress has incentivized mitigation. for example, to authorize program funding by states but only 12 states have adopted it is very difficult to get states to take action so how did we get those ideas to the public and private sectors. >> i am happy to say we have already taken signed steps in that direction in charity institute held a hearing in washington d.c. to bring together experts for the purpose of discussing what was presented in to share our own ideas how to incentivize resilience the next up is to develop a stakeholder leadership

council over the various stakeholder groups whole business says, utilities will voters local state and federal home owners with a goal to work with the idea that by getting a bad buy in of the stakeholders directly because they come up with the incentive strategies that others will follow there will be incentivize for what it currently does not exist for writing insurance originating activity in the goal is to produce a set of products that consumers want to. him a couple of examples the will finds there was a premium discount of impact resistant roofs the results was that the products went

from 10 in 1998 to more than a thousand in 2003 that program has now expanded a and according to state farm homeowners that product is now something that they want but just earlier this week in washington with the mayor of alabama was attending their resilience building codes forum in his community is one of the most desirable places to live specifically because the homes are recognized to be more resilient and that is where more fortified program is found. the institute is planning to serve a role to identify these solutions in roe v well-to-do is bring together the stakeholders to identify best practices to see them replicated across the industry.

we recognize coster hide and we believe it is a creative approach and the need to be viewed as a character not as a stick everything that can happen. >> thank you. you mentioned fema new customer service for the public assistance program are there other actions fema could take to mitigate the disaster costs or loss? >> i believe continued implementation of those procedures that are highlighted in ways to help expedite could result in cost savings as we move

forward we're eager to continue to work with fema in this process. city and helped to get those communities back up on their feet as soon as possible with a minimal cost. the question you asked earlier we had done a very good job to provide assistance with the enhanced mitigation program with the flood insurance program but none of those have fully met with what they intended to do with continual reevaluation to determine where they not taken aback that level that we anticipate it if we improve our process by which we implement would help to meet the maximum good mayor designed to effect.

>> administrator, earlier this week the white house hosted a conference on resilient building codes including the fact sheet issued by the white house stated that fema is developing a more detailed plan to be put forth for public this touched -- discussion. determining it will go forward with rulemaking with deductible concepts if so they expect the proposed rule to be issued? period representative thank you for the question that deductible process is one where we reached out heavily to the user group and we have received over 150 very detailed responses.

me with it through that rulemaking process to get that feedback where there are concerns where this may be the ability to transfer costs to the federal government and local communities. to incentivize to make more consistent to invest in a prepared is capabilities. >> we're now going through those 150 comments that will have details that we will go after to get specific comments. we anticipate that will be out sometime this calendar year. >> i yield back. >> mr. chairman you're

recognized but it. >> administrator who is in charge of our national efforts of resiliency? which agency? >> as you would expect fema to the national preparedness program provides the guidance for the federal government to assist state and locals to develop their preparedness program san fema and working with the state's with their threat program as well as the prepared this report captures that information that captures that each agency are responsible for their support. >> deal of knowledge and the statistics that mr. nelson referenced to cities indicating pro-active investment with hazard mitigation generates cost savings? >> yes, sir,. seven maya opening statement

>> thank you do you see any of the work of u.s. army corps of engineers to address the mitigation strategies? >> we were closely. >> just yes or no. >> i am not comfortable answering just yes or no for the record. i do believe a lot of their efforts go to reducing the impact of potential future disasters in north dakota we work very closely with fargo. >> thank you. >> you have the u.s. army corps of engineers to and spend money to address flood damage in hurricane protection the administration budgeted $1 billion through a cut in the country resiliency fund with the department of interior trying to establish

a $2 billion with the last budget request in fema as a hazard mitigation program so does it make sense for us to have five different programs out there attempting to address various aspects are they court needed or prioritize? of himself louisiana. we have had more than our fair share of disasters with katrina andrea record high water with the mississippi river in also hurricanes this year and in 2008 so watching over and over again to have fema pick up the pieces after words with millions of dollars spent by state government i can think of the project in st. john

in state james parishes that project has been the steady face of u.s. army corps of engineers for over 30 years. 30 years. so my plate is everyone wants us to reduce disaster spending. everyone. but the solution is making the principal pro-active investments to make them all resilience we have had a fema with a 500 year flood risk management in revisions in 2014 of a bigger waters we have proposals now to increase cosher associated with disaster response with county in parishes and state governments mr. chairman my point is making productive investments is the solution to reduce spending we

estimated we spent around $89 billion -- eight or 9 billion to finish projects the supposed to be finished by the u.s. army corps of engineers we could have saved 90 percent in never from 120 in what hundred $50 billion out was spent we could have saved that not to mention more important we could have saved over 90 percent of those polled the drug lives that were lost all of these efforts by fema or in a vacuum as we need to have better coordinating efforts to be proactive to makers cesta more resilient stock all levy after the fact there are studies than models of

following the data in the recommendations instead we make these investments in the programs that are exceeding the recommendations of these reports i am very concerned. lastly i want to say in south louisiana much bolder ability is a charitable to the actions of the federal government as we have lost 1,100 square miles because of how the corps of engineers manages the water resources that is why we are more vulnerable. louisiana it has a buffer and that is disappearing. i want to urge the committee is to move forward with legislation we need to make sure we don't get too myopic in the view the all these efforts and her under way

quite frankly should be in the subcommittee's jurisdiction. i yield back. >> as we learn from all of these disasters, we pick up how to construct better codes so why do you think some are so reluctant to do the mitigation encoding and reinforcement? >> lead decision on building codes are the decisions based on other economic factors and desires for research and development but i do think we need to continue to insure that we invest currently we're out

with a stakeholder groups changes that require if the committee has code or not and if they don't if they want us to pull back infrastructure to either a national or international code so we take very seriously to say even if the committee doesn't feel they are of value read to add investing federal dollars will roll back the code to. >> web bothers me about new jersey three years later people still have not gone back to their homes. there is plenty of blame to go around. and adelaide you have to mitigate the for the post disaster to waffle with those fraudulent and not

take years before we can't come up with those debtor perpetrating a fraud and you have to be ready right after the disaster. >> yes, sir, and i can proudly say we have moved rapidly since katrina to ensure we have programs and have as much protection as possible but we do have to air on this side of supporting about the requirement or a fraudulent requirement people support that. but it takes a time to go back and look and with the first cases of prosecution in fraudulent taking money from people that the secondary home was a primary home to take those dollars away from those people that need it, does take time and

we have to realize for that post disaster to make sure those that need it will get it and they take too long but we don't stop and will recruit -- three coupon the money -- recoup the money from the services they did not deserve we're down below 1% so if they include do a pretty girl job it goes to those who deserve it or need it. >> i provide incentives that the federal government will bring new money then it should be a part of it for public debt these disasters in the midwest sec tornadoes

and oklahoma much more than everybody else and i see where schools are damaged but if the federal government will give money to build a school you should require a strong. kelly for word is something you should look into. and they see the damages so i come around to the idea with the cause that they need to deal with these disasters. thank you. >> we will begin the second round of questions. sanders ted your district had major wildfires that destroyed a tremendous

number of homes. can you explain some of those challenges to mitigate the risk in the you have any recommendations to improve the mitigation and programs? >> yes we have obviously had and specifically what you can do from the standpoint as to local community resiliency. what happens at the state and local and federal level between agencies as almost 95% of that parade mitigation ed needs to

happen at the federal level because the forest service now spends more than 50 percent of the budget on responding to wildfires instead of premeditating ahead of time but we do have control to work with wild fire protection plans for individuals to negate a head of time i was just doing crystal park in they have taken steps to do that. and did you can take that ability from a personal standpoint to provide that mitigation. if we look bad an ounce of prevention is worth a pound of cure and i do have a

small business when the fire happened i lost thousands of dollars from reservations then the slow disaster that keeps happening those that don't in windy areas where they're treated comes through that mitigation and immediately following the fire and a large flash floods that will happen as a result. it is hard to understand if you're not from colorado or western state that has those treated is. so understand there is an impact on small business

would thurgood businesses clout of business after a major incident. am looking at the flexibility of the requirements. >> we talk about how much the federal government pays out for disasters but it is insurance companies. mr. nelson discuss how your lawsuits generally compared to the federal assistance provided in the wake of the disaster? >>. >> so we are paying for the building if you are a small business we will give you business interruption and coverage with additional living expenses with those

individual small grants to consumers but not enough to rebuild your home in general and we have seen the trend go up this is an important concept. we spread the risk over people and overtime. as the risk changes the price is change so it is important to bend the cost curve and then the the cost curve for consumers. but for every $1 invested $4 is saved. most federal litigation funding is provided for the grant program after a disaster declaration.

how can we more proactively address to shift the investment before the catastrophe? thinks to the committee and the congress to allow the mitigation money and to be part of the recovery process. we have authority to do post mitigation and for the five-year grants to restore the burned areas is a more robust way. the three can't consider reauthorize seeing that ability but the reality is had used a device every

level to the local to the county into the state and federal government to invest. to define the visible level of a deductible and as they had indicated that counties and communities to to reduce that deductible to support those communities that have invested in their own well-being and i do believe it is a mitigation plan reduces the cost of a disaster to find pro-active ways to incentivize. >> as it relates to the mitigation in hazard grant program it is what communities the to be provided for. there are some issues that

need more flexibility to utilize those at local level. i will give example. which the canyon fire we ) to three houses two weeks ago that were in the floodway as a result of a fire that happened on forest land they never had flooding ever before and it has taken us that we have time to get it completed. at the office said the emergency management in the accountability and the paperwork is so extreme for such a small amount of money it doesn't even seem feasible to apply for the grant.

we do take it seriously but sometimes they need to be looked at and how they get to the folks who need help to provide additional assistance who want to take personal responsibility to reduce mitigation in to be proactive on their own personal property that was the second fighter wing dash buyers and we have seen different problems with each of those. >> as the director of the floor dead division of the emergency management every time there are new programs or incentives we make sure we take folic fantasia of that program a good number

of states do not have that same luxury. every time it is put into place they have to determine how they could help meet the needs of the program to use a courier staffing and budgeting down the road. and to consider streamlining to enhance the administrative burden that the state and local level. the fare data analysis of how they impact all levels will help calculate the true return on investment to make those decisions. moving the mitigation and cycle for bird so it isn't something we start thinking about on day one of recovery but it is dead ahead of the disaster.

>> we have to get the word out about mitigation there is a perception that it costs so much money to consumers and travelers are proud supporter of habitat for a humidity we build one doesn't fortified homes on the coast and i personally participated. the average cost is only two or 5 percent of construction. we have to be sure consumers understand this. first. and second you have a difficult decision in front of us. spending is the difficult and everybody in this stance that with the approve the techniques in to streamline

the programs. [inaudible] to take those positive

actions. >> thank you. >> ranking member? >> disaster assistance reforms calling for comprehensive study it has you in june earlier the government bears a large portion but yet dated is scarce what are they doing so that it can be construed as part of a comprehensive study to insure current federal disaster cost are not just being shifted to local communities. >>.

>> when the really that we hear from the government in here to help is how we can best provide the data for those who have done this before we had for declared a disaster so we have a lot of information it would be helpful to sit down with those communities to have been to the process to have feedback on how to change the policies of not only in the committees but local governments spend requested you i ask is are they responding to the proposed concept of how do we capture all of those cost? to remove the tree that just fell on the road?

we're still having those conversations for which cost we need to capture so that helps feed the investment calculations but the flip side with the added credit budget for florida to receive a presidential declaration is pretty high. that will not be eligible for a federal declaration so we shirt -- should have that methodology to understand what the costs are. >> human did did your testimony to simulate

disaster what types of adjustments to building codes have they found mower effective damages that cost during new construction? >> coming down with a program called fortified that concentrates on the roof covering so we're looking at the seams of the roof deck maybe 501,000 to prevent water intrusion incase you lose your shingles. sec can to bolster your openings covering them or other reinforcements and how would is a bearded to the foundation and so these are techniques that the coast of

alabama and alaska has embraced those standards to put it a program for mitigation grants so we see a lot of success with this program and builders voluntarily building these homes. >> lastly to provide valuable services necessary to understand the disaster threats and risk had we make it known to others to expand on the projects that the center has taken? >> 84 the opportunity to talk about the state i am proud of, indiana we have 27 years of successfully comedienne expertise.

our goals are to come visit the sins of the state of indiana. but the reason we have been successful is the at this here that exists in the state of indiana. to have the privilege to have complete mitigation plans and close collaboration with cities and towns in indiana. it is high the collaborative work plan is created so that becomes a living document that they could be a part of is a critical component to make it a success part of the reason we are successful

that i a.m. proud of is the understand the importance of affirmation they created of program that is a significant part of the resources in indiana. the technology that allows communities to estimate be impact and they are able to do that and more profound in its successful way to integrate local resources but we have 100 percent of the county's even though they have disagreements everyone can download every single part in hazard information. that combine with other resources makes it possible

to be much better protected and respond to disasters. we have taken the success story to other states as well bricky extensively in the states of georgia and have worked in 36 states and over 100 cities. intervenes education and how to do hazard analysis in terms of the long term resiliency connecting the fabric to the solution so hollander and homelessness is just as important that it will not be resilient to disaster we look at those

things to lot of people to take a vintage of that knowledge. >> i yield back. >> to direct the the to incorporate simulations into some of the estimates can you discuss how fema is doing that in regard to the common models? >> tis the best science possible to determine the flood risk as continued work with the scientific and local communities to identify what the potential might be moot with that adaptation with the rising tide of the floods of -- zone. >> so what about those

uncertainties of future c rise and potential all along that line? >> another question the committee that was established indicated in a recent report they believe there was say uncertainty with the flood models that were used if you take that degree of uncertainty that is extraordinary and tried to estimate future changes for storm intensity and frequency it seems like we get to arrange to even use those models with predictive information. >> i know the guy can go to

the extent without using a model of predictive capability to determine mitigation their preventive actions have to be taken so we continue to use the best available information based on scientific data as that is available is their uncertainty? there always is the we have to start somewhere to create a basis we just experienced floods it northern louisiana and nobody would have expected so we need to continue to find the best science and then come back to reevaluate. >> maddow i concur to use the best into richet that we

can but to do though significant consequences with up 500 year flood risk management but my point is having such severe implications with the predictive models a comfortable accommodation of issues to keep that in mind with the reliability with the financial parishes and others i know a number of people who go you and your great reputation i appreciate your testimony the week before last, that

build allows for private flood insurance to be a surrogate is soundalike day good idea to be more efficient than government however being from your area i am very concerned romney will seek is private insurers to cherry pick those that have the lowest risk. see you are left with the policies of higher risk those that require given those floods headed been repaid and then to be

charged those actuarial rates so the point is a private sector is they have the same financial burden now they will have a smaller rate because they pull those often that will be subjected to pay off the debt of $17 billion are those reserves or should i not be concerned should reform the border comprehensive? >>. >> i think it is closer to $23 billion of the national flood insurance program but the answer of my a opinion then i was head it encourage them to have this conversation when it is up

for reauthorization is that directly relate to the conversation that we have here today with regards to mitigation activities across the country. one of the things that i express quite frequently in the state of florida that as a result of the actions of 2012 we have seen a significant reduction of flood insurance policies across the country in the state of florida. so what that means is those citizens the next time day have a disaster they could not recover like they would have had they had fled insurance better not eligible for assistance from fema so those cost will be borne by individuals and

government so that comprehensive analysis and reform is completely appropriate at this point. last year the legislative cycle did reduce those regulatory burdens some of private insurers to offer flood insurance policies maybe only two were 3,000 but it is a start. i do share your concern of the cherry picking. but we had a similar situation non-citizens insurance that have depopulated comprehensive reform and can tie in

navigation. >> and those are profound issues and for the record but i do think if you just get back from travelers can rate flooded turns on a commercial basis for commercial insurance but we do not write homeowners we have no point to enter that market the l'express and all points of view. and that private industry should not compete with fema of price. remember we have to buy reinsurance and have capital to meet obligations to have a pool of money and that shareholders money to get a return.

we should not be able to compete with fema. the rate plan needs to be modernized. >> let's start with that to modernize the program then we can evaluate how we can privatize. >> that was a good point earlier with the levees to bend the cost curve of disaster with the fema authorization bill should help to make those expectations to congress also to administrator few gate i don't know if it is the right solution but a vigorous debate if we drive

down the losses not just shift losses and if they're no further questions i ask unanimous consent the record remain open until such time blisses have provided the answers. any questions submitted by writing it will remain open and for additional 50 days. fifth and then to be included in the record of today's hearing thanks again for the testimony if you have anything to add we stand adjourned. [inaudible conversations]

[inaudible conversations] [inaudible conversations]

>> and but what we're concerned with is not how much money you have but how did you get it? through a process that was unfair and when you tried to equalize covered money honestly that is not a fair way to treat people. >> the american dream is not threatened by in kind and quality. --.com in the quality. >> this book is not bosnia or roosevelt or on the political spectrum. is a call to action that is meant to inspire and motivate what makes america

special period it is worth fighting for. some of us carry a rifle and many still do but you don't have to to be in the read that. is our job to instill that principle that perpetuates the experiment of human freedom. >> a series of activity that the future of the country rests is budgetary tie ropes , costumes disappearing acts and collins. instead is three rings of fire. we're so fatigued by the time the skeletons come out of the closet and election day is over briard exhausted by a legislator before they even have a chance to start their job.

>> holding the hearing and management practices and leadership challenges and transportation security administration reheard testimony from the tsa administrator then said his main focus is on counterterrorism and security issues. this is two hours 50 minutes >> come to order. the chair has authorized to declare a recess anytime. important hearing today to have regular contact with the transportation security administration. we have a fairly new it minister we have had a chance to visit with but it is important we take a look at what is happening or not at the tsa. so the second to hearing the message read practices a unit misconduct at the

trends the turkish -- a transportation security administration. the traveling public picks up this time of year as people travel sometimes sad record levels. people get frustrated they go to airports, long lines and we have to find a balance to make sure they are properly secured b tests the terrorist leads to get by once and dealing with the passengers and the tsa. we have good men and women who serve on the front lines who do the best job that they cannot with the public of their hot and sweaty and the late with a lot of issues to deal with. last summer the inspector covert -- did covert testing

to find a failure in the technology that has procedures in a human error. very alarming rates of success for penetration to bring something nefarious on to a airplay. based on the recommendations they're making progress to make it more thorough to resolve the security concerns that the agency loses around 103 streeters each week through attrition. many of these are part-time but that is very expensive to get somebody trade only to have them leave later in the process. agency ordered a 373 pep 400

-- 466 departures you concede the trade is going of faster. and there gets to be a problem. we're very concerned about the overall -- the morale of the tsa. it does go out to do surveys to cover up with a scientific way but of the 320 agencies tsa rate to 380 this is an alarming trend has a number of agencies including secret service said earlier the very bottom of of agencies that are ranked in that has to be assessed and there are probably reasons for that if you worry that people in that situation with low morale you don't get the

best of security act of that. wanted to administrator has security and much-needed priority we rebated agency increases. he attributed for leadership and oversight appointments over the last several years as contributing factors. we have heard senior leaders with far more leniency i don't know this man i don't believe i have ever met him but i don't remember as the assistant administrator of the office of security operations, this gentleman is named kelly and receives the base compensation of

$181,200,500. a healthy salaries since his promotion to security operations have been abysmal. the inspector general will testify that penetration and previously is getting close to a successful. in terms of their rock-bottom performance. butted timber 2014 and the inspector general said $551 million spent on training they did not improve baggage screening of all. and last summer covert testing revealed an alarming high failure rate reported

by the media. whistleblowers said is said is being held accountable to receive an amazing amount of bonuses. i will show you the slide. this is what is so frustrating. a base salary of $181,200,500 it did 13 months he gets $90,000 in bonuses. those are just about mrs. . nine times he gets bonuses over a 13 month period in addition in that will go to the next slide. in then john work -- makes our recommendation to the purpose at the bottom the

makes of recommendation to get a bonus and then he who made the recommendation he recommends him to get a bonus and he gets a bonus and that happens four times. go back to the first slide. so you have rank-and-file working hard with massive security failures and this person gets $90,000 in bonuses? i don't understand it didn't even necessarily happen during this administrators watch but we want to know what is done to clean this up. you can take that down. so how did he get it done? in the normal scenario the

president pasteur proved any bonuses over 25,000 opium over 10,000 but yeah it they don't apply to the tsa and that is why we have to go back to review. with the idea investigated after the whistle-blower tip that tsa had no clear policies such as what we had just seen and all the loose in internal oversight. hope we don't -- to open here this is cleaned up into truly reward those you have success those bonuses are given to someone who oversees a part of the operation that was in total failure. this is contributing to the massive problems and other challenges that we have.

administrator has many challenges to overcome with the perception that some leaders have to continue to harbor wrong with the ranks of the tsa to deter employees to speak up about security challenges that impacts the core responsibility of the agency to keep america's transportation save the inspector general testified creating a culture of change dividend the ability without fear of retribution is the new evidence traders most challenging task we have somebody on the panel dealing with the transportation committee hearing space will defer to the representative from florida.

>> there are some very serious concerns of performance for the first time since we created tsa from irresponsible position of lowe's touchier chaos i express my concern of the mill town -- milt down and i am prepared to of one figure during the break 800 american airlines passengers we hear that members of congress three people who i

invited to washington all of them this to their flight standing in the tsa line. i am so livid traffic was bad and they relate get the there but the tsa did not have the courtesy to accommodate those who could have caught their flight even though they were somewhat late. i was on the phone for hours. one of the individuals whose family is leaving on vacation today had to get back to orlando to accompany his family and actually had a staffer drive him and bought him a ticket home last night. you cannot get a hold of the idiom% at tsa even as a member of congress nor will they take your calls it is

unbelievable with the operation did you have the one digit thousand dollars going down accommodating members of congress we cannot get a passenger on a plane that has to get home to leave with his family. i want a list of all those people standing around that chauffeur members of congress and vip to the front of the line? you cannot get three people and one baby with a physical disability? i tell you what. i am so discuss -- disgusted it makes you lose your focus. but you can delay them here is my gao report 70 known terrorists have flown on 24 different occasions that is

the most troubling you can fail and randy you will with the trading in the recruiting and i told you that when you came in. you cannot recruit or trade or retain it is a huge failing government program but the most troubling was the testimony from the former assistant administrator ruth testified it is my testimony today that is the core of a government responsibility if he is telling us n.m.

portage government function to stop those travelers that we have chaos with the operation. i yield back. >> the key very miche mr. chairman. in my a 20 years of the committee there have been times when i have felt so strongly about some individual. administrator neffenger is a person that i had a phenomenal amount of respect for. when i was the chairman of the subcommittee of the post card -- coast guard was

admiral teeeighteen neffenger who cleaned up a mass for deep water horizon. the coast guard was buying ships that did not float. with the system that was supposed to have 360 degrees or 380 degrees in new radios when they got what didn't work. he cleaned up the of less and saved a the coast guard hundreds of millions of dollars. no matter what happens in this hearing, thank you. really. last month the committee heard testimony from three tsa employees.

they raise troubling allegations about personnel practices that stretches back several years in some cases. the employee's deserve to have their allegations thoroughly and fairly investigated. and i emphasize that. we need all the facts so we keep an be about the business not build the the testimony but to a form that is necessary. i am sure you agree with that. unfortunately we have not yet had the opportunity to fully steamers substantiate their claims. is in your testimony you did a big favor. >> distinguish with what happened to no one in this

end bollenbach to aig that we have the responsibility where it belongs and i hope you will do that. i was struck by the whistle-blowers' speaking about our witnesses today. despite the understandable frustration of what they into word they've repeatedly told the committee that the administrator took private steps that the tsa to make clear he sets a course for the agency to put the top

priority where it should be on security and for example, mark livingston a program manager mitt chief risk officer testified administrator neffenger is a man of integrity. and also pulled back tsa will not compromise the passengers at the expense of other our mission. what we're going to do is get better. we will keep pushing pre-check and a better process to get more people and to get better. mr. neffenger has made it his priority.

. . to go back so we strike a balance, end of quote. mr. brenon said it's important to make sure that we reassure our offices that regardless of the fact that somebody is going to have to wait a few extra mints, we still have their back, end of quote. and we have an administrator who fully supports that and that is part of the culture that he has established with tsa. that's a very difficult job. it's certainly not the most popular job and we certainly appreciate it, end of quote. i have to say that during my many years in the oversight committee, i have rarely seen employees simultaneously come

forward to report what they believe to be abuses while at the same time commending an individual who was in charge of the agency for his efforts to address them so vigorously. i can never remember that in these 20 years. and i've been in just about every minute of all the hearings. admiral and administrative testified last november that tsa faces, and i quote, a critical turning point, end of quote, and i agree. he cannot turn around this agency on a dime, i wish he could. i don't think anybody up here could. but in the ten months he has been on the job, and i emphasize ten months, he's taken bold actions for what he inherited,

if you'll remember, a committee when a lot of the complaints were about people who felt that they were being punished and being retaliated against by the -- being moved from place to place. the wife would be sent to northeast and the husband would be sent to the southwest and all kinds of mischiefs and so i'm glad that you address that and i hope that you'll talk about that a bit today. that was a large part of our hearing. in march he issued a memo whenever redirected assignment is requested, brought transparency to the executive resources council and appointed chief operating officer to assist the assistant administrators in charge of agencies operating divisions. he has worked to address the

security shortcomings identified by inspector roth who is with us today and i certainly have a tremendous tremendous amount of respect for you, mr. roth. he created a new academy to train newly high screeners. inspector testified last november, and i quote, he has deactivated certain risk assessment ruilts that granted expedited screening through precheck lanes, end of quote. however, despite all of the positive changes, the number of screeners has dropped by nearly 6,000 over the past four years and i agree with the chairman, that's something that we all should be concerned about. we all need to fine, get to the bottom line of why that is happening. we want to retain our folks and i do not -- and i'm hoping that it's not a situation that the

chairman and i found with the secret service where people had gotten to a point because they did the same job over and over again, i, at at at least, concluded that they had moved to a culture of mediocrity. congress mants to make sure it has resources to accomplish security mission and i want you to let us know whether you do have resources including right sizing the number of screeners. i look forward to what more he needs@improvements he has put in motion and i am looking forward to listen to mr. roth. i believe that we are well on our way to making the tsa a better organization and -- and

if it is a moral question, i would like for you to address that forthrightly mr. neffenger, and let us know what you plan about that. with that, thank you and i will yoald back. >> we will hold the record open for five legislative days. we will recognize the witnesses, please welcome mr. peter neffenger and mr. john roth, inspector of home lant scooter, we welcome you both pursuant to committee rules all witnesses are to be sworn before they testify, you've each testified here previously but if you will please rise and raise your right hand, do you solemnly swear or affirm that the truth that you're about to give is the truth, the whole truth and nothing but the truth. let the record reflect that each witness answered in affirmative. we like to limit the oral testimony for five minutes but

your entire written statement will be entered into the record. you're recognized for five minutes. >> thank you, good morning, chairman chaffetz. i sincerely appreciate oversight at tsa, the issue has been of great concern to me as well. i commit to you that under my leadership tsa has established high standards of performance and accountabilities. i also want to thank inspector general roth for his support, i great deal value the oversight and i have been working closely with him during my tenure. my leadership perspective is shaped by more than three decades of crisis leadership. throughout my career i have emphasized intreg rity and foundational elements for myself and the dedicated civil servants

and members entrusted to lead. since taking office, i have traveled around the country and met with employees, i have been impressed by patriotism and sense of duty. servants that perform demanding tasks under difficult circumstances and i deeply respect and appreciate their work. they have risen to the challenge of service to a mission and have taken an oath of office and loyalty as a condition of employment. their success requires the upmost professionalism from all of our employees from front-line offices to senior leaders. my priority to fulfill and secure nation's transportation system. in ten months we have taken transformational efforts. i set a renewed focus on security, revised alarmed procedures and made investments in new technology and retrained the entire workforce. we are holding ourselves accountable to high standards of performance and are supporting

the front line officers in their critical counterterrorism mission. we have reinvigorated and tread and travel industries and are working closely with congress to address security mission. we simultaneously took a broad evolution of the entire tsa enterprise with respect to that mission and our people. i am leading this transformation and i have made it clear that we are focused on our security mission. most importantly i'm investing in our people. with congress' help i directed a complete overhaul approach to how we train workforce in all levels of agency, we established the first ever tsa academy in january 1st of this year, the intensive training will enable to develop common culture, instill core values and raise performance across the entire workforce. establishing a culture of mutual respect instills confidence and pride and prudent investment in

the future of the agency. i also ordered a review of all personnel policies and practices. this lead to a significant changes. among which are restrictions on permanent change of relocation costs and significant controls on bonuses at all levels. we are overhauling management practices. i've conducted independent review of acquisition programs. we are building a planning, budgeting and execution process. we are building system to address recruitment, development, promotion, assignment and retention. to ensure integration of leadership team, i have brought new leaders from outside the agency, a new deputy administrator, new chief of staff, a chief of operations and other key positions, with respect to the intelligence, there are intelligence office received award from the national terrorism center for the work that they have don't to analyze

resent attacks on the aviation system. i assure this committee rnd my leadership tsa treats employees fairly and affords every legal to exercise due process rights. we revise them as needed and fully investigate misconduct at every level and i hold those who violate standards accountable. with respect to leadership, my experience tells me that good leaders set high standards and inspire people to perform at their best. i have demanded much of my leaders over the past ten months, i expect them to work hard and i supervise them closely. finally, we must deliver a highly effective capability every day. to do so we must have fully trained, highly motivated, professional employees supported by agency with common set of values. my guiding principles are focused on mission, invest in

people, and commit to excellence. we are pursuing these objectives every day. as administrator i will continue to do so until we achieve and sustain success in every mission, in every office and with every single employee. thank you for the opportunity to appear before you today and for the committees support mission, i look forward to your questions. >> the administrator will recognize inspector roth. you're recognized for five minutes. >> ranking members cum moneys and members of the committee, thank you for inviting me to testify this morning. one year i testified before a committee on a hearing on tsa's programs and operations, during the hearing i testified that we were concerned about tsa's ability to perform mission. i know it had challenges in almost every area of operations. at the time i testified that tsa's reluctance to correct that audits uncovered reflected tsa's

failure to understand the gravity of the situation. six months ago i testified before the committee and stated that i believe that the new administrator had begun the process of critical self-evaluation and aided by the dedicated workforce of tsa was in a position to begin addressing some of these issues. i predicted that the new critical challenging task would be to create a culture of change by giving the workforce the ability to identify and address risks without fear of retribution. today i still believe that to be true, however, we should not minimize the significance and the challenge that is tsa faces and the great risks that failure brings. the task is difficult and will take time. in the meantime my office will continue to conduct audits, inspections and investigations and bring independent look and professional skepticism to our reviews as we are required to do. in light of part one of the committee's hearing, i would like to discuss our offices work

in investigating misconduct within the tsa workforce. as you know, we are organizationally independent from both dhf and tsa and have crucial role by independent fact finder. the department employees more than 240,000 employees in an equal number of contractors. we have fewer than 200,000 inspectors, two thousand employees for every oig inspector, we received 18,000 complaints, about 350 complaints per week, substantial number of those complaints alleged that dhs personnel engaged in misconduct. last year we initiated 664 cases and investigations resulted in 104 criminal convictions and some of these investigations involve tsa personnel.

in the last fiscal year we received a thousand complaints. we typically accept investigation, only about 40 of those cases per year. criteria involves assessment of allegation, the rank or individual involved and whether it's independent role is necessary to ensure that the case is handled appropriately. we value the contributions that whistleblowers make to identify fraud and abuse. federal law provides wrong doing specifically the agency may now retaliate against employees by taking or threatening to take adverse personnel action because they report misconduct. the ig act also gives me the salute right to protect the identity of witnesses upon whom we depend to expose fraud waste and abuse. in tsa we investigated a whistlebrower's allegation. the traveler was a former member

of terrorist group and while a member was involved in numerous activities that led to arrests and conviction. after serving multiple year sentence, the traveler is released from prison. the tsa officer gave us the tip because the officer recognize it had traveler from news coverage. we investigated it and found that the officer was correct, because of tsa's policies at the time the traveler was given expedited screening, we were able to write a report and give notification, thanks in part to the whistleblowers complaint we were able to address policy and tsa thought the issue of management. the chairman's description was as a result of alert dhs employee that notified us of the situation. when i arrived two years ago i was concerned about how we had been managing our protection

program, my goal is to make sure we have a program better than in the federal government. we have instituted a number of changes in the last six months to ensure that whistleblowers are listened to and claims are fairly and independently investigated. mr. chairman, this concludes my testimony and i welcome any questions you and any members of the committee may have. >> we thank you both and now we recognize mr. micah for five minutes. >> i'm sure administrator, you heard or watch it had proceed ings, i had three tsa officers in here. as i said in my opening remarks, one of my major concerns is your intelligence, analyst office and that capability. i never heard more damaging testimony than i heard under oath from -- on that matter.

you know, they have -- we have detailed information that we've acquired about some of the personnel that are there and, of obviously, the qualifications and the background are lacking. what do you want to say to this? >> congressman, thank you for the question. i had questions about the capabilities in the entire organization when i first came in. >> are you currently reviewing the qualifications and the allegations -- >> i have a new chief of intelligence that i brought in, he's here, i can report -- >> i think i would like an outline to the committee, i mean, the screening function is fine and you may find fives and guns, they're not going to take down an aircraft, but intelligence is government responsibility. we don't have good intelligence and again i cited an older gao

report where known terrorists are going through the system. this is -- this was a risk-based system. so can you provide us with an outline of what you intend to do to correct this situation? >> yes, sir, and i will also provide you with examples how we have built an intelligence enterprise and i think it's the best in the country. >> again -- >> it's been recognized by the recently counterterrorism center. >> again, it's just most troubling. the other thing tsa has been giving this line, it's a lack of funds that right now create some of the problems in the lines. that's been out -- put out by tsa, hasn't it? >> no, sir, i have not said that it's a lack -- >> well, i've seen it from tsa. it's actually staffing. last night like at reagan at

7:00 o'clock they closed some of the lines. tsa cannot staff to traffic. i mean, we -- i've seen it all over. i had report last week of a member that told me that at one airport they were backed up lines forever and the other side of the airport there was a concourse and there were not thousands standing around but everybody standing around and someone can't shift them and in the lane that the individual was -- lanes that the individual was leaving in two were closed. i've been at national airport, i've seen the same thing. people can't make a decision to staff to traffic. the other thing too, is we have to look at the money that you're spending. the last account i had we are spending $1.1 billion on administration and 1.9 billion on screening. that's a lot of administration. we need to pair those numbers down. the bonus that is the chairman

said $80,000, i asked the staff, well, how much can we pay screeners, you're losing 30% of the screeners, 30% of the screeners and 38% of the nontsa leave their job and you could be training these people, like the chairman said, you've got a boat, you know, with a leak in it and it's going to sink. but again, how much -- let me ask this question, how much is the bonus you can give to a screener? i'm told $300 a year. >> no, it can be higher than that. >> can someone tell us the exact amount? >> yes, sir. >> i'm told it's about $300 a year. we will knock off one month. $80,000 in bonuses and i have people who are doing the work, not sitting in an office, and i want a full accounting of all the people working in the

washington area, one time there were 4,000 people within 10 miles of here working for tsa making an average 103,000. i would like that figure into the record, can you provide us with that? >> yes, sir, we will provide that. >> and then finally, i'm not management analyst, but they -- these folks testified too that you went from a risk-based system to the system we see out there with the long lines and everything. we have got the summer coming and they said, if you think -- the day after thanksgiving was bad, we are going to see that every day. what -- what is plan b? we have gone from risk-based system now to shaking and -- and thoroughly examining everyone and no plan b? can you tell us about plan b? >> well, we are still a

risk-based system. we still have precheck. we are growing the population. we are doubling, we doubled the enrollment over the last year and the risk-based approach is the more people i get into trusted travel programs, the more i can move in the expedited and focus on the ones who aren't. we discontinued the practice of assigning and randomly assigning people from an unknown population into that expedited population. that was called management inclusion. that pushed a lot of people to screening lanes. we have a significantly larger population of travelers and growing substantially. it grew faster at a higher rate than predicted by those who set the predictions for our budgets which had been built, which you know in the past. when i came into this organization last year i found an organization with 5,800 fewer screeners and fewer frontline officers than four years previously. that was in the face of significant higher traffic volume.

one of the first things i asked congress to do is haul reduction because it was my suspicion because we didn't have enough people to staff our lanes, my suspicion was correct. >> i respectfully disagree and yield back. >> now recognize the general woman ms. maloney. >> thank you, mr. chairman, for calling this important hearing. nothing is more important than securing the lives of american people. and i want to thank admirable neffenger and ig roth for your work to really make the tsa security system more effective. i would like to remind my colleagues that tsa was built, not for speed or created by government, but to protect our citizens. element -- almost 3,000 people

just in new york city alone were murdered on 9/11 merely because they woke up and went to work and sat at their desk and they were murdered. not on a military site, but at their work site and this happened at other sites around the country. and if you remember, i would go to the airport just to see what was going on. it was closed down, no one would fly. our commerce was crumbling, our air system was totally dead. everything was dead until government came in and started putting security measures in place to protect the american people. 500 of my constituents died on 9/11 and hundreds of friends and acquaint answers of mine merely because they were americans going to work. this is horrifying and we know that our airlines continue to be

a terrorist target. we know, i talk to the pilots, they tell me they continue to test the system all the time to if there are weaknesses and they find it often after they leave the plane and see where they were metling, so i want focus on security and i would like to remind my colleague that is when we created tsa it was hotly debated for months. there was a division between both sides of the aisle, some thought it should be privatized, others thought the government should have this responsibility since our main responsibility is protect our citizens. if our police and our fire are maintained and supported by the government, surely the tsa that plays a vital role of making sure that america doesn't get on a plane that's going to blow up should have that same type of

support from the federal government. so i want to thank mr. feffenger for your statements before this committee where you -- and i'm going to quote you, you said you were readjusting the measurements of success to focus on security rather than speed and i will say to you, i don't see tsa pandering to any passengers. i get stopped all of the time, sometimes i say, why am i being stopped, it's a random number, you're the random number. sometimes the bells go off but like every other american, i have not seen anyone protest the fact that they were stopped. they realize that they're there to help make it more secure for us. and i study the lines like all of us, i travel every week back and forth and we have long lines, tsa has really helped. the precheck, sometimes the

precheck line is longer than the other line, precheck line is really growing as you said, but i've studied my fellow residents and i don't see them angry. if they lose their flight, miss their flight, they should have been earlier, we are all supposed to be there an hour earlier, we rarely are there an hour earlier. they're not upset. they realize that they're stopping people to make sure they don't get killed when they get on that plane. so i for one just want to support the oversight strength of our nation, the ig's office came out saying it wasn't strong enough for security. the add mirror rabble has responded. he has ten points that he's implementing and i just want to ask add mirror rabble neffenger, what have you done to ensure on security results that they achieved, and i want to reiterate i have never, never since 9/11, it's been 15 years,

i have never seen a resident or foreigner, whoever is in that line object that they are being stopped or someone else is being stopped and because of their feeling that there's an emergency, they may miss their plane. the one complaint i hear is, is it secure enough, what's the oversight? every now and then someone gets on a plane with a knife or some weapon and it gets all over the papers and people start calling my office, how did this happen because if people do not believe their planes are secured, they're not going to fly. the commerce is going to hurt and country hurts and fear is a terrible and undermining the american spirit to get things done. what are you doing to improve security? if you need more people, let us know and give us a report on how you can keep the security at the top level, but you may have to have more people. i just know in new york it's a

busy place but often times there are only one or two lanes open because they don't have the people to staff the other lanes, but no one is complaining about a pressure on security. you know, i want to thank you for the job you do. >> general -- >> in my opinion. >> time has expired but the administrator may answer. >> thank you, i'll provide comment, as you know following the results of the ig's tests last year, the first thing we did was a true root-cause analysis, what actually happen. what i found were systemic problems in agency focus, in agency training and the way we deployed our equipment. the first thing we did is retraining of the entire workforce, that took two months, every single employee including myself, i made all of my senior leaders go through it as well. we have followed up with a quarterly motion of mission essentials and focus on various aspects of the check point.

we have dramatically increased our covert testing, internal covert testing and we do immediate feedback into that. we provide -- i work from -- as i said, i work from the positive side of the equation, we provide reward for those people who perform well and then we turn those people into trainers for the next round of folks. we do immediate feedback. i get daily measures, workforce performance, workforce accountability. we've changed that. it's no longer based upon how long the lines are that you're working, that's a separate issue and we deal with that at the management level. but for the front line workforce, i want them to know that i want support and best possible training. we also train them on the equipment, how it operates and we give them hands on understanding of what the limitations were. there's a more fuller answer for