there's a headline that it drone is the will -- being worked upon. does that concern you? guest: yes and no. they have come of age. just like in the 1970's with computers. it did not take until the 1980's and the 1990's when computers came into vogue. host: when did you have computers? guest: in the 1970's. the internet have not matured and the mail system was not there. -- how did not richard and the e-mail system was not there. drones are coming of age. as far as the motors, the reason i said, no, there is no airplane on a planet right now that can take two different motors, the

reality is, you can take a ford truck and a chevrolet engine and stockholm. and -- and swap them. you can't do that anymore. you put in a general electric motor, or a rolls royce motor, it will work as long as it works. host: we will have to leave it there. the we will continue with the summer series tomorrow. we will look at drones on thursday and on friday, the rehabilitation process for those coming back from iraq and afghanistan. thanks for being with us this morning. we will bring your note to the year to foundation. >> make sure you turn off your cell phone.

join me in welcoming claude berube. [applause] >> thank you. this is the first of two panels on homeland security. i would like to welcome our today who is in the audience. the numbers are daunting. 140 million shipping containers and world wide. 17 million registered and unregistered small craft. how do we secure the maritime environment? we will address this question and other issues. our first panel brings the private panel perspective. each will provide about 15 minutes of remark. there will be time for questions

and answers. barrett has been the lead intelligence officer and as the director of strategy for the white house homeland security council. his most recent book is " securing global transportation networks." he has an m.b.a. from the austrian school of business. >> good morning and thank you for having me here. homeland security is a tough business and is made all the harder to focus on it over the long haul. it is instructive that heritage has titled this series of events "homeland security in 2020."

these changes should be enacted now so we're father along the curve. we live in a truly globalized environment. as a result, homeland security is a field that continues to mature. it lies at the intersection of the government's need to protect people and at the private sector's need to provide for safe commerce. the key actors in homeland security are almost always in dynamic tension. this is a quandary and one which requires innovative solutions.

it requires true collaboration. i believe you will hear some of the important naval aspects. these are important issues. i believe national security is key for a number of reasons. i want to speak about the least well understood aspect of maritime security. america has been described as a maritime nation. the economy has hit on hard times. being a maritime nation the relies upon capitalism is connected to the global supply chain. 90% of the crudes are delivered via maritime channels.

let's start with where we are today. i believe that today is september 10, 2001. it is the day before katrina hit landfall and the day before the blowout preventer failed in the gulf. this approach is based on defeating a level of threat. this is inadequate for the types of threats we face. consider bp. it cost bp and everyone in the system and bystanders as well. supply chain disruptions hit retailers and restaurants and practically everyone in the u.s. in the scale of consequences, it

is not masked in terms of traditional risk models. consider smuggling. there are multiple layers of security and have improved the total number of layers in the community. current efforts remained at stopping habitual offenders. they conduct pattern-based screenings. this approach relies the nature of the terrorist who may want to send it just one package just one time. we can discuss the other means by which a nuclear device would be delivered. but we step back, a weapon

would affect all shippers and a lot more be gone. this demands a new approach. the consequence of a single failure pixies the historical presumption. the fact is this. a nuclear weapon that goes off in a city is a very bad. it is not necessarily on recoverable. a nuclear weapon arriving through the supply chain could be unrecoverable. it could be an existential threat. i speak about nuclear weapons. we are concerned with large scale defense. that would make us shut down the system.

chemical weapons could be improvised. biological weapons would probably come in a different way. looking at just sources of radiation he as good and bad, our failure to intercept the material would collapse the system as we know it. our current system is inadequate and that we need to stop the system. we did just that by grounding all planes after 9/11. we banned all liquids on planes. we did it when the blowout preventer failed. if you rely upon a system any profess it works well, when it fails, you have to pretty much start over. after 9/11, we made all

screeners government employees. something had to change, something tangible. it is much harder to change the process of the global supply chain movement. it was relatively easy after 9/11. every passenger has to funnel through a designated checkpoint. cargo moves in and out by ship and rail. we only inspect about 6% of cargo. if you triple it, we have a long way to go. what can be done? threeke to outline critical issues -- who is in

charge, knowledge matters, and prevention and resilience. who is in charge? it is natural to think he contacts false to dhs. they are two of the biggest players. but that is the point. the overall system is run by the private sector. i know that we tended to think of owning the battle space. we deploy our military. homeland security is different. we are important but not dominant players. this is hard for many americans to understand. it seems hard for congress to

understand. the system operates for its own purposes. rules and procedures must all be considered differently when you are not a decisive player. the security could fall to industry. it is not that easy. industry is dominant but is individually operated. maritime security is the collective good. there is a limited role. this creates gaps that terrorists can exploit. solutions must accommodate the operational realities of the system. it has been understood that good information -- industry is

reaping the economic rewards. there is massive data flows and effective sufficient supply chain movements. the speed enabled by that is a double agent soareword. our systems are antiquated. we are trying to build out a related capability. i think this is critical. information is essential. it enables the time to focus on problems. we need to know which ships are entering our waters, who is on board, and where they are heading.

we need to identify anomalies. information is necessary. we need to better implement the maritime effort. it should be done in an efficient manner. true security requires preventive measures and resilience. resilience is about being able to continue operations during a crisis as quickly as possible. i fear this is our weakest link in terms of maritime security. in today's complex threat in farming, we have to define security on the entire string of events that may come our way. each is important. it is the war that matters.

we invest equally in preventive security measures as well as resiliency. it is not as emotionally satisfying to say we will stop all future attacks. it is much more practical. we have a lot to lose if our maritime security fails. it helps to lessen the damage from non-terrorist events such as natural disasters. to sum this up, not everything can be secured or scanned. there are small ports and the system cannot be secured 100%. but we can do a better job. a handful of carriers and a few

operators -- securing just the car broke that moves through them would be a great step forward. working with the private sector is possible in advance of a mass of systemic discussion. working with the private sector, it is possible to build out protocols so that we contract items and conduct rapid forensic developments. working with the private sector is possible to redesigning the process flows. working with the private sector is possible to create some number of secure corridors through which you could move a subset of the cargo better. this makes it less likely the terrorist would use that specific transit route.

this enables the continuity of trade. this is the essence of resilience. let me return to a controversial statement. in nuclear weapon going off in a city is bad. the one delivered could be unrecoverable. it could be an existential threat. the government released a memo stating 9000 jobs were affected by a drilling moratorium. these numbers are orders of magnitude if the global supply chain team to a screeching halt. we would have to halt the system. how else could you respond? we have to we imagine our approach and secure the car broke that comes through select

portals. we are a maritime nation depended on democratic nationalization. we must keep the economy alive, come what may. >> thank you. adam salerno is with the u.s. department of commerce -- u.s. chamber of commerce. sorry. responsible for their initiatives and supply chains and trade. he worked in the department of homeland securities and oversaw the activities pertaining to the secure borders advisory council. he worked with capital management. he earned his mba from the university of massachusetts. >> thank you. thank you for the heritage foundation for putting on this

event. i wanted to start off by talking about some of the things that the u.s. chamber of commerce is doing and the global supply chain. the wanted to go into some of the problems we see on the horizon. mike talked about some of the problems. i agree with you in working together now with the private sector. the chamber several years ago started a global supply working group, which is what i manage. this is a group of 110-member companies. this group is a much more manageable 110 members. these members are engaged in

this issue of global supply chain. they are engaged on a day-to-day basis on issues in the regulatory environment. they try to make changes tsa and throughout the department of homeland security when it comes to moving goods. to move goods efficiently through the supply chain. the second thing cut that i will mention today is that these members are critically involved in securing these supply chains. in many cases, more than i may know or that you may know, and they do this for many reasons. the interdiction of terrorist activity in smuggling something

through the supply chain. they do from a theft perspective, too. there are two roles. they are going after the issues that hit the supply chains and work with the department of homeland security. as i said, both efficiency in the supply chain and security are critical to all the business models. that is where these issues interject. as michael said, the private sector does a significant amount to secure the supply chain. they do it, and they need to work with homeland security and homeland security needs to work with them on the regulatory

level and the legislative level. there is a lot of talk -- and i wrote a report about trade facilitation and security. i will hold it up. it is on the internet and on the website. i was corrected by the commissioner a few weeks ago. we were discussing the balance. he said, i think is more -- that both of these issues can be elevated at the same time. facilitation and security. i put a lot of thought into that. when the commissioner tells you something, you generally take heed of what he says. he is absolutely right. there does not need to be a balance between trade facilitation and security.

there is not a trade-off. we can elevate both of these issues at the same time. there are numerous examples. unfortunately, there is a lot of issues today that we are seeing it come to the forefront. the government is pursuing -- the house representatives in the senate were pursuing issues and regulations that don't help trade facilitation and hurt many companies along the process. let's get into those first. you are giving -- michael was giving more of a broader discussion. i want to get into the particulars. and what we can do to proceed.

the 100% scanning issue -- i have talked to many of you about this issue in the past. that issue hit us in 2007. the passage of the recommendations and the 9/11 act of 2007. the legislation had some significant positive things. we were proud to move forward. there were some destructive things when it came to the supply chain. radiation overseas before product comes into the united states. it passed, it was hr-1 in 2007. it was opposed by the international community and the business community. and pretty much and want the put a good amount of talk into the

scanning debate. i will go into the reasons why it was opposed. is a wrong that this thing. these issues are taken from gao reports. from testimony, talking points. the issues with 100% scanning are very broad and the mandate stays in place. it can almost certainly detect kitty litter every time it goes through. if we are investing $6 billion per portal to get the technology, don't you think we should technology that can efficiently do that? technology right now is lacking.

it might not always be lacking. scanning in foreign ports. this is a mandate for them to change their port of entry to allow for imaging and radiation detection. there has been fear happened overseas about this mandate. we are looking at 2012. construction needs to start fairly soon if we are going to be hitting that deadline. strong opposition and the threat of reciprocity from trading partners. i will talk about a european commission report later. all of our trading partners are opposed to this mandate. this should send up some red flags.

it has been proven many times that this provides less security than we currently have today. if it is not improving the process, what is it doing? many of our trading partners -- i am seeing some nodding heads. that is the case for a lot of people, a lot of the business community. this is another form of protectionism. we should not be confusing this with protection. if people are, we have a serious problem with the mandate. kitty litter gets detected by this program. bad stuff that should get detected is not detected. if we are devoting of limited

resources to program that is not the best approach to security, these limited resources are being wasted. there has been a multi-layered risked based approach. in many cases, security is diminished, not in hands. if we are spending all this money on one particular program, then we're not spending it on other programs. the container security initiative, csi. it is like the re-enter thousand dollars per port to set up -- is like $300,000 to set up csi in

each port. i promise some discussion about the european commission report. i will jump into that right now. the european commission released secured trade and 100% scanning of containers. this goes into some of the issues i discussed here. their most important to the private sector. it also goes into the deeper issues for europe in particular. one issue they discuss, and this is the final issue in terms of scanning, and that is the overall cost of implementation. the report estimated 430 million euros, so probably double that with infrastructure. to wonder million euros -- 200

million euros. that is the cost to the economy and gdp in improving trade -- to continuing trade with the u.s. do the math. that is a 10% increase in costs for the business community, for the government, for everybody involved in the training aspect. 10% increase. i talked about my business is. there is a competitive advantage when talking about the supply chain. a 10% increase across the board for something that has little to no security benefit is not worth the risk to our economy. there is a lot of talk about other issues hitting the economy like financial rate reform and health care.

i am focused on trade facilitation and economy. this hits business is terribly hard and hurt the economy just as bad. when very intelligent people on both sides of the table have determined 100% scanning is not the right answer, yet it remains loaw. finding the balance of the future, the report we released last year made the point that imports equal exports. cars, parts passed through our ports. carports across the border seven times before they become manufactured into a car. we manufacture things together with canadians, mexicans, pretty much anyone over the world. boeing is the number-one

exporter when it comes to value. they export tons of planes and other products. number one exporter. they are also usually in the top five to 10 importers, which means we're importing a lot of goods to manufactured products. we do have the competitive advantage to manufacture, which should manufacture and we need to get those products into the united states as quickly as possible, and then get them out of the united states in the form of exports. no security benefits to 100% scanning, yet it remained law. the safe port act of 2010.

this was release by sanders collins and marine -- by urray.rs collins and m it does go after the 100% scanning mandate. it mandates that they reach a certain amount of critical benchmarks for securing the supply chains. and then it said some of the requirements for the 100% scanning debate. it is positive from the security aspect. the only problem is it needs more engagement with the international community. these products are going everywhere and at critical

speed. the international community is so critical in the engagement right at the point of manufacturing appeared we're securing peace supply chain from the very point the good is put in a boxed and shipped overseas. if you secure that supply chain, you don't have bombs coming in through the supply chain. the legislation needs to go a little farther. the bill by rockefeller and snowe, they take a different approach to the wonder% scandent mandate. they delay in three years -- they take a different approach to 100% scanning mandate. this will delay critically needed discussion when it comes

to security supply chain. picture yourself a business or government. there are plenty of ways you can do it. i will lend us some more ways. plenty of ways to do it. but who will invest the dollars when 100% scanning is still on the table. the mandate is looming over your head. we need to take this mandate off the table and engage the international business community and everyone involved, because they are securing the supply chain for their own purposes, as well. but we can do more and we should do more. with the mandate in place, it is not going to happen. the house of representatives, there was a letter released

august 3 or 4 of this month saying that dhs was avoiding or delaying the mandate. i think that sends the wrong message. there are too many people saying this is a poor mandate, a poorly functioning mandate. it will be a poorly implemented mandate if it moves forward. we should be considered in iing. there is a lot of opportunity to work together on the issues of global supply chain, but it cannot happen with this mandate still out there. it is a risk-based approach to security. it is multi-layer. if you have -- i was on vacation last week. if you're looking out a window

and the sunshine is coming through the window and you have one curtain, that is like 100% scanning. if you do it multi-layered risk approach with reasonable overlaps, to protect the sunlight from coming into that room, that is when you will have the greatest opportunity for interdicting products. it is looking at we currently have and developing it and seeing where we can go from here. there is opportunity to expand. all cargo is not created equal. we learned that with the customs and trade partnership. if you are a trusted shipper in the program, there is a good chance your products are going

to get through without any problems at all. we need to take the program to the next generation and move that forward. we can develop commercial benefits. if it is a good program, which is, for securing the supply chain, you want to have more members in that program. the cost to get into the program are extremely steep. small and medium-size members, the vast majority of membership for the u.s. chamber of commerce is small business. i get a call once a day, it should we join the program? i want them in the program. but the cost associated with the program and the benefits, there

is not enough. there needs to be a program to secure the supply chain. i will skip ahead. we need to increase funding to the program and not decrease it. mutual recognition. there are plenty of supply chain security programs around the world. there is one program. we'd have mutual recognition between the two programs. we need to move forward with that and mutually recognized them. a member of one should be a member of both. we would see a drastic improvement in the supply chain security. i am trying to -- i will move

forward a little bit. another program. both of these programs in proof facilitation and security at the same time. we need to increase funding and we need to finish this programs as quickly as possible. the last thing i will mention is the administration. we have seen some current science. the warehouse announce some measures earlier this year and a dump massive outreach when it comes to this issue. michael was in one of those meetings. i think that is an encouraging sign. looking any vision of what we have in the future. the new commissioner has reached

out to the private sector. i want to commend both the white house and the new commissioner for this action. it is important to engage the private sector. i think we will see some good results from this dialogue. >> thank you. i just want to note, please wait for the microphone before asking your questions. this is being broadcast on c- span. we will open it up in just a moment. first, you mentioned the concern about the 100% standing requirement. if we eliminated that come up with to envision in its place? >> we put together this graph. i have been asked this question a lot.

it is small, but a church youth to go to the u.s. chamber website. it puts together a list of everything we have, partners in protection, container security initiatives. overlapping with scanning. what needs to occur is to step back and say, how many programs do we have? where are the gaps? let's fill in those gaps. i cannot say there is a magic bullet. i cannot say there is a magic solution to it. but taking a step back and finding where the gaps are, i think mutual recognition would do a lot in terms of securing the supply chain. that is not the only step that needs to be taken.

>> i have a two-part question for you. you mentioned that when there is a disaster or a terrorist change we tend to the system and start a nenew. does this pose a difficult for policymakers to try to sell the idea of resiliency rabin full protection? >> sure. resilience is very nascent. the notion of psychological resilience, which is frankly the easiest and cheapest approach. there is a we conceptualization of how the process works. you have to think about surge capacity. fema has spent time and effort in figuring out how they can do

that. it is about communication and interacting with the private sector. we live in a complex era. the coast guard was talking about what might happen the following and if then. they cannot tell the shippers where to go. they can close certain ports for safety reasons. but a shipper may divert trade headed to the u.s. into canada because that is where they have pre-existing relationships. that is where the business continuity is. the first thing is to figure out, what is the right operating model for the private sector? there has been discussion about public-private partnerships. it has to be a private-public partnership. it is a challenge for the

private sector and to do it at the right levels. we need a better way to create security and to facilitate trade flows. >> we will open it up to the audience for questions. if you could wait for a microphone. >> i guess this is on. i am not sure. my question has to do with metrics. we put a lot of programs into place here today while other suggestions since september 11, 2001. are there metrics we can depend on to help us understand where to make the next investments to get the facilitation that you talked about?

>> that is an excellent question. the biggest challenge is you say that we predicted this much this year. was that good? we do not know. we do not know how much was coming. the metrics need to be figured out in a way that is logical. this drives you towards 100% scanning. it is an easy political talking point. it is about laird security. i would argue that one of those layers needs to be focused on existential threats. one of those layers needs to be resiliency. i am concerned with layers of security with a capital s.

we writing exercises and to say how well he we perform. during katrina, we did not do well. have we gotten better? we run a few, but we do not run nearly enough. we do not involve the journal public-sector. -- the general public sector. i think the first place you have to start is figuring out where you are. you need a baseline, and that comes from experimentation. >> i think you're right. if you measure something, you're much more likely to hit that goal then you're not. we talk about setting metrics and create benchmarks for security and trade facilitation. i will talk on facilitation.

border crossing, how long it takes to get products through there. i had another section about a product at rest -- a product at rest is a product he at risk. if you're leaving goods in any port, that product is potentially at risk for interdiction. you need to keep the product moving. getting a better understanding of metrics and security and how fast products are moving across our ports of entry, particularly in mexico. we're doing a lot of work at the mexican border. you have trucks sitting there for five or six hours. that is a big risk. they both work together. >> hello. i am with"american shipper

magazine. talking about the risk-based approach to security. you talked about using pattern recognition. at first you dismiss that. he said pattern recognition information is key later. i am wondering how you square that. there was an importer security filing. you talked about getting information from ships and vessels. now we have individual cargo shipments. i wonder how you think that benefits. talk about the private sector models. are you advocating a private sector scanning approached with a private sector terminals and shippers skining everything and take it out of the government's hand so that it is done more efficiently and not clogging up ports -- scanning everything?

>> the risk-based models are focused on individual threats. you might say this specific port is that this risk, or this shipper has never sent a shipment that was found to be bad. therefore, we think this shipper is bad. the reason i talk about the coast guard, they are talking about 12 nautical miles, but they are looking at extending that can dramatically. it is critical. if you don't have the information, you cannot figure out the patterns. it is also important in terms of forensic. think back to the christmas day bomber. when a person has a weapon, you think, who else had that same pattern today? you cannot do the media

forensics exactly like that. there is no more visible evidence like that then 9/11 when the fourth plane was taken down by passengers. information is important. there are a lot of ways to make it better. information is critical that a systemic level. the reality is, i will tell a quick story. i went into a school. we were talking about potential domestic terrorist threats. the folks at the school, the police officer said, if you just opened your highly classified bulb, you should tell us. i said, we don't know. there's a huge disconnect between the need for systemic information and the tactical

level information. we're getting better. industry is collecting this information. there is reduced insurance costs. who should be doing these scanning stack? we have governments gaps. the system is not going to be able to self regulate. there is a different amount of rest. if you only run a couple of million dollars a risk, you are only at so much risk. at bp, everyone is at risk. the government is not in the right position to do this. people cannot wants to share information with the government if they don't have to. we are looking at how to create

a trusted third-party. whether it is a non-profit or regulated. you have this other entity that collects it. the government can request pieces of information from the collective body. i think a lot more work needs to be done. the recent open a decent to figure out the correct solution. if it means having a trusted middlemen, so be it. efficiency is important. i think efficiency is important overtime. it is like having car insurance. the cheapest thing you can do is not have car insurance every day. the day you get into an ax and, if you wish you had car insurance. it creates macro efficiency. when something bad happens, the system continues to function. >> i have a comment and one

question. we are in a consumer-driven world. the guy who wears a honda from japan may get the honda in the timeframe he wants in, he will go to the government and say, let's get this worked out. someone in europe who wants a ford, he will go to his own government. consumers will have a good say in focusing their respective governments on this issue. what efforts should be done on a multi lateral basis through organizations such as the international maritime organization and other agencies to address these concerns that are ongoing? >> i can jump in. talk about international

organizations i have been working with. the world customs organization has been extremely engaged long before the mandate came into place. those players need to be taken seriously and they need to be brought to the table yesterday. the wco has put together their framework, which i think was an effective way of promoting the risk management approach. harmonizationbal organizatio to secure the supply chain, to give people in the business community more consistency and to secure the supply chain. wco has been instrumental in promoting that point of view. i think they need to be brought back to the table. i am not a part of the white

house global supply chain review. i can not assume the government would ignore them. as well as the broader international community. this other player that needs to be brought to the table now. >> we have time for one more question. we have about four minutes. >> the international extremes are extremely important because you need to establish a baseline. we also have to be realistic. if your walmart, you stand a lot to lose is something bad happens. you have so much more skin in the game. it is critical but not necessarily sufficient. if i am a shipper, consistency and predictability are the two most important things.

i could get my car from japan and honda within 24 hours. i am better off if it is always 48 hours then if it was sometimes 24 and sometimes 72. we have decreed a standardization of the system. they can deal with the predictability of it. >> we have time for one more quick question. down here. >> i have heard a great deal about the supply chain and securing it and whether we can do 100%, which is ludicrous. maybe 4% we're going to scan. one thing i have not heard too much about is the small boat problem. i have spent a lot of time thinking about gaming, traveling

all over the world talking about issues like this. whereas the intermodal supply chain highly computerized and so forth, something like that, is and will be a problem, what about the small boat problem? what about the steamer that is under the radar, if you will, that is below the raider one has to consider? it can go anywhere anytime -- below the radar. or. or a private yach. >> it is possible when you look at pakistan and see how they took over a fishing trawler to

infiltrate them in india. there are other venues that need to be secure. my point was that we have to look at that system and protect that system. have we put away more security at airports then the risk? more than the threat merits but not more than the risk. the risk includes consequences. >> ok. please help me in thanking our panel. [applause] i would at this point invite our second panel, team palace to come up to the station -- teen panelists.

. \ >> it is an honor to introduce

our next panel. the first speaker is vice admiral terry cross who completed a 36-year career with the u.s. coast guard. he planned and directed coast guard operations in the western u.s. and throughout the pacific, including the arctic, an arctic, and asia. as assistant, dawn for operations, he led a team that implemented the nation's first maritime homeland security plan and that teams that design, funded, and commissioned new capabilities such as special anti-terrorism, maryland -- maritime safety. he is a graduate of the u.s. coast guard academy. here they masters of science degree in industrial information from perdue university school of management. he is director of common security programs throughout north america. >> let me begin by saying thank you to the heritage foundation for highlighting homeland security. i used to address coastguard

people a lot in the years post- 9/11 and just before i retired, and i always pointed out that the fact that the first attack on the world trade center took place in 1993. and of course, 9/11 took place about eight years later. so we have not had a major homeland security event, a successful attack, in our country over the last nine years, and that is not necessarily a reason for us to feel more safe. i think these kinds of forms are critical in helping to battle inevitable complacency that i think we're already seeing. i was asked to talk about programs, platforms, and people with coast guard capabilities in 2020. i turned it around of wanted to start talking about platforms first. maybe because that is the easiest one for me. the coast guard has done a good job of laying out its platform

requirements over the past many years in a program called deepwater. i can recall in the mid-1990s, we began to talk about the need for what we saw as a coming block obsolescence of coast guard cutters, especially in our offshore fleet, and most of our aircraft fleet. we saw this coming over the course of the next five to 10 years. this is in 1995 or so. here we are 15 years later, and we are really off to a fairly slow start in terms of implementing deepwater. i recall having any discussions with hill committees about the need to replace coastguard assets, and we had a great deal of interest and sympathy and almost no money. so we find ourselves now in a situation where the coast guard cutter fleet is one of the two oldest coastguard/navy fleets in the entire world.

i think a number i saw recently with regard -- i will quote and ron allen with the coastguard cutters responding to haiti, and the average age was over 41 years of age. so the deep water plan, because we cannot get traction initially to replace coast guard cutters in aircraft on a piecemeal basis, the coast guard put together a plan to replace the water cutters and most of the aircraft fleet, and they call the plant deepwater. let's see if i can figure out the technology. i brought along some slides. i know some people are visual learners, and i did not want to lose those people. and we're talking capabilities. numbers are an issue. i wanted to be able to show them two this was just a logo in how

the coast guard introduced the deepwater program. i will go right to the next slide and point out, give you a sense of where we stand in terms of implementing deepwater. the requirement for national security cutters, there currently four on contract. bear in mind, this contract was signed in june of 2002. eight years later, we a four of eight on contract, zero offshore patrol cutters, and we are respecting a request for proposals sometime in the next year. but the coast guard does not plant to find that offshore patrol could procurement until they completed a national security getter procurement. also, with regard for funding for national security cutters, the way that the previous four or funded, in any given fiscal year, funds were provided for

items for the first year in the next year would provide funds to complete that ship. then long lead time items for the following ship. the president's foes -- fiscal year 2011 budget this year contains no funds for long lead time items for ship #6. so we are experiencing a slowdown in terms of the replacement. faster response cutters are essentially patrol boat replacements, and none of those have been provided as yet, although we're starting to see phase one in terms of those being built up. c-130 j's, 11 required, six of been provided. there was a supplemental recently passed. c-130 h model, most of these aircraft are 30 + years old. rather than replace a new one for one in terms of the fleet, the coast guard, primarily for funding reasons, elected to

extend the service life for 16 of the c-130 h's. for the hc 134 maritime patrol aircraft, the requirement is for 36 new aircraft. 10 have been delivered, and 14 are on contract. then there's an ongoing effort to upgrade, not replace, but a ouple-upgrade hh 60 j's and 65 charlie's but ana burial aircraft, an initial requirement is for 45. none have been delivered. none are currently in the budget plan as i speak. i also thought it was useful to talk a little bit about the fact that the coast guard is actually replacing, in many instances, the replacement numbers are actually less than the numbers

of existing assets. for example, we have eight national security commanders planned to replace 12 high endurance cutters. we have 25 offshore patrol cutters plant to replace over 30 medium endurance cutters. i just use that number over 30 because the coast guard has been taking medium endurance cutters out of service for several years lout -- now. we can argue with that should be. 58 fast response cutters to replace 49 patrol boats and some number of 87 flight patrol boats. the c-130 shlep and acquisition is about one for one. but we have 36 hc 144'a replacing 41 others. 25 -- the 45e, the replaced over 90. over time, you see the coast

guard cutter and aircraft fleet shrinking. it is not all necessarily bad. they're primarily three reasons for that. one is technology. with better information, better communications, better censors, it is reasonable to expect that you can accomplish the same mission with somewhat fewer aircraft. another issue for the cutters involves the crew. the coast guard has a plan to actually operate the new ships with multiple crews so that rather than being away from home court -- home port are on patrol 181 days a year, that would be on patrol 270 days a year. in terms of mission accomplishment, the have not actually tried to do that yet. it will be important that they are able to make that work. the third issue is always money. in terms of having the funding available to replace fleets on a one-for-one basis. i am generally supportive of

that idea, but we need to keep in mind that budget pressures intensify and or even reduce funds for acquisition, that we can only go down that road so far. at some point, you reach a situation where the idea that you cannot have one cover in two places at once or one aircraft and two places at once began to adversely affect your ability to do business i will shift now and talk about people as luck would have it, there wasn't recent article in the washington post that will " make my point. it says, in the past 35 years -- when they take care of my business here. in the past 35 years, congress has handed the agency by agency, meeting the coast guard, at least 27 new responsibilities, according to a tally by the rep. chairman of the house

transportation and infrastructure committee. then he said, they just do not have enough personnel to carry out all those missions. the net noted that congressman oberstar favors, is taking the coast guard out of the department of homeland security. well. well, i agree. i think he is right. the coast guard does not have enough people. but i felt to understand how taking the coast guard out of the department of homeland security solves that problem. if the idea is to take the coast guard out of the department and reduce the coast guard's missions, that would leave a gap within the department that resisted -- is still required

more people to accomplish the mission is the coast guard was doing. i am not really sure that they agree with that. in fact, i disagree. i would go further than that. i think the coast guard is probably the ultimate department of common security organization. and i think that because the coast guard is unique in the u.s. government, and as a pretty sure it is unique anywhere in the world. in that is simultaneously is a first responder organization, a law enforcement organization, and regulatory organization, and really imploringly here, one of the nation's five armed services and shares the department of defense's responsibility for defending the nation. all the bases you want a homeland security organization to touch. the only one within the department that does that is the u.s. coast guard. so it would seem to me that the answer is not to take the coast

guard out of the department of all men security but provide additional people for the coast guard. because i expect to get the question anyway, how many people do i think the coast guard should have? i do not think i could quote better source than thad allen as saying the coast guard could meaningfully employed 10,000 additional people. and programs. well, we talked about deepwater already, but in addition to its being capabilities is also a program. it is absolutely the most important program for the coast guard today. the future of the coast guard's ability to do missions and accomplish missions for the country is based in deepwater.

and also, i would like to talk a little bit about the program itself. the water has received a great deal of criticism, some of it warranted, and i think some of it not. and beyond that, many of the deepwater successes have not really been publicized. so let me just walked through what i think the key elements of the deepwater are an address that issue. the patrol boat problems were real, serious, and the initial efforts to replace the patrol boat fleet or failures. no question about it. what was not reported however is that the original plan to turn 110 ft control votes to 123 foot patrol boats was for 49 vessels, and that program was stopped after eight. it would have been stopped earlier than that, but you get into a situation of long lead time items. quite frankly, it took us awhile

to understand engineering issues involved. uav issue, the coast guard made an attempt to field a vertical uav. that attempt was halted when it just began to cost more money than the coast guard had. should the coast guard have tried to do the vertical uav? i can argue both sides of the question. perhaps not because it was really pushing the edges of technology, and typically that is not something the coast guard does. but there was no question there was a need for a vertical uav both in the navy in the coast guard, and the navy has been trying to field fires got for 10, 12 years now and have poured a great deal of money into the effort. so i have to think that at least the coast guard effort probably at its own technology and assistance to the navy program. even today, the coast guard is now working with the navy to evaluate fires doubt on coast

guard cutters. national security cover issues, structural issues, and some communications issues. they were real to a certain extent, but i think they were overblown. i do not think there has ever been a fleet of new ships, a first in class, that and not have some kind of minor issues involved. that is what these were evaluated by, the coast guard, relatively minor issues. part of the problem was that the model that talked about potential structural concerns that would limit the service life of a national security cover was a brand new model. it was later used to evaluate the existing fleet of whec's high endurance cutters. i endurance cutters would have only lasted 15 years according to that model, but they are well over 30 now. some questions about the model as well. let's talk about the deepwater successes. the a65 reengineer program, absolute total success.

the acquisition on schedule and on budget, a complete success. there were issues with the associated emissions system, but that is now a separate acquisition, and those problems of been resolved. the upgrade program and the age 65 of great program both complete successes. their programs to missionize his c-130 j's and modernize hc-130 h's, complete successes. certainly there were some failures of friend that were heavily criticized for publicized, but there was much less information provided on notable successes in the deepwater program. i will move on now and talk about programs. i would also like to talk about

-- let me make one other point first. if we are going to talk about the deep water program, i think the focus should not be on criticisms, but the focus should be on how to make it affordable and how to make it go faster. for example, there was a study noted is accelerating the program could save the birds of $4 billion and the industry has estimated the number is between 67 and 10% of the total cost that could be saved. i was very pleased earlier to hear maritime domain awareness mentioned. let me talk just a minute about that. the coast guard, and the international community, has made a great deal of progress in the ability to gain information and tractions greater than 300 gross times. but ships smaller than that, vessels smaller than that, would

not be a great deal of progress. earlier, i think we said the coast guard was able to track everything within 12 miles. that is kind of a misstatement. probably the vessels within 12 miles is for the coast guard has the biggest problem. the biggest lack of knowledge. there was initially part of our post-9/11 program, something called command 21. in the idea of command 21 was to upgrade existing vessel traffic systems and then implement vessel traffic systems similar to flag vessel traffic systems and upwards of 50 poorest the work considered to be the most critical in the nation, either economically or militarily. the word to the coastal radar surveillance which would help us with that 12-mile limit that we currently do not know all that much about, especially with small vessels.

i would just know that there has been 0 funding for command 21 for the past two years in that program is essentially dormant. quickly, i will talk about arctic policy. i think the admiral has done a terrific job of raising the issue, articulating the threats, the problems, but thus far, we've seen $130 million appropriated to attempt to overhaul and make serviceable a 30 + year-old ice break that had been in cold iron for the last three or four years. let me point out that i think there are few people in the u.s. are may be anywhere who understand that the united states is an arctic nation, and we are. that the infrastructure in the north slope of alaska is virtually nonexistent, so responding to any kind of

emergency event our problem in the arctic is going to be extraordinarily difficult. the only practical way to do it quickly is with an ice breaker. the potential to experience the kind of catastrophic emergency events in the arctic is increasing over time as we see commercial traffic in the ring cruise ship traffic increasing in that part of the world. the coast guard's total icebreaker fleet consists of three vessels. only two are currently servicing. the other thing to consider is the coastguard also has obligations for polar ice breaking in the act -- in the antarctic as well as the arctic. clearly, and sufficiently to meet our obligations in the emergency that might occur in the arctic. key takeaways. coast guard needs more people. the admiral says the number is 10,000.

i think that is a reasonable place to start. the coast guard needs deep water now. gio agrees that deep water acquisition criticisms have been largely fixed. deepwater needs to be accelerated by one ship a year when the requirement is for 33 ships, it can show you that the project is in chile will never be completed. and the coast guard needs a multi-year funding authority to make deep water affordable. again, savings between 6% and 10%. finally, the nation is to have an adult conversation and make a decision on the arctic question sooner rather than later. >> thank you very much. our next panelist is the former deputy assistant secretary of defense for homeland defense, overseeing policy issues involving the defense domains, national guard operational issues, domestic counter-

terrorism, and readiness exercises. he became the military assistant to the secretary of defense in july 2001 and later led a team of 25 kernels to baghdad to directly assist a coalition provision of 30 leadership and the final six month time span leading to the transfer of sovereignty. a graduate of west point. retired from active duty in 2000 time. here is a ph.d. in international relations from the university of south carolina and as a graduate of the war army college. >> thank you. i am kind of light entertainment after the three heavies' you just had. i like to thank herridge for having me here and thank you everyone for inviting me to do this. this form is very, very important, so wonderful venue to get a lot of issues out. this one on the maritime domain i do not think is important. i said that as a guide is that most of his life be there on the ground or jumping on their plans to get to the ground.

not on the water. when i became part of homeland of defense and found out one of the things i was in charge of as the maritime domain, it was a steep learning curve for me. one thing i found out was a very important information. the united states coast guard was one of the greatest assets this country has. i never wore the coast guard uniform, but i had to work with them a lot. they're the most flexible of the military services, and i say that with all due deference to all of my other buddies including my own in u.s. army special forces. there's nobody as flexible as the coast guard in getting a mission done. if they had not put the coast guard in the department of homeland security, the department of homeland security probably would have collapsed a long time ago. to pull them out would not only do a disservice to coast guard

but to that department into the nation. with due respect to the congressmen, that is a really, really bad idea. so the coast guard, when you see one, thank them because they're doing a lot of work for you all the time. maritime domain awareness and maritime domain in general frankly was the bane of my existence when i was part of that. one, because it took me the most time to learn. but two, i realized we had a lot of work to do. when i left after two years, i did not feel we had made enough progress in that arena. the good news is, on a day-to- day basis, there is a good process in place. if a maritime accident occurs, whatever one of the big operations center throughout our system gets it, there's a phone call made to a committee of 2005 to 2006 personnel. that was commander and captain

level people in the naval services and maritime services. they get together. and it has dod personnel, department of justice personnel, the department of common security, the intelligence community. it is a working level bunch of guys together, and it is called the motor process. the maritime operational thread response program. there are no flag officers are senior civilians involved. it is operators talking to one another. there's always one lawyer. there was the coastguard officer out on vessels, and when he gave his legal opinion, it was based in operational need. these guys make the decision as to how the situation should be dealt with, whether one organization or another will take it and run with it right then or whether it needs to be

kicked up to a higher level. you're not believe how many calls this group fields on a day-to-day basis. seven days a week, 24 hours a day, and they deal with probably about 98% of the incidents out there. the other ones they kick up in the bigger guys get involved in the site had to deal with it. the system works. you can say it is personality driven because all the people have really good folks working it. but i think all the different organizations get the fact that process is very important, and we make a real effort to only put our best folks involved in it. and it works. the bad news, you have already had a lot of it this morning. just the magnitude of this problem. the size of it doris pretty much every other domain as far as this threat factors. the problem is simple compared to the maritime problem. when i learned the question

about small boats, when i think of small boats, i am thinking of some man in a speedboat or maybe an inflatable boat with an outboard floater. it is everything that is 299 to ns or less. that is a pretty big ship. they're out there. nobody has to keep track of them. they do not have to file a flight plan. 300, you have to do that. when you look at one of these big maps of we have with their great technology, all it has is the 300 tons of boats out there, and it looks like a bunch of electronic boats all over the waters of the world. there are a lot of clubs on its that screen, and it does not have those small boats. the other aspect, which was not

touched on that much, was not just the clothes lines for the united states. they have to take care of all the rivers and lades and other stuff. i learned a lot about that because i did a presentation for another group on during a terrorist attack on the st. marie locks. and that is on the great lakes. the coast guard's domain in the department of homeland security domain. so it is just enormous. one of the speakers mentioned the number of contain no with those giant ships scare the heck out of you. they're like a tractor-trailer. i am used to clearing rooms. how do clear something like that if you think there's something that going on on that vessel? it is an enormous problem.

they touched on it. we had this swiss cheese model of. there is all these different screening things. all this stuff is on there. it is an imperfect system. but they are working there tells off to get the holes in the swiss cheese as small as they can get them to make it as difficult as possible for the bad guys to get through one of those holes or more importantly, they make it their operational risk assessment, the bad guys operational risk assessment, is such that it is not really worth it to them to try because there is such a good chance of them might get caught by one of these tripwires. i have been working homeland security issues from the higher level department of defense standpoint when i was up in the front office. but then when i was working directly with justice and with the department of homeland security.

we're never going to have perfect homeland security. never. all of us wish we could. all of us are working as hard to get it as good as it can get, but it is not ever going to be perfect. there will always be holes summer in that system. we need to understand that and support the organizations that are trying to minimize those holes. and we need to improve that awareness of what the bad guys might be doing every day. that is going to require some legislative changes and other authorities and things like that to allow the organizations to do their jobs more effectively. it is going to take the continued imagination of the operators and their superiors to make those systems work as well as they can. but it is never going to be perfect. and the american people need to understand that. their leaders need to not only understand it, but they need to articulate it for the american

public so they do not have an expectation that we have more capability than is humanly possible, frankly. two provoking ideas, hopefully for the q&a part, the one thing that think will improve greatly with this, and it was touched on briefly, but the use of uav's for homeland defense, security, for the maritime domain because of its size, i think is critical. we not only need to have that capability, but we need to equate it with the most advanced sensors that we can because they're not just looking for bad guy humans. they're looking for bad guy stuff. that is very difficult to do. that is one area i think we can work on. and to there is one of the speaker's earlier that talked about the fact that the big

thing we're looking for is the nuke on the shipper container. my old boss always used to use the tom clancy sum of all fears scenario of the new coming into the u.s. on a ship and how do we stop it? we're working on trying to find those things, the sensors, the scanning, all that stuff. but here is an issue. what do we do when we find it? when it is just off our coast. and the coast guard or one of our naval elements determine there's something setting off all the little sensors on that ship. what do we do with it. the answer used to be when we thought there is contraband, we would cool it into one of our boards and segregated. is a nuke. how segregated is it going to be? it is tough to inspect a ship full of containers when it is bobbing around out in the ocean. as big as those things are, the

ocean is bigger. we do not have any sort of capability to efficiently start plucking those containers of, looking for the one summer on the bottom of the big kids block pile of containers or that thing is going off and causing that sensor to go off. i do not have an answer to that. do we build an island? do we try to hire some other country to allow us to go there and do those inspections? that would be a tough deal to negotiate. i do not have a good answer, but that is something in the future, as we're looking at 2020, that we need to have the capability to do. and they're bad guys out there, and we're going to continue to try and bring stuff into this country. their holy grail is getting the nuke in here. our maritime supply chain is

critical to this country. if it's screwed up, even for a couple of days, it costs us a fortune. if it gets screwed up for an extended time span, it will put a real danger in our national standing and economy. we have to protect against that, but we have to give the people who protect us the capability to do it. on the tactical level, a budgetary level, but then on this higher technological level, we have to figure out, ok, it is kind of the dog that chases the bus. one of these days, we're going to catch the bus. and what are we going to do with it when we catch it? i have a special forces guy's thing, and using it in the middle of the ocean. that is not necessarily something the governments are going to agree with, nor do we necessarily want a device to go out in the ocean. we want to control the device. the leven out there for somebody else to do with it.

i will leave it with that, just saying this issue -- the people who do it pay lots of attention to it. the rest of the country, including our leaders, it is way under the radar, and it means not to be. it is a critical one for this country, and we've got to get our arms around it, and we have to do better than we are doing now. not through any lack of effort by the practitioners but because the magnitude of it is just so huge. >> thank you very much. same rules apply. we will open it up to questions. make sure we get a microphone to you before you began. as to gather your thoughts, i will throw out the first question. how, if at all, do you see the coastguard changing post deepwater verizon oil spill?

>> well, not an expert on drilling for oil a mile below the surface of the water, but i think i will answer that i may be paraphrasing the admiral when he gave his state of the coast guard message as it related to the fiscal year 2011 budget going forward. he said something, i believe, like this is going to require us to mandate for risk. and i think what he really meant what he was answering is we're going to incur greater risk, and it will be harder for us to manage. the reality is, i do not think there is a coast guard officer or commander that went through his career without managing risk every single day. that is part of being a multi- mission agency were you have to determine -- i have gone on flights. i have taken off in an airplane on a training flight and have been diverted to a search and rescue case. and on the way home, asked to

check of a possible pollution event. if somebody had to determine with the best use of the aircraft was in and what priority in order, and that is what we call managed risk in the coast guard. at some point, it is perfectly likely that there were other missions assembly did not get addressed because there were not sufficient numbers of resources. so as we see pressures to reduce the budget, i think admiral allen was exactly right. especially if we see the deepwater program strung out over the next 20 years or so. then it is going to be harder and harder for the coast guard to manage risk and the probabilities that we're not going to be able to do it successfully, the coast guard is not going to be able to do it successfully, are going to increase. i think i will leave it there. >> thank you. we will open it up for questions.

>> thank you. musselman from and the sea -- i am from an embassy could not want to thank the heritage foundation for this important topic and excellent panelists. there has been a lot of discussion today and many aspects mentioned regarding the maritime domain awareness. but one aspect that i would like to hear more about regarding your views on the current state as well as the future needs and prospects is the regional and international cooperation in that field. it is great to have your own assets in place and analysis in place, but it makes some sense to also get the information from your neighbors and from the probe because weird things can happen. in europe, there are many

initiatives currently in place to actually merge and share data that different countries and different agencies create or choir. for example, in the area that i am more familiar with, the baltic sea area, pretty much all countries in the area have signed a sort of mou to share the information, from coast guards from civilian agencies, and also the military. every country has their own discretion on how much they share. but it makes sense to get the early warnings from your neighbors. of course, the countries in europe are smaller, and the u.s. is big. so you might have early warnings, earlier than the others. >> i will start. it is absolutely key. the u.s. cannot do this alone.

if we try to do it alone, we will fail miserably. and they have not been doing it along. there's a huge amount of outrage from the department of common security. their homeland, but they have a lot of folks now living and working overseas to do these programs specifically. the department of defense, the u.s. navy has been involved, our policy people, the department of state. we recognize that it is an international problem. maritime domain awareness cannot be achieved by one nation, even if it is really big and really rich and has lots of assets. we have to have our friends and allies working together. and we are seeing a willingness to share information more readily once the different players, whether they be companies or countries, realize if they put some information in, they get a heck of a lot more information out that helps them do their jobs better. and some of the programs that

vhs has started have helped. the thing or if you participate in it, you get sort of a fast lane. it is like having your ez pass to get your stuff in. it makes good business sense. the more we can do that, the more we can make it worthwhile for players to cooperate to share information, and the better off we will all be. i saw more potential cooperation and less stovepipe benign the maritime domain awareness things that i did when i was in the government than almost any of the others. without it, everybody was sound. so yeah, we're trying to tap into the different regional exercises, different regional cooperative groups that are out there. we're doing a lot of bilateral things directly with national governments. but without it, the entire effort will fail. so you're right, it is an

absolutely critical piece to this whole process. >> i would just and that and point out, actually from almost day one, certainly that was the approach that the coast guard and customs and border protection took. i know the coast guard played a role in drafting the national transportation safety act, i believe it was november 2002, which essentially laid out a national protocols for airport security requirements and ship security requirements. and simultaneously to those protocols to the maritime organization and began negotiations in other similar type protocols excepted internationally, and they were. so especially, once again, for those vessels over 300 gross tons, we have some good protocols in place. i probably need to pay more attention now to those vessels under 300 gross tons.

i think that point has been made several times here, and i cannot agree more. >> next question. >> i do not have a question but perhaps a comment. one of our earlier speakers mentioned that an awful lot of the information in maritime domain and a lot of what goes on there, those supplies that are flying around your crt are commercial. an awful lot of information that is key, what we want to understand in maritime domain, belongs to industry. the efforts i have seen so far have failed to provide an incentive for industry to cooperate. governments cooperate readily. there's not much of an incentive, not much that industry gets back. so i would comment that as we continue to look at that problem, which i think is

important, it would be good to look at it from an industry perspective and find what values they can derive by getting something back. otherwise there will be no incentive to report. >> i do agree with you 100%. i struggle with this same issue because now i work for ibm and cybersecurity stuff, and it is exactly the same argument. it is mostly in the private sector, and they have a lot of the information. we have to find a way to encourage them to share. actually, the maritime area is probably much further along than it is on the cyber side. the big companies that are out there that do so much of the major shipping has seen the benefit of sharing information because they do get information back. there is much less debate as to what is useful and what can be shared and what cannot be shared. i think some of that is because the coast guard is kind of at the heart of it as opposed to the intelligence community being at the heart of it.

the coast guard, by its multi- faceted entity and a viewpoint, is a lot better at sharing stuff than other parts of our government. so there's more tendency to share that information, to share what an individual company might consider useful and worth while getting. is it perfect? no. do we need to find more incentives, make it more worthwhile for companies to share that information, to upgrade their own security? yeah, that is all part of the incentives stuff. frankly, that works a lot better than you either do this or else. that does not work very well with the commercial side. so we do have to find a lot more incentives to do that. >> i would just offer that, no disagreement, but many times it is not -- the fact that you have information does not necessarily get you where you

want to be because you have no way to validate the information. this issue of green lane said xl its containers through the system has been talked about a lot, but it does not really exist in any meaningful way. an example of that would be that there was an idea not long after 9/11 that if we could create a secure container and then if you can validate the loading of the container contained no threats, they could also validate that the container, any insurance are opening in the container could be detected, that would be a green line that would allow the contended go through. this must be really difficult problem because i know dhs has been working on container security standards for about nine years now, and we still do not have any that are published. that is despite the fact that there are a number of companies

out there who have pretty good systems in terms both of container tracking and sensors inside the containers that can detect changes in temperature, changes in light, any intrusion into the container down to about a 3 inch diameter hole. so i think that is something that i in the near future, we are really going to need to take a harder look at and encourage customers to publish those standards. >> thank you. next question was down here. >> i it just wanted to ask -- can you comment on the relationship between what is happening in alaska and -- [unintelligible] the development of the arctic.

you mention the relationship between the arctic developing -- [unintelligible] >> i do not know if i said the arctic was developing, but i did say there was increased traffic in the arctic. increased commercial traffic. both commercial and on cruise ships. one of my earlier assignments, i was the coast guard commander in the arctic. i mean, in alaska, which included the arctic waters. people ask what keeps you awake at night, and one of the things that kept me awake at night was the fact that i had cruise ships transiting throughout the state with between 2,000 and 4,000 people on board. i lived in juneau, alaska, the state capital in the third largest city in the state. the hospital there have 50 beds.

so how am i going to take care of the disaster that might involve a thousand people? if you transfer that disaster to the arctic, there is no doctor. if you're lucky, you have a physician's assistant there, and there are no hospitals. he might have a clinic with two or three beds. more importantly, if the event would take place 100 miles offshore, how are you going to get there? certainly, the alaska national guard, therefore is, and coast guard could scramble helicopters and aircraft. it takes a long time to shuttle that amount of people. you really need to be able to have some sort of a presence that you can launch a fairly immediately with enough size and capability that you can address the issue. another aspect of this is the fact that nobody has done the

charts in the arctic. we do not know where the bottom is. [laughs] so that is another issue that needs to be addressed if we are going to actually dramatically increase traffic in that part of the world. >> i am with the carlyle group. i appreciate heritage putting on this series. acknowledge the need for more funding to go to deep water to try to accelerate that. we have seen secretary gates lay out a number of potentially stride in actions to free up $100 billion to stabilize or boost procurement accounts to reduce the potential for dhs having similar types of initiatives to boost money or free up money that could go to dewater or come from some other aspect across government in this budget environment? >> well, since neither of us is

in government anymore, we can say these kinds of things. but yeah, the u.s. government system is not the most efficient in the world. i mean, it is just the reality. you are always going to be a defined, if you're willing to dig enough and willing to accept the political pain, you can find ways to save money or move money around. are people willing to pay that price and endure the pain? that remains to be seen. i applaud secretary gates' initiatives. secretary rumsfeld tried to do a few and did not have much success or not near as much as he wanted. i hope secretary gates has more success with it. there's a lot of fat in the american federal budget. that is the reality. but every bit of that fact is connected to somebody and something. and when you start cutting on a, it hurts somebody. so we have to assume we're

willing to do that. could dhs do the same thing? i am no expert in their budget, but i am unwilling to bet there is some fat in there that could be cut away. does that mean money is free to suddenly go somewhere else? no. there's probably just as many, if not more, gaps in the things that need to be doing. it is a tough one. but it would be pretty easy to say that there is that out there and we can cut it and save money. exactly where, i do not know. exactly what the cost in pain would be, it depends on where you're sitting. >> i think it could certainly be done, but i have not seen any indication that anyone is actively doing it. for example, the president's fiscal year 2011 budget going forward, proposed to cut 1100 people, 1100 people from the

coast guard. taking helicopters out of service. retired aircraft faster than we are bringing on new aircraft. i think they're also plans to cut at least two other maritime safety and security teams. the coast guard's 2011 budget is with the of play. i think the guinness for the coast guard is that congress has seen fit to restore most if not all of those cuts. there is another thing to think about. much of the funding and the department of: security is event-driven. there is a reason why airport security, aviation security, gets the money it does. just for example, a very, very late in the year, $2 billion was added to the department of homeland security budget as a result of the christmas day bomber. the coast guard did not get one

nickel of that money. >> we have a question over here. >> you mentioned about what we would do if we haven't to find a nuclear device aboard a ship. with an answer be to construct a series of terminals, such as for example sunny point marine terminal in southport, north carolina that handles munitions, construct those type of facilities that a ship could be brought to an safely unloaded and the nuclear device defused. will that be a possible answer to that particular question? >> certainly, that would be one of the types of options we would look at. my guess is despite the benefit of getting jobs and a new mission, i do not know how many american port cities are going

to say we are the place this and all the potential nukies to be the fittest. sometimes it is not always like in the movies or they get that red wire before the clock goes out. clearly would be one of the options that people are looking at. no one has been willing to sign up to do that yet. and i understand that, frankly. but those are some of the things we would have to look at. but remember, it is not always necessarily a little one where you put some sort of protective thing in to minimize the damage. we do not know how big this thing might be when it comes. they're pretty nasty things when they go off. we have run enough exercises looking at a nuclear device is going off in american cities and stuff like that, and it is some scary numbers when you start to lay out what might happen if that occurs. that is why it is such a big concern for all the people involved in this process and why

people stay up late at night worrying about it. we do not have all the answers yet. we did not in the last administration. they do not in this administration. but i can tell you everybody's working real hard to figure out the best way to deal with it. >> we have about three minutes. this might be the last question unless we have time for more. >> based on what we have heard here about the nuke issue and how it might be disposed of, do think perhaps more efforts should be put on looking at were said in a vise or components for such a device might come from? let's face it, they're not all the many places around the world where this kind of thing would happen. in the last year two, was involved in an interagency effort to look at, for example,

what one might do with the loose nukes are fissile material coming out of the former soviet union. we know that after the collapse -- let's put it this way, the security around nuclear facilities was not too good in a lot of areas. thought was given to how that might affect the movement of nuclear material theft. more recently, i think people are looking at it in another likely place, pakistan. is it perhaps better to put more of an emphasis on the end best overseas before it even gets to our shores? as opposed to how to deal with the ports. >> that is probably the intelligence community's number one priority, trying to stop people from doing this stuff.

the lights and buzzers that go off around the world in the intelligence world, whenever anybody moves any of the components that could possibly be used for a device like that is incredible. so yeah, it is being done now. but that is the number-one priority for the entire intelligence community and for all of our allies and friends around the world. but still, there's always that ability to do something under the wires, what we still need these clothes end detection capabilities and inspection rushing speed up it is not an either-or. we have to do all those things if we are really going to be able to say to the american people that we did everything we can do to try and protect you. the american people put us and a pretty high standard, by the way, like perfect. >> thank you very much to our panelists. c-s[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] [applause] [applause]