World. And the evidence is that these patent Innovation Box policies are not very good at that because what theyre targeting is the income generated from the patents rather than the research that leads to them. This is true of lots of r d tax credits. In holland they just designed one which is quite intelligent, i think, because it targets the research that leads to the r d. So the labor hired rather than the income generated from that r d. But i think we should remember that, for example, the act which in 1980 allowed publicly funded research to be patented. If you read that act, its really interesting. They also say we better make sure that the taxpayer doesnt pay twice, right . So just like year, i think the nih spent arounded 39 billion in research, both basic and applied. And the problem is what happens to the prices of these drugs . Do they reflect that input . So its not only and ive been reading a lot about this, but the pricing mechanism itself could be one way to be rewarded so that you dont pay twice. But the government has never felt the confidence to cap the prices of drugs because precisely of this long narrative that i talked about before where youre metaling in the market when actually youve created that market. As soon as we talk about government having a say on the price or even the whole obamacare, if you want, vision, where we talk about the government metaling in the health care industry. So this is why we need a new narrative. So what im hearing you say, to boil this down a little bit, is we get more innovation if we do more federal research for basic research, not if we make these giveaways to big Drug Companies. Theres no evidence. So the patent box which has been tried and tested in places, like the uk, theres no etched that that increases investment and innovation. It might increase time that people golf. I dont know. That might happen. But what driechs investments and innovation by the private sector are their perceptions of where the future market and opportunities are. Warren buffett is very good on that. Good. And what were talking about is what actually drivers those future policies. Thats what were talking about and thats what policymakers should be talking been. One more question and then ill hand it over to the congressman. Then ask about Something Like the impact of my medical innovation action which could boost the nih budget by about 20 without aciding new taxes and adding to the deficit by asking the Drug Companies to put a little more of their profits into nih. No surprise, the army of lobbyist thats work for the biggest Drug Companies dont like this bill. But, doctor, could i ask you how the medical innovation action might affect the pipeline of new products and affect the drug industry itself . Well, i think the medical innovation action is a good idea because it provides a substantial sum to the nih for its work in in catalizing drug transformance and development, to make sure drugs are evaluated and approved so that we know that they work and are safe before they can come on the market. So i think that the ufrlts, the amount of money that pharmaceutical companies have made over false advertising and other problems is that has led to a substantial amount of money that they could be contributing back into the into the Development Economy through this medical innovation. Well, naung very much. And its clear from the testimony weve heard today that new drugs are build on a foundation of taxpayer supported investments in basic research. It does not make sense to me that Congress Says that it wants more innovation and then turns around and cuts the budget for nih, for nsf, for our basic research. It is time for lawmakers to put their money where their mouth is. I think the medical innovation action is one way we could get back on the right track. So thank you all. Congressman cummings. Yes. The journey from lab to market certainly involved many steps and is a perilous one that many technologies and discoveries, even some of the most promising ones have not succeeded in making. Is that right . Some of them dont make it. Thank you. And for that reason, the its my understanding its based between the lab and market is often call the valley of debt. Yush in the process of taking a Software Technology that you developed through your research, out of the lab and into the commercial market, just a few questions. Your firm speech has received several Small Business Innovation Research grants from the National Science foundation. How important have those grants been to enabling the socalled valley of death . Well, i hope weve crossed it, but were well on our way to if we havent. But critical. I would not have started the company in the first place if those grants didnt exist. Being a propheter, i know how to write proposals. Its something that we do all the time. And so having that there made it a lot easier. But ill also add that university of maryland has been very supported through professor students forming companies and so has developed a lot of programs. And one crucial program, for me, was a program called the venture accelerator. That i joined where you have people with a lot of business acumen who have been entrepreneurs several times. Theyre there to advise you to help you write a business plan, to help you develop a financial model, to help you think like a business because because thats very different from thinking like a professor. In other words, that goes to effectiveness and efficiency of what youre doing. Yes. Is that right . Yes. Sometimes i think you have people that go out there and they were trying to reinvent the wheel and they dont know how to do it. The next thing you know, they fall in the ditches and they never get back up, they become discouraged and the next thing you know, theyll decide on it. Yes. So thats also the goal of the icor program that nsf has developed. Again, that came after i had started so i wasnt able to take advantage of that program. But one of the main things that they have, people who are thinking of being entrepreneurs do is to test the market, to actually go out and talk to your potential customers, to your potential Strategic Partners and understand what is the market need . Because oftentimes we develop technology because we think its great only to find that theres no one thattel really wants that telling. So you want to make sure that you dont waste that time. And theyve been able to reduce the possibility of that happening significantly. How important is Venture Capital funding to getting that technology to market . Dependant on how much money you have. If youre able to generate revenue early, you may not need to get inventory occur capital funding. But if its going to take a control amount of time, to get that kind of traction where youre generating millions of dollars that can support all of your employees and your growth, then you need Venture Capital. You said something and i dont want it to go unnoticed. You talked about how when these younger people cannot get grants to go and to do research, you said they often become underemployed. And neither warren and i have not looking at this whole middle class prosperity situation and the idea that we have one hearing or two where we talked about people being saddled with debt, students come out of school saddles with dead. Then we have a situation here where if they dont have opportunities, then they dont have a job to even pay the debt. Exactly. And i havent even gotten to giving the feel probably of hopelessness and wasted, you know, potentials that they could be giving these great gifts to the world. And thats something that, you know, we just kind of i dont want us to pass by that because weve got a lot of young people who want to go out there and do great things. But unless we open these doors, and senator warren talked about it a lot about how all of this, you know, allows us great jobs. That is significant. Do you see that . I mean, do you see young people . Youre a profront seater. Do you see young people falling by the wayside or becoming discoura discourages . Yes. Even the young scientists who are trained and are able to apply for proposals through nih. I mean, i think theres research that shows its the young investigators that are hurt the most because they dont have the track record that your more established scientist ves. Unfortunately when youre sitting there in a peer review panel, you think the more established scientists, you know what theyre capable of. They tend to, in my opinion, get favors over the young investors because they dont have a proven track record. Were also cutting off our pipeline. Exactly. They do try to make efforts at nih to give special attention to young investigators. But theres still a lot of them who end up without support. Doctor, in your book, the entrepreneurial state, you discuss how u. S. And i quote has one of the most interventionist governments when it comes to innovation. If the government no longer played the rolled of mission centers, is there any other force in the United States capable of making what president kennedy called the national commit of scientific and technical manpower facilities to marshall of nations capabilities and talent toes solve our Biggest Challenges . Well, no. I think that the point is not do we need, you know, just a state, another private sector, a more private or more. Its always be very important dynamic public sprieft, if you want, interactions that have been fundamental to creating the kinds of innovations. The problem is today we have real crisis on both sides so we dont have that Mission Oriented or if you want we have less confidence for many agents even to talk about their commissions. They have to show their economic value. But also, you know, when we think about these sbir funds, for example, which you were just talking about, in some ways what they were able to do in the past were to act kind of like a public dc fund, which by the way is very common around the world. This knot about communist, its about how to get Capital Investments and innovation. But the problem is by not allowing them to talk about tlemz in a particular way, we havent allowed them to do what any normal Venture Capitalist will do which is to welcome failure, right . When you try to innovate, you will fail and fail and fail again. Michael jordan i think has one of the best quotes on that. But what the private Venture Capitalists have is they have the ability to reap some of the reward on the up side, which you were talking about before, to also cover ta downside investment, right . All the failures. So this lack of ability to admit, yes, we are kind of like a public Venture Capital fund has not allowed nih, but i would argue nih and bartha to think more concretely about how to create a resolving fund. And you see sth with, say, the recent guaranteed loans that were given to companies. Everyone knows the cylindra story. Why . Because it failed. It was a great story for anyone that wanted to bash government. Actually, everything behind the iphone that we know, you know, was picked, internet, gps, touch screen display, siri, they were all picked by different government institutions for financing. So if we admit that for each internet youll get 20 concords, for each tesla, youll get 20 cylindras. They have to get much more realistic about whether the tax system by its own, if you want, is actually bringing back enough money to do these experiments again and again. Let me ask you a question about china. The 2014 global r d forecast reported china was continuing to make double didnt increases in its annual r d budget. Projected that if this rate rate of Growth Continues through the end of the decade, china could surpass the u. S. In total r d spending by about 2022. Is china trying to emulate the r d model we utilize in the u. S. And is it trying to entice researchers and new technologies to leave the United States to come to china . Well, china i think has an incredible ability to adabt and learn in some ways the right lessons. Theyre spending 1. 7 trillion on these five new sectors which are broadly defined. Its very much milg Mission Oriented policy. If you look at these five areas, theyre all in that green direction. Theyre increasing massively their r d expenditures. But i think whats also interesting is those countries around the world that are able to a see that as an opportunity as opposed to a threat. So denmark, you know, small country, is the number one provider of High Tech Services to chinas green economy. And denmark is sort of punching its weight in terms of investment and innovation and they themselves have been able to engage in china in this interesting way that sees these chinese investments, again, as an opportunity. And i think what would be transformational for the u. S. Is to stop seeing china as a threat in terms of oh, god, theyre increasing their R D Investments more than we are and ask themselves how they can benefit from this massive increase in spending because theyre also potentially supplying a demand side, not just the kind of supply side push which in some ways weve all been talking about supply side pushes on innovation. Thats an important point which is all the big technological revolutions in the u. S. Required a demand side policy, right . So mass production would not have had the effect that it did in transforming productivity across the whole u. S. Economy without big thinking Mission Oriented demand side policies. And one way, i think, that china today is thinking about that is precisely using green as a new direction, also for the i. T. Revolution, right . So you not just spend on r d in high tech areas, but you would think how are you going to help the phi fusion and the employees of those innovations across the whole economy. Green becomes an interesting direction to think about how in this country we allow i. T. To get fully deployed. I think the data make it clear that so create real innovation, we need more investment in basic research. But right now, instead, congress is focused on lowering the fda standards for aprofessional so that companies can get their products on the market faster. The industry argues that patients just arent getting new drugs fast enough and its too hard for them to get drugs approv approved. I think this is a very sdrus game so i just want to ask a question about this. Doctor, can you tell us about the authority the fda also has to speed Innovative New drugs to market and in the fda is using that authority . Sure. There are a number of pathways that the fda has to provide patients with access to important new drugs treating serious or life threatening conditions or unmedical medical need. There are at leave phi different pathways that have the effect of trying to speed new cures to market. Last year, especially two 30s of the fda were approved vee kra one of these accelerated development or review pathways. So not only does the fda have these pathways in place, but it is using them liberally. If you look at the statistics, a lot of new drugs are being approved on the basis of stus studies in, you know, treating biomarkers or other surrogate end points. Most new drugs are approved on the basis of studies in six months or less despite the fact that theyre intended to be for chronic diseases and used for a lifetime. So i think the statistics and data dont support the industrys assertion that there is a very long and arduous process for a for testing, approving new drugs once its known that those drugs work. In fact, its quite the opposite. Thats very helpful. Lowering fda standards may make Drug Companies even more profitable, but it is not going to make them more innovation. So let me ask you another question about this. Some things put forward in congress would allow drugmakers to advertise and promost uses for their drugs that arent approved by these called off label drug uses, that have only initial Clinical Evidence that they my work, very small trial. As an expert, can you explain how innovation and safety would be affected if these proposals were passed into law . Yeah. These proposals are very dangerous for patientes and public health. What they would do is allow companies to get drugs approved on the basis of an extremely narrow limited indication and promote them widely for conditions where they might not be effective and they may be unsafe because there hasnt been any testing done in them. Patients want transformative innovations. They want treatments for their conditions, but they want treatments that work and treatments that are safety. If you dont allow if you dont provide companies with a requirement to do those kinds of tests by virtue of having the fda approve those conditions, Companies Wont do them. So youre not going to get that kind of testing that we need in order to guide physicians trying to prescribe these drugs, to guide patients who are looking for these drugs. We dont know how to use them and whether they will be working. Meanwhile, because these drugs are defensive, we would be dumping resources into these treatments that arent well known when what we could be doing is testing them first to make sure they work and then using them appropriately. That is a very supportful point. The fda is the Gold Standard around the world because it has protected americans safely anden sures that the drugs used are effective. We could disman the fda, but lower standards wouldnt produce any new cures and it certainly wouldnt keep us any safer. If were serious about finding new cures, congress should better fund the fda so that the fda can do its work. We need to make a real commitment of real dollars here. Thank you very much. Dr. Kesselheim, according to the data here, between july 2013 and june 2014, at least 1200 generic drugs more than doubled in price. Are you aware of this . Yes. There is one generic drug on the lot that could reverse the effects of heroine overdose or opiods in minutes. According to cdc, heroine related overdoss nearly group ruineleled over the last decade. And yet the company that makes this in the nasal formula increased its prices across the country by more than 50 over the past year. And baltimore, where i live, the cost of this more than doubled in less than one year. Doctor kesselman, are you aware of these price hikes . Yes. The only explanation for these price increases seems to be that this company see tess increase in demand for the product and it sees the lack of competition and it is increasing its price toes make additional profits. This year, i introduced a medicaid generic price fairness act. This bill would require generic drug manufacturers to pay rebates when prices increase faster than inflation. Brand name drugs already pay these rebates. My big would simply extend the same offer to generic producers. Do you think this proposal makes any sense . Well, first of all, absolutely. I think its great that were talking about generic drugs in a meeting on innovation because one of the key principals towards drug innovation is that, sure, we need a period of Market Exclusivity in which a brand name kb can make back its invested revenue, but what drives innovation is when the exclusivity ends and a vibrant generic drug marketplace in order to compete with the brand Name Companies and that forces them to then pursue the next great thing. And in this case, it seems like there is a major market failure in the case of being able to provide these generic drugs for reasonable prices and we need substantial attention to this particular case as well as the many other cases that i know youve looked into and others have looked into about generic drugs that have been increasing in price and i think that your bill is a good step in the right direction, but i think there are a lot of other things that could be done to try to make sure there is a vibrant drug marketplace to try and promote innotion vacation. A lot of people dont realize it, but there are according to the American Hospital association, over 90 of all hospitals are suffering from drug shortageses. And a lot of this is that folks are hoarding the drugs and then jacking up the price, i mean, and over and over again and creating situations where a lot of hospitals cannot get first rate drugs. Are you aware of that . I am. Its very wasteful. A lot of these drugs are old drugs, theres no intellectual property covering them. This is a problem of a lack of attention that i think our society has on making sure that there is a vibrant generic drug market and, you know, policies that can help ensure that these kinds of shortages are addressed in a timely fashion. I think the fda has taken some steps internally in it, but i think they could use a lot more attention and resources like the kind youre trying to bring to it. Were going to continue to try and shine a spotlight on this. Going back to this project senator warren and i are involved in, were trying to figure out how do the middle class and others keep more of their paychecks. Theyre paying more. More for the basis of life and producing more, yet and still theyre not getting paid more. And then they see the paycheck that theyre getting being i mean, its slippinging and they dont know theyre trying to figure out how to make ends mooe meet and they cant see a future even for their children where their children do better than what they did. Its all a part. Its so amazing how all of this comes together. And how every aspect, again, is hitting that middle class over and over again. I have to tell you, people are tired and many of them are throwing up their hands trying to figure out what can we do to make their lives better and this is an efforts in that regard. I want to thank you all for being here today. Dr. Espy wilson, thank you and good luck making it through on the project. Thank you very much and thank you for reminding us that we need the right language to discussion this and expand some of our vision of what Research Really means and what it means to support research, how it changes our economy and our country. I think the key message here today has been that innovation is built on federally funded research and speaker gingrich, we were delighted to have him here to talk about how in the 90s he was successful in doubling the nih budget. And i was glad to hear him say he thought his only mistake was he didnt triple the nisf. But since then, we have headed in the wrong direction. We have cut and cut and cut support for basic research. We need to support that research. We need to make sure that america doesnt go bankrupt trying to deal with the medical problems of the future. So i want to thank everyone for being here. Its interesting when president obama was in kenya, i set up at 5 00 in the morning and watched his speech. One of the things he said is one of my favorite quotes, he says, we do not inherit what we have from our mainly our environment and our opportunities from our ancestors. We borrow them from our children. We borrow them. The question is, is what are we going to provide for our children . When you look at research, making sure that people have a best medical care, making sure that we take advantage of innovation, making sure that we open the door for jobs, good jobs and jobs here in the United States that have impact all over the world, its all connected. Its all connected to what we do here today. You all have contributed greatly to our discussion. Were going to take what you said and use it in every way that we can. Well probably be calling on you again, trying to get your advice, seeking your advice because, again, we want the best minds. And we have them sitting in front of us. And we also, of course, thank speaker gingrich for his contributions and, again, thank you very much as we march forward trying to make a difference. My mom used to say, in my time and in my space i will make a difference with gods grace. Thank you very much. Thank you. Sgloos the house passed a bill stengd highway funding for three months until october 29th. Kooel keith laing of the hill writing about it today with a vote with one member present in favor of 385 in favor of that bill, it extends Highway Program funding for three months. What kind of programs are we talking about . This bill is set to replenish the highway fund. There will be no increases in this bill. Theyre just going to extend spending at current levels for another three months, which leader said would buy some time to work on a longer bill. Everyone is saying they hope to get to a multi year bill before the end of the year. Now, we havent had a multi year bill in a while. A number of shortterm funding. What is the impact on states with shortterm funding versus a longterm deal . Well, transportation advocacies here in washington and leaders from the state department of trpt transportation said it makes it harder for them to plan large Construction Projects because theyre only guaranteed funding at these piecemeal levels. The last extension was two months, this one is three months. That is weakening the nations infrastructure. How many shortterm funding deals has Congress Passed . This is the 34th since 2005, if youre talking about a bill that is longer than two years. Now, the senate has continued work this week on a sixyear bill. What is the status there on what the senate is doing for highway and transportation funding . Well, the senate has said theyre going to accept this to prevent the interruption in transportation funding that i was speaking of earlier. But theyve also said theyre going to finish work on their multi year bill. They have a sixyear authorization. It only contains three years worth of funding right now. So its contingent upon them finding the rest of the funding to finish that plan out. But they say theyre going to finish that and do a final vote on it tomorrow in the hopes of putting pressure on the house to pass a multi year bill on their own when lawmakers come back from this august recess. Lets talk about the house. With a shortterm bill in place, only until october 29th, now we go back to the house. What kind of prospect is there for a sixyear deal or a longterm tooem deal coming out of the house . Well, the house that originally passed an extension that would have carried until december to provide even more time. Because they would like to work on a package to tie this into Corporate Tax reform. They say that they can take some money from whats called repatriation and taxing overseas revenues and put that back into the highway trust fund. Theres been some skepticism about that in the senate and they have a package that theyre suggesting. So it remains to be seen if the chal better committees come together by october. Who are the key leaders in the house and senate that are working towards get ago highway bill put together . This has reached the highest levels of both chambers now. The senate bill was authored by senator mitch mcconnell, paul ryan has worked on it in the house, Speaker Boehner said today that it is going to be a top goal for him to be a longterm highway bill by october. So it is not something that is being discussed in committees any more. Republican res democrats, are they playing nice . Are they working well together on highway funding . This has been an a issue thats divided more along the chambers than in parties. You had republicans in the senate really pushing for this multi year bill and republicans in the house balked at it because they were opposed to the inclusion of a renewal of the Export Import Bank in the measure which was talked about in the senate. What is the white house view on the shortterm versus longterm funding for highway and transit and where does the transportation secretary work into the mix here . The white house said today that president obama will sign this temporary patch if its passed by the senate as expected tomorrow. The white house doesnt want to see an interruption in transportation funding right now, especially at the height of the busy summer construction season. But transportation secretary anthony fox said the president s patient sess wearing thin. Hes proposed a sixyear bill of his own, which includes some of that Corporate Tax reform idea that are being talked about in the house and hes saying that congress should take up that measure when they come back. Keith laing covers transportation for the hill. He is also on twitter, keithlaing and you can read him at thehill. Com. Thanks for joining us. Thank you for having me. A couple of events to tell but on cspan3. A house agricultural pam investigations the recent avian flu outbreak that killed 48 managerial turkeys in 21 states. Well have live coverage starting at 8 30 a. M. Eastern. Later in the morning, a look at recent veteran affairs whistleblower claims. The Deputy Inspector general of the va is among those testifying. Our live coverage gets under way at 10 30 eastern here on cspan3. When first Lady Ida Mckinley arrived at the white house, her husband, president mckinley would sit next to her so when he saw he was she was having a seizure, he would cover her face with a handkerchief until it passed. Ida mckinley, this sunday night at 8 00 p. M. Eastern on cspans original series, first ladies, influence and image, examining the public and private lives of the women who filled the position of first lady and their influence on the presidency. From Martha Washington to michelle obama. Sundays at 8 00 p. M. Eastern on American History tv on cspan3. Next, the director of the federal air Marshal Service, roder Roderic Allison testifies for an hour and ten migz minutes. The committee on homeland security, subcommittee on transportation will come to order. The subcommittee is meeting today to hear testimony on examining the federal air Marshal Service. And its readiness to meet the evolving threat. I now recognize myself for the opening statement. Welcome, everybody, to todays hearing on tsas federal air Marshal Service. The subcommittee is meeting today to examine the federal air Marshal Service and its readiness to meet the evolving threat. Before we begin, id like to express my support for the administrator who assumed his position at tsa last week. I had the opportunity to sit down with mr. Neppinger and im hoping that he can provide steady leadership that is badly needed at tsa to bring tsa into a new and more effective chapter. While it is clear he will have his work cut out for him, i believe that his experience in the United States coast guard will be a valuable asset to tsa and i look forward to working with him and hearing his plan to fix the agency. Since the beginning of the 114th congress, this subcommittee has aggressively examined several issues related to tsas operations, policies and procedures in order to ensure that tsa is fulfilling its mission of keeping the traveling public safe. Today, we will examine what many have called the last line of defense against potential terror attacks in the sky. That is the federal air Marshal Service. The federal air Marshal Service was significantly expanded in the wake of the terror attacks of september 11th, 2001. The outcome of 9 11 could have been very different if we had federal air marshals on those planes. However, we also have to keep in mind that the threat to Aviation Security has evolved dramatically over the last 14 years. The terrorist tess who want to do us harm are constantly adapting their tactics and we need to make sure we are not protecting ourselves against yesterdays threat and ignoring the threats of tomorrow. For example, the threat of an i. E. Drchlt or an im proadvised explosive device being dead nated aboard an aircraft is very real. Is a federal air marshal capable of preventing an i. E. D. From being detonated or should we reallocate monies towards better intelligence efforts, more security measures for other soft targets such as unsecure areas of airports . The purpose of todays hearing is to discuss if the federal air Marshal Service in its current form is demonstrating an appropriate riskbased approach to securing our nations Aviation System from a terrorist attack. It is not clear to me whether the service and the strategy for resource allocation have kept pace with the new threats and thats why we look forward to hearing from mr. Allison today. Additionally, a remained concern that employee misconduct and abuse within the federal air Marshal Service have hurt Public Confidence in the air marshals and have this the ek of decimating employee morale. Today, we plan to examine several key areas of this program to determine its effectiveness and whether there is Anything Congress can do to assist and ensure the safety and security of the traveling public. We all share the same goal and, as such, it is our duty to ensure that we constantly reexamine what we are doing and why we are doing it in order to yield better security enhancements and be more intelligence driven. At todays hearing, we are very fortunate to have the assistant administrator of tsas office of Law Enforcement, mr. Rod allison, to address these issues and to discuss what tools are necessary to improve efficiency and security and on respective panel, we will have captain tim connell from the Airline Pilots association to discuss the federal flight deck officer program and its coordination with the federal air Marshal Service. I look forward to hearing the testimony from both of our witnesses and having a meanful dialogue on how to make improvements to the federal air Marshal Service as we Work Together to counter threats facing the aviation sector. I annoy recognize the Ranking Member of the southbound committee, the esteemed gentle woman from new york, miss rice, for an opening statement. Thank you, mr. Chairman. And thank you for convening this hearing. I understand that this is actually the First Time Since 2012 that a panel in this committee has discussed the federal aviation Marshall Service. So its clearly important that we do so and i want to thank our witnesses for their participation today. Prior to september 11th, the federal air Marshal Service consisted of only 33 full time sky marshals. The 9 11 attacks made it clear that we needed a much greater presence on commercial aircraft. In the wake of 9 11, the federal air Marshal Service was rapidly expanded through the transportation security act of 2002. 600 marshals were trained and activated and thousands more activated in the months that followed. The federal marshals as well as flight deck officers serve as one of the last lines against threats of national flights. We know the threats are constantly evolving and have only increased in the years since 9 11. We must ensure our air Marshal Service is continually evolving. That is why were here today. There are a number of issues of concern with the current state of the federal air Marshal Service. First and foremost, the dwindling ranks of the service, there has not been a new federal air Marshal Service class for four years. When you couple this with high adirection and poor retention rates, its clear that the organization is shrinking dramatically and it races serious questions about workforce morale. As the workforce is dwindling, so is the number of federal air marshal field offices. Last year, there were 26 nationwide. Currently there are 22 and there are two more scheduled to close in 2016, which will bring us down to 20 field offices within the next year. Now, i understand that these closures are determined by complex risk analyses and by the fact that there tend to be fluctuations in which areas around the country are commercial aviation hubs. But we need to be certain that none of this comp miegzs security on commercial flights and we need to ensure that marshals are transitioning to openings in other field offices as efficiently as possible. I am very eager to hear from assistant administrator allison about the details of these closures and what measure res in place to help with this transition as well as details of what outreach efforts are being taken to improve workforce morale. Im looking forward to hearing about other details from captain canoll to hear about federal flight deck officers and enhanced barriers. The selfless pilots who volunteer for this program are subjected to intense training and prepare themselves for dangerous aspects on aircraft. Im interested to learn more about how its evolving. Mr. Chairman, thank you again for your leadership and for convening this hearing. I look forward to a productive dialogue with our witnesses and colleagues and i yield back the balance of my time. Thank you, miss rice. Other members of the committee reminded that Opening Statements may be submitted for the record. We are pleased to have a distinguished witness before us today on this important topic. Let me remind the witness that the entire Opening Statements will appear in the record. Our first witness is mr. Roderick allison who began serves as the assistant administrator for the federal air Marshal Service. Mr. Allison was the i would like to note that i met with mr. Allison yesterday in advance of his testimony here today and if he displayed the same candid demeanor that he he did yesterday, i think were going to have a productive hearing. So i look forward to hearing from you, sir. And i now recognize you to testify for your five minutes, sir. Good morning. I appreciate the opportunity to appear before you today to testify about the federal Marshall Service or whats known as fam. We perform our core mission by deploying federal air marshals on United States flagged aircraft throughout the world 365 days a year, utilizing a comprehensive concept of operations that aa lines with tsa riskbased security strategy. Fam Law Enforcement officers receive training to prepare them for the difficult working environment. They operate at 30,000 feet in a restricted space and have no backup to call about. Familiar is unique in its ability to remain flexible and to rapidly deploy hundreds of Law Enforcement officers in response to specific evolving threats with the transportation domain around the world. In competition of the department of homeland security, familiar recently completed an updated addressing Risk Mitigation and incorporating randomness and unpredictabili unpredictability. While the focus remains on the highest risk flights, the office ensures advocacy uncertainty through potential deployment on any u. S. Carrier flight. A risk by flight methodology is underdeveloped which will include fam Mission Planning based upon passenger travel patterns, assess passenger risk and consideration for Airport Locations with known vulnerabilities. In addition to deploying familiars on board aircraft, they assign visual inner modal response at locations to augment the visible presence of security personnel. Those teams can be made up of several components of tsa, each working closely with federal, state and local Law Enforcement partners and transportation stakeholders to ensure the safety and security of our transportation systems. The federal air Marshal Service is made up of dedicated professionals whose job demands that they demonstrate the highest level of preparedness and integrity. Since becoming familiar director in june of 2014, i have implemented several Workforce Engagement initialists to enhance communication and to promote the highest level of professionalism within the workforce. Over the past year, my Deputy Director and i have conducted nearly 50 Office Visits in town hall sessions across the country. I have personally visited each headquarters sight on multiple occasions and 19ous of the 22 field offices to meet with personnel in all levels of the organizations, to communicate expectations, address concerns and answer questions. I recently launched a directors award which honors annually one nonsupervisor employee at each office who demonstrates that highest level of integrity and serve as a role model to their colleagues. Ive initiated a thank you campaign wherein hundreds of employees have received letters of accommodation for noteworthy accomplishments. These provide me with a great opportunity to demonstrate my deep appreciation to the workforce and highlight the good work of our employees. Additionall additional, as part of this effort, fam maintains a robust system of both medical, including mandatory physical and psychological assistance programs which are readily available to the workforce and their families. The fam medical Program Section is staffed with a physician and full time medical position who are available to fam at any time, 365 days a year. Fam recognizes the value of this program to our workforce. We will continue to make these and on her Employee Assistance programs available to our personnel. Fam recently completed a staffing and field office assessment review in order to maximize organizational effectiveness and efficiency and to ensure fams are locate bted in offices in a risk based manner to cover the most critical flights. As a result of this assessment, six field offices either have been closed or will be closed in the next year. Personnel from these affected offices were reassigned to our most critical offices which service the highest risk flights. The federal Marshall Service is a strong element in the security the tsa provides to the traveling public. We take our mission seriously and our workforce is dedicated to preventing and disrubting criminal acts on board and in transportation with the domain. I appreciate this committees partnership and your effort for a critical mission. Thank you for the opportunity to appear before you today and i look forward to answering your questions. Thats pretty remarkable. I dont think anybody spoke within two second of the fiveminute limit. Thats pretty good. If thats part of your organizational skills, were impressed, sir. I want to thank you for your testimony. We appreciate you being here, mr. Allison, and we know your time is valuable. I now recognize myself for five minutes to ask questions. And i want to you know, lets get right into it. With reinforced cockpit doors like we have now on airplanes and we are move flight Desk Officers that are piemts that are armed and passenger information via the secure flight, is the need for the federal air Marshal Service the same or is it declining . Mr. Chairman, i will tell you if i didnt believe in this mission win wouldnt be in this job. All those things you cited are improvements that have happened within Aviation Security business over the years. And as we like to say, you know, no one element or no one layer stands on its own, right . We do need to have federal air marshals on these flights. We need that partnership with the program. We need to continue to work on the improvements on the cockpit doors, as you and i discussed yesterday, the secondary barriers. So those things will be ongoing and, as we get to a place where were satisfied that those things are in place, thats officially mitigates the threats that we see, well start looking elsewhere where we can be effective and where we can add value and make a difference. What additional changes do you feel the air Marshal Service could implement to become more efficient and better risk based . I mentioned in my opening statement, mr. Chairman, that we are looking at a model of a risk by flight. So with that, id like maybe it sounds pretentious, but id like to say were pretty good at being risk based, as we are today, but were going to examine Critical Infrastructure. Our flights flying over Critical Infrastructure in addition to the populous areas, in addition to using that passenger information from secure flight. Known travel patterns of ksds, known and suspected terrorists. So we are moving to a model where we can better utilize the information thats available to make better judgments about how we assign our personnel. Is there any new initiatives that youre planning for the current fiscal year, the upcoming fiscal year . With respect to operations . Yes. We recently amended our concept of operations. That was started by the former director. But i was able to get that over the goal line. But in that construct, what we did was we really took a look at how we were deploying our federal air marshals. On the event of 9 11, there were a number of things that we were required to do. For instance, mandatory flight coverage levels at dca, looking at long haul flights, looking at the particular areas of the country and giving them certain priority levels. Weve actually readjusted that and i think its going to make us more productive, more unpredictable and well be able to, you know, to be seen and have air marshals on flights where we otherwise would not have coverage. And ill be happy to share that concept of operations with you and the Ranking Member at your convenience. I appreciate that. Now, you mentioned i think you called it a secondary door theyre talking about and that is obviously something that some groups have been interested in with respect to additional airline safety. That would so when a pilot is coming out of the cockpit for that temporary moment when the door is opened, to have some sort of barrier there. I know now on flights they have a cart turned sideways and the Flight Attendant is standing behind the cart so if someone isnt able to get right up to the cockpit door right away. Is a secondary door, in your opinion, based on your expertise, something that should be considered based on your knowledge and experience . I think its absolutely necessary to take a look at and see if it works, if its effective, if its something that is going to result in less resources and more protection and security for the flight crews. As you stated, the flight crew does bring out the cart and block the entrance for the pilots to use the facilities. So we are working and have been for a number of years with boeing, the faa. I was just informed yesterday that theres some foreign partners that have an interest in looking at this, as well. So that work will continue. You know, one of the things we touched on yesterday, there has been a concern within the industry about the federal air Marshal Service booking flights close to the time that the plane is set to take off within a 24 hour period, for example. And oftentimes if theres first class is full, someone if youre ever sitting in first class, they get bumped out of first class, they cant tell them why and that lead to some consternation and leads to some difficult explaining to try and attempt to do with the passenger who paid for a first class ticket and is no longer able to sit in first class. So first of all, have you looked into this issue since we spoke . I did look into the issue of deadheading. And ill get tospecifically to question. Mr. Chairman, if these young men and women who fly these flights, theyre having to submit their schedules and availabilities 60 days in advance. Two months in advance is when we start the scheduling process. As i related to you yesterday, sir, i know more than anybody that what we do is necessary. Its important. But at the same time, it does impact the industry to some degree. Over the course i think it was 2014, june 14 and june 15, the amount of Economic Impact the federal air marshals was 0. 11 of the total revenue of the industry. But be that as it may, as you can sense here, we are sensitive to that and we make all attempt toes minimize the disruption to their business. Okay. I guess going forward, i would ask, you know, perhaps it might be advisable to reach out to some of the airlines and at least examine the issue and make sure youre both on the same page with that. We hear something a little different from them. But the bottom line is, we want to make sure that the disruptions of passenger traffic is as minimal as possible, bit allows you to fulfill your duties going forward. But i guess planning, planning, planning is the best we can do. So to the extent you can reach out to them, it would be advisable you do so. Absolutely. Ill do that. The chair now recognizes the gentle lady from new york, ms. Rice, for any questions she may have. Thank you, mr. Chairman. Mr. Allison, if you were given a wish list of improvements that you could make to your agency, what would they be . The first thing i would put on that wish list in big, bold letters is the ability to hire. You know, as i go across the country and i talk to fellow air marshals, the number one question i get is what is the future of the organization . You know, not being able to hire has a detrimental effect on the workforce. Theres a sort of feeling of dying on the vine. You know, if i was able to hire, i would be able to open up and allow employees to move to places where they would want to go conceivably. The workforce is getting older. Right . A lot of people that we hired in the beginning of 9 11, as i told the chairman yesterday, theyre going to be walking out the door, 2020, 21. So i ask the chairman for his support in working through this problem to get to where do we want to be in five years . So that is the number one issue that i would put on my wish list in big, bold letters. I think the other thing that the men and women of the federal air marshal would say is this is a tough, tough job
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