port for security programs and a broader role for the agency in support of the administration's defense requirements.

It also reflects a broadening scope of responsibilities for homeland security in the aftermath of September 11. For weapons activities, a subset of those programs, we are requesting $5.9 billion, an increase of over $300 million from last year's level.

Our budget supports a healthy Stockpile Stewardship Program, a comprehensive weapons certification program, and a robust infrastructure for nuclear weapons production.

The highest priority of our stewardship program is ensuring the readiness of nuclear weapons through maintenance, design, life extension and manufacturing, and funding for the Directed Stockpile program will increase by 18 percent.

We have also begun a concerted and, believe me, a much needed effort to address a serious maintenance and modernization backlog at our various facilities. After years of neglect, our scientists and engineers are forced to work in buildings where literally ceilings can fall in on them. This is a disgrace.

Consequently, we are requesting a 23 percent increase over last year's appropriated level, a boost of about $46 million, which will provide $243 million for infrastructure modernization as part of a longer-term plan to get the facilities into appropriate condition.

For non-proliferation-related activities, we are requesting over $1.1 billion, the highest amount at which these programs have ever been funded. When we came into office, we began working closely with the White House to review these non-proliferation programs with an eye toward a new comprehensive non-proliferation objective and program.

Presidents Bush and Putin further shaped that agenda when they met and agreed to share information and expertise to counter bio-terrorism, improve protection and accounting of nuclear materials, and prevent illicit nuclear trafficking.

Shortly after the Bush-Putin agreement, I met with my Russian counterpart, Minister of Atomic Energy Alexander Rumyanstev, to discuss how we could accelerate, perfect, and expand cooperative measures on material security and accountability. I believe our meeting was a major success. We agreed on the need for greater cooperation, improved steps for protection of dangerous materials, enhanced safeguards of fissile materials, and ways to boost safety and security in the peaceful use of nuclear energy. This administration is fully committed to the success of this deepening cooperation in this area.

We are asking for $800 million to support our non-proliferation programs with Russia, an increase of $115 million, 17 percent above the 2002 appropriated level.

The Department is also on the cutting edge of homeland security and energy assurance. To that end, we have requested $283 million for non-proliferation research and development, and $27 million for an expanded energy security and assurance effort.

Additionally, our outstanding naval reactors program, which supports the submarines and carriers now on station around the world, remains a critical part of our security mission. We are requesting over $700 million for this program, an increase of about $19 million.

Finally, I know there have been concerns expressed about security for our facilities. Our 2003 request attempts to address this. For all safety and security programs, the request totals in excess of $1 billion.

Let me also say a word about our EM programs. Mr. Chairman, EM is one of the Department's most important tasks. When I came into office last year, I was presented with the old plan for cleaning up our weapons sites, which called for a timetable of about 70 years to complete at a cost of up to $300 billion.

I think this committee would agree with me that the citizens in the communities where these sites are located and the taxpayers deserve a better plan than that. At the time, the question seemed quite simple: Do we follow that course, or seek something better? Immediately upon their confirmations, I have asked our under secretary and our assistant secretary for environmental management to conduct a top-to-bottom review of our environmental management programs, with the goal of expediting cleanup in these various sites to try to reduce that time dramatically, from 70 years to something which would give the citizens in these communities a chance to see, in their own lifetimes, the completion of these programs.

That report review is now complete. We propose in this budget a request of $6.7 billion for this program at this time in fiscal year 2003. That budget has two categories; one for basic funding at every site; and then an $800 million expedited cleanup account, out of which those sites who agree and come to an agreement with the Department to participate in a new approach would receive additional funds to begin to speed up the cleanup.

This additional $800 million-this initial $800 million expedited cleanup account represents our current estimate of the number of agreements for accelerated cleanup that can be established with state and Federal regulators this year. However, we are ready to expand this account with more money in the fiscal year 2003 budget as we indicated in our budget document, should sufficient sites agree to move to expedited schedules to justify it.

Mr. Chairman, the Department is strong and, I think, getting stronger. We have an extraordinarily talented and dedicated workforce, as I said, that has been ahead of the curve during a difficult and challenging year.

As a department, I think we are poised to increase the contribution we make to the war on terrorism, to enhancing America's deterrents, to fulfill our environmental responsibilities, and to try to build a stronger foundation for energy security in the 21st century. Mr. Chairman, thank you very much. I appreciate the chance to be here.

[The prepared statement of Secretary Abraham follows:]

PREPARED STATEMENT BY HON. SPENCER ABRAHAM

Mr. Chairman and members of the committee, it is a pleasure to appear before you today to discuss the Department's fiscal year 2003 budget request for defense related programs.

On September 11, our Nation changed as did our national security challenges. The Department of Energy's $21.9 billion budget responds to that change-in our focus as an agency and in the way we do business. This budget meets these challenges through investment in our national defense and in an important component of that, our Nation's energy security addresses the new security challenges we face

as a Nation after the events of September 11, as well as increased concern regarding our dependence on foreign oil and the security and reliability of our critical energy infrastructure. This budget request also reflects the results and recommendations of several government-wide and DOE internal policy reviews recently completed. The incorporation of these broad strategic and policy reviews into the fiscal year 2003 budget reflects our intention for serious reform in some important program areas and continue us on a course toward a comprehensive change in the way we do business.

PRINCIPLES GUIDING THE FISCAL YEAR 2003 DEPARTMENT OF ENERGY BUDGET

Of the total fiscal year 2003 budget request of $21.9 billion for the Department, approximately 70 percent, or $15.4 billion, is for programs within the jurisdiction of this committee.

In October 2001, I laid out for the Department's managers and employees a strong statement of mission and purpose and a series of principles to guide the Department's programs and operations. With an emphasis on measurable performance objectives and accountability, I am holding Department of Energy (DOE) managers responsible for ensuring the safety of our employees and the communities surrounding our facilities, respecting and observing the highest standards of security, and building a culture where merit determines promotion and diversity is viewed as key to recruiting and retaining the best people. My vision for excellence requires that we set priorities, discipline our focus, and measure everything we do by reference to our missions and priorities.

To achieve this vision, the key is understanding our overarching mission. That mission, put simply, is national security. Our national security mission is readily apparent in the Department's National Nuclear Security Administration, but it is also inherent in our Energy and Science programs that advance the Nation's energy security, and in our Environmental Management programs that clean up our sites to ensure that legacies of the Cold War are resolved and meet our future responsibilities in a manner that protects the security and safety of the individual American taxpayer, our environment, and our future. An effort is underway to review DOE activities, including those at the national laboratories, to ensure they adhere to the Department's core mission and objectives.

The Department is also addressing long-standing criticisms of DOE management and moving toward the administration's model as set forth in the President's Management Agenda. With an emphasis on measurable performance objectives and accountability, we are holding DOE managers responsible for making these changes. We have set priorities, disciplined our focus and will measure everything we do by reference to our missions and priorities.

Last year's budget maintained the administration's flexibility to respond to government-wide policy reviews then underway, including the Department of Defense Nuclear Posture Review, the National Security Council reviews of U.S. deterrence requirements and nonproliferation programs, as well as an internal review of the Office of Environmental Management. These reviews are now complete, and the results and recommendations are reflected in the fiscal year 2003 budget request. We stand ready to work with you to address the recommendations from these reviews. In addition, we are implementing the President's Management Agenda. The President has called for an active but limited government, one that empowers States, cities, and citizens, ensures results through accountability, and promotes innovation through competition. The administration has targeted areas for improvement throughout the Federal Government. Our work to fully implement these initiatives will continue through fiscal year 2004 and beyond, but we have a path forward and are making changes now.

Human Capital

In order to eliminate unnecessary layers of management, direct personnel to highpriority missions, address skill imbalances, and achieve a 5-10 percent savings in management expenses through comprehensive, creative management reform, DOE will accelerate workforce planning and work with the Office of Personnel Management to conduct complex-wide organizational surveys to analyze and evaluate DÕE field and headquarters redundancies, fragmentation and duplication of effort. Competitive Sourcing

We are initiating formal competitive sourcing reviews under the provisions of Office of Management and Budget Circular A–76 on approximately 1,000 positions. In addition, line managers are planning other reviews that may lead to formal studies. The longer-term goal is to conduct reviews on 50 percent of the Department's inventory of Federal positions that are not inherently governmental.

Improved Financial Management

We will continue to build on the Department's unqualified audit opinion on the consolidated financial statements and work to integrate better financial, budget, and program information in order to provide costs information related to performance. Key to the success of this initiative is the completion of the Financial Management module of the Department's Corporate Management Information System (CMIP). E-Government

To make better use of computer information systems to improve management, promote efficient use of resources, and make our systems provide more people friendly information, the Department will strengthen its Information Technology investment portfolio by linking investment control processes, using enterprise architecture, and improving security policies and capital planning.

Budget and Performance Integration

We have strengthened the Department's ability to measure performance by establishing the Program Analysis and Evaluation Office and developing a 5-year planning, programming, budgeting and evaluation process for the entire Department. Building on the integration of performance metrics into our fiscal year 2003 budget submission, we are improving the performance measures contained in our fiscal year 2003 budget request and will continue to improve performance measures and their integration into the fiscal year 2004 budget. These improvements will provide clear, quantifiable outcomes to support budget requests.

Now I will turn to the details of the Department's fiscal year 2003 budget submission for defense related programs.

NATIONAL NUCLEAR SECURITY ADMINISTRATION

The National Nuclear Security Administration (NNSA) is in its third year of implementation. Created by Congress to respond to the changing and complex set of challenges in the national security environment, this year the NNSA takes on a national security role in a way Congress could not have envisioned. The fiscal year 2003 budget request for programs within the NNSA totals $8.0 billion, a $433 million increase over the fiscal year 2002 appropriation, and includes:

• Weapons Activities ($5.9 billion)

• Defense Nuclear Nonproliferation ($1.1 billion)

• Naval Reactors ($708 million)

• Office of the NNSA Administrator ($348 million)

The administration's national security strategy is transforming to meet the threats of the 21st century. The NNSA is intimately involved in the formulation of the administration's strategy through participation in the Strategic Review, Nuclear Posture Review and the review of nonproliferation programs. We have accelerated research and development into technologies to detect and deter weapons of mass destruction. We responded swiftly and comprehensively to the terrorist events of September 11, protecting our valuable national security assets and employees, and offering our unique capabilities to the national response. We have contributed directly to the homeland security needs of Governor Ridge with our technology and scientific staff. Work such as this will extend into fiscal year 2003 and beyond.

While policies and priorities established by the administration and Congress will determine the scope of our work over the years to come, nuclear deterrence remains the cornerstone of our national defense strategy for the foreseeable future. The NNSA will also be deeply involved in arms reduction and nonproliferation activities, and will make significant contributions to the administration's new capabilitiesbased national security strategy that requires us to maintain our military advantages in key areas while developing new capabilities. The NNSA will continue to be involved in the Nation's homeland security efforts. The Naval Reactors program will continue to be responsible for all naval nuclear propulsion work.

The NNSA faces major challenges during the next 5-year period in responding to evolving customer requirements while maintaining and improving the health of the Nation's national security enterprise. The expanded focus on international terrorism following the September 11 attacks underscores the importance of maintaining a strong capability in the science and technology of national security.

NNSA's ability to perform its national security functions depends upon renewing our internal capabilities. As we conduct our daily technical work of maintaining the reliability, safety, and security of the Nation's nuclear weapons and developing the scientific tools necessary to perform our work, we need to ensure that our national security enterprise remains capable. Both the physical and intellectual infrastructure of the national security enterprise were built during the era of underground

nuclear testing, and have eroded to the point that we are no longer able to perform some essential tasks. It is imperative that we address these issues during the upcoming 5-year period. NNSA's program and budget planning emphasizes maintaining an adequate workforce of scientific, technical and business skills, and building a diverse, multi-talented leadership. We must be able to recruit, train, and develop quality employees throughout our organizations in a highly competitive employment environment. We must implement our plans to renew the physical infrastructure to ensure adequate capability and capacity as well as compliance with environment, safety, health and security standards.

Another key element to NNSA's ability to perform its national security functions is an organizational plan to achieve greater effectiveness and efficiency. Last month, Under Secretary John Gordon submitted NNSA's "Report to Congress on the Organization and Operations of the NNSA" describing our accomplishments to date and our strategy for operating an integrated national security enterprise.

WEAPONS ACTIVITIES

In spite of the many challenges we are facing, the NNSA has continued to meet the core Stockpile Stewardship mission-that is to maintain the safety, reliability, and performance of the nuclear stockpile to meet national security requirements. As stated earlier, the NNSA actively participated in the strategic reviews of national-security related activities conducted by the administration. Participation by NNSA ensured that the choices, plans, and requirements being developed were within the realm of the technical and production capabilities of the NNSA. It also increased the awareness of our issues and technical capabilities by the administration's national security senior management team.

While there are many important points and conclusions in the Nuclear Posture Review (NPR) including the goals to reduce operationally deployed nuclear weapons to between 1,700 and 2,200 by calendar year 2012 and the maintenance of a “responsive force" for use as a hedge against unforeseen problems, several points are of particular relevance to the NNSA:

First, nuclear weapons, for the foreseeable future, remain a key element of U.S. national security strategy. The NPR reaffirms that NNSA's sciencebased Stockpile Stewardship Program is necessary to assure the safety and reliability of the nuclear stockpile in the absence of nuclear testing. This includes basic surveillance of our aging weapons, systems refurbishment, chemistry and metallurgy of materials aging, detailed understanding of weapons physics, reestablishment of warhead advanced concepts teams, and development of additional diagnostic and predictive tools for long-term stewardship. The NPR revalidated the stockpile refurbishment plan previously developed and approved by the NNSA and the Department of Defense.

The fiscal year 2003 budget request for Directed Stockpile Work is $1.2 billion, an increase of $190 million, or about 18 percent over last year. Principally, this increase allows us to support life extension activities for the W80, W76, and B61 warheads, including supporting research and development and additional hydrodynamic testing for assessment and certification. Also, $2.1 billion is requested for the 17 scientific and engineering campaigns that provide the knowledge, technologies and capabilities to address current and future stockpile issues.

• Second, more than any previous review, the NPR's concept of a new triad emphasizes the importance of a robust, responsive research and development and industrial base. This calls for a modernized nuclear weapons complex, including contingency planning for a Modern Pit Facility, which will provide the Nation with the means to respond to new, unexpected, or emerging threats in a timely manner. The fiscal year 2003 budget request supports our industrial base in two key ways: a request of $1.7 billion for Readiness in Technical Base and Facilities, a 10 percent increase supporting the operations of weapons complex facilities; and, a $243 million request for the Facilities and Infrastructure Recapitalization program to continue this important multi-year initiative into its third year.

• Third, a study examining the aspects of reducing test readiness lead time below the 24 to 36 month requirement for a fully diagnosed test-the NPR states that the lead time needs to be shortened out of prudence, not because there is a current need to test. In fiscal year 2002, the NNSA and the DOD will study the optimum test readiness time that best supports the new triad as directed by the NPR. Pending the outcome of the study, the fiscal year