Hearing of the Strategic Forces Subcommittee of the House Armed Services Committee - Fiscal Year 2010 National Defense Authorization Budget Request for Department of Energy National Security Programs

HEARING OF THE STRATEGIC FORCES SUBCOMMITTEE OF THE HOUSE ARMED SERVICES COMMITTEE

SUBJECT: FISCAL YEAR 2010 NATIONAL DEFENSE AUTHORIZATION BUDGET REQUEST FOR DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

CHAIRED BY: REP. ELLEN O. TAUSCHER (D-CA)

WITNESSES: THOMAS P. D'AGOSTINO, ADMINISTRATOR, NATIONAL NUCLEAR SECURITY ADMINISTRATION; INES R. TRIAY, ASSISTANT SECRETARY FOR ENVIRONMENTAL MANAGEMENT (ACTING), U.S. DEPARTMENT OF ENERGY; GLENN S. PODONSKY, CHIEF HEALTH, SAFETY, AND SECURITY OFFICER, U.S. DEPARTMENT OF ENERGY.

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REP. TAUSCHER: Good afternoon, this hearing of the Subcommittee on Strategic Forces will come to order. Today we will consider the Department of Energy Fiscal Year 2010 Budget Request for the Atomic Energy Defense Activities.

Let me begin by welcoming our distinguished witnesses, the Honorable Tom D'Agostino, administrator of the National Nuclear Security Administration; Dr. Ines Triay, acting assistant secretary for Environmental Management, Department of Energy; and Mr. Glenn Podonsky, chief health, safety, and security officer for the Department of Energy.

I want to thank each of you for being here today. I also want to welcome to the hearing, the newest member of the subcommittee, Mr. Murphy of New York, who is not here, but we welcome him anyhow. And we are delighted that he is going to be on this subcommittee.

The Fiscal Year 2010 budget request for the Department of Energy is slightly more than $26 billion. The Armed Services Committee annually authorizes about two-thirds of this total for the atomic energy defense activities. For Fiscal Year 2010, the request of $16.4 billion for these programs is an increase of about $147.9 million over the Fiscal Year 2009 appropriations.

This committee is a strong supporter of the critical missions embodied in your respective program areas; maintaining and ensuring the reliability, safety, and security of our nuclear deterrent; conducting the scientific research, engineering, and production activities necessary to support that deterrent. Keeping our nuclear weapons and the weapons complex safe from physical, cyber, and other threats; leading the government's international nuclear non- proliferation efforts, and cleaning up the environmental legacy work -- of decades of nuclear stockpile work.

We are eager to hear testimony for the Fiscal Year 2010 budget request. I am especially interested in your thoughts about the following issues. First, does the budget adequately fund the Stockpile Stewardship Program? As the congressional commission on the strategic posture of the United States just wrote in its final report, the Stockpile Stewardship Program has been, and I quote, "remarkably successful."

Remarkably successful, but it is -- but its continued success is not something we can take for granted. With world class experimental tools like the National Ignition Facility, the DARHT Facility, and the Z-Machine now available to the NNSA, the stewardship program is poised for even greater achievements.

But for that to happen we must continue to sustain and strengthen the stewardship program. That means supporting both the scientific tools and advanced computing capabilities that are coming online as well as the world class scientists and engineers that use these tools to run the stewardship program. In this context, the committee needs to know whether the budget adequately funds the exercise of these physical and intellectual capabilities.

Second; and this is a question I ask year after year. Does the budget properly balance various safety and security priorities? What impact will the new graded security protection strategy have on your security investment strategy?

And third, does the budget for environmental management support the numerous commitments the federal government has made? With the approval of more than $5 billion in defense environmental clean-up funds in the 2009 stimulus package, can the department successfully manage three years' worth of funding in two years?

Finally, this committee continues to be concerned about the relationship between plans for consolidation of special nuclear materials and another national security activities including the stockpile stewardship, complex modernization, non-proliferation, and environmental clean-up.

I hope that you can shed new light on the efforts to coordinate material consolidation and disposition among the stakeholder offices within the department. These are the concerns we hope you will address in your statements and during your discussion that will follow your testimony.

Before I turn to our ranking member, the distinguished gentleman from Ohio let me welcome our newest member. We are happy to have Congressman Murphy with us. You bring a special kind of background as a former investment banker -- to a former investment banker -- business that is now no longer in existence by and large. I welcome you to the committee. It is a very, very interesting committee and we are happy to have you along, Mr. Murphy. Thank you for being here.

And now I would like to turn to my ranking member, the distinguished gentleman from Ohio, Mr. Turner, for any comments he would like to make.

REP. MICHAEL TURNER (R-OH): Thank you, Madame Chairman. I want to acknowledge that we have our chairman with us pending her confirmation by the Senate to an appointment to the State Department, and we are very glad to have her continued leadership, while we are awaiting that confirmation.

REP. TAUSCHER: Thank you.

REP. TURNER: I'm told that our opening statements will somewhat echo common themes. I think that shows the bipartisan concern that you have on this committee for this issue. And I'd also like to refer to -- I welcome Scott Murphy to the committee. And we look forward to your added thoughts on what really is an important issue for national security.

I would like to welcome back Mr. D'Agostino and Mr. Podonsky and extend a warm welcome to Dr. Triay who -- this is her first appearance before the subcommittee. As I look at this year's atomic energy defense activities' budget request, I can't help but think that we are in a state of treading water.

The science and engineering campaigns are stagnated. Key decisions on warhead refurbishment are avoided.

And a significant number of construction projects are halted. We understand that many NNSA program decisions are on hold, pending the completion of the Nuclear Posture Review, the NPR.

This review and the stockpile and infrastructure decisions that follow cannot happen soon enough. Earlier this year, the commander of the U.S. Strategic Command testified, quote, "The most urgent concerns for today's nuclear enterprise lie with our aging stockpile, infrastructure, and human capital."

The chairman of the Bipartisan Strategic Posture Commission, Dr. William Perry, who appeared before this committee last week, stated the key to maintain a credible, safe, secure, and reliable nuclear deterrent rests with, quote, "robust, healthy, vigorous weapons laboratories," a "strong Stewardship Program," and an "effective life extension program."

However, the commission observed two worrisome trends. The intellectual infrastructure is in serious trouble and lab funding is likely to be reduced by 20 to 30 percent in the out-years.

The Fiscal Year 2010 budget request substantiates these concerns. There is a net decrease in NNSA's science and engineering campaigns. Four of the five campaigns experienced zero growth. The fifth campaign readiness decreases by 38 percent.

In the future years' nuclear security program, these campaigns show decreases from 1 to 20 percent in a given year. Has the NNSA thought about these trends and their implications? How does NNSA continue to meet the demands of the Stockpile Stewardship Program with fewer people and decreasing scientific resources?

Furthermore, there is a serious need to transform the physical infrastructure. The commission recognized this and recommended that Congress fund NNSA's complex transformation plan.

However, this year's budget request halts a significant amount of construction activities accounting for a $111 million decrease in readiness in technical base and facilities. And top commission priorities, the Chemistry and Metallurgy Research Replacement, CMRR facility, at Los Alamos, and Uranium Processing Facility, UPF, at Y- 12, are only modestly funded.

On the part of some, there appears to be a perception that if the stockpile goes down, we don't need these facilities, and perhaps the NNSA budget can go down as well.

Mr. D'Agostino, I would like to have your thoughts on this. And in addition, though the Fiscal Year 2010 budget request terminates the Reliable Replacement Warhead, RRW, and avoids making substantial decisions on the stockpile, I would like to solicit your thoughts on how NNSA is approaching its modernization, or as Dr. Schlesinger prefers to call it, "refurbishment."

The commission concluded that the current warhead life extension programs could not be counted on indefinitely. They recommend that decisions about weapon modernization refurbishment be made on a case- by-case basis that included consideration of a spectrum of options from component replacement to new design.

Lastly, it strikes me that balance is the major challenge for NNSA in the years ahead; balancing recapitalization and modernization of the infrastructure, human capital, and weapons systems, all within an assumed flat or declining budget scenario.

Shifting to other areas of the Department of Energy, Dr. Triay, I am concerned about the department's nuclear material consolidation storage plants. Can you update us on these plans and also discuss the implications of the president's decision to terminate the Yucca Mountain Repository?

And finally, Mr. Podonsky, physical security, and the safe transport of our nuclear weapons and materials are top priorities for me. There is no margin for error. In the past year, the department has replaced its design basis threat security policy with the graded security protection policy. What drove this change in policy and what is the status of its implementation?

The budget and budget strategy presented before us today may work for a single year, but it is not sustainable unless the placeholders we see in out-year funding are significantly changed based on the outcome of the nuclear posture review. We risk losing our world-class intellectual talent and endangering our ability to successfully maintain and certify the stockpile.

I would like to thank the chairman for calling this important hearing and thank you for your leadership and service. I look forward to the testimony today.

REP. TAUSCHER: Thank you very much, Mr. Turner. We will begin with Mr. D'Agostino. Since we have received your prepared statement, and it has been entered into the record, I would like you to please, have you summarize if you can. We would welcome that.

And let me also say that while the Armed Services Committee handles NNSA non-proliferation programs at the full committee level, Chairman Skelton has agreed again this year to allow us to address the budget request for these programs as part of the hearing. So if you want to make some remarks about the Fiscal Year 2010 request for defense nuclear non-proliferation, we would welcome that too.

I just want to let the members know that we are expecting a series of three votes in a few minutes. At that time, we will try to continue as best we can with our summarization of your testimony, and then we will take about a half-an-hour break, and go back to the agenda as we have it. Mr. D'Agostino, the floor is yours.

MR. D'AGOSTINO: Okay. Thank you, Madame Chair, and members of the subcommittee. I'm Tom D'Agostino, the administrator for the NNSA. I'm accompanied here by Brigadier General Garrett Harencak who is the -- essentially running the defense programs for me and Ken Baker as well. They are seated behind me over my left shoulder. And I'm honored to have them here helping me out, not just here today, but running the programs with me with -- it's a very exciting year for us.

And we appreciate the opportunity to appear before the subcommittee and sincerely thank the subcommittee's support for our programs. We think they are quite important. The NNSA is critical to ensuring the security of the United States and its allies. The president's Fiscal Year 2010 budget request for the NNSA is $9.9 billion. It's an increase of 8.9 percent over the FY 2009 appropriated level.

The budget request provides funding to enable the NNSA to leverage science, to promote U.S. national security objectives. NNSA programs are on the front lines of the following national security endeavors. Maintaining a safe, secure, and reliable stockpile and the capabilities that support the stockpile; accelerating and expanding our efforts here and around the world to reduce the global threat imposed by nuclear terrorism, non-proliferation, and unsecured nuclear materials. Providing the United States Navy with safe military- effective nuclear propulsion and supporting U.S. leadership in science and technology.

The president has initiated both steps, put an end to cold war thinking, to lead to a new international effort to enhance global security. The FY 2010 president's budget request is the first step towards implementation of the strategy. For our non-proliferation programs, funding increases are requested to expand and respond quickly, to opportunities to reduce global nuclear threats.

Increases are also requested in the naval reactors propulsion program to begin development of reaction propulsion systems for the next-generation submarine along with other activities. The programs in the weapons activities appropriation budget strategy is to maintain capabilities and activities at the current level until the strategic direction is established in the upcoming nuclear posture review.

In President Obama's speech in Prague, he indicated his commitment to maintaining a safe, secure, and reliable stockpile; of pursuing a vision of a world free from the threat of nuclear weapons. The NNSA maintains the unique knowledge, capabilities, and skills that are critical to achieving both of these objectives, which in many case some people think are opposing -- quite the contrary, they're complementary to each other.

Our non-proliferation programs are focused on securing the key ingredients, the nuclear weapons.

And that is weapons useable materials and the related equipment and technologies. Supporting NNSA's efforts include the elimination of weapons grade plutonium production program, which has been working with Russia to shut down Russia's plutonium production reactors, and the Fissile Material Disposition Program which will provide a disposition pathway to eliminate at least 34 metric tons each for the United States and Russia of weapons grade plutonium.

The NNSA is the recognized leader on these and other non- proliferation initiatives to prevent proliferators and terrorists from acquiring nuclear weapon. This includes our activities to secure and reduce weapon's grade nuclear materials at sites worldwide, but also NNSA's efforts to detect and intercept weapons of mass destruction related materials that are in transit.

In addition, we also work in FY 2010 to support the president's call to strengthen the non-proliferation treaty, support the international atomic energy agency, and strengthen international safeguards and technologies that support inspections that are so important to our future -- safer future. To implement this comprehensive non-proliferation strategy, we will expand our cooperation with Russia, pursue new partnerships, and work to secure vulnerable nuclear material around the world within four years.

NNSA's global threat reduction program and the international material protection and cooperation programs will have a major role in this four-year plan. The NNSA is actively participating in our national debate over our nations' nuclear security and non- proliferation strategic framework. This debate is not just about warheads and the size of our stockpiles.

It includes the inescapable obligation to transform our cold war weapons -- nuclear weapons complex into a 21st century nuclear security enterprise that retains the capabilities necessary to meet emerging national security threats.

In a future with fewer warheads, no nuclear tests, tighter controls on weapons systems, and weapons materials worldwide, and an effective counteraction of nuclear terrorist threats, the NNSA science and technology capabilities will play an ever-increasing role to address these challenges.

We must ensure that our evolving strategic posture and our nuclear stockpile, non-proliferation, arms control, and counter terrorism programs are melded together into a comprehensive strategy that protects America and its allies.

The Department of Defense has initiated the nuclear posture review which is scheduled culminate in a report to Congress in early Fiscal Year 2010. We are actively participating in this review and all of the aspects related to nuclear security.

As you are well aware, the commission on the strategic posture was established by this committee and affected by Congress to identify the basic principles for reestablishing the national consensus on a strategic policy. The commission has examined the role of deterrents in the 21st century and assessed the role of weapons in our national security strategy.

The final report was issued; I have a copy here and it includes a variety of recommendations. I'm familiar with the report, and given the breadth and the scope of the report, the secretary and I are actively taking a look at the findings and recommendations and are coming to some conclusions. We haven't quite finished yet, and I expect to have an opportunity to maybe to discuss some of those things today.

As you know, we've made tremendous progress in reducing the size of the stockpile. A stockpile would be less than one-quarter of what it was at the end of the cold war. The smallest stockpile in 50 years. These reductions send the right message to the rest of the world that the U.S. is committed to Article 6 of non-proliferation treaty, which will help create positive momentum into the 2010 review conference that we will be having next year.

Each year since this program -- the stewardship program was developed; we have been able to certify the safety, the security, and the reliability of the stockpile with no need to conduct an underground test. Since 1993, we have acquired a whole suite of capabilities, tools or facilities if you will, that are necessary to maintain this effective stockpile. And most recently, the national admission facility has come online. We are applying these tools to help solve current stockpile reliability issues.

There are challenges though, and the main challenge for our program for the future would really be to make effective use of these tools and capabilities. On completion of the nuclear posture review, we will prepare a five-year plan that recapitalizes our infrastructure, retains our scientific technology and engineering capability and expertise, and really makes full use of the extra amount (ph) and super computing capabilities that we've invested in so far over the last ten years.

Madame Chairman, numerous external reviews have identified the fragile state of our expertise and capabilities that reside in our people. It's very clear to me, people are most important resource.

We need to retain those skills and capabilities and develop the next generation of scientists and engineers and technicians, needed for homework in non-proliferation, needed for homework in nuclear counterterrorism, and forensics, and needed for homework to maintain our deterrent.

We also need the skills -- these skilled people for a foreseeable future, especially when we consider a world potentially without underground testing. Madame Chairman, I conclude my statement. I will be pleased to take your questions. I do have your comments Mr. Turner and Madame Chair and I will be glad to address them in the question -- Q and A part of the hearing.

REP. TAUSCHER: Thank you, Tom.

Dr. Triay, welcome. I believe this is your first appearance before the subcommittee and we welcome you. And the floor is yours.

MS. TRIAY: Thank you. Chairman Tauscher, Congressman Turner, and members of the subcommittee, I am pleased to be here today and to address your questions regarding the Office of Environmental Management Fiscal Year 2010 budget request.

The Office of the Environmental Management's mission is to complete the environmental clean up of the legacy left by the Cold War in a safe, secure, and compliant manner. Our goal is to complete this mission by keeping our projects on schedule and within budget. We will continue to pro-actively pursue our cleanup objectives and our regulatory compliance commitments. At the same time, we will continue to seek out sound business practices in order to maximize cleanup progress.

We put forward this effort to achieve the greatest environmental benefit by maximizing risk reduction, while being good stewards of the taxpayers' money. To best achieve the Office of Environmental Management's cleanup mission, we have prioritized the cleanup activities that are conducted at the site.

The high priority cleanup activities include, requirements necessary to maintain a safe and secure posture at each site, radioactive tank waste stabilization, treatment, and disposal. Spent nuclear fuel storage, receipt, and disposition, and special nuclear material consolidation, processing, and disposition.

These activities represent the highest risks that the environmental management office faces, and make up a large portion of our work Fiscal Year 2010 budget request. In more specific terms, we have made substantial progress in the areas of consolidating surplus special nuclear materials and stabilizing tank waste.

Today, the Office of Environmental Management has eliminated 11 of the 13 highly secure nuclear material locations. At the Hanford site, the Office of Environmental Management has transferred pumpable radioactive liquid waste from leaking underground single-shell tanks to more durable double-shell tanks. Parallel to that effort, we are also pursuing tank clean-outs at Idaho, Hanford, at the Savannah River site.

In addition, the Office of Environmental Management has nearly completed the transfer of 10 nuclear fuels from wet to dry storage. Many of these storage areas were aging basins filled with radioactive water. At the Idaho National laboratory, these basins were located over a groundwater aquifer and at Hanford these basins were located within a quarter mile of the Columbia River.

We continue to move forward with the design, construction, and eventual operation of three large tanks waste processing plants.

These processing plants will treat approximately 88 million gallons of radioactive tank waste. The estimated total cost for construction of these three plants is $4.3 billion. The Office of Environmental Management remains devoted to building the capability for tank waste treatment and disposition.

The Office of Environmental Management Fiscal Year 2010 budget request fully funds these high priority activities. We are also focusing on technology development in our Fiscal Year 2010 budget request. Technology development is instrumental in reducing the technical uncertainties that comes with the construction and operating of these unique cleanup facilities.

Because of these challenges, we have increased technology development and deployment funding to a $105 million in Fiscal Year 2010. EM will target science and technology investments on solving challenges associated with tank waste management and high-risk ground water remediation.

We are confidant that with an increase in funding, the environmental management program will be better positioned to address science and technology uncertainties associated with these activities. The Office of Environmental Management will also continue to seek ways to maximize footprint reduction efforts.

Footprint reduction activities include the contamination and the commissioning of excess facilities, source and groundwater remediation, and solid waste disposition. Each of these activities has proven technologies and established regulatory framework. Footprint reduction makes laboratory facilities in the Department of Energy and other site infrastructure available for beneficial reuse.

In Fiscal Year 2010, many of the footprint reduction activities would have been deferred to fund higher risk activities. However, because of the American Recovery and Reinvestment Act funding provided by Congress, the Office of Environmental Management was able to fund many of these footprint reduction activities.

Now that we have outlined our program priorities, I would like to discuss some key cleanup strategies. The Office of Environmental Management continues to have a strong commitment to safety first, the safety of our workers, the public, and the environment. Safe operations and cleanup is our overarching goal with every activity that is commenced.

At the committees are aware, the Office of Environmental Management has come under considerable criticism for the execution of its projects. Aggressive efforts are underway to transform the environmental management programs into a "best-in-class" project management organization. We will strengthen our project management capability and improve the skill set of our project management teams.

This project request supports $1,674 full-time equivalent employees to assist in this effort. We have added over 300 mission critical hires since 2007, to support both the best-in-class project management initiatives and align that program with the human capital recommendations made by the National Academy of Public Administration.

With these plan improvements in project management and acquisition, the environmental management program moving foreword, will identify and manage the programmatic risks associated with start of construction during the early stages of the design phase. We will also integrate safety early in the design phases of all projects.

We currently, are instituting construction project reviews that are modeled after the reviews performed by the departments office of science that have had great success in delivering projects on cost and schedule. These independent reviews will examine all detailed aspects of our construction projects.

This process will include expert knowledge and experience of world class engineers, scientists, and managers. With all of these improvements, we are confident that the environmental management program can succeed in its mission.

Chairman Tauscher, Congressman Turner, and members of the subcommittee, I look forward to addressing your questions. And on a very personal note, within the Department of Energy, we really thank Chairman Tauscher; your leadership has made all the difference for our program.

REP. TAUSCHER: Thank you very much. I am aided by my fabulous colleagues and great staff, so -- no one ever does anything alone, as you so often know. Dr. Triay, thank you for your testimony.

Mr. Podonsky, you are a veteran of appearing before the subcommittee, and we want to welcome you back. The floor is yours. We've been called for a vote, so if you could limit your time to about five minutes, then we will take the votes. Thank you. The floor is yours.

MR. PODONSKY: Thank you, Chairman Tauscher, Ranking Member Turner, and members of the subcommittee for inviting me to testify today on the Fiscal Year 2010 budget with the Office of Health, Safety, and Security.

As you know, we are the department's central organization responsible for the health, safety, security, and environment regarding policy, technical assistance, training and department-wide enforcement, and independent oversight.

The brevity of my oral statement is not a reflection of our responsibilities, but a reflection of your alluded time. So I will simply conclude and say that I look forward to answering the questions that you pose in your opening statements, and we look forward to continued support from the Congress, the department, and our stakeholders, so that we can continue to strengthen the department's health, safety and security posture. Thank you.

REP. TAUSCHER: That's a true veteran, thank you. Colleagues we have three votes. It will take about half an hour on the clock, but 40 minutes in real time, so we will adjourn for about 40 minutes. We will be back as soon as we can. And we thank the witnesses for their forbearance. And this subcommittee is temporarily adjourned.

(Sounds gavel)

(Recess)

REP. TAUSCHER: The hearing will resume. I'm going to begin our questions and our discussion by going back to the fine (ph) state of the Stockpile Stewardship Program. The strategic posture commission discussed at some length the future of the nuclear security complex and the laboratories in particular. The commission noted that many of the best veteran scientists at the labs are taking early retirements, and many younger scientists are seeking employment elsewhere.

The commission noticed the problem of maintaining the intellectual expertise necessary to execute the Stockpile Stewardship Program is critical, aggravated by budget pressures. Pressures that are made worse by the need to reduce spending on science and engineering in order to fund improvements in the physical infrastructure of the complex.

But of a greatest concern to me, the commission also found that and I quote, "The NNSA expects to reduce the number of laboratory personnel funded by the weapons program by 20 to 30 percent. It is doing so without any understanding of what types of expertise to seek or to retain or reduce? It does not know whether the results will be a weapons program too large or too small, to its required purposes." Close quote.

Then with a remarkable flair for the understatement, the commission said, and I quote, "This poses several risks." And Mr. D'Agostino, I want to know whether the NNSA has conducted any analysis of the staff reductions that have taken place at the nuclear security laboratories over the last two years, which total than 4,000 at Livermore, Los Alamos, and Maryland.

And secondly, do you plan, and does the FY 2010 budget request entail any additional staff reductions? And thirdly, what steps does the NNSA plan to take to ensure that we retain the intellectual capability needed to continue the success of the Stockpile Stewardship Program?

MR. D'AGOSTINO: Okay, I'll answer your questions in order. Maybe I'll start off with a comment, though I agreed in large part with most of the commission's report I would argue with the details of the statement of a 20 percent -- 20 percent to 25 percent reduction in the weapons activities account is a true statement.

We think one of our strategies -- we have actually four main strategies; change the stockpile, change the infrastructure, change the way we do business, and support the science and technology ways. So those two middle strategies, change the infrastructure, and change the way we do business, mean basically do things more efficiently.

And we think we can drive out, what I recall, kind of, efficiencies that are built up over 30 to 40 years of the program. And in fact as the laboratories have -- rightfully, they have come down 4,000 over the last couple of years and that's a very significant number.

But the majority of those changes happened in areas of what I would call administrative technical support, operations support. In a new infrastructure, you don't need as many maintainers. Right now, we have a lot of people taking care of Cold War facilities and that's very expensive and we want to get out of that business.

So in effect, this 4,000 reduction was an opportunity and Director Miller and Anastasio took advantage of to shape the workforce for the future. So to answer your question, yes, we're very aware of -- we did do a study. We took a look at the skills that we lost.

It's never good to lose any skill, but where our focus was is to try to retain the skills that matter the most to the core program. Second point is that hasn't -- that unfortunately 4,000 people is a significant part of the workforce and it sends a signal.

And it's -- clearly hits morale, and that's an unfortunate part of reshaping the workforces. There is kind of a spin-off effect and we have lost a few folks. The 2010 budget plan is specifically crafted to avoid major changes in workforce.

The -- as Mr. Turner correctly pointed out, there are a lot of flat line numbers when you look at our program, particularly, into the out-years. I don't like the idea of having flat line numbers in the out-years, because it sends a signal to your workforce that the country thinks this is just to keep on -- this is a flat program and it's got no future.

But in reality, we made some changes in the last few months to actually add money to science and technologies to insure that we didn't take any major reductions in that area. So our focus ultimately with the weapons activities account, which includes support for not just warheads, but quite frankly nuclear counterterrorism and incident response, and things that we think are very important for the future, specifically, crafted to avoid write-offs.

Your last question was that how do we put together a program to retain people?

REP. TAUSCHER: Right.

MR. D'AGOSTINO: And I think it's done probably in a couple of fashions. One is obviously, we need -- we have elements of our program to fill the pipeline of young folks that are going to come in behind and get trained. And there is a program right now that we have to get folks from historical black colleges and universities and other minority institutions as well as big schools. One from Washington, but the focus is to get those folks out into the labs.

Each laboratory has their own undergraduate, graduate degree programs to bring people in. I think the best signal to send, quite frankly, will come in the form of, you know, a report like this, the Strategic Posture Commission report whose ultimate aim is to drive this national consensus on where our programs are going out in the future.

And as our scientists and engineers look at these programs, they listen to these testimonies, they read the transcripts, they read the conference report language, and they want to get a sense if the country cares about this program. I care passionately about it. They need to see it in financial terms. They need to see it in the words from the administration. And they need to see it in the words from the Congress.

I think we're on the way to turning the corner and getting that national consensus. In my view that will send one of the best signals to getting the workforce confident that they're -- we are on the right track.

REP. TAUSCHER: Well, I agree with you. I think that the -- one of my first meetings with the Strategic Posture Commission, I asked them to have -- provide us with a narrative, not only with results of their hard work, but to provide us with a narrative and I asked them to make it readable and have it produced like the 9/11 book was.

And I think that what that book does, is provide every American with an opportunity to understand where the investment capital was going and I --

MR. D'AGOSTINO: Absolutely.

REP. TAUSCHER: -- think it also creates a raison d'etre for the scientific community, and the innovative community, the technology community --

MR. D'AGOSTINO: Right.

REP. TAUSCHER: -- the academic community to see that there is a big future for folks that want to go into this line of work and that not only are they going to get rewarded as everyone does, commensurate with their hard work, but this is a very patriotic way to serve your country.

MR. D'AGOSTINO: Right.

REP. TAUSCHER: I have one more question. Dr. Triay, I would like to ask about the office's handling of the funding provided for the Defense environmental cleanup through the stimulus, basically the American Recovery and Reinvestment Act. In addition to the ($)5.7 billion appropriated for the Defense environmental cleanup for Fiscal 2009, the stimulus package provided ($)5.1 billion. The request for these activities for Fiscal 2010 is ($)5.5 billion.

This is essentially three years' worth of funding in two years. First of all, do you anticipate any challenges associated with signing the contract or work force to carry the recovery act work without detracting from EM's program baseline activities?

And second, will you be able to obligate the recovery act funding within two years and expend it within five years as required by law?

MS. TRIAY: Thank you for the opportunity to talk about the recovery act funding for the environmental management program. We selected the portfolio of the recovery act in a very careful manner. Our portfolio is geared towards reducing the footprint of the environmental management legacy cleanup complex.

And in particular, disposition of solid waste, decontamination, and decommissioning, and demolition of excess facilities, and in addition to that dealing with soil and groundwater remediation.

The reason we did that is because we wanted to actually maximize the jobs, while at the same time maximizing the cleanup progress that we can make. And these areas have proven technologies, have an established regulatory framework.

The contract vehicles are in place and the environmental management program, even though we have had issues associated mainly with our construction project performance management, in these areas associated with footprint reduction, we have had a proven track record of good performance.

In addition to that, we have demonstrated that we can get great economies of scale and a substantial return on investment. In 2005, the environmental management program had an annual budget of $7.3 billion, seems too -- sounds (inaudible) -- our annual budget has not exceeded essentially ($)6 billion.

So the Recovery Act funding actually addresses some deferred activities in this area associated with footprint reduction. (Inaudible) -- funds and under-funded contracts that we already had for these three areas, and it improves their compliance posture of the environmental management complex.

In addition to that, it deals with some of the high risk activities associated with the excess facilities, not only the environmental management program but in NNSA, in science, and in nuclear energy.

In January of 2009, the environmental management program was required by Congress to send progress report of the cleanup progress. And in that report and in a previous report we delineated that there are 340 excess facilities and materials in NNSA science, and nuclear energy that were not part of the environmental management portfolio that would increase the lifecycle or cost of the environmental management program by ($)3 (billion) to $9 billion.

So the recovery act funding has not only assisted us in dealing with those deferred activities already in the EM portfolio, but also deal with some of the high risk excess facilities in other programs, in particular for instance in Y-12.

As you know there has been significant issue with respect to the deterioration of some of those facilities and this -- substantial amount of this funding is utilized for programs in addition to EM.

With respect to your question about whether we were going to utilize the entire five years that the recovery act delineates, you know for execution of this program, our target, our goal is to obligate the funds by the end of 2009. And finish our portion of the recovery act activities by the end of 2011; that's our goal. And the reason for that is again, because we wanted to maximize the jobs that would be created.

Chairman Tauscher, I have to tell you that at Oak Ridge, Tennessee, Washington State, South Carolina, when we have job fairs, we have on the order of 5 to 10 times the number of individuals showing up for jobs, as the jobs that we have to give out.

The environmental management program has very rigorous training processes to train workers that were previously construction workers; a tool to work in decontamination and decommissioning using very rigorous processes for handling radioactivity.

So we are confident that we can find the work force and that we can train it appropriately and we can do this work safely.

REP. TAUSCHER: Thank you, Dr. Triay.

I have some questions for Glenn Podonsky, but I am going to wait until the second round. I'm going to yield time now to the distinguished ranking member Mr. Turner, from Ohio.

REP. TURNER: Thank you, Madame Chairman.

Mr. D'Agostino, you in your comments acknowledge that the president's statement of desiring to have a world free of nuclear weapons, and that is a very laudable goal.

The strategic posture commission in their report indicated that it would take political transformation unlike what is expected or foreseen in order for that to be accomplished. And they go on to indicate that -- and a significant investment needs to be maintained in order to ensure that we have our strategic deterrent.

One of the interim steps obviously to the laudable goal is just stockpile reduction, and a recognition that perhaps the strategic deterrent can be satisfied with a lowered number of weapons, overall. As we do that and there are many of you who would like to see the goal of no nuclear weapons.

I think even those who would support or desire the United States to have no nuclear weapons, would want, and understand that the United States needs to have nuclear capability. We need to have the conditions of an infrastructure that is capable and that we need to engage in activities, research, and development that can encourage the type of ingenuity that could perhaps lead us to even other greater discoveries.

I know that you have a concern that as we look to reducing our stockpile, that there might be a misunderstanding that that would reduce correspondingly our overall costs in having nuclear capability, our labs, our infrastructure that supports the know-how and the weapons that we maintain.

So if you could speak for a moment about the size of the stockpile and the level of capability needed, size of facilities needed, and also discuss the Chemistry and Metallurgy Research Replacement Facility at Los Alamos, and the uranium Processes Facility at Y-12. Your thoughts about how stockpile reduction relates to savings and also the issue of how do we ensure that we maintain our investment.

MR. D'AGOSTINO: Okay. Thank you, sir.

The -- absolutely, there is -- in my view there is a false view out, kind of out there that says if you reduce your stockpile by half, you can reduce your budget by half or your program by half, and consequently your facilities by half, and just keep reducing everything by half, or you know, smaller quite frankly.

But I think most people that spend time and ultimately have the responsibility for and were in positions of responsibility here on the committee as well an in the executive branch to making sure that the country's national security is maintained not only today, but more importantly out into the future. Because the future is uncertain, we don't know what that future holds.

But one thing we do know is that we have been quite fortunate to have invested the amount of effort we have, in the people and the facilities that we currently have right now, because they are dealing with problems that 10 years ago we would never have imagined we can deal with.

So it's this question of capability versus capacity. And when we took a look at what we had called, in transformation from a nuclear weapons complex to a 21st century national security enterprise, we took a look at it with exactly what in mind.

What capabilities do we need to maintain out in the future? When we look at reducing the size of the stockpile, what impact does it have on our facilities? And what we found out is we are at that point where we are at that bottom plateau as you start reducing your -- how much work you have to do, we are down at producing.

We think we're going to take our infrastructure to a point where it will either produce one off, or up to a small number, what we think the country not might need in the future.

For pits, for example, we're shooting at this 50 to 80 number, so -- of pits per year. Not because we were going to plan on building 50 to 80 weapons per year, but because the nation has the capability to do that in this uncertain future.

I'll liken it to a garage that exists in the neighborhood. You know the garage has a lift; most of them have two lifts. It has a mechanic and has a set of tools, and that garage can take care of one automobile for a whole year or can take care of x number, maybe a 100 or something like that for the whole year.

But it provides you a range of capability and that's where we are, that's where our plan is right now, is to do that. And to take care of that capability requires resources.

With respect to CMRR, the chemistry and metallurgy replacement facility, that facility is designed, again, as I mentioned to the chairman earlier, we're trying to change the way we do business and have a much less expensive infrastructure and much smaller infrastructure, one that size (ph) for the future.

That capability that we would like to bring there will allow us to reduce the number of plutonium facilities in our infrastructure from nine down to two. Now, that's cheaper. That allows me to take that money I saved there and invest it in scientists and engineers and actually have them work in a facility that's designed with the future in mind, unlike the facilities we had built during the Cold War.

So there is a lot of money to be drawn out of the program.

By consolidating the uranium process and facility at Y-12, building that structure will allow me to shift from a 150 acres of security footprint in very old Cold War facilities to 15 acres of security footprint in modern 21st century capabilities that allow me to drop my security costs way down.

In fact, we think we can save over $200 million a year at Y-12 alone. This is an -- separate audit we did just on the basis of building that facility. It's almost a facility that builds itself -- that pays for itself over a 15-year or less time period.

So we -- my goal is, ultimately when the -- as we work the nuclear posture review, which is actually happening today, and it's happened yesterday, and it's going to be happening very intently over the next three months or so. In getting that output and having that shape this program in a cohesive manner for five years and get away and then send that right signal to our workforce that there is a future in doing nuclear security work.

And when I say nuclear security, it's not only the deterrents in that, but also nuclear counterterrorism, nonproliferation, forensics, intelligence analysis, incident response, and a whole suite of things that I believe the country needs.

REP. TURNER: Thank you.

The strategic posture commission also spoke a lot about our aging stockpile using the words and concerns or issues of modernization, or as Dr. Schlesinger says, "refurbishment" of our stockpile.

Could you please tell us -- give us a picture of trends that we're facing with our nuclear stockpile, and what types of issues we're going to be facing with weapons capabilities and performance. What are we going to need to do even if we reduce our stockpile with those that are left, what's ahead of us?

MR. D'AGOSTINO: Reducing this -- by reducing the stockpile, which is something that's clearly -- that we're trying to do in this administration. And not only reducing, but taking the warheads apart ultimately, and dealing with the material that we have left.

We have to -- because we'll have smaller numbers of warheads and because we still haven't extended the deterrents that we extend after 30 of our allies and other nations. It places a real premium on the warheads that you have and on our desire to make absolutely sure we know exactly what's going on with those warheads.

General Chilton has once called these warheads, "chemistry experiments," kind of, "in action." That's a great way to describe that. You've got radioactive material radiating various organic materials and causing them to change over time.

Many of these warheads have been out there for 20, 30 years or so. So what we're seeing is from a trend standpoint is that the ageing, we are seeing problems that we did not expect to see. When we started the Stockpile Stewardship Program 10 years ago, we expected to see certain problems. And what we found out is that we aren't always that great at predicting the future.

We've been able to address all the problems we found, and there are problems that cannot -- we didn't expect to see. But what's clear is that things are changing. I'm very confident in the significant finding investigation process and the accountability we have in there, and my briefs to the secretary in tracking on the specifics.

But if we don't change into a, what has been termed, the spectrum of activities, which I think is the right one -- we don't look at changing the way we modernize. We're going to continue to run into more and more problems.

And ultimately my job is to make sure that we have a stockpile that will never need an underground test for the nation, and so that's why I completely agree with the commission's saying that these have to be done on a case-by-case basis because every warhead is different.

And I'm very pleased to see that despite a -- I mean, you've spent a lot of time looking at this topic. They came to the same conclusion that we -- to a similar conclusion that we in the program have worked out over the last number of years.

REP. TURNER: (Off mike.)

Thank you, Madame Chairman.

REP. TAUSCHER: Thank you, Mr. Turner.

I'm happy to yield five minutes to the gentleman from Rhode Island, Mr. Langevin.

REP. JAMES R. LANGEVIN (D-RI): Thank you, Madame Chairman.

I thank the panel for testifying today and if could maybe continue on that line of questioning, working out the Stockpile Stewardship Program. Can you talk about your highest priorities in areas of emphasis for NNSA science-based Stockpile Stewardship Program, and do you have the tools and the capabilities in place that you need?

And what are the gaps if any and if you could also, you are mindful that we are in an open session, could you also give examples of the challenges the stewardship program will confront in the coming years, and could you indicate the time, outlines involved with those challenges? For example, when the challenges, you know, when will the challenges manifest themselves?

MR. D'AGOSTINO: Okay. Thank you, sir. My highest priority quite frankly -- we'll, probably kind of look at it in two ways. There is a tactical priority that I have right now which is -- which are the people sending this -- sending the signal to the people in this infrastructure and program that the work they do is important and making sure that message gets out.

I think we've gone through over the last few years, a pretty rough period, quite frankly, of lots of pressures from an infrastructure standpoint, and certainly on where the program is going, and well, not say just great trends with respect to investments in science and technology.

I see a tactical problem, at times keeps changing a little bit from a challenge standpoint, because we are getting a bit closer with the nuclear posture review and with this report that we have towards getting that consensus. So that will take care of that part of the tactical problem.

I see us taking well over 100 -- well, about $130 million of the show out of our infrastructure investments and that crates another problem, but bringing it back in to support programs in computing and in high-energy density physics that are important for the future.

So we're dealing with that near-term tactical problem. The bigger challenge -- the more strategic challenge I think we face after we get this national consensus is putting together an integrated program that deals with fully utilizing these tools that we've -- that we're bring on board that we have brought on board.

I'm talking about the national ignition facility, the Dual-Axis Radiographic Hydrotest Facility, at Los Alamos, the Z-machine at Sandia. The JASPER Facility with the Livermore Facility, but it's at the Nevada test site.

In other words, now we've invested part of the money here, well, let's get the experimental data out of that and then, well, let's make sure we have the scientists and engineers that can analyze that information to send us in the right direction out in the future.

And we'll have to reinvest in our infrastructure and ultimately all those things are going to require additional resources. And it comes down to money and -- but I can't ask for the money, unless I have the strategic context to put those resources in.

And that's why I am anxious, quite frankly, to get past, I mean, the consensus and the strategies that face us is the right thing. I'm anxious to get past that and get into developing that program and that's what in essence we'll be doing this summer.

Timelines involved, I think, was the last part of that question.

There -- as we go through this next upcoming decade, there would will be a few -- if we can get the infrastructure facilities that Mr. Turner talked about, the UPF, Uranium Processing Facility and our plutonium capability back up-to-speed, I think, we're going to start seeing some significant -- and allow me to shift some significant resources into the S&T program without changing the bottom line of the program.

And that will happen, mid-to-end of next decade. These are very complicated facilities to build. We've gotten a lot of use out of these Cold War and facilities. We need to get our people out of them. That's one way we show respect quite frankly to the work forces, with the main facilities. So I don't have my good friend, Glenn Podonsky, you know, rightfully saying, hey, we might have some safety problems here, Tom, or we might have some security problems here.

So I'm anxious. I think there is a great opportunity that we have over the next few years to shape this program in the right way. I see it, and my job ultimately is to put together that program for you, or for the president and ultimately to bring it here to you, and explain it to you in more detail.

And in effect we are in a, kind of a one-year budget scenario. We've put together a program to stop things from getting worse, while we define what that better future is going to be. It's a little different than normal, unfortunately.

REP. LANGEVIN: Thank you, sir.

REP. TAUSCHER: Thank you, Mr. Langevin.

I'm happy to yield five minutes to the gentleman from New Mexico, Mr. Heinrich.

REP. MARTIN HEINRICH (D-NM): Okay. Thank you, Madame Chair.

Thank you all for being here today. I'm going to jump right into a number of sort of specifics, and they deal with this issue that you've already alluded to, of the general strategic context, and some of that, I'll infer from comments and speeches that the president has made regarding the comprehensive test ban treaty, the potential for additional negotiations, and strategic arms reduction.

And the need that you articulated to be able to have the adequate science and the adequate capacity to make sure we support the capability of doing those things. I'm very concerned with the proposed budget for Sandia's Science and Inertial Confinement Fusion campaigns.

The NNSA's Fiscal 2010 budget request represents a $19 million cut from FY 2009. I think that's about 35 percent. And with the newly referred Z-machine your budget will cut the annual shot rate from 200 in 2009 to around 130 in 2010, even though the weapons and high-energy density physics user community has an operational requirement of over 400 shots, I believe.

At a time when we were reducing the stockpile and thus increasing our investment in science-based stockpile stewardship programs, aren't you concerned with such a dramatic cut to the operations of science facilities, for example, the Z and Sandia?

MR. D'AGOSTINO: Yeah. The answer to your question is I am concerned -- very concerned. The 400 shots that we had previously were kind of a two-shift operation in effect for the Z-machine.

We're down to about 80 percent of a one-shift -- full-loaded one- shift operation. What we focused on doing were making sure that we had the minimal -- I would say, is the minimal set of shots we needed to support the primary mission of the Z-machine, which is the stockpile itself. And we're confident we have that program that does that.

There is absolutely a lot more work we could do with the Z- machine. It's, you know, in the aggregate; the Sandia budget is in effect flat, and it you know, puts and takes the decisions that we have to make, that my staff had to make with respect to how much should go in this versus how much should go in that one.

And we felt, when we balanced across the -- across all of this, that keeping the lab -- not hurting the lab population, doing some re- prioritizations with respect to what we need to do in the future was the right thing to do. It ended up having an impact on the Z-machine.

It's ultimately my responsibility, it's a decision that I made. And with more money we would have definitely put there, but we definitely are in a situation where we are, essentially, the term Mr. Turner used was, "treading water," I think was the term you used, sir, which is kind of where we are at.

REP. HEINRICH: So do I understand you to say sort of -- this is sort of, the wait-and-see we develop a grander vision of what the strategic context is, and maybe adjust in the following budget year, is that what you are trying.

MR. D'AGOSTINO: Absolutely, I mean, I do think, you know, whether it's -- we call it the wait-and-see or treading water here. I mean, the focus was, you know, priority number one for me, because many of you're aware that this budget was developed, kind of, fairly quickly in the last days of January and end of the -- into the month of February.

So what we ended up doing is saying priority is, you know, focus on not having any reductions in staff across the complex, in the aggregate. Try to preserve as much as possible the people in the program, while the administration gets its hands around what it wants its nuclear security posture to be.

And, you know, because it is a fact that still wasn't done yet, we're developing that posture. And so my expectations, I mean, I spent a lot of time in this program, I know a lot of the people, I know Keith Matzen quite very well, out at Sandia, running the Z- machine.

My expectation is that in order to drive this program into the future that supports the visions on CTBT and reduce start that we absolutely have to have a fairly significant increase in the science and technology in this program in the out-years, it just can't happen any other way.

We have to have support for facilities upgrades out into the future. It just can't happen any other way. We have to send the signal that this is a nuclear security program, not a nuclear weapons program, because in fact that's exactly what it is, it's a nuclear security program not a nuclear weapons program, not completely a nuclear weapons program.

And those messages have to get sent out by the administration in an integrated five-year program that will look different than -- I didn't bring a budget book with me, but it will look different than what we have in front of us today. So it is a one-year program right now.

REP. HEINRICH: Jumping on to, sort of, the next thing in response to that, the readiness in technical base and facilities accounts, and sort of given the 16 percent decrease in operations of facilities, 28.6 percent in program readiness from FY09 levels, how are some of those things, going to play into this brighter picture that you're talking about. I mean, those seem to be, those are kind of, bread-and-butter sustainment accounts?

MR. D'AGOSTINO: Well, the readiness in technical base and facilities and program readiness accounts or accounts that fund what we call our fixed cost, in effect, you know, lights burning, you know roads working, roofs maintained, and that kind of thing. In parallel, with what we have right now, which is a fairly, like we've said earlier, flat budget scenario for the weapons activities account; we are driving changes in the way we do business.

Probably, the best example and I've got numerous examples, but the best example is what we call Supply Chain Management Center. It's something we started about a-year-and-a-half ago. It's the centralized procurement of commodities-like products.

Every laboratory, every production site needs paper, paper clips. It needs a variety of commodity-type products and they are all being purchased separately. And we felt that there was an opportunity to leverage our purchasing, you know, operate as an integrated organization, instead of eight -- seven separate types, and in fact, there is opportunity, and we took advantage of it, and we've demonstrated $32 million worth of savings; that's one example.

Another example is, doing the same type of concepts with placing roofs across the concept, and we saved money there, so a lot of the pressure -- the negative budget pressure you see in those fixed cost accounts are due to our driving our lab directors individually, and the enterprise as a whole towards being more efficient.

Just one last point, and I'll stop; and that is, we have -- about two years ago, I chartered a group and it's only contractor employees. Lab, senior people from each lab and production site when we developed a nuclear security enterprise integration council.

And this integration council was set up so that I would put essentially operational efficiency pressure, and I'd say, you guys run this place, you are M&O contractors, you tell us what is a more efficient way to operate and I would like to see specific results.

And that group meets, in fact they met yesterday here in Washington, and they have a very well-projectized list of activities. In the essence of saving time, I'd be happy to provide, if I could, to the committee, examples of those types of projects and where they produce savings.

REP. HEINRICH: That would be helpful. I think I wasn't surprised so much with the cuts as with the scale, you know, 20.6 percent is a lot of paper cuts and proofs. I am sure there is capacity there. I just thought, I mean, that's substantial. So I'd be curious to look at some of those programs and see how they match up with the scale of the reductions that we are seeing.

MR. D'AGOSTINO: Okay, we'll try to show you that, sir.

REP. TAUSCHER: Thank you.

Mr. Podonsky, I wanted to go back to the one question I have. It's an issue that we discussed about a year ago. When HSS was established it was structured so that you were not responsible for any operational elements with one exception, the DOE headquarters security. This exception which gives your organization responsibilities for an operational unit appears to represent what we considered at that time, a conflict of interest.

Last year, you agreed and said that you were working with the past administration to address the issue. But since then, I understand your office has conducted an oversight inspection of the security operations at the headquarters' facilities, and we still think that's a conflict.

Why don't you tell us where you think you are with this right now and can you provide the subcommittee with an update on what you've done over the past year to address the concern we have?

MR. PODONSKY: Yes, madame. Thank you for the question. And it is true at the hearing that I testified last year that we talked about the inherent conflict from my office to be responsible for environment safety and health safeguard, security cyber, emergency management, policy, oversight, enforcement and then to have an operational arm. It has proven to be quite a challenge.

We just had a vigorous inspection, as I mentioned last year, that we would conduct, and my operation did very poorly. And so I put myself on report, and went to then Secretary Bodman and talked about the corrective actions in the same way I would expect when I go to inspect any of colleagues to my right here -- (audio break) -- operations.

We did the corrective actions at the headquarters to make the improvements, but the administration -- the previous administration at the time did not want to make any wholesale changes, because we were so close to the changeover with the upcoming election.

Now, where we are, that we have all the corrective actions fixed in place, we await the current administration for what they're referring to as a resetting of the DOE organizational structure.

So my recommendation will be to the Secretary Chu and the deputy secretary designate that when they look at the restructuring of the department, as they intend to do, my recommendation will be that even though we've taken every precaution to avoid any conflicts, the fact of the matter is that they exist. And, but honestly I don't want to have to put myself on report again for poor performance.

REP. TAUSCHER: And we don't want you to either, so we are going to -- I think that the subcommittee will write to the Secretary Chu, and will ask exactly what the plan is to reset the organization, and to take you out of that situation.

Mr. Turner, do you have any further questions, I want to go to Mr. Thornberry. I'm going to call Mr. Thornberry for five minutes.

REP. MAC THORNBERRY (R-TX): Thank you. And I apologize for being in and out during the testimony. Mr. D'Agostino, I know you said that you all are still digesting the commission report that came out last week. But as I have read that report, and now I look at the future year budgets for weapons activities, it seems to me that two things don't fit together.

I mean, the weapons activity budgets go down not even on account of inflation under this budget, and it just seems to me when you look at the challenges with people, facilities, the other things that were talked about in that report, this is not fitting together, am I missing something here?

MR. D'AGOSTINO: No, sir, you're not. They don't match up. Our focus, I recognize the report just recently came out, because I've been looking -- I've been working at this program for a number of years. And that what we've got in essence is, in consistency, in fact, you know, the report will inform, in fact is informing the Nuclear Posture Review groups that are meeting, I am one of those people that are on that group.

The report helps me out, quite frankly, quite a bit in defining what I believe is the right path for the program. The out-year numbers for this program do not reflect what I think are important to do to maintain a stockpile, to do a CTBT, to take care of a variety of challenge we have coming forward.

And, you know, granted, I mean, somewhere buried in the narrative of the actual president's budget submission, I do make it clear that what we're trying to do is, first do no harm and not reduce significantly the program between '09 and '10. And second, set us up, you know, it's kind of like getting yourself ready for the next pitch that has to happen.

Getting the program set up so that it can move out smartly given a strategic direction. But the report actually sets the right tone in my view of where programs need to go. It endorses things that the committee has looked out for a number of years now with respect to the stockpile. So --

REP. THORNBERRY: You know, my concern among others is that if we have this idea we're going to negotiate further reductions with the Russians, that means, we can spend less money and -- when in fact that even puts greater necessity on making sure what the other things we do are done well, or else. And articulating that risk of not funding those other things well, is something that does concern me.

Let me ask on another topic; I know that you and Mr. Podonsky have, I believe, written a memo on the issue about whether the Guard Force should become federal employees or not. And my impression is that you are both in agreement that that is not a good idea. Could you briefly, each of you tell me why?

MR. D'AGOSTINO: Yeah, I can start and I would ask Glenn maybe to -- because in essence there is a policy piece to this, and as Glenn has that responsibility. My sense is just as a program lead that we can spend a lot of time and effort; I call it "reorganizing" or making fairly significant strategic shifts.

It's been my observation in the past, in running programs that there is, the devil is in the details on many of these things that the Guard Force may have, if certain view that, hey, being a federal employee is a great thing, because you get this, that, and the other.

And actually there are some unintended consequences. So in my view, unless there is a hugely obvious benefit that seems to override a variety of things; reorganizing or restructuring are things that should only be done with very careful deliberation.

I know Glenn has done the glade work on this and I would ask you to -- I'll defer that.

MR. PODONSKY: If you indulge me, Congressman, this actually stands with a conversation that started with former Secretary Spencer Abraham, deputy -- former Deputy Secretary Frank Blake, General John Gordon, myself, and Clay Sell was in on a conversation at one point.

And what it was that Secretary Abraham at the time said he wanted to take a look at how to improve security posture of the Department of Energy in the post 9/11 environment, this was 2003. And I had put on the table the option of looking at federalization of the Guard Force. And I put it on the table for the department to take a serious look to see whether or not security posture of the department would be improved by federalizing the force.

And there were a number of joint studies done by both, contractors and the field managers, staff, and our staff at headquarters. And the conclusion was that security posture would not be improved. Now, the Guard Force unions who I work with closely, saw this as an opportunity, and rightfully so, as to create a current path for themselves.

So as they got older, they had a place to go because maybe they were not any longer in physical condition to meet the standards of a security officer. So the conclusion that Undersecretary D'Agostino and I came with is that the federalization was not the answer.

But what we've done is, I have started another group to involve the guard unions across the complex, to involve my policy people, my overseers, to find the alternatives that would meet the challenge of improving the guard security for their own job security, and also meet the challenge that we originally had in '03 to improve the security posture.

One of the things we did was come up with a what we called the security elite force so that that would help improve the security posture. But the federalization as a whole, our conclusion was that it would not improve the posture for the amount of money that would be spent to change the entire construct of the department.

REP. THORNBERRY: Thank you.

REP. TAUSCHER: Thank you, Mr. Thornberry.

Mr. Turner.

REP. TURNER: Thank you, Madame Chairman. Mr. Podonsky, I don't think there's been a hearing where you've been present where I have been here, where I haven't said something about my concern for a security, both for our facilities and our weapons, so I just wanted to turn to that.

I appreciate your diligence and your commitment, but I have a main concern and I would appreciate your continued efforts to keep us informed of ways that we can close any gaps that may exist. I know you're transitioning from a design basis threat security policy to a graded security protection policy.

And should in the future knowing more of that and also ways in which we can make a difference, because as I said in my opening statement, we do not have a margin of error in the issue of security and Mr. D'Agostino and I have also had that conversation, so thank you for your efforts there.

REP. TAUSCHER: Thank you, Mr. Turner.

I think we will finish at 4:30, and I just wanted to see if Mr. Langevin and Mr. Heinrich had another round of questions.

Mr. Langevin, for five minutes?

REP. LANGEVIN: Sure.

REP. TAUSCHER: Mr. Langevin, for five minutes.

REP. LANGEVIN: Thank you, Madame Chair. Going back on the stewardship program, if I could, one of the questions, I want to get to was, would ratification of the comprehensive test ban treaty change any of the current plans for the Stockpile Stewardship Program, and if so could you describe how?

MR. D'AGOSTINO: Sure, certainly. Yes, it would change our plans. It would in fact reinforce the fact that we need to bring our science and technology infrastructure, if you will, which would then put people, facilities, experimental tools, actually start using our tools in the way they were meant to be used. Mr. Heinrich talked about the; we're doing about 80 percent of what we could do on one shift on the Z-machine, we will want to do quite frankly two shifts worth of shots on Z to get that experimental data out.

If ratification of CTBT comes forward as we expect, we will be putting forward a program that will fully utilize these machines. So it will be increased effort that presents some technical challenges, because you know, we are now going to be shifting from a build the capability to actually use the capability.

And then next step is analyzing the results of that data, and get ourselves down into this ability to do what has been termed predictive science, which is an art right now and not quite yet at the science level. So --

REP. LANGEVIN: I guess so -- let me ask, I guess you kind of asked me, but why wouldn't you do that absent ratification (ph) of the treaty?

MR. D'AGOSTINO: Well, what we are doing right now is we would need to do that absent, because we are -- right now, we have to maintain that policy of no underground testing, but we're not getting in other words without the -- the problem that we have had in the past, quite frankly is this national consensus, you know, an agreement in effect between the administration, the executive branch, the international community, and quite, you know, what I call non- governmental organizations. That national consensus, and frankly it goes to a global consensus in some respects, but the national consensus on our strategic posture.

And not having that has made running this program very difficult. We've had greater than $600 million shifts, you know, as a program of record to submit up and it gets debated in Congress, and whenever you have that kind of shift and you have those kind of deltas, it makes it very hard for a program to be successful. I think we have a real opportunity frankly to get to this national consensus.

We're not quite there yet, but I think we are on the cusp of it. I mean, there will be debates whether or not we took the stop off size-down too much or not enough, or whether our reserve capability on warheads is too big or to small, or that we have too many scientists or engineers, or not. And some people will debate that.

I go back to kind of, the legwork that's happened here, in this document, as it informs the Nuclear Posture Review that will clearly demonstrate the need for reinvestment in our facilities, in our people, and to fully utilize that, and I guess maybe I've been, let me call it, stymied in the past on getting these increases.

But I see this is kind of like a running back, you know, a full back -- walking full back in front, making sure that all issues are out on the table for us to debate. And then once the debate is done then we move out, because frankly these people, as we talked about earlier, are getting older, they are getting mixed signals.

They are getting mixed signals and they end up wondering, you know, what we're doing here. This strange budget from that standpoint.

REP. LANGEVIN: Before my time runs out, can you tell me, looking to Russia, what is NNSA doing to ensure that it expands the scope of its non-proliferation programs, existing programs with Russia remain a cooperative endeavor, and the U.S.-Russia non-proliferation partnership continues to address remaining work in Russia and other possible opportunities in non-proliferation operations.

MR. D'AGOSTINO: And we're doing a lot in that area, sir. Mr. Baker, who is here behind me just came back recently from a trip to reinforce -- talk to his counterparts. So we have a whole series of deputy directors in Rosatom, in the Russian Custom Service, and in the military, while we have ongoing problems to do security upgrades, do vulnerability assessments, to do sustainability projects.

We're identifying not only those -- making sure that those partnerships are continued on, but we're looking at opportunities to develop new areas for work with Russia. I would give you some examples here on the research reactor conversion.

Russia has a number of research reactors in the country that have highly enriched uranium. So we are looking at a joint partnership of both the U.S. and Russia to have a domestic reactor conversion effort to take advantage of the fact that if we're going to have the rest of the world convert the research reactors from HEU to LEU, we ought to be doing the same thing.

So in fact I see expanded work with Russia out into the future, and I see our program shifting a little bit, towards not just the U.S. paying, but a cost-shared approach. And we have examples of where Russia and certain parts of our program have picked up the load, quite frankly on sustainability.

Once we've done the upgrade, they have picked up the responsibility for doing the sustainability or carrying it out in the future, and we get to check and see how they are doing, so I see a lot more work sir, in that area.

REP. TAUSCHER: Mr. Thornberry, do you have a second round?

REP. THORNBERRY: Madame Chair, may I follow-up. I was a little confused in your testimony. At one point it says that the U.S. and Russia have reached agreement on disposition of excess plutonium, and at another point it kind of sounds to me like they are -- it is still in negotiations and expect to complete negotiations this summer.

MR. D'AGOSTINO: Yes, sir, and we may have been made it confusing unfortunately. There is a joint technical statement where we've agreed in principle, I think it was in 2000 -- end of 2007, where we basically said, we agree on the -- this is the 34-metric tons question. But we agreed in principle on how each country was going to do it, but what we needed to do is upgrade what's known as the Plutonium Disposition Management Agreement, or Plutonium Management Disposition Agreement.

That agreement has one of the elements of what Mr. Baker's trip was, to work out the exact words that the two presidents can sign in July. And so there's the technical piece of the program where everybody that actually does lay the work says, it's a done deal, we are ready to go, but we want the two presidents to sign the agreement in July. And then that actually commits both countries, frankly, to now, let's follow-up and do it, sir.

REP. THORNBERRY: Okay. And are we paying for their plutonium disposition.

MR. D'AGOSTINO: The commitment on behalf of the United States is if appropriate $400 million, since it is money that was appropriated in the past. I think about $200 million or so that was appropriated in the past. Some of it -- most of that was retracted last year, but we're only paying for a portion of it quite frankly, because the plutonium -- they are going to have to do a lot -- put out a lot more of their own capital to do it.

And they are planning on doing it via their fast reactor disposition program. So the $400 million the U.S. would be committed to would help, but would not take it all the way. And frankly, I am okay with that, because you know, Russia is a different country now than it was 10 years ago when the agreement was --

REP. THORNBERRY: Yeah, we have been dealing with this for 10 years, so that's --

MR. D'AGOSTINO: That's why I have --

REP. THORNBERRY: So the ($)400 million is a cap that we would pay.

MR. D'AGOSTINO: The ($)400 million is what now we will pay, yes, sir.

REP. THORNBERRY: Okay, okay, thank you.

Thank you.

REP. TAUSCHER: Welcome.

Mr. Heinrich, for five minutes.

REP. HEINRICH: Thank you, Madame Chair. I want to go to the B61, which I think was touched on a little bit in the report, but given -- even given the uncertainties in our overall strategic posture, it seems like some sort of a life-extension program or a refurbishment program for that should be a priority. And is that bid into the next year's budget?

MR. D'AGOSTINO: The way it fits in is to finish -- it does fit in the next year's budget for one. Two is, our focus of next year's budget is to do and I will use this term, it's called a Phase 2A study, which is a cost, scope, and schedule study on exactly what we are going to do, by when, and how much is it going to cost.

It is actually the completion of an effort we've started in 2009, and on, you know, again when the strategic posture review comes out -- the Nuclear Posture Review comes out, I am sorry, I am hoping that it has enough definition with respect to the B61. Because General Chilton, I believe that this warhead, you know, whether ultimately 15 years from now it goes away, it's not on a good path between zero and 15 years.

I mean, I don't, you know, we have to do work on that warhead. And so the question will be, okay, let's say it goes away in 15 or 20 years, then that helps inform the study to say well, let's just do enough work to get us to that time-phase period. That's why we need to do the study in 2010. Once the study is completed --

REP. HEINRICH: Then that will be done this fiscal year.

MR. D'AGOSTINO: It will be done into the next fiscal year, because what we are going to be looking at is, you know, whether we just do a non-nuclear replenishment, just change out those non-nuclear parts or whether we actually have to get into the nuclear package itself, because of aging of components and other things.

And there is also the desire I think on the part, surely on my part, and I believe on the part of the subcommittee and others, that where we can insert improved safety and security without substantially changing that we ought to take advantage of that opportunity. And in fact, that's where Sandia comes in, and provides the details there.

REP. HEINRICH: All right. Thank you. Dr. Triay, I want to ask you a quick question. I don't know if you remember us meeting in Santa Fe a few years ago.

MS. TRIAY: Absolutely, sir.

REP. HEINRICH: But I wanted to ask what you're doing to address the natural resource damage issues at DOE and NNSA facilities like LANL (ph)?

MS. TRIAY: I have been working closely with NNSA on this particular issue, and the reason is that as a philosophical matter, I feel that while the cleanup is going on to the extent that we can address some of the issues that ultimately will come out of assessing the damages after the cleanup is done. We actually do a lot better.

So I firmly believe that we have to work, NNSA and the environmental management program need to work together to ensure that anything that can be identified while we are in the cleanup phase that we work in partnership with a tribal nations, the state, so that we can get ahead of ultimately having to assess the damages at the end. So you have my commitment that, in my case, if confirmed, I will continue to work in a very close manner within NNSA on Los Alamos issues.

REP. HEINRICH: So you're saying you understand that the advantage of a parallel track, as opposed to a rocky-like (ph) situation where you do want, and then try to figure out how you figure out the other one, when you've changed the data.

MS. TRIAY: Absolutely, sir. I definitely do understand that and I am very committed to that approach.

REP. HEINRICH: All right. Thank you.

REP. TAUSCHER: Thank you very much. We're about to be called for pre-votes, well, the last votes of the day. I want to thank our witnesses, Dr. Triay, Administrator D'Agostino, Mr. Podonsky, thank you very much. And the people behind you that do such great work for this country, and the people behind them, and the people behind them --

(Laughter)

Thank you for your service, thank you for informing the committee as well as you have, and we will look forward to talking to you again soon.

MR. D'AGOSTINO: Right.

(Sounds gavel)

REP. TAUSCHER: Hearing is adjourned.

MR. D'AGOSTINO: Thank you.

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