targets of the president's budget and suggested that you needed to go to -- was there a plan b in place or some thought of, if we don't reach this, how are we going to triage or how are we going to make decisions about where the money ought to be spent. it turned out that that was true. the vote against the president's budget was unanimous, 97-0 for 2012 fiscal year. this new budget has been offered. it's unlikely we'll even debate or vote it. the majority leader has said he's not going to bring it for a vote. if it does, it will probably have the same fate. my question is are you looking at a plan b for fy 13 fiscal year? if not, why not? if you are, could you share that with us either today or in subsequent hearings or work with us to try to address the fact that the country just simply can't afford to do everything that we would like to do? >> well, as what happened last

year, i think -- i hope you felt that there was a willingness to work with congress, ultimately it's congress appropriations that determine what we do and what we get with the consent of the president. i think we will -- as the budget process unfolds, we certainly are willing to work with all members of congress in the house and the senate. >> thank you. i think we're going to need to do that. this plan is a billion more than last year, this budget. i don't see the possibility, given our current fiscal situation of being able to defund everything that you've requested. we look forward to doing that. let me just turn to the issue of loans and guarantees and subsidies and so forth and so on. i want to try to take it out of the political. whether it's a republican administration or a democratic administration, there have been a number of embarrassing moments

where winners an losers have been selected on the basis of not doing basic research which i think is a function of government, but in transferring that research to a specific industry, specific company. and it's embarrassing to you. it's embarrassing to the president, embarrassing to congress. it's embarrassing to the way in which money is allocated. talk a little bit about how we can avoid -- the problem is that the political gets involved and there are headlines and there's allegations of crony capitalism and favoring one company over another for political reasons accompanied with, well, maybe this is the -- maybe this is the future and we ought to invest this money. i know your department has taken some second looks at some of the proposed loan guarantees.

one of those was as a result of a letter senator toomey and i sent to you. i thank you for doing that second look, that due diligence which resulted in a different decision, saving potentially the taxpayer well over half a billion dollars. i thank you for that. can you talk a little bit about what i'm suggesting here? and that is two things. one, the due diligence needed to take second looks at what programs are currently being evaluated, and secondly, the whole concept of should the government be involved. i think it was larry summers who said, pardon the language here, government picking winners and losers is a crappy way to invest money. we've had examples of that. could you address the role of the government being involved in

basic research as opposed to selecting specific companies to develop a particular product when we continue to run into, as i said, whether it's republican or democratic administration, continue to run into embarrassing situations on the taxpayers' dime? >> first, senator, let me say i'm very glad to hear you are very supportive of the research and development. that is a proper role for the government. in many instances, not all the investments in research and development are captured by the company that makes that investment. and because of that, not only this country but countries all over the world feel it is a government responsibility to help with the competitiveness of the businesses in their home countries, to continue research and development. as you go more towards piling and especially towards deployment that becomes increasingly a larger

responsibility to -- really the responsibility of the private sector to decide what they want to invest in. having said that, there have been policies in the united states that go back a century or more that do help beginning industries start off. this has been part of the tradition, if you think about going back again, about 100 years, and the beginning oil industry in the united states. there were incentives to help early investments and develop this, that are continuing, but certainly those incentives were there to spur new technologies. there were incentives in the airplane industry, lots of things in how to help the semi conductor industry. but in the last analysis, i think the most effective programs are ones which can guide and stimulate private

investment. senator bingham and murkowski i think are supportive of sort of a seeded-like program, loan program. but in addition to that, there are other things that we can do which can actually again just help guide those investment choices. mostly what we want to do in my opinion, what we'd like to do is guide the investment choices that could really stimulate high technology manufacturing in the united states. there's no reason why we cannot be competitive with any country in the world. germany remains competitive in high technology manufacturing. i believe they have higher labor costs than we do, and we're at least as innovative and inventive as any country in the world.

i would say more so. >> my only response would be i think the market makes a better decision -- a better decision-making process than the government based on the record. it's not the taxpayers' money at stake. it's the stockholders' money at stake with the winners and losers. i think personally that's the way it ought to be. secondly, the historical comparison made might not work now because we weren't drowning in debt when those loans were made. today we're drowning in debt and we just can't keep going in having headlines that half a billion or a billion dollars are lost again to the taxpayer. my time has more than expired, mr. chairman. thank you. >> senator stabenow. >> thank you, chairman. welcome secretary chu. let me indicate first that i n working with us on a clean energy manufacturing strategy. it's clearly leading the recovery for the country. our efforts, the chairman and i

championing the 48c and the loan program you mentioned where ford is actually now bringing jobs back from mexico because of their efforts around advanced batteries and retooling. we're seeing jobs come back from a number of countries because we're focused there. i would encourage you to continue that and use the tools available. i want to talk specifically today, though, about a very, very important project i believe for the country and certainly for michigan, and that's the facility for rare isotope beams project that michigan state won a very rigorous competition as you know, a number of years ago. they're at a critical point. we're coming into the fifth year of funding on this national project. it's a core piece of our research for the united states research infrastructure with broad benefits to science, homeland security, medicine, industry. not only would the project develop the next generation of

nuclear physics workforce as you know, but it will create thousands of jobs and really address our u.s. competitiveness and energy security. so we have to move forward. if we don't, other nations will. and they will be the ones attracteding the best and the brightest scientists and researchers, not the united states. as you know -- i've talked to you numerous times about this as have my colleagues in michigan. you've heard from the scientific community. i'd like to hear from you today what is the department of energy's level of commitment to this project? >> well, senator, yes, you certainly have talked to me many times, same which i think the entire michigan delegation it feels. we agree with you that it's a worthy scientific project. what we're trying to do is to try to figure out within the constraints of the nuclear physics budget in the office of

science, how to best ap eight all the precious dollars. so the question is precisely that, and ultimately it's going to be the nuclear physics community that will be deciding what to do. so -- it's not targeted after efrib, it's targeted at the entire nuclear physics program. we think nuclear physics as is high energy physics are important parts of the department of energy portfolio. but the budget has said that we have constraints. we also need to use our budget in the office of science to help on the mission oriented research that could lead to energy solutions and lead to more competitive america in the near term. we recognize the value of the michigan state project. we have asked for a budget that's the same level as what

was appropriate last year. we will continue this. but in the end we need -- the nuclear physics community at large to comment on all the projects, not projects, but the program in general. >> mr. secretary, let me ask you to clarify this. the president has indicated support for this in his budget. it's not the level that will allow them to proceed as they have been planning to be able to break ground this year which is critically important. this is going into the fifth year of commitment in the united states on this particular project. they've been through numerous reviews -- competitive reviews and in fact come out with stellar recommendations in the past. so i'm very concerned about what you're now calling another review process and whether this is just an effort to slow down or stop progress on this

incredibly important project. so can you describe the review process and how does this fit with the fact that there is, in fact, a commitment in the president's budget to continue this? >> the fact there is a commitment in the project means precisely what you just said. we're not prepared to abandon this project. the review project -- the review will not be review of just this, and i want to make that clear. we have three large projects, but we have a large nuclear physics program as well. and within the constraints of our budget we need the nuclear physics community to tell us what they value the most. and this panel of review is not going to affect what happens in fy 13. >> so, it's not affecting what's happening in fy 13. and so that means the project

and funding moves forward for this year. >> we requested -- it depends on what congress does. we've requested the same amount of fy 13. that was appropriated. >> as a member of the budget committee and moving forward with the appropriations committee, it's my intent to make sure we do everything possible to make sure we have the full commitment to be able to move forward with this project. i hope the department is going to keep its commitment going into the fifth year of a very important, not only science project but economic development project that's going to create over a billion dollars in economic activity and makes no sense to me why as we go into the fifth year that we're having this conversation when those conversations were conducted at the very beginning of all of this and priorities were set, decisions were made, dollars were spent. and now we go into the fifth year. it's in the budget.

it seems to me we ought to be talking about what we need to break ground and to be able to move forward with this rather than another evaluation. i'm all for evaluations, but this project has been evaluated and evaluated and, in fact, has come out with stellar reviews every step of the way. i would hope that the department will keep its commitment thank you, mr. chairman. >> senator paul. >> secretary chu, thank you for as you know we're in the midst of a great recession with 12 million people out of work. i'm very concerned about 1200 jobs in particular, though, in paducah, kentucky. they work for a nuclear enrichment plant there that's been in operation for many years. over 50 years we've accumulated 40,000 cylinders of uranium,

uranium waste sitting on the ground. something has to be done with it. 14-ton canisters of uranium. we'd like to enrich them. if we were able to enrich them you can save these 1200 jobs. these 1200 jobs in likelihood will be lost if the company goes under if we're not allowed to enrich this uranium. it's my understanding it's under your discretion whether to wren itch this uranium. >> senator, i see it as not matter -- first, this company usec which is running the paducah plant, for them they say it's going to be a business decision, we're talking about depleted uranium and whether they'll use the enrichment facility to generate the uranium.

and what they are asking for is government assistance to say we have some depleted uranium. we can give it to them and have them enrich it. it's certainly true, we're very concerned about those jobs. we're also concerned of a number of other things, because in order to provide the funds to allow this to go forward, we would, for example, be using -- we would have to be essentially putting some of our uranium that we have on the open market. we have to do this very carefully because we have a commitment that any use of our uranium, u.s.-owned uranium onto the open market might have an effect on the uranium markets that would affect the miners. >> if we allow this to happen, it doesn't cost the taxpayer anything. the payment for enriching it comes from the proceeds of the sales of the uranium. >> it does, but you have to take that a little bit further because the market for uranium

has changed after fukushima, as you well know. the japanese have had the reactors down for a number of months, and it's going to be -- as they bring them up, it's going to be quite slow. the germans have decided they're going to bring down the reactors more quickly than they had thought possibly. so the market for uranium and for reactors has changed over the last couple of years. >> if you're concerned about how much you sell, could you not increase your stockpile, and as you increase your stockpile, then sell it over time? >> but the way we see it, this is a very complex process. the way we see it, we're going to be giving -- we'll be using taxpayer money to pay for the usec services. that will keep the paducah plant running.

in the end, let's pose there's a glut in the market of uranium, the value is not as high. and then in the end the taxpayer has to foot that bill. so the analysis -- for example, the cbo's office says this is not a money maker. in fact, it could be a big liability so we have to work through all those things. >> the gao says the uranium there has a value of $4 billion and that would be returned to the taxpayer if we were to enrich it. you've got a lot of problems here. we've got 50 years of waste and we're providing you with an alternative that brings money back to the treasury and helps you get rid of a waste problem. we have i think 700,000 tons of uranium that's a waste product now sitting on the ground. many in the administration say you're a green administration, you're for recycling. we're giving you a chance here to save jobs, not on some kind of loan program, save jobs, existing jobs and recycle something and cut the amount of uranium waste in half. these are all problems we face.

if we do nothing -- and i believe you have the power to save these jobs and this is on you basically. these 1200 jobs are yours to save if you don't save them. if you don't, it's going to cost the taxpayer. it's $100 million a year to put things into cold storage there, also $100 million a year because someone has to guard the uranium. the surveillance cost all come out of the company now. i think this is a win-win solution for the taxpayer. you know i'm not a big fan for expending new taxpayer dollars. the taxpayer dollars here come out of the sale of the uranium. if we temporarily raise the limit which you're allowed to do under the law, that's under your discretion, talking 1% of the world market. i don't think we're talking about affecting the price in a significant degree if we were allowed to do that. >> just very quickly in closing, first the gao report came out several years ago before fukushima. so there was a sea change in

prospects for the demand of uranium because of fukushima, because of the german decision, these 1200 jobs are 1200 jobs you could save with the stroke of a pen if you choose to do so. this isn't 500 million dollars or billions of dollars being spent on something where we might get jobs and we haven't. we've lost it. these are 1,200 existing jobs in a long standing nuclear trade

that that are defense considerations for why we have to enrich uranium. uranium is not a purely open market. we don't sell it to just anybody. there are strict controls on this market. i think it is something where the government could do something that costs no money. i just hope you will help us there. the 1,200 families in paducah are sitting there listening to you today and they know you have it in your power to save their jobs and i just hope you'll consider this. it doesn't cost the taxpayer anything ultimately because the proceeds will come out of the sales of the uranium. >> if -- if the sales keep at a certain price. again, senator, i'd love to talk to you at length about this. we've thought deeply. we also see a potential hundreds of millions of dollars liability in the future and that we have to work through that as well. >> senator cantwell. >> thank you, chairman. secretary chu, good to see you here this morning. thank you for visiting the hanford site and the plant

specifically. obviously you know it is one of the most complex and largest contaminated sites in the world. and our concerns about making sure we continue to get clean-up done in a timely fashion is of critical importance. not just to this state of washington, but to the nation. are you confident with this level of funding that we will have that plant open and operational in 2019? >> senator, again, within the budget constraints we are essentially working hard to keep the environmental management budget -- essentially it went down a fraction of a percent, .1%. essentially flat. we are trying very hard to make some tough decisions. there is protection of the columbia river, the waste plant -- the tanks and wtp. so we first feel that we're going to meet all our

obligations -- our legal obligations for fy '13 with this budget. but as you know, i spoke to you about this, that there was an ideal funding profile for the completion of the wtp plant that would call for more aggressive spending this year, next year and the following years so that you, just like in a commercial building, when you build a building, you don't mess around. if you got it engineered, you build it, you build it very quickly. that funding profile is not in the cards anymore because of our budgets, and so because of that, we know that there's a risk that could slip schedule. but on the flip side we are also -- we have to prioritize and we have to make sure that the waste tank farms are cared for as well. so it's a tough decision, and as

you well know, we take these responsibilities very seriously. >> so 2019, that's your -- >> well, we can't say right now, but because there's -- we are working through some of the issues. we have a plan, a program for testing, for example, the so-called pulse jet mixing, things of that nature, that, perhaps, two or three years ago we felt that -- we've determined with the defense board and others that it would be prudent to go through a more comprehensive testing. so we acknowledge that. and so these are some of the issues on this very, very complex project. this is, in my mind, the most complex nuclear project the world has undertaken, let alone the united states. >> i couldn't agree more and that's why, you know, when some of the questions have been

raised about the vit plant, do you think we have the right oversight on the issues that have been brought up by whistle blowers? obviously once the plant goes operational, you can't fix any -- it's too hot to fix structural issues. >> i think we've worked very hard, both the deputy secretary and i have worked very hard to make sure that we have essentially our a-team in place in the direct oversight of -- of the -- of the contractors. dale knutson is a truly outstanding project manager. has had a long track record. we were able to talk him into doing this. we have a new head of the office of river protection. scott samuelson we have a lot of respect for. dave huzinga, a superb manager

position. so all the way up and down the chain we are putting in place what we believe is a very good team. and because of the importance of this project, a lot of these discussions go right into my office. i've spoken to the coo of the head contractor, bechtle, riley bechtle, probably now four times in my office on making sure he, too, has an a-team as the contractor. and from my discussions with the people on the ground, they say that bechtle has also been doing their job in trying to get the right people there. >> thank you to that level of detail. u think that is what it takes. i've often said you should make the energy secretary till life or until hanford is cleaned up just so we don't continue to change horses in the stream. but can i get your viewpoints on whether we can dispose of military waste first?

what we don't want is hanford to become a de facto site for 90% of the storage. the commission was in here, blue ribbon commission a few weeks ago. senator domenici basically threw out on the table. my colleague, senator wyden, got him talking about this. i tried to follow up about whether the waste isolation plant in new mexico might be an ideal place for hanford waste. do you agree with him on that? >> first, we're going to keep separate the civilian nuclear waste issues. i think they're -- that it would be prudent to treat it differently. we are considering -- i'm not sure where in the status of -- but the whip, first, it's for low-level radioactive waste. and so one would need to do some studies to make sure that that would be safe for the high level waste. and so we need to do something along those lines.

but i'm glad you pointed out whip, because this is a success story. it's been there operating for about a dozen years. there have been no incidents. the local people are -- feel confident we're running this in a very safe way. and it's good for the local economy. it's good for the economy of the state of new mexico. and so, again, this is something where we can show that we can develop repositories for nuclear waste which have the acceptance of the local people. >> if i could get a more follow-up with you on the details of that, i'd appreciate it. >> sure. >> also on the 1,000 acres we're trying to get shifted over from doe, as the clean-up goes on, shifting over acreage to the local community there for energy parks in general. i think it's a proposal that's moving its way through. if we could follow up on both of those, thank you.

thank you, mr. chairman. >> thank you. senator risch. >> secretary chu, first of all, let me just say for the record -- i know this falls on deaf ears. this is simply philosophical disagreement. but your budget requests the 3.2% increase for the year. yet decreases the nuclear energy component by 10%. i find that particularly discouraging as we look to the future. i know that that is not the administration's position that nuclear is our future. i do. a lot of other people do. i suppose that's not going to change until the administration changes at some point in time. so, for the record, just take my objection to the decrease while increasing other of the boutique-type energy production systems that you have. i want to ask particularly about one part of that. i noticed that in the budget you