SPEAKERS CONTENTS INSERTS
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85–517PS
2003
THE AEROSPACE COMMISSION
REPORT AND NASA WORKFORCE
HEARING
BEFORE THE
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
MARCH 12, 2003
Serial No. 108–7
Printed for the use of the Committee on Science
Available via the World Wide Web: http://www.house.gov/science
COMMITTEE ON SCIENCE
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HON. SHERWOOD L. BOEHLERT, New York, Chairman
LAMAR S. SMITH, Texas
CURT WELDON, Pennsylvania
DANA ROHRABACHER, California
JOE BARTON, Texas
KEN CALVERT, California
NICK SMITH, Michigan
ROSCOE G. BARTLETT, Maryland
VERNON J. EHLERS, Michigan
GIL GUTKNECHT, Minnesota
GEORGE R. NETHERCUTT, JR., Washington
FRANK D. LUCAS, Oklahoma
JUDY BIGGERT, Illinois
WAYNE T. GILCHREST, Maryland
W. TODD AKIN, Missouri
TIMOTHY V. JOHNSON, Illinois
MELISSA A. HART, Pennsylvania
JOHN SULLIVAN, Oklahoma
J. RANDY FORBES, Virginia
PHIL GINGREY, Georgia
ROB BISHOP, Utah
MICHAEL C. BURGESS, Texas
JO BONNER, Alabama
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TOM FEENEY, Florida
VACANCY
RALPH M. HALL, Texas
BART GORDON, Tennessee
JERRY F. COSTELLO, Illinois
EDDIE BERNICE JOHNSON, Texas
LYNN C. WOOLSEY, California
NICK LAMPSON, Texas
JOHN B. LARSON, Connecticut
MARK UDALL, Colorado
DAVID WU, Oregon
MICHAEL M. HONDA, California
CHRIS BELL, Texas
BRAD MILLER, North Carolina
LINCOLN DAVIS, Tennessee
SHEILA JACKSON LEE, Texas
ZOE LOFGREN, California
BRAD SHERMAN, California
BRIAN BAIRD, Washington
DENNIS MOORE, Kansas
ANTHONY D. WEINER, New York
JIM MATHESON, Utah
DENNIS A. CARDOZA, California
VACANCY
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C O N T E N T S
March 12, 2003
Witness List
Hearing Charter
Opening Statements
Statement by Representative Sherwood L. Boehlert, Chairman, Committee on Science, U.S. House of Representatives
Written Statement
Statement by Representative Ralph M. Hall, Minority Ranking Member, Committee on Science, U.S. House of Representatives
Written Statement
Prepared Statement by Representative Nick Smith, Member, Committee on Science, U.S. House of Representatives
Statement by Representative Bart Gordon, Member, Committee on Science, U.S. House of Representatives
Prepared Statement by Representative Jerry F. Costello, Member, Committee on Science, U.S. House of Representatives
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Panel I
The Honorable Robert S. Walker, Chairman, Commission on the Future of the United States Aerospace Industry; President, Wexler Walker Public Policy Associates
Oral Statement
Written Statement
The Honorable John W. Douglass, President and Chief Executive Officer, Aerospace Industries Association of America, Inc.
Oral Statement
Written Statement
Biography
The Honorable John J. Hamre, President and CEO, Center for Strategic and International Studies
Oral Statement
Written Statement
Discussion
Role of Propulsion & Power
Using Defense Technologies for Civil Applications
Peer Review of R&D Investment
Financial Health of Commercial Aviation
Air Traffic Management
Future of Civil Aviation
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Industry R&D Spending Practices
Airline Ticket Taxes
NASA Infrastructure Investment
Wind Tunnels
Engine Technology
Future Air Traffic Management & OEP
Trusted Traveler Program
Space Imperative
Space Tourism
High Speed Propulsion Research
Science & Math Education
NASA Aeronautics R&D Investment
Aerospace Sectoral Budget
Improving NASA's Infrastructure
National Aerospace Initiative
Panel II
Mr. Max Stier, President, Partnership for Public Service
Oral Statement
Written Statement
Biography
Mr. Bobby L. Harnage, Sr., President, American Federation of Government Employees, AFL–CIO
Oral Statement
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Written Statement
Mr. George Nesterczuk, Nesterczuk and Associates
Oral Statement
Written Statement
Discussion
Employee Input to Workforce Plan
Buyout Provisions
Outsourcing
Bonuses
NASA Recruiting
Bonus Pay
Funding Salaries and Bonuses
Need to Compare Flexibility and Financial Problems
Pay for Scientists and Engineers
Importance of Continuous Learning
Destination and Vision for NASA
Demonstration Project
Outsourcing
Demonstration Projects
Need for Oversight
Plans for the Workforce Authorities
Appendix 1: Answers to Post-Hearing Questions
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Robert S. Walker, Chairman, Commission on the Future of the United States Aerospace Industry; President, Wexler Walker Public Policy Associates
John W. Douglass, President and Chief Executive Officer, Aerospace Industries Association of America, Inc.
Max Stier, President, Partnership for Public Service
Bobby L. Harnage, Sr., President, American Federation of Government Employees, AFL–CIO
George Nesterczuk, Nesterczuk and Associates
Appendix 2: Additional Material for the Record
H.R. 1085, NASA Flexibility Act of 2003
THE AEROSPACE COMMISSION REPORT AND NASA WORKFORCE
WEDNESDAY, MARCH 12, 2003
House of Representatives,
Committee on Science,
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Washington, DC.
The Committee met, pursuant to call, at 2 p.m., in Room 2318 of the Rayburn House Office Building, Hon. Sherwood L. Boehlert (Chairman of the Committee) presiding.
85517a.eps
HEARING CHARTER
COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
The Aerospace Commission
Report and NASA Workforce
WEDNESDAY, MARCH 12, 2003
2:00 P.M.–4:00 P.M.
2318 RAYBURN HOUSE OFFICE BUILDING
Purpose of Hearing
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On Wednesday, March 12, 2003, at 2:00 p.m. in room 2318 of the Rayburn House Office Building, the House Science Committee will hold a Full Committee hearing to review The Final Report of the Commission on the Future of the United States Aerospace Industry and NASA Workforce legislation. This hearing will consist of two panels. The first panel will review the Aerospace Commission report issued last November to the President and Congress. The second panel will review proposed legislation, H.R. 1085, the NASA Flexibility Act of 2003. This bill provides additional authorities for the agency to recruit and retain a highly-skilled workforce which was one of the primary recommendations from the Aerospace Commission.
Major Issues for Congress Taken From Aerospace Commission Recommendations
Making U.S. leadership in aviation and space a national imperative. The Commission urges Congress to call public attention to how the aerospace industrial base is in serious danger of decline, and to establish policies and programs to rebuild and sustain this nationally critical industry.
Increasing Federal Investment in Aerospace Research. The Commission calls on the Federal Government to significantly increase its investment in basic aerospace research. One area of research the Commission cites is the development of a new, highly automated air traffic management system that is capable of handling more traffic than could be managed with the Federal Aviation Administration's current system.
Government-wide Management Structure Changes. The Commission recommends a White House aerospace policy coordinating council, creation of an aerospace management office in OMB, and a joint committee in Congress to coordinate federal investment and policy decisions for aerospace.
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Revitalize the U.S. Aerospace Workforce. The Commission recommends several programs to recruit and revitalize the U.S. aerospace workforce for government and industry. One component, to be explored in the second panel, is providing additional legislative authority to enable NASA to recruit and retain skilled employees.
Need for the Aerospace Commission
The Aerospace Commission was established in the Defense Authorization Act of 2001 (P.L. 106–398). Backers of the amendment to create the Commission were concerned that U.S. aerospace industry was at serious risk even before the tragedy of September 11, 2001. The industry was already losing ground in the international marketplace for an array of aerospace products, including commercial aircraft, space launch vehicles and satellites, and military aircraft.
The aerospace industry is a powerful force in the U.S. economy, contributing over 15 percent to the Nation's Gross Domestic Product and supporting over 15 million high quality jobs. Last year, more than 600 million passengers relied on U.S. commercial air transportation, and over 40 percent of the value of all U.S. freight was transported by air. However, a convergence of negative trends in the commercial aerospace market and government spending, aerospace workforce cuts and industry consolidation, overseas competition, and a perceived lack of planning led to a growing alarm and calls to investigate these complex issues through a statutory Commission.
Charter of the Aerospace Commission
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After enactment, the President, Senate, and House of Representative named twelve members to the Commission with a broad range of experience in government, industry, academia, Wall Street, trade associations and unions. The President named former Science Committee Chairman Bob Walker as Chair. The Commission was chartered to study the issues associated with the future of the U.S. aerospace industry in the global economy, particularly in relationship to national security, and to assess the future importance of the domestic aerospace industry to U.S. economic and national security. The scope included an examination of the budget and acquisition processes within the Federal Government, international trade and export controls, the impact of tax policies on international competitiveness, space launch infrastructure, and science and engineering education. Over the course of a year, the Commission held six public hearings, received testimony from over 60 witnesses, and met with over 50 government and industry organizations. The Commission presented a final report to the President and Congress last November. The details of the Commission's recommendations are listed in Appendix A, and the final report is posted on the Commission's website at http://www.aerospacecommission.gov.
NASA Workforce Challenges
One of the nine recommendations from the Aerospace Commission's report was that government, industry, labor, and academia work together to develop an aerospace workforce for the 21st century. Several studies show an approximately 20 percent decline in the number of undergraduate and doctoral degrees awarded in aerospace science and engineering over the last ten years. As 60 percent of NASA's 18,800 civil service employees are scientists and engineers (S&E), the agency's workforce is adversely impacted by these larger national trends and the shrinking talent pipeline of aerospace scientists and engineers. Within NASA's S&E workforce, the over-60 population outnumbers its under-30 population by nearly 3 to 1. While the average age today of NASA's S&E employees is 46 years old, the average age of NASA S&E employees during the Apollo era was 39 years old.
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These workforce trends jeopardize NASA's ability to manage its highly complex missions. Since 2001, the General Accounting Office has ranked ''strengthening human capital'' as one of NASA's top management challenges. The GAO reported in January 2003 (before the Columbia accident): ''NASA's shuttle workforce had declined significantly in recent years to the point of reducing NASA's ability to safely support the shuttle program. Many key areas were not sufficiently staffed by qualified workers, and the remaining workforce showed signs of overwork and fatigue. To the agency's credit, NASA has recognized the need to revitalize the shuttle's workforce. . ..'' Additionally, NASA's independent Aerospace Safety Advisory Panel report in 2001 made similar observations relating to deficiencies with the Space Shuttle workforce.
Need for NASA Workforce Reform Legislation
In May 2002, NASA submitted a set of legislative proposals to augment current civil service authorities to recruit, retain, and restructure its workforce along with justifications for how each proposal would help meet the agency's workforce challenges. The Space and Aeronautics Subcommittee held a hearing on NASA's management and workforce challenges on July 18, 2002 in order to review these legislative proposals and their justification. Since then, some of these legislative proposals were enacted government-wide in the Homeland Security Act of 2002. The NASA Flexibility Act of 2003 (H.R. 1085) would provide the agency with additional civil service authorities. The individual provisions for this legislation are summarized in Appendix C along with comparisons to NASA's current civil service authority.
Witnesses
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Panel One—Aerospace Commission
The Hon. Bob Walker, Chairman, Aerospace Commission
President, Wexler Walker Public Policy Associates
The Hon. John Douglass, Commissioner
President, Aerospace Industries Association
The Hon. John Hamre, Commissioner
President, Center for Strategic and International Studies
Panel Two—NASA Workforce
Mr. Max Stier, President
Partnership for Public Service
Mr. Bobby Harnage, President
American Federal of Government Employees
Mr. George Nesterczuk,
Nesterczuk and Associates
Appendix A
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Aerospace Commission Recommendations
1. The integral role aerospace plays in our economy, our security, our mobility, and our values makes global leadership in aviation and space a national imperative. Given the real and evolving challenges that confront our nation, government must commit to increased and sustained investment and must facilitate private investment in our national aerospace sector. The Commission therefore recommends that the United States boldly pioneer new frontiers in aerospace technology, commerce and exploration.
2. The Commission recommends transformation of the U.S. air transportation system as a national priority. This transformation requires:
Rapid deployment of a new, highly automated air traffic management system, beyond the Federal Aviation Administration's Operational Evolution Plan, so robust that it will efficiently, safely, and securely accommodate an evolving variety and growing number of aerospace vehicles and civil and military operations;
Accelerated introduction of new aerospace systems by shifting from product to process certification and providing implementation support; and
Streamlined new airport and runway development.
3. The Commission recommends that the United States create a space imperative. The DOD, NASA, and industry must partner in innovative aerospace technologies, especially in the areas of propulsion and power. These innovations will enhance our national security, provide major spin-offs to our economy, accelerate the exploration of the near and distant universe with both human and robotic missions, and open up new opportunities for public space travel and commercial space endeavors in the 21st century.
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4. The Commission recommends that the Nation adopt a policy that invigorates and sustains the aerospace industrial base. This policy must include:
Procurement policies which include prototyping, spiral development, and other techniques which allow the continuous exercise of design and production skills;
Removing barriers to defense procurement of commercial products and services;
Propagating defense technology into the commercial sector, particularly in communications, navigation and surveillance;
Removing barriers to international sales of defense products;
Sustaining critical technologies that are not likely to be sustained by the commercial sector, e.g., space launch, solid boosters, etc.; and
Stable funding for core capabilities, without which the best and brightest will not enter the defense industry.
5. The Commission recommends that the Federal Government establish a national aerospace policy and promote aerospace by creating a government-wide management structure. This would include a White House policy coordinating council, an aerospace management office in the OMB, and a joint committee in Congress. The Commission further recommends the use of an annual aerospace sectoral budget to establish presidential aerospace initiatives, assure coordinated funding for such initiatives, and replace vertical decision-making with horizontally determined decisions in both authorizations and appropriations.
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6. The Commission recommends that U.S. and multilateral regulations and policies be reformed to enable the movement of products and capital across international borders on a fully-competitive basis, and establish a level playing field for U.S. industry in the global market place. U.S. export control regulations must be substantially overhauled, evolving from current restrictions on technologies through the review of transactions to controls on key capabilities enforced through process controls. The U.S. government should neutralize foreign government market intervention in areas such as subsidies, tax policy, export financing and standards, either through strengthening multilateral disciplines or providing similar support for U.S. industry as necessary.
7. The Commission recommends a new business model, designed to promote a healthy and growing U.S. aerospace industry. This model is driven by increased and sustained government investment and the adoption of innovative government and industry policies that stimulate the flow of capital into new and established public and private companies.
8. The Commission recommends the Nation immediately reverse the decline in, and promote the growth of, a scientifically and technologically trained U.S. aerospace workforce. In addition, the Nation must address the failure of the math, science and technology education of Americans. The breakdown of America's intellectual and industrial capacity is a threat to national security and our capability to continue as a world leader. The Administration and Congress must therefore:
Create an interagency task force that develops a national strategy on the aerospace workforce to attract public attention to the importance and opportunities within the aerospace industry;
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Establish lifelong learning and individualized instruction as key elements of educational reform; and
Make long-term investments in education and training with major emphasis in math and science so that the aerospace industry has access to a scientifically and technologically trained workforce.
9. The Commission recommends that the Federal Government significantly increase its investment in basic aerospace research, which enhances U.S. national security, enables breakthrough capabilities, and fosters an efficient, secure and safe aerospace transportation system. The U.S. aerospace industry should take a leading role in applying research to product development.
Appendix B
Aerospace Commission Members
The Honorable Robert S. Walker, Commission Chairman; Chairman, Wexler & Walker Public Policy Associates
The Honorable F. Whitten Peters, Commission Vice Chairman; Partner, Williams and Connolly
Dr. Buzz Aldrin, President, Starcraft Enterprises, Sharespace, Starbooster and Starcycler
Mr. Edward M. Bolen, President, General Aviation Manufacturers Assn.
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Mr. R. Thomas Buffenbarger, International President, International Association of Machinists and Aerospace Workers
The Honorable John W. Douglass, President and Chief Executive Officer, Aerospace Industries Association
The Honorable Tillie K. Fowler, Partner, Holland and Knight
The Honorable John J. Hamre, President and Chief Executive Officer, Center for Strategic and International Studies
The Honorable William Schneider, President, International Planning Services
Mr. Robert J. Stevens, President and Chief Operating Officer, Lockheed Martin Corporation
Dr. Neil deGrasse Tyson, Director, Hayden Planetarium
Ms. Heidi R. Wood, Executive Director, Morgan Stanley
Appendix C
Major Provisions of H.R. 1085,
''NASA Flexibility Act of 2003''
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Section 1: Title
Section 2: Compensation for Certain Excepted Personnel. This section provides a technical correction to update section 203(c) of the NASA Act of 1958 (the Space Act). The correction ties the pay scale for NASA Excepted (NEX) Employees to level III of the Executive Schedule ($142,500) rather than the obsolescent pay scale of grade 18 of the General Schedule.
Section 3: Workforce Authorities. This section amends the National Aeronautics and Space Act of 1958 (NASA organic act) to provide an additional title, ''Title V—Workforce Authorities'' and the following sections would be included under that title.
Section 501. Definitions. Several terms used throughout the Act are defined in this section. One key definition used throughout the Act is the term ''critical need,'' which is a specific and important requirement of NASA's mission that the agency is unable to fulfill due to workforce limitations. Many of the authorities in the bill can be used only to address a ''critical need.''
Section 502: Planning, Notification, and Reporting Requirements. This section requires NASA to provide a Workforce Plan to Congress and NASA employees before using its new authorities. The Plan would specify the kinds of cases in which NASA would use its new personnel tools. In addition, six years following enactment, the Administrator is required to provide an evaluation of workforce actions and recommendations for addressing any remaining critical needs.
Section 503: Workforce Authorities. This section lists the specific workforce authorities provided until the time limit of October 1, 2009, subject to certain exceptions specified in Section 511.
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Section 504: Recruitment, Redesignation, and Relocation Bonuses. This section authorizes the NASA Administrator to pay recruitment, redesignation, and relocation bonuses. The size of the recruitment and relocation bonuses is higher than what is allowed under current law. In addition, a new category of bonus, a redesignation bonus, is added, which could be paid to an employee who is newly appointed to a position in NASA from any other Federal Government position without relocating. The bonus allowed under the bill is up to 50 percent of an employee's annual salary multiplied by the agreed-upon service period (up to four years) if the position addresses a critical need, and 25 percent if the position does not address a critical need. Under current law, recruitment and relocation bonuses are authorized only up to 25 percent of annual salary without locality adjustments and without the multiplicative factor of service period.
Section 505: Retention Bonuses. This section authorizes the NASA Administrator to pay retention bonuses up to 50 percent of an employee's annual salary if the employee's position addresses a critical need and 25 percent if the position does not address a critical need. Current law authorizes retention bonuses only up to 25 percent of annual salary without locality adjustments.
Section 506: Voluntary Separation Incentives. This section allows the NASA Administrator to pay Voluntary Separation Incentive (VSI) payments up to 50 percent of an employee's annual salary (current law, under the Homeland Security Act of 2002, only allows up to $25,000) if the employee is in a position that fills a critical need. NASA employees could not receive a VSI payment if they had received any bonus or allowance in the previous 12 months.
Section 507: Term Appointments. This section authorizes the NASA Administrator to make term appointments for up to six years. Current law authorizes four year appointments. This section also allows term appointments to be converted to permanent civil service appointments, which is not allowed under current law. However, the section imposes certain conditions on the use of this term appointment conversion authority.
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Section 508: Pay Authority for Critical Positions. This section authorizes the Administrator to fix pay up to the level of the Vice President's pay ($198,600 per year) for up to ten employees at any given time.
Section 509: Assignments under the Intergovernmental Personnel Act. This section allows the NASA Administrator to extend the term for Intergovernmental Personnel Act (IPA) employees up to four years (from current two years).
Section 510: Enhanced Demonstration Project. This section allows NASA to conduct a personnel demonstration project agency-wide by exempting NASA from the current limitation of 5,000 individuals.
Section 511: Termination. This section specifies that the workforce authorities listed under section 503 terminate on October 1, 2009, but grandfathers in bonuses and appointments made before the termination date.
Chairman BOEHLERT. I want to welcome everyone here this afternoon. I want especially to welcome Bob Walker, who I think everyone knows. He was the first Republican Chair of this committee, and he set a very high standard for all of us who follow. Every time I sit in this chair, Mr. Walker, I have to deal with Bob looking down at me from his portrait on the wall, and it will be a nice change today for me to be able to look down on you.
We are dealing today with two very important and related subjects we have dealt with before. First, we will hear from three members of the Commission on the Future of the United States Aerospace industry, which Mr. Walker chaired. All three have distinguished records of public service. John Hamre is a dear and old friend, and it is always good to see him back. And Mr. Douglass and Mr. Walker, we are so happy to have you here on this panel. You have all performed great public service through the Commission, which has emphasized the threat the U.S. aerospace industry faces and the need to counter that threat.
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This is actually the third hearing we have had just this year that has featured this issue. Members on both sides of the aisle raised concerns about aeronautics research at our NASA budget hearings just two weeks ago. And last week, our Space Subcommittee, under the leadership of Mr. Rohrabacher, raised concerns at its hearing on Aerospace Research at NASA and the Federal Aviation Administration. So we are committed to doing all we can to focus attention on the aerospace industry and issues and to work to resolve them.
One of the issues the aerospace community faces is difficulty in attracting and attaining a top-notch workforce. And there is no place that problem is more obvious than at NASA. As I noted in testimony that I gave before the Senate last week, within five years, a quarter of the NASA workforce will be eligible to retire. As a matter of fact, 15 percent of the scientists and engineers are eligible for immediate retirement. The most recent accounting office report on NASA issued just this past January noted, ''The agency still needs to deal with critical losses due to retirement in coming years.'' This conclusion built on numerous past GAO reports that concluded that NASA had to do more to address its workforce needs.
I have introduced H.R. 1085 to help NASA deal with this enormous challenge, and our second panel will comment on that bill specifically. I hope we can move the bill through the Committee swiftly. H.R. 1085 builds on existing law. It allows NASA, for example, to offer larger recruitment and retention bonuses than are permitted currently and to offer bonuses to employees shifting between federal jobs without relocating. But the language we use parallels existing law and Office of Personnel Management Regulations.
This is a targeted and limited approach. We didn't give NASA everything it asked for, and we have added accountability provisions NASA didn't request. What we are offering is a well thought out and effective approach that will help address critical needs at all levels of the agency. Will this solve all of NASA's problems? Of course not, but this is something we can do right away that will help NASA regain strength while we come up with additional steps to help the agency. To those who criticize this as a Band-Aid approach, I would say that a Band-Aid is a pretty good alternative to continued bleeding and infection.
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I look forward to hearing ideas today on how we can improve H.R. 1085, but we do need to move ahead with this legislation. All of the problems we will hear about today are pressing matters. It is incumbent upon us to act.
[The prepared statement of Mr. Boehlert follows:]
PREPARED STATEMENT OF CHAIRMAN SHERWOOD BOEHLERT
I want to welcome everyone here this afternoon, and I want especially to welcome Bob Walker, who, I think everyone knows, was the first Republican chair of this committee, and he set a high standard for those of us who have followed. Every time I sit in this chair, I have to deal with Bob looking down on me from his portrait on the wall, and it will be a nice change today to be able to reciprocate by looking down on him from the dais.
We're dealing today with two very important and related subjects we've dealt with before. First, we'll hear from three members of the Commission on the Future of the United States Aerospace Industry, which Bob Walker chaired. All three have distinguished records of public service—John Harare is also an old friend—and they have performed another great public service through the Commission, which has emphasized the threat the U.S. aerospace industry faces and the need to counter that threat.
This is actually the third hearing we've had just this year that has featured this issue. Members on both sides of the aisle raised concerns about aeronautics research at our NASA budget hearing two weeks ago, and last week our Space Subcommittee raised concerns at its hearing on aerospace research at NASA and the Federal Aviation Administration (FAA). So we're committed to doing all we can to focus attention on the aerospace issues and to work to resolve them.
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One of the issues the aerospace community faces is difficulty in attracting and retaining a top-notch workforce. And there's no place that problem is more obvious than NASA.
As I noted in testimony I gave before the Senate last week, within five years, a quarter of the NASA workforce will be eligible to retire. The most recent General Accounting Office (GAO) report on NASA, issued just this past January, noted, (quote), ''The agency still need[s] to deal with critical losses due to retirements in coming years.'' This conclusion built on numerous past GAO reports that concluded that NASA had to do more to address its workforce needs.
I've introduced H.R. 1085 to help NASA deal with this enormous challenge, and our second panel will comment on the bill. I hope we can move the bill through the Committee swiftly.
H.R. 1085 builds on existing law. It allows NASA, for example, to offer larger recruitment and retention bonuses than are permitted currently, and to offer bonuses to employees shifting between federal jobs without relocating. But the language we use parallels existing law and Office of Personnel Management (OPM) regulations.
This is a targeted and limited approach—we didn't give NASA everything it asked for, and we've added accountability provisions NASA didn't request. What we're offering is a well thought out and effective approach that will help address critical needs at all levels of the agency.
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Will this solve all of NASA's problems? Of course, not. But this is something we can do right away that will help NASA regain strength while we come up with additional steps to help the agency. To those who criticize this as a ''band aid'' approach, I would say that a ''band aid'' is a pretty good alternative to continued bleeding and infection.
I look forward to hearing ideas today on how we can improve H.R. 1085, but we do need to move ahead with this legislation. All the problems we will hear about today are pressing matters. It is incumbent upon us to act.
PREPARED STATEMENT OF REPRESENTATIVE JERRY F. COSTELLO
Good afternoon. I want to thank the witnesses for appearing before our committee to discuss the Aerospace Commission report issued last November to the President and Congress and Chairman Boehlert's proposed legislation, H.R. 1085, the NASA Flexibility Act of 2003.
A strong aerospace industry will enable the United States to defend itself, compete in the global marketplace, maintain a highly skilled workforce, and provide all Americans with the ability to travel safely and securely anywhere in the world. The Commission has done extensive work in studying these issues and has made nine recommendations to improve the aerospace industry. I look forward to hearing more from our witnesses on the implementation and feasibility of these recommendations.
Further, I support the Aerospace Commission's recommendation that government, industry, labor, and academia must work together to develop an aerospace workforce for the 21st century because the issue of a NASA workforce shortage is problematic. However, I am concerned about the effects the legislation would have on the NASA workforce. H.R. 1085 includes provisions relating to recruitment, redesignation and relocation bonuses, retention bonuses, voluntary separation incentives, special pay authority for critical positions, and unlimited enhanced demonstration project authority. The legislation essentially exempts NASA from several provisions governing the Federal Civil Service. Recruitment and retention are significant problems throughout the Federal Government and I believe that to address this effectively, it is important to examine a comprehensive government-wide approach.
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I welcome our witnesses and look forward to their testimony.
Chairman BOEHLERT. Mr. Gordon.
Mr. GORDON. Thank you, Mr. Chairman. And Bob, let me add my welcome back to you. It is good to see you again. You certainly served with distinction. We may have disagreed on some areas, but it was never a matter of integrity. You were—you served with great distinction. And Mr. Wilson, thank you for coming by yesterday. It was a—Mr. Douglass rather. It was a very good conversation. I wish that we had more time, and hopefully we will have—can do that later.
And to the panel at large, let me thank you for your public service. This is a very important issue. I know that it is time-consuming, but we are glad that you spent the time to do this.
Mr. Hall should be coming in later. If he has some words of wisdom, I would hope, Mr. Chairman, that you would allow him to speak at that time, otherwise, I am going to yield the floor so we can get on and hear from the folks we need to.
Panel I
Chairman BOEHLERT. We always welcome the words of wisdom from Mr. Hall. Our first panel is a very distinguished panel consisting of the Honorable Bob Walker, Chairman, Aerospace Commission. Bob is President of Wexler Walker Public Policy Associates, and served with great distinction as the Chairman of this committee; the Honorable John Douglass, Commissioner, President, Aerospace Industries Association; and the Honorable John Hamre, Commissioner, President, Center for Strategic and International Studies.
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Gentlemen, we would ask that you try to summarize your statement. We will not be arbitrary, but try to be guided by the five-minute rule, and then we will go right to the questions. You are up first, Mr. Walker.
STATEMENT OF HON. ROBERT S. WALKER, CHAIRMAN, COMMISSION ON THE FUTURE OF THE UNITED STATES AEROSPACE INDUSTRY; PRESIDENT, WEXLER WALKER PUBLIC POLICY ASSOCIATES
Mr. WALKER. Well, thank you very much, Mr. Chairman. And thank you and Mr. Gordon for your words of welcome. And I appreciate the reference to a portrait staring down upon you. The portrait that stares down upon me in my office these days is Mario Andretti, that great Pennsylvania philosopher. And it does so because I think a statement of his characterizes the work of this committee that I try to carry with me into the private sector and that is he one time said, ''If you are in control, you are not going fast enough.'' Well, I think that is the reality of the world in which we live, but anyhow, I am delighted to be here. And I thank you for the opportunity to testify and report to you on the work of the Commission on the Future of the United States Aerospace Industry.
Let me begin with a few thoughts about the Commission's final product. First, our recommendations were unanimous. Despite a very diverse group of commissioners whose diversity brought great strength to our deliberations, we were able to achieve unanimity in what we ultimately recommended. There remained some differences in detail about some of the narrative within the report, but we agreed on the nature of the problem faced by the aerospace sector and on a series of recommended paths for the Nation to pursue.
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Second, our overall vision of the 21st century where aerospace allows anyone and anything to go anywhere at any time speak to the mobility that we believe international leadership will require. The ability to move people, goods, services, and munitions quickly to where they are needed and when they are needed to be there is a definition for both global security and global economic leadership.
From here, Mr. Chairman, I—my written testimony goes into detailing the specific recommendations that the Commission made. I will not go through those right now. If there are questions about them, I would certainly be happy to deal with it, but what I wanted to deal with in the rest of my testimony was the questions that were raised as part of the charter for this hearing.
First of all, you raised the issue about the Administration's budget proposals as they relate to the Commission's recommendations. My assessment is that the Administration is moving aggressively in several areas to meet our goals. NASA's request for funding for Project Prometheus is very much in line with our recommendation that they move toward technologies emphasizing power and propulsion. DOD and NASA are cooperating on the National Aerospace Initiative that was specifically endorsed by the Commission. NASA and FAA are beginning cooperative efforts in an advanced air traffic management system, a major focus of our report. And the Commission's—or—and the Administration's Hydrogen Program is very much in line with our recommendation for work on breakthrough energy capabilities.
On the issue of foreign competition, I would make two points. First, the global challenge comes from nations more focused than we are about the importance of aerospace technology and who are developing long-range plans to overcome the United States in an area where we have strategic and economic superiority. Second, our export control policies are preventing U.S. companies from selling products into world markets, meaning that we are undermining the strength of our own aerospace supplier base. Next, we have been very concerned, as this committee has been, about workforce issues. The Commission said quite clearly the aerospace sector requires a scientifically and technologically competent society.
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We recommended several things in the workforce arena, which were covered previously in my testimony, but I would point particularly to the suggestion that educational reform should emphasize individualized instructional programs and lifelong learning. Finally, if there is one overriding conclusion of the Commission it is that we must move toward horizontal decision-making as opposed to the vertical silo decision-making regime that characterizes government interaction with the aerospace industry.
The aerospace mission crosscuts many different departments, agencies, programs, Congressional Committees, and Subcommittees. Decisions made inside of vertical silos are wasteful of taxpayers' dollars and destructive of the coordination needed to utilize aerospace resources to the fullest capacity. For example, an advanced air traffic management system is absolutely vital to our continued leadership in aerospace.
To get the system we need, there will have to be significant cooperation and funding coordination between FAA, NASA, DOD, and NOAA. This is a very tall order, but also a very necessary process. No one of these agencies can do the multi-billion dollar expenditure necessary to get the new system in place. But a cooperative effort with each agency doing its own mission for its own reasons, coordinating research and technology so that individual mission assets can be used broadly is the way to go. DOD flew GPS for its own mission requirements, but the technology has become even more valuable as a broader mission. That is the kind of example that we think needs to be done on a much broader basis. It is the way in which the market has to go in the future.
I thank you for the opportunity to testify.
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[The prepared statement of Mr. Walker follows:]
PREPARED STATEMENT OF ROBERT S. WALKER
Mr. Chairman, thank you for this opportunity to testify and report to you on the work of the Commission on the Future of the United States Aerospace Industry.
Let me begin with a few thoughts about the Commission's final product.
First, the recommendations made were unanimous. Despite a diverse group of Commissioners, whose diversity brought great strength to our deliberations, we were able to achieve unanimity in what we ultimately recommended. There remained some differences in detail about some of the narrative within the report, but we agreed on the nature of the problem faced by the aerospace sector and on the series of recommended paths for this nation to pursue.
Second, our overall vision of a 21'' century where aerospace allows anyone and anything to go anywhere at anytime speaks to the mobility which we believe international leadership will require. The ability to move people, goods, services and munitions quickly to where they are needed when they are needed to be there is a definition for both global security and global economic leadership.
Let me if I can outline the recommendations made by the Commission and some of the reasoning behind those recommendations.
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RECOMMENDATION 1: VISION: ANYONE, ANYTHING, ANYWHERE, ANYTIME
The integral role aerospace plays in our economy, our security, our mobility, and our values make global leadership in aviation and space a national imperative. Given the real and evolving challenges that confront our nation, government must commit to increased and sustained investment and must facilitate private investment in our national aerospace sector. The Commission therefore recommends that the United States boldly pioneer new frontiers in aerospace technology, commerce, and exploration.
Background
The 20th century was America's century. Our nation thrived on previously unimagined advances in ground, air and space transportation, rapidly becoming the world leader in nearly every economic sector driven by the progress of science and technology.
One hundred years ago, the slogan ''Anyone, Anything, Anywhere, Anytime'' would have meant leaving home with transportation permitted ,and then allowing a week or two to travel between widely separated American cities. Today, New York to London is a day trip. A package of any size shipped today arrives tomorrow morning anywhere in the country.
What could ''Anyone, Anything, Anywhere, Anytime'' mean a century from now? A suborbital day trip between Japan and the United States? A lunar vacation? A Martian hiking expedition? Whatever our future holds, the aerospace sector will take us there, providing our nation and the world with the ability to move people, goods, services, and ideas wherever they are needed and wherever they are wanted.
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We need a bold vision for air transportation that creates a new, highly automated ''Interstate Skyway System.'' The system needs to be safe, secure, and efficient and accommodate the large volume and variety of civil and military aerospace vehicles the Nation will require in coming years.
We also need an audacious vision of space exploration that recognizes the solar system as our backyard, the Milky Way galaxy as our neighborhood, and the universe as our hometown. We should do this not simply because it's fun or thrilling, or challenging, or enlightening. . .but because it represents a critical investment in our economic strength and ultimately in our capacity to defend ourselves.
It's America's choice.
RECOMMENDATION 2: AIR TRANSPORTATION: EXPLOIT AVIATION'S MOBILITY ADVANTAGE
The Commission recommends transformation of the U.S. air transportation system as a national priority. The transformation requires:
Rapid deployment of a new, highly automated Air Traffic Management (ATM) system beyond FAA's Operational Evolution Plan so robust that it will efficiently, safely, and securely accommodate an evolving variety and growing number of aerospace vehicles and civil and military operations.
Accelerated introduction of new aerospace systems by shifting from product to process certification and providing implementation support.
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Streamlined new airport and runway development.
Objective
Delivering people and goods quickly and affordably—when and where needed.
Background
Our air transportation system is severely limited in its ability to accommodate America's growing need for mobility. The basic system architecture, operational rules, and certification processes developed decades ago don't allow today's technologies to be fully utilized and don't allow needed innovations to be rapidly implemented. There are barriers to advancing our air mobility.
First, the U.S. air traffic management infrastructure is not scalable and is vulnerable. Air transportation's inherent speed advantage is being limited by air traffic infrastructure and operating concepts.
Second, revamped certification processes, procedural regulations, and airborne equipage innovation is needed. The bulk of certification and procedural regulations and processes were developed in an era whose time has passed and hasn't kept pace with new technologies. Furthermore, aircraft operators must equip with compatible hardware and systems in order for a modernized air traffic network to succeed.
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Third, new runway and airport development takes too long. Meeting the Nation's demand for air transportation and fully exploiting its benefits will require a ground infrastructure that accommodates significant traffic increases. Many of the Nation's major airports are operating at capacity limits during large portions of the day.
In addition, the economic downturn and the substantial added security burden since 9/11 have seriously disrupted the economic health of the airline industry. Well-intentioned security policies have resulted in billions in post-9/11 costs and lost revenue and account for a large majority of the projected $9 billion in airline industry losses in 2002.
General aviation also has been acutely affected, manufacturers and suppliers are suffering significant losses in aircraft and equipment sales, and the overall impact is rippling through the rest of the U.S. economy.
And, as the forced contraction of the industry continues, small and mid-size communities are being disconnected from the national air transportation system that is vital to their economies.
The U.S. government must assume full cost and responsibility for assuring the protection of our aviation system against terrorist attack. At the same time it must adopt rational security measures that facilitate public access to the air transportation system, and thereby encourage air travel.
RECOMMENDATION 3: SPACE: ITS SPECIAL SIGNIFICANCE
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The Commission recommends that the United States create a space imperative. The Department of Defense, NASA, and industry must partner in innovative aerospace technologies, especially in areas of propulsion and power. These innovations will enhance our national security, provide major spin-offs to our economy, accelerate the exploration of the near and distant universe with both human and robotic missions, and open up new opportunities for public space travel and commercial space endeavors in the 21st century.
Objective
The challenge we face on the space frontier is to build from dreams and concepts the political will to move forward to new technologies and destinations. For almost 20 years we have been satisfied to limit our dreams, rely upon proven technologies, and invest little in building public or political support for space initiatives. But the potential to do great things has never been nearer.
Background
The Commission believes the Nation would benefit from a joint effort by NASA and DOD to reduce significantly the cost and time required to access space. Such an effort would build on the capabilities of both organizations and provide the ''critical mass'' of funding needed to create the necessary breakthroughs in propulsion.
Investment in the development of more advanced propulsion systems will lead to faster transit times, improve operational flexibility, and reduce the radiation impact for long-duration, human exploration missions. Once the time to explore many parts of the solar system has been reduced to reasonable numbers, the political imperative to do what is now possible will be acted on.
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A significant limiting factor in the performance of most spacecraft, including the International Space Station, is the amount of power that can be generated from solar energy, increasing available power could expand opportunities in military, civil, and commercial space applications. Once there is sufficient power in orbit to do real things, investment will be more likely.
New technologies open up opportunities for a next generation of satellites and launch systems for military operations, homeland defense, global protection, and air transportation management.
The Commission believes the Nation needs a joint civil and military initiative to develop a core space infrastructure that will address emerging national needs.
Our national space infrastructure is aging. For example, the Vehicle Assembly Building at Kennedy Space Center has a 35-year-old roof that requires frequent patching and other failures that have resulted from hurricanes and high winds. Replacement cost of infrastructure is $3.9 billion at the Kennedy Space Center and $3.0 billion at Cape Canaveral Air Force Station. Clearly a new operations and management structure is desirable for these facilities.
The civil and commercial aerospace sectors will look to space more in the future to develop new products and services and create new markets as they have for telecommunications and commercial remote sensing. The U.S. commercial space industry continues to lose access to markets as demand decreases and international competition increases. Government regulations and incentives are necessary to bolster this important market until there is a turn-around in demand.
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The Commission believes that the search for knowledge will not only answer fundamental questions but also will inspire our children and provide a source of future products and services. This will require that the U.S. government sustain its long-standing commitment to science and space and continue to focus on international cooperative efforts.
RECOMMENDATION 4: NATIONAL SECURITY: DEFEND AMERICA AND PROJECT POWER
The Commission recommends that the Nation adopt a policy that invigorates and sustains the U.S. aerospace industrial base. This policy must include:
Procurement policies that include prototyping, spiral development, and other techniques that allow the continuous exercise of design and productions skills.
Stable funding for core capabilities without which the best and brightest won't enter the defense industry.
Removing barriers to international sales of defense products.
Removing barriers to defense procurement of commercial products and services.
Propagating defense technology into the civil sector, particularly in communication, navigation, and surveillance.
Sustaining critical technologies that aren't likely to be sustained by the commercial sector, e.g., space launch and solid rocket boosters.
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Objective
A healthy aerospace industry is central to maintaining a safe and secure world. It provides the ability to:
Rapidly, safely; and securely send and receive information;
Move troops, equipment, and supplies to anywhere on the globe or into space at anytime, and
Prosecute effects-based warfare.
Background
The effectiveness of American defense is a crucial determinant of world peace, prosperity, and stability. In the 21st century enabling technologies for vital military capabilities will come from the commercial sector as well as the defense sector. Today's military capabilities are at risk due to a threatened industrial base, workforce concerns, and the need to protect critical infrastructure.
The Defense Department should task the Defense Science Board to develop a national policy that will invigorate and sustain the U.S. aerospace industrial base. The policy should address issues such as mergers and acquisitions, procurement and budgeting policies, research and investment, technology transition, international sales, and workforce development.
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The United States must continually develop new experimental systems in order to sustain the critical skills to conceive, develop, manufacture, and maintain advanced systems and provide expanded capabilities to warfighters.
The Federal Government and industry must partner to enhance the operational readiness and capability of new and legacy military aerospace systems. The government should fund research and technology development programs to reduce total ownership costs and environmental impacts and create a structured, timely, and adequately funded technology insertion process and reform procurement practices accordingly.
RECOMMENDATION 5: GOVERNMENT: PRIORITIZE AND PROMOTE AEROSPACE
The Commission recommends that the Federal Government establish a national aerospace policy and promote aerospace by creating a government-wide management structure. This would include a White House policy coordinating council, an aerospace management office in the Office of Management and Budget, and a joint committee in Congress. The Commission further recommends the use of an annual sectoral budget to establish presidential space initiatives, and replace vertical decision-making with horizontally determined decisions in both, authorizations and appropriations.
Objective
In the rapidly changing global economy, government leadership must be increasingly flexible, responsive, and oriented toward decision-making at macro levels. It must prioritize and promote aerospace within the government and in its interactions with the industry in order to realize the fullest potential of aerospace to the Nation.
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Background
The development and implementation of federal aerospace policy is currently spread across multiple government agencies with oversight by numerous congressional committees. The government isn't organized to define national aerospace priorities, develop federal aerospace sector plans and budgets, manage programs that cross multiple departments and agencies, or foster a healthy aerospace sector in a global economy.
The Federal Government is organized vertically while national aerospace challenges are becoming more horizontal in nature. Without integration, national aerospace policy occurs either by default or piecemeal. The Commission believes that the U.S. government can only ensure U.S. aerospace leadership by leading itself. To do this, the executive and legislative branches need to be reoriented to better address national aerospace issues.
Maintaining a national aerospace policy should be a function assigned jointly to the National Security Council and the National Economic Council. They should establish an Aerospace Policy Coordinating Council to develop and implement an integrated national aerospace policy. OMB should create a Bureau of Aerospace Management that would translate the national policy into annual planning and budget guidance.
Federal departments and many agencies should establish offices of aerospace development to promote aerospace activities and align aerospace with their missions. A prudent response from Congress would be to organize a Joint Committee on Aerospace.
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Government processes tend to be complex, lengthy, and inefficient. As a result, aerospace products and services developed and used by the government are more costly for the taxpayers and take longer to acquire. Also, aerospace products and services developed by industry for sale in the commercial marketplace take longer and cost more because of extensive government barriers resulting in lost market share and diminished profitability.
Government, industry, labor, and academia must work together as partners to transform the way they do business, allowing the Nation to capitalize on the best ideas available and apply them rapidly to new aerospace products, processes, and services.
RECOMMENDATION 6: GLOBAL MARKETS: OPEN AND FAIR
The Commission recommends that U.S. and multilateral regulations and policies be reformed to enable the movement of products and capital across international borders on a fully competitive basis and establish a level playing field for U.S. industry in the global marketplace. The U.S. export control regulations must be substantially overhauled, evolving from current restrictions on technologies through the review of transactions to controls on key capabilities enforced through process controls. The U.S. government should neutralize foreign government market intervention in areas such as subsidies, tax policy, export financing, and standards either through strengthening multilateral disciplines or providing similar support for U.S. industry as necessary.
Objective
A globally competitive U.S. aerospace industry.
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Background
Open global markets are critical to the continued economic health of U.S. aerospace companies and to U.S. national security. The 2001 U.S. aerospace trade surplus was nearly $32 billion, the largest surplus of any U.S. manufacturing sector. However, the U.S. industry share of the global market has declined in key sectors over the last 20 years. We are on the brink of ceding our position as the top producer of large commercial aircraft and are losing market share in civil helicopters and aircraft engines. Much of this decline is a direct result of foreign government intervention and protectionist policies.
In order to remain global leaders, U.S. companies must remain at the forefront of technology innovation. They also must have access to global customers, suppliers, and partners.
The defense industrial base is falling farther and farther behind the commercial marketplace because it has to cope with excessive regulation. The current export control regime provides too little security and is choking American companies and preventing effective technology collaboration with others. U.S. export controls must be completely overhauled, and defense procurement policies must more effectively balance international collaboration and maintain U.S. industrial capacity in critical technologies and capabilities.
Although we are ahead of other countries in investment in military technology and capability, we are on the edge of dropping out of the race in the civil sector. Instead of continuing to invest, our government has increasingly pulled back from the civil aerospace market and left it up to U.S. companies to compete against competitors subsidized by their governments.
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RECOMMENDATION 7: A NEW MODEL FOR THE AEROSPACE SECTOR
The Commission recommends a new business model designed to promote a healthy and growing U.S. aerospace industry. This model is driven by increased and sustained government investment and the adoption of innovative government and industry policies that stimulate the flow of capital into new and established public and private companies.
Objective
A strong and healthy U.S. aerospace industry that is attractive to investors.
Background
The U.S. government budgeting and procurement system is extraordinarily complex and inefficient. Unpredictable and unstable government budgeting and funding creates a cycle that contributes to the diminished return on the government's investment in national security capabilities and serves as an impediment to long-term industry excellence.
A stable long-term investment budget is critical to the modernization and transformation goals of U.S. armed forces. The Commission advocates increasing the government's financial flexibility to make funding adjustments among and within programs.
In a call to revise program management policies, the Commission believes the use of multi-year contracting for both procurement and R&D programs will improve program stability and performance as well as produce needed cost savings.
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The U.S. aerospace industry extends through a network of purchasers, subcontractors, suppliers, and partners—sometimes referred to as the supply chain. Each of the participants is intrinsically tied to the factors affecting the industry. Encouraging a climate that is attractive to new entrants, while stable enough for current players, will promote competition and innovation, add to efficiencies, and lower costs.
Certain U.S. tax and trade laws and regulations that affect a variety of industries weigh particularly heavily on defense and aerospace in competition with domestic commercial entities as well as in international markets.
Government and industry should work together to develop and implement training and exchange programs that would educate and expose their respective workforces to each other's challenges and responsibilities.
Government must develop and implement a policy regarding international cooperation in defense and aerospace that recognizes the global industrial base. The Commission urges a review of the policy regarding domestic and international business combinations.
RECOMMENDATION 8: LAUNCH THE FUTURE
The Commission recommends that the Nation immediately reverse the decline in and promote the growth of a scientifically and technologically trained U.S. aerospace workforce. In addition, the Nation must address the failure of math, science, and technology education of Americans. The breakdown of America's intellectual and industrial capacity is a threat to national security and our capability to continue as world leader. Congress and the Administration must therefore:
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Create an interagency task force that develops a national strategy on the aerospace workforce to attract public attention to the importance and opportunities within the aerospace industry.
Establish lifelong learning and individualized instruction as key elements of educational reform.
Make long-term investments in education and training with major emphasis in math and science so that the aerospace industry has access to a scientifically and technologically trained workforce.
Objective
A well educated, scientifically literate, and globally competitive aerospace workforce.
Background
There is a major workforce crisis in the aerospace industry. Our nation has lost more than 600,000 scientific and technical aerospace jobs in the past 13 years. Those losses began as a result of reduced defense spending following the end of the Cold War. But subsequent contraction of the industry through mergers and acquisitions and the events of 9/11 have made that situation worse.
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Due to these actions and events, many of the workers who have lost their jobs are unlikely to ever return to the industry. These losses, coupled with pending retirements over the next 10 years, represent a devastating loss of skill, experience, and intellectual capital to the industry. Few new young employees are in the ''pipeline'' to replace the aging aerospace workforce.
The aerospace industry has historically been cyclical and strongly driven by defense spending. Global competition, especially in commercial aviation, has risen rapidly since 1989, most notably from Europe, and is likely to grow.
The aerospace industry must have access to a scientifically and technologically trained workforce. In the long-term, the Commission stresses that that action must be taken to improve mathematics and science education from K–12 through Ph.D.
It is likely that people entering the workforce now will hold five or more jobs in their lifetime, and the education system must be prepared to deliver training and education to meet these changing skill requirements and labor market needs.
RECOMMENDATION 9: ENABLE BREAKTHROUGH AEROSPACE CAPABILITIES
The Commission recommends that the Federal Government significantly increase its investment in basic aerospace research, which enhances U.S. national security, enables breakthrough capabilities, and fosters an efficient, secure, and safe aerospace transportation system. The U.S. aerospace industry should take a leading role in applying research to product development.
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Objective
U.S. preeminence in aerospace research and innovation.
Background
In the past, aerospace led the technology revolution because of large public investment in research directed at national security imperatives and goals. Today, we have no integrated national aerospace consensus to guide policies and programs. This has resulted in unfocused government and industry investments spread over a range of research programs and aging infrastructure.
The lack of sufficient, sustained public funding for research, development, test, and evaluation infrastructure limits the Nation's ability to address critical national challenges and to foster breakthrough aerospace capabilities that could enable a new era in aerospace leadership for America.
To provide focus for aerospace investments on developing breakthrough capabilities, the Commission suggests the government achieve, as a national priority, the following goals by 2010:
Air Transportation
Demonstrate an automated and integrated air transportation capability that would triple capacity by 2025.
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Reduce aviation noise and emissions by 90 percent.
Reduce the aviation fatal accident rate by 90 percent.
Reduce transit time between two points on Earth by half.
Space
Reduce cost and time to access by half.
Reduce transit time between two points in space by half.
Demonstrate the capability to monitor and survey continuously Earth, its atmosphere, and space for a wide range of military, intelligence, civil, and commercial applications.
Time to Market
Reduce the transition time from technology demonstration to operational capability from years and decades to weeks and months.
Now I would like to turn to the specific questions you raised in your charter for this hearing.
On the issue of the Administration's budget proposals for research and their relationship to Commission recommendations, my assessment is that the Administration is moving aggressively in several areas to meet our goals. NASA's request for funding of Project Prometheus is very much in line with our recommendation that they move technologies emphasizing power and propulsion. DOD and NASA are cooperating on the National Aerospace initiative that was specifically endorsed by the Commission. NASA and FAA are beginning cooperative efforts in an advanced air traffic management system, a major focus of our final report. The Administration's hydrogen program is in line with our recommendation for work on breakthrough energy capabilities.
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On the issue of foreign competition, I would make two points. First, the global challenge comes from nations more focused than we are about the importance of aerospace technology and who are developing long-range plans to overcome the United States in an arena where we have had strategic and economic superiority. Second, our export control policies are preventing U.S. companies from selling product in world markets meaning that we are undermining the strength of our own aerospace supplier base.
Next, we are very concerned about workforce issues. The Commission said quite clearly that the aerospace sector requires a scientifically and technologically competent society. We recommended several things in the workforce arena, which are covered previously in my testimony, but I would point particularly to he suggestions that educational reform should emphasize individualized instructional programs and lifelong learning.
Finally, if there is one overriding conclusion of the Commission, it is that we must move toward horizontal decision-making as opposed to the vertical silo decision-making regime that characterizes government interaction with the aerospace industry. The aerospace mission cross cuts many different departments, agencies, programs, Congressional committees, and subcommittees. Decisions made inside vertical silos are wasteful of taxpayers' dollars and destructive of the coordination needed to utilize aerospace resources to the fullest capacity.
For example, an advanced air traffic management system is absolutely vital to our continued leadership in aerospace. To get the system we need, there will have to be significant cooperation and funding coordination between FAA, NASA, NOAA, and DOD. That is a very tall order, but a very necessary process. No one of these agencies can do the multi-billion dollar expenditure necessary to get the new system in place, but a cooperative approach with each agency doing its own mission for its own reasons coordinating research and technology so that individual mission assets can be used broadly is the way we must go. DOD flew GPS for its own mission requirements, but the technology has become even more valuable as a broader mission. That is a market for the future.
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Thank you for this opportunity to testify.
Chairman BOEHLERT. Boy, what a skilled master you are. You even left some time. Mr. Douglass.
STATEMENT OF HON. JOHN W. DOUGLASS, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AEROSPACE INDUSTRIES ASSOCIATION OF AMERICA, INC.
Mr. DOUGLASS. Thank you, Mr. Chairman. I would like to begin by thanking you and Mr. Gordon for holding this hearing today, sir. This is a very crucial time for our industry, and your leadership in holding hearings like this is greatly appreciated. But I would also like to thank my two colleagues here for the work that they did on the Presidential Commission and for the continuing involvement of the time and energy that they both are putting into this work. And with your permission, sir, I would like to submit my written statement for the record and just briefly summarize it.
Chairman BOEHLERT. Without objection, all of the statements will appear in the record and in their entirety.
Mr. DOUGLASS. I—there are really three basic points that I would like to make in this summary. The first is that the aerospace industry, in its entirety, which is that its military work, its civil aviation work, its space work, and its homeland security work, is really the cornerstone and foundation of both our national economy and our national security. It represents about 11 million jobs, 15 percent of our gross domestic product. And it is the single biggest positive export trade balance in the American economy, approximately $30 billion in fiscal year 2002. So it is the cornerstone of two of the most important parts of American life: our economy and our national security.
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The second point, sir, is that the industry is passing through a severe crisis. The American airline industry is nearly bankrupt. Just yesterday, my colleagues at the Air Transport Association, published a report called ''The Perfect Storm,'' and with your permission, sir, I would like to also enter that into the record. That outlines in detail the nature of the crisis that the airline community is facing.
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Mr. DOUGLASS. The second part of this second point is that the commercial space market has almost ceased to exist. Several years ago, a panel not unlike the Commission that the three of us are on, looked forward to the first decade of this century and estimated that we would see about 70 commercial launches a year. Last year, there were two, sir. And so that part of the market has almost collapsed, meaning that the military market for space is taking up the whole load of our national commitment to space.
Next, the manufacturing base is contracting at an alarming rate because of these events in commercial aviation and civil space. Despite the increases that we have seen in our defense program, we have lost 115,000 jobs since September the 11th, 2001. That is approximately 15 percent of our workforce. And today, the workforce, which underpins this vital part of our economy and our national security, is at the lowest level that we have ever kept records for. Our records go back to 1953. And just by extrapolating from '53 back and discounting the war years, we think we are at a level approximately of where we were just before World War II broke out, which is the lowest level in well over 50 years in terms of employment.
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While all of this is going on, our international competition has made it—this—I am primarily now talking about the European aerospace industry, has set their national goals to supplant us as the world's leader in aerospace.
Now my third point is, I think, the major point that was made by the Commission in its entirety, and that is that we can turn this situation around with a relatively modest investment if we act now. Some of the key parts of the Commission report that I would like to bring to your attention are first that we must act to create an environment where air transportation system is profitable. And we must be mindful of the long-term needs of this sector of our economy. The second one is the one that you introduced in your opening statement, sir, and that is that we have got to renew our aerospace infrastructure. And here, I am talking about our human capital in our facilities. You outlined very eloquently some of the problems in the human capital part of the industry.
Our facilities at NASA today are aging to the point where no one wants to use them anymore. I just happened to be over with the Navy the day before yesterday looking at some of their advanced programs, and they, like industry, are thinking of going to Europe for future wind tunnel testing because of the old nature of NASA facilities.
Sir, we have got to also maintain our ability to use and exploit our position as the world's leader in space technology. If you think about where we are today and you think about the dreams and vision of our leadership a generation ago, we pretty much achieved all of those dreams and visions of a generation ago in regards to what our nation can do in space. The issue for us today is can we maintain that vision and where do we go from here? And as we all know, the recent tragedy with the space shuttle has made this even more complicated and more difficult.
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Finally, sir, we must not lose sight of our long-term needs as we solve these current crises. There are huge, long-term structural needs in modernizing our air traffic control system here in the United States, and we have got to look to those needs.
So I will just close with the good news. And the good news is what my colleague pointed out in his testimony, and that is that much of the technology that we need to solve these problems exists today in our Department of Defense. And hopefully, if we look at using this technology in a crosscutting way in our economy, we can resolve some of these problems without too much of a massive investment in new research.
Thank you for the opportunity to talk, sir.
[The prepared statement of Mr. Douglass follows:]
PREPARED STATEMENT OF JOHN W. DOUGLASS
Introduction
On behalf of the member companies of the Aerospace Industries Association of America, or AIA, I wish to thank Chairman Boehlert, Congressman Hall and the Members of the House Science Committee for the opportunity to testify this afternoon regarding legislative implementation alternatives proposed by the report of The Commission on the Future of the U.S. Aerospace Industry. The House Science Committee has worked diligently on issues affecting the vitality of our industry, and AIA is grateful for your efforts. We also appreciate, Mr. Chairman, your early and vocal support for the mandate and the recommendations of the Aerospace Commission.
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AIA operates as the Nation's largest trade association representing small, medium and large manufacturers of aerospace products. We currently have approximately 80 regular and 150 associate member companies involved in the design and manufacture of aircraft and spacecraft as well as related systems and subsystems. After discussing some of the key economic and technological indicators of the industry's position today, I will address the Commission's Research and Development (R&D), civil aviation and space recommendations of particular interest to the Committee and then highlight several military programs of importance to the long-term defense of our homeland as well as our allies and interests overseas.
A Snapshot of the Aerospace Industry
A Record of Industrial Innovation
The aerospace sector of our economy, Mr. Chairman, generates economic activity equal to nearly 15 percent of the Nation's Gross Domestic Product and supports approximately 11 million American jobs. Our industry leads the Nation in net exports, posting a $30 billion surplus in 2002. Aerospace workers furthermore represent 4.5 percent of all manufacturing employment, and their productivity generated $148 billion in sales last year. Of this amount, civil aircraft revenue totaled $43.3 billion while military and space-related sales accounted for $80 billion.
Aerospace enterprises contribute directly to the economic and national security of the United States. Civil aviation, for example, enables the movement of people, resources and ideas that anchor jobs at home while expanding our trade and investment opportunities abroad. Cable and wireless technologies pioneered by the military planted the seeds for the Internet and mobile telecommunications. Materials and optical transmission research done by NASA and its contractors have advanced life-saving diagnostic procedures, land management techniques and our understanding of climate change. And in the realm of national defense, Mr. Chairman, precision-guided weapons and real-time reconnaissance systems prepare our dedicated forces to protect the United States from new adversaries who blur the boundaries—and the standards of conduct—between nations.
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The Challenges Ahead
Economic, political and demographic developments of the last several years, however, pose immediate challenges to the aerospace industry. Since the end of the Cold War, two recessions, business re-structuring and subsidized foreign competition have caused the U.S. share of the global aerospace market to fall from 72 percent in 1985 to less than 52 percent today. ASIA forecasts that sales of civil aircraft alone will decline by nearly $20 billion between 2001 and the end of this year. Commercial space sales peaked in 1997 at six billion dollars but had fallen to $3.4 billion by the end of 2002. Most dramatically, the aerospace manufacturing segment, with 689,000 employees as of last December, stands at its lowest level since World War II. Just since the attacks of September 11th, this work force has declined by 13 percent. In answer to the second question of your invitation letter, Mr. Chairman, the near-term decline in aerospace sales and employment have harmed the overseas competitiveness of U.S. producers. The superiority of American satellite, space-based communications, military and civil airframe products, paired with ongoing improvements in worker productivity and manufacturing automation, will aid our companies in the search for stable international markets. But as the Aerospace Commission made clear, prudent investment, regulatory strategic policies on the part of government, which I will discuss beginning in a few minutes, are equally vital to the long-term health of the industry.
I would like to address another question of interest to the Committee concerning the relative impact of economic conditions and evolving business models on aerospace profitability. Market- and merger-driven business model reforms, compounded by changing government funding cycles, have pressured the revenue streams of the industry. DOD's FY04 procurement request, for example, recovers barely more than one-half of the FY85 high point of $142 billion. Corporate mergers and the rise of European state-subsidized consortia have intensified the development of low-cost, highly-automated production lines in the civil transportation segment just during the last seven years. Industry business models, by emphasizing higher productivity per employee, should have a stabilizing effect on cash flow. But long-term profitability depends on the recovery of the civil aviation market and substantial increases in defense procurement. Unfortunately, the pending crisis in Iraq is eroding investment in each of these markets as civil flights continue to decline and the operational needs of our forces shift investment from modernization.
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Next to revenue and job losses, the industry faces a significant shortage of younger, technically-skilled professionals. The average age of the aerospace manufacturing employee is now 51; the same number,for engineers rises to 54. In 2008, 27 percent of aerospace workers will become eligible for retirement. Government agencies confront similar demographic trends. NASA's personnel under the age of 30, for instance, are one-third the number over the age of 60. As the workforce ages, technical professionals also migrate to other disciplines. Twenty-four years ago, aerospace companies employed 20 percent of the Nation's R&D scientists and engineers; by 2001, the level had tumbled to 2.4 percent. At the same time, foreign nationals represent 40 percent of the students now earning engineering and science doctoral degrees in the United States. These young people often return to their native countries or cannot qualify for sensitive domestic defense and space jobs.
By acting now, we have the opportunity, Mr. Chairman, to revitalize the markets and human capital of an industry so critical to our freedom, mobility and prosperity. As you and the Committee know, the Aerospace Commission report contains nine overall recommendations for civil aviation, space, military, acquisition, research and workforce reforms. In the following sections of my testimony, I will offer some legislative and policy proposals on aspects of the report that fall under the jurisdiction of the Science Committee. I will then detail a few items from the defense budget to complete the picture of how the aerospace industry makes an integrated contribution to our national security and socio-economic quality of life.
Aerospace Research and Development
The first question of your invitation letter, Mr. Chairman, accurately noted that the Federal Government spends more on aerospace research than any other country. But as your question further anticipated, the Aerospace Commission found that the government should create a systematic framework to support pre-competitive basic aerospace research. This process would embrace the policy of fostering capabilities for industry to apply in advanced air transportation; navigation, surveillance and telecommunications products. Our foreign competitors not only appreciate the value of pre-competitive research, but also focus investment on product development. In a bold 2001 document entitled A Vision for 2020, the European Commission (EC) established a multilateral goal for obtaining ''global leadership'' in civil aviation during the next 17 years. More importantly, the EC has committed $93 billion to its vision, making government entities responsible for the funding of 30 percent of the continent's civil aeronautics R&D. And as you wrote to the Secretary of Transportation on October 1, 2002, Mr. Chairman, the European Air Traffic Alliance has started to work on a next-generation Air Traffic Management system scheduled for activation by 2018.
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In the United States, however, the tide has moved in the opposite direction. Since 1998, the combined NASA and DOD investment in aeronautics research and technology programs has fallen by one-third. Federal R&D and research infrastructure investments in aerospace dropped 75 percent from 1987 to the year 2000 (after adjusting for inflation). Taking these factors into account, the Aerospace Commission warned that the Nation could miss several opportunities to incubate ''breakthrough capabilities'' in high-performance computers; propulsion and energy systems; noise and emissions mitigation; and hydrogen-fueled engines.
The President's FY04 NASA and FAA budget proposals represent a modest start in addressing our federal R&D resource gaps. I respectfully urge the Committee to support NASA's $959 million Aeronautics Technology and the FAA's $100 million Research, Development and Engineering requests. These two programs devote the majority of their funding to civil aircraft safety and structural improvements: As a complement to the President's budget, I also recommend that the Committee pass the Aeronautics Research and Development Revitalization Act of 2003 (H.R. 586), introduced on a bicameral, bipartisan basis by Senators George Allen, Christopher Dodd and Representative John Larson of this distinguished Committee. H.R. 586 gradually increases the NASA and FAA research budgets between now and FY08, with more than 50 percent of the authorized funding reserved for low-noise, low-emissions aircraft and aviation safety programs. The passage of H.R. 586 would signal domestic air travelers and our competitors in Europe that the United States has a vision of reliability for the civil aviation realm to match our global superiority in the military realm. It would also give the FAA more flexibility to adapt military surveillance and communications technologies in upgrading the air traffic control network.
Moreover, the Committee has an opportunity, in cooperation with the Ways & Means panel, to re-visit the issue of the federal R&D tax credit. The current 20 percent credit expires next year. Based on outdated defense spending trends from the 1980s, however, the aerospace industry qualifies only for an ''alternative credit'' of less than four percent. This inequity has a disproportionate impact on companies that invest in high-risk R&D to validate many of the aeronautics capabilities that I mentioned a few moments ago. Furthermore, a recent study by the General Accounting Office found that the R&D tax credit generated one-third of real economic growth in the U.S. during the late 1990s. Congress should act this year on the conclusions of the GAO by making the credit permanent and gradually increasing the ''alternative'' percentage to a level comparable with the standard rate.
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Finally, I recommend that the Committee consider legislation to streamline the research information transfer process between the government and the private sector. As the Aerospace Commission noted, technology deployment often outpaces the completion of cooperative agreements among federal agencies and private sector research organizations. The manufacturing sector, in turn, has missed opportunities to capitalize on government-sponsored basic research to develop higher-performing aerospace systems. To address these problems, the FY04 NASA Reauthorization bill could serve as a vehicle for mandating an assessment of interagency research programs and new guidelines to streamline proposal evaluation and contractual oversight procedures.
Products and services that transform or prolong our lives always begin with bold ideas, as proven, among others, by the Wright brothers, Dr. Jonas Salk, and the information entrepreneurs who power the World Wide Web. I therefore ask the Committee to support basic aerospace R&D programs that will enable Americans to travel, trade and communicate with greater efficiency in the future.
Civil Aviation
The decline in air travel and system delays following the attacks of September 11th is temporary. Forecasters agree that growth in demand for air transportation ultimately will return to much higher historic levels and will outpace available and currently planned capacity. Aging infrastructure and often insufficient capacity, coupled with high passenger volume, should make the cause of airport and air traffic management modernization an urgent national priority. U.S. airlines and general aviation carriers serve more than 750 million passengers per year, carry 27 percent of the Nation's exports and imports and pump nearly one billion dollars into the domestic economy. But a duplicative infrastructure review process delays many airport facility and runway projects by between 10 and 15 years. At the same time, the Aerospace Commission found that FAA policies and oversight practices fail to take advantage of new communication, navigation, surveillance and air traffic management (CNS/ATM) products to modernize our aging and cumbersome air traffic control system.
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NASA's Strategic Plan estimates that as domestic and international airports reach full capacity without adequate expansion, the airline industry could lose $20 billion in output and forfeit up to 200 billion passenger miles by 2015. Your October 2002 letter to the Transportation Secretary, Mr. Chairman, also noted that while the U.S. is ''the world's preeminent provider of safe and efficient air navigation services. . .at the federal level, no department or agency has taken on the task of planning for a follow-on Air Traffic Management system.''
As a result of this crisis of economies and mobility, AIA and the Aerospace Commission urge the Committee to consider the following legislative initiatives to create an integrated federal strategy for air transport modernization:
Full funding of the FAA's FY04 $3.9 billion request for National Airspace System (NAS) safety, homeland security, and air traffic automation programs to advance the Agency's Operational Evolution Plan (OEP). The OEP anticipates the expansion of national air transportation capacity by 30 percent over the next nine years.
Passage of an amendment to the FY04 NASA and/or FAA Reauthorization Bills establishing a joint program office among DOD, NASA, FAA and NOAA. The amendment would mandate a multi-year blueprint and timeline for a revitalized air traffic management network that leverages capabilities and resources from across the Federal Government. The integration and timely dissemination of information using advanced networks will enable the broad situational awareness and collaborative decision-making essential to civil and military users. Beyond the scope of OEP, this provision would also set general policy guidelines for establishing system-level performance requirements to meet long-term safety, security, capacity, efficiency and environmental needs.
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Industry could make a vital contribution to the mission of this proposed joint program office. Many AIA member companies, for example, have invested years of work with a broad group of stakeholders to develop system performance requirements as well as modeling and simulation capabilities to evaluate advanced concepts.
Amending the Aviation Investment and Reform Act for the 21st Century (AIR–21) to require a streamlined FAA regime for airport improvements. Congress should request a detailed plan for concurrent or deadline-driven permitting, licensing and project approval milestones. A priority projects list should also be prepared for the approval of the FAA's authorizing and appropriating committees.
AIA believes, Mr. Chairman, that legislation of this nature would begin to align the resources of government with the well-documented capacity and technology shortfalls in the civil aviation sector.
Space Exploration
Transcending their pain and grief, the families of the Columbia Seven Shuttle astronauts told the world that ''the bold exploration of space must go on'' because our lost heroes had accepted ''risk in the pursuit of knowledge.'' This declaration, Mr. Chairman, defines our resilience as a people. And resilience, combined with curiosity about the galaxy beyond our skies, has propelled America into space. Drawing on the courage of the Columbia families and the determination of the Administration and this committee, the U.S. space program can emerge from tragedy in a stronger scientific and exploratory position.
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AIA and its member space companies will work tirelessly with NASA, the White House and the Gehman Board to uncover the causes of the Columbia tragedy and to implement the needed reforms in our space transportation programs. Towards this end, we commend you and the Committee, Mr. Chairman, for obtaining the cooperation of NASA last month in allowing the Board to retain independent professional analysts and to set its own investigative timetable.
The Colombia disaster also requires us to sharpen our focus on the cost, reliability, propulsion and safety hurdles posed by the exploration of space over the last three decades. In the assessment of the Aerospace Commission, government and industry must scrutinize the ''significant expense to get to orbit and a hostile and highly limited environment once on-orbit.'' To tackle this issue, Mr. Chairman, I respectfully urge the Committee to assess NASA's strategy for a long-term Shuttle replacement vehicle. Before the Colombia tragedy, NASA had determined that the space program would rely on the existing fleet for at least another 15 years. This timeframe may still apply, but it requires the agency to design a post-Shuttle architecture as rapidly as possible so that human observation and experimentation can continue to enrich our understanding of the universe.
Similar to the crisis in civil aviation, the challenges to the U.S. space program center on the need for interagency coordination guided by coherent policy objectives. In recognition of this fact, the FY04 NASA Strategic Plan, which AIA urges the Committee to support, charts an ambitious course for the country's space research and flight programs. Six Enterprises (Space Science, Earth Science, Biological and Physical Research, Aerospace Technology, Education and Space Flight) will undertake a joint effort to breach what the Agency candidly defines as ''technological barriers'' in four areas: power, transportation, on-orbit human capabilities and solar system communications.
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To amplify the impact of the Strategic Plan, AIA and the Aerospace Commission recommend the following amendments, summarized by program categories, to the FY04 NASA Authorization Bill. These proposals will also establish guidelines for reform in the relationship between NASA and Congress.
Next-Generation Launch Vehicles
The Committee, in evaluating the budget justifications for the Expendable Launch Vehicle, Space Shuttle upgrades and the Orbital Space Plane concept, should consider a requirement for a separate, early 2004 report from the Administrator, to be followed by an oversight hearing, on the state of research and experimentation to:
reduce the cost to orbit;
develop and test enabling technologies for a Reusable Launch Vehicle in cooperation with DOD, a mission endorsed by the Director of the National Reconnaissance Office;
improve control center operations and security; and mitigate launch, flight and recovery constraints.
These areas, identified by the Aerospace Commission, represent the key financial, navigational and safety issues for the post-Shuttle generation of space transportation vehicles.
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Power and Propulsion Systems
A second authorization amendment should formalize NASA–DOD joint efforts, possibly by creating a program office or task force under the auspices of the National Aerospace Initiative, on propulsion research and power systems. NASA and the Aerospace Commission have both targeted propulsion and power advances as the critical ingredients for the sustainability of spacecraft.
Space Launch Infrastructure Upgrades
As a result of a presentation by NASA Kennedy Space Center (KSC) officials, the Aerospace Commission revealed that the Current Replacement Value of the KSC infrastructure amounts to $3.9 billion. The main deficiencies include corrosion in the cable plant and the Vehicle Assembly Building as well as aging and under-performing Shuttle launch pad transporters. The Committee therefore should consider an amendment mandating a launch infrastructure improvement plan from NASA with out-year budget allocations based on the $3.9 billion estimate by KSC management.
As J.F. Creedon, Associate NASA Administrator for Aerospace Technology, testified on February 27th before the Senate Commerce Subcommittee on Science, ''access to space will require interagency partnerships to meet common needs.'' AIA strongly believes that the Committee can clarify our strategic roadmap for space exploration by creating and directing a new series of federal partnerships.
Human Capital
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I noted at the beginning of my testimony, Mr. Chairman, the difficulties faced by the aerospace industry in recruiting and retaining skilled professionals. As the Aerospace Commission pointed out, the United States has lost more than 600,000 aerospace jobs in the last 13 years. Previewing future generations of workers, we find that the math and science testing performance of students in the U.S. relative to their European and Japanese counterparts gradually erodes to the 10th percentile or below by the end of high school. Yet in the awesome mix of platforms and technologies that characterize our industry, no resource is more valuable than human and intellectual capital.
AIA joins the Aerospace Commission, therefore, in urging Congress to empanel an interagency task force, with a formally designated lead agency or department, to build a strategy by mid-2004 for improving and expanding the math, science, engineering, and technical/vocational education of Americans. Congress should then sub-divide and revise the various elements of the strategy to incorporate them as mandatory mission planning objectives in the appropriate budget authorization bills.
NASA's strategic human capital program, the subject of the second panel of today's hearing, could serve as a model for an integrated federal workforce plan. AIA strongly supports this comprehensive initiative. The Education Enterprise of NASA will unite the Human Resources division with other critical units, such as the Technical Programs office, to design new scholarship and recruitment programs to narrow gaps in professional skills across the organization. This approach, by assigning responsibilities to all functional and program activities, makes the improvement of human capital a continuous agency mission.
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National Security Programs
I want to draw the Committee's attention to a few key programs from the FY04 defense budget that demonstrate the Pentagon's evolving Total Force framework to deter or defeat the unpredictable adversaries of our age.
Naval Force Modernization
The oceans cover 70 percent of Earth's surface, and the majority of the world's population and industrial facilities reside within 250 miles of a coastline. If only for these reasons, the Navy's surface and submarine fleets provide the United States with the forward military presence, free of dependence on foreign bases, to prevent or prevail in conflicts and to safeguard the global sea lanes of commerce. The Navy's FY04 shipbuilding request of $12 billion deserves strong congressional support as the Service continues to execute a full-scale modernization and recapitalization program. The aircraft carriers, destroyers, cruisers, submarines and combat support ships of the future will magnify the power of ground forces with deep land attack, special operations, theater missile defense and reconnaissance capabilities. As a result of this strategy, Mr. Chairman, the Navy will assume an increasingly important role in meeting many of our national security objectives from the sea and along the shore.
Armored Programs
In their 2003 Posture Statement, Army Secretary White and Chief of Staff Shinseki describe their vision of an Objective Force that by 2010, will complete training for ground dominance, cyber-warfare and space exploitation operations. In addition, the current Stryker Brigade Combat Teams and the planned Future Combat System (FCS) provide soldiers with mobile air-ground units to project power and subdue adversaries in the most austere or heavily urban environments. Armored forces will therefore remain vital to our unchanging need for enemy territorial control as the end-state of victory, and the FY04 Army budget contains focused R&D and acquisition proposals to keep the Objective Force plan on schedule. Aerospace technologies will also provide a number of critical networked solutions to the fully-deployed FCS. The current heavy armored deployments to the Persian Gulf theater only underscore the requirement to keep the FCS program on schedule since our soldiers will need state-of-the-art battle space management and force protection equipment over the course of several years.
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Today's Stryker industrial base reflects the successful shift from a single product line to a flexible manufacturing process capable of building multiple combat vehicles in a variety of weight classes. What once functioned as a Cold War tank line now supports the production of the Stryker family of 10 different vehicles. This armored transformation would not have occurred without the resources, skills, vendors and investment by both government and contractors. During Operation Desert Storm, for example, a warm production line made it possible to supply over 22,000 spare components and major assemblies on short notice. As current and future ground threats arise, the existence of a modernized armored industrial base will prove critical in supporting the Nation's military response and deterrent objectives.
Tactical and Mobility Aircraft
Our combat experiences in Afghanistan, Southwest Asia and the Balkans illustrated the dramatic utility of air power as a wartime force multiplier. During the opening phases of conflict, precision air power destroyed or crippled enemy air defense, fighter-bomber and command-and-control networks, thereby depriving hostile forces of territorial defense and combat attack assets. At the same time, personnel and cargo transport aircraft enable the United States to introduce troops and firepower into a zone of conflict during a time when we lack fewer basing facilities overseas.
I subsequently urge Committee Members and Congress to support FY04 Air Force and Navy budget requests that dedicate a combined $21.3 billion to seven tactical and mobility aircraft (the F/A–22 tactical fighter; the F/A–18E/F carrier-based strike fighter; Joint Strike Fighter development; C–17 Airlifter procurement; C–5 avionics upgrades; C–130 Transporter modernization; and V–22 Tiltroter procurement), supplemented by more than 45,000 precision-guided munitions, to expand the Nation's global force projection capabilities.
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In addition to promoting the modernization of U.S. air-breathing military forces, Congress should ensure that the appropriate DOD components and Services sustain, as the Aerospace Commission advised, critical, high-risk defense-related technologies such as combat system design capabilities, solid rocket boosters and radiation hardening.
Conclusion
In closing, Mr. Chairman, I commend you, Congressman Hall, and the entire Committee for serving as the trustees of scientific innovation and programmatic accountability among your colleagues. Through this testimony on implementation alternatives regarding the report of the Aerospace Commission, I have tried to concentrate on legislative policy reforms to improve interagency cooperation, direct the development and fielding of new technologies for the civil aviation and space arenas, and begin the vital effort of workforce revitalization. These three assets—knowledge-sharing, modernization and people—will open new frontiers for the aerospace industry to serve our commercial and war fighting customers of tomorrow.
BIOGRAPHY FOR JOHN W. DOUGLASS
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John W. Douglass is President and Chief Executive Officer of the Aerospace Industries Association, which represents the Nation's manufacturers of commercial, military, and business aircraft, helicopters, aircraft engines, missiles, spacecraft, materiel, and related components and equipment. Mr. Douglass became the seventh full-time Chief Executive of the Association in 1998. Before that he served for nearly three years as Assistant Secretary of the Navy for research, development and acquisition of defense systems for the U.S. Navy and U.S. Marine Corps.
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A nationally recognized expert in systems acquisition, Mr. Douglass has extensive acquisition experience in Congress, the Defense Department, and the executive branch as a policy authority, contracting officer, engineering officer, test and evaluation officer, program control officer, and research director.
Before being named a civilian Navy executive, Mr. Douglass was with the Senate Armed Services Committee where he was foreign policy and science and technology advisor to Senator Sam Nunn and served as lead minority staff member for defense conversion and technology reinvestment programs.
Earlier Mr. Douglass completed 28 years of U.S. Air Force service and retired as a brigadier general in 1992. His numerous Air Force assignments included service as the deputy U.S. military representative to NATO as well as Director of plans and policy and Director of science and technology in the Office of the Secretary of the Air Force. He also served as Special Assistant to the Under Secretary of Defense for Acquisition.
Within the Executive Branch, Mr. Douglass was Director of national security programs for the White House, responsible for formulating policy on a broad range of national security issues. He served as President Reagan's personal representative to the Blue Ribbon Commission on Defense Management chaired by David Packard.
A native of Miami, Florida, he earned a Bachelor of Science degree in industrial engineering from the University of Florida, a Master of Science degree in industrial engineering from Texas Tech University and a Master of Science degree in management science from Fairleigh Dickinson University. Mr. Douglass has done postgraduate work at the Cornell University Center for International Studies where he was an Air Force Research Fellow with the Peace Studies Program.
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Mr. Douglass is a member of the Board of Governors of the Aerospace Industries Association, a member of the Commission on the Future of the U.S. Aerospace Industry, and Chairman of the Aerospace Technology Policy Forum. In addition, he is Chairman of the Board of Trustees of the National Center for Advanced Technologies and Past Chairman of the International Coordinating Council of Aerospace Industries Associations.
AIA Positions:
Chairman, Aerospace Technology Policy Forum
Chairman, Board of Trustees, National Center for Advanced Technologies
Member:
Commission on the Future of the U.S. Aerospace Industry
National Contract Management Association
Space Day Foundation Council of Advisors
Chairman BOEHLERT. Thank you very much. Dr. Hamre, before we go to you, we have been joined by the Ranking Minority Member, the distinguished gentleman from Texas, and it is a pleasure to recognize him for any remarks he might care to make.
Mr. HALL. Mr. Chairman, thank you. And I subscribe to the remarks you have made. I will be very brief. Of course, I want to welcome all of the witnesses today. I know you have to prepare, and you have to get here, and you have to testify when you get here, and you have to get home, so you have gone to a lot of trouble, and we appreciate it. And you are here because it is obvious that we think you know a lot more than this panel knows, and we kind of pick your brains, especially our old friend, Bob Walker. Bob is a class guy, was a class guy, will always be a class guy. He wrote a lot of bills that made this a better Congress, and he improved a lot of bills that others had written from time to time. Sometimes when we didn't want him to improve them, he improved them. But Mr. Chairman, thank you for that time. And I will ask unanimous consent to put a very extraordinary speech in the—I haven't read it yet, but I know it is a good one.
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Chairman BOEHLERT. Without objection, so ordered.
[The prepared statement of Mr. Hall follows:]
PREPARED STATEMENT OF REPRESENTATIVE RALPH M. HALL
Good afternoon. I would like to welcome all of our witnesses to today's hearing. We look forward to hearing your testimony. I'd like to extend a particular welcome to former Chairman Bob Walker, who once was an active Member and leader of the Science Committee.
We have a great deal to cover this afternoon. Each of the topics to be discussed could easily merit a separate hearing. As a result, I will be brief in my opening comments so that we can spend as much time as possible hearing from our witnesses.
Let me say just a few words about the topic to be addressed by the first panel, namely the report of the Aerospace Commission. The Commission was chartered at a time of uncertainty for the Nation's aerospace industry. However, the reality is that the future of the industry is now even more uncertain than when the Aerospace Commission started its work. More than 20 percent of the Nation's air carriers are in bankruptcy. The Nation's space pro