Chairman BOEHLERT. The hearing will come to order.

Before we start the official part of today's hearing, I would like to take a moment to recognize a real person to illustrate the importance of the issues we are going to be discussing today. Neela Thangada, who is in the audience today. Neela, would you please stand?

Just yesterday, she won the Discovery Channel Young Scientist Challenge. She got into the finals of this contest by doing an individual project on plant cloning and won by demonstrating leadership, teamwork, and scientific problem-solving on a series of experiments related to forces of nature, a very timely thing for this year's contest. Now let me point out that Neela is 14. She is in the seventh grade. What she is doing is so exciting. She is accompanied by her mom. Where is mom, Neela? You know, when I first met Neela, this is not as a politician, this is just an observation, I didn't know which one was the student and which one was the mom. Mom, please stand and be recognized. I want to thank you for the guidance you are providing.

Neela is what this whole hearing is about and what the whole Augustine report is about, so we are so pleased to see you, and thank you for joining us.

It is a pleasure to welcome everyone here this morning for our hearing on the new and vitally important National Academy report, "Rising Above the Gathering Storm." This report is already getting an unusual amount of media coverage, and how refreshing that is to have the media concentrating on something that is not sensational but is critically important, a tribute, in part, to the reputations and work of our witnesses here today, and that is helping to jump-start, and in other quarters, to intensify, a national discussion on research and education and the Nation's future.

The overarching message of the report is simple and clear, and it is one the Congress had better heed. And the message is this: complacency will kill us. "Where there is no vision, the people perish." If the United States rests on its withering laurels in the competitive world, we will witness the slow erosion of our preeminence, our security, and our standard of living. That is a very sobering message. We used to be so far ahead of everybody else in the global enterprise that when we looked around, we couldn't even find a person in second place. Now we can't even take a nanosecond to look over our shoulder, because they are breathing down our neck. It is a message that this committee has been trying to send for many, many years, and now, joined by Chairman Wolf of the Appropriations Committee and some of our other friends over there who get it, indeed this committee has pressed, sometimes successfully and, unfortunately, sometimes not, for many of the specific proposals in the Academy report. So Mr. Augustine, you guys are really helping us, and I appreciate it.

We have authorized increased spending on basic research, including funding for research equipment and for more daring and crossdisciplinary research, and we have created programs like the Noyce Scholarships to try to attract more top students into teaching. And Neela, consider teaching as a career, will you please? And like Tech Talent to get more students who express interest in science, math, and engineering to complete majors in those fields.

We have pushed for greater funding for the education directorate at the National Science Foundation and for the basic and applied research programs at the Department of Energy.

But clearly, we haven't done enough. We have all of the zeal of the most fervent missionary, and we are trying, but we haven't done enough, and we haven't succeeded nearly as much as we would like. That is why the Augustine report helps this. Science programs still have to scrounge around for every additional cent. Young scientists still have to beg for funds. Our education system is still producing too many students who can not compete with our counterparts around the world. And the Federal Government is still ignoring our fundamental energy problems while wasting money pandering to special interests.

So I urge our witnesses today, who are among the most prominent and respected leaders in the Nation, to redouble your efforts to get the word out about this report. We need a lot more missionary work, especially in this era of fiscal constraint. While Congress turns its attention to fixing the immediate problems caused by the literal storms that have hit our coasts, we can't skimp on the funds needed to address the gathering storm described so starkly in your report.

There is an exchange in a Hemingway novel in which one character asks another how he went bankrupt. He answers, "Two ways. First gradually and then suddenly." As a nation, we are gradually going bankrupt now in the ways described in the Academy report. If we don't act, we are going to wake up one day and find ourselves suddenly unable to compete.

I look forward to further guidance this morning on exactly what we should do to compete. And I hope we will have a spirited discussion about the details of the Academy report recommendations. But as we argue about the specifics, and it won't be so much an argument, it will be sort of a debate, I hope we can all come away with an open and even greater commitment to address the problems that the report lays before us.

[The prepared statement of Chairman Boehlert follows:]

PREPARED STATEMENT OF CHAIRMAN SHERWOOD L. BOEHLERT

It's a pleasure to welcome everyone here this morning for our hearing on the new and vitally important National Academy report "Rising Above the Gathering Storm." This report is already getting an unusual amount of media coverage—a tribute, in part, to the reputations and work of our witnesses today--and that is helping to jump-start (and in other quarters, to intensify) a national discussion on research

and education and the Nation's future.

The overarching message of the report is simple and clear, and it's one the Congress had better heed. And the message is this: complacency will kill us. If the United States rests on its withering laurels in this competitive world, we will witness the slow erosion of our preeminence, our security and our standard of living. It's a sobering message.

It's also a message that this committee has been trying to send for many years, now joined by Chairman Wolf and some of our other friends on Appropriations. Indeed, this committee has pressed-sometimes successfully, sometimes not-for many of the specific proposals in the Academy report.

We have authorized increased spending on basic research, including funding for research equipment and for more daring and cross-disciplinary research; and we have created programs like the Noyce Scholarships to try to attract more top students into teaching, and like Tech Talent to get more students who express interest in science, math and engineering to complete majors in those fields.

We have pushed for greater funding for the education directorate at the National Science Foundation (NSF) and for the basic and applied research programs at the Department of Energy.

But we clearly haven't done nearly enough. Science programs still have to scrounge around for every additional cent; young scientists still have to beg for funds; our education system is still producing too many students who cannot compete with their counterparts around the world; and the Federal Government is still ignoring our fundamental energy problems while wasting money pandering to special interests.

So I urge our witnesses today-who are among the most prominent and respected leaders in this nation-to redouble your efforts to get the word out about this report. We need a lot more missionary work, especially in this era of fiscal constraint. While Congress turns its attention to fixing the immediate problems caused by the literal storms that have hit our coasts, we can't skimp on the funds needed to address the "gathering storm" described so starkly in your report.

There's an exchange in a Hemingway novel in which one character asks another how he went bankrupt. He answers, "Two ways. First gradually and then suddenly.” As a nation, we're gradually going bankrupt now in the ways described in the Academy report. If we don't act, we're going to wake up one day and find ourselves “suddenly" unable to compete.

I look forward to getting further guidance this morning on exactly what we should do to compete, and I hope we have a spirited discussion about the details of your recommendations. But as we argue about the specifics, I hope we can all come away with an even greater commitment to address the problems this report lays before

us.

Chairman BOEHLERT. With that, it is a pleasure to turn to my partner in this venture, the Ranking Member from Tennessee, Mr. Gordon.

Mr. GORDON. Thank you, Mr. Chairman.

Let me, once again, concur with your statements and also say that I have witnessed firsthand your passion for these issues. You are a leader in the area, and I appreciate working with you on it. Let me also thank the Committee for the work you have done, Mr. Augustine. Once again, you have done a tremendous service for the country.

And let me say this, without diminishing what you have done. To a great extent, what you have done is just rehash what we already knew and brought it together from different sources. There is not a lot new here, and I don't mean that as- -I mean, I think it is good that we have brought it together. I think that it is good that we can look to your report and say these are leaders in academia, with the private sector, and hopefully get us more energy in trying to accomplish something here. But again, as our Chairman has pointed out, this committee has passed many of these things already.

And so really, what I would like to hear you talk a little bit about is how do we get the private sector, and what do you intend to do to help implement these proposals. Í mean, again, you know, we have to have more energy. Clearly, what we are doing is not enough. And I would like to hear something about that.

The other thing that I noted reading through this report is that, with the exception of talking about R&D credits, there really wasn't much said about the private sector in this area. Now maybe you didn't think that was your charge, but I think the charge said what are some federal policies that deal with it. The R&D credit is one of those. And I pose this question that I would like to hear more about. There seems to be a growing disparity between top level CEO and other kind of salaries and the salaries of others in those companies in relationship to other countries. And is this lead

ing us to a situation where those top executives are so pushed because of this type of compensation that they have to be so quarterly oriented to having results that the private sector is not doing its part in R&D? And is there some, I mean, I guess, one, is this accurate? And if it is not, then that is fine. If it is accurate, then is there a federal role in somehow trying to encourage looking beyond the quarter? Looking beyond. I mean, right now folks, in two or three years, can make all of the money they can spend the rest of their life. So you know, as long as they keep the stock up, why should I worry about five years from now? Why should I make these investments?

Again, if I am wrong, I would like to know.

The other thing is in your statement, and it was $10 billion, I hate to say, is a modest amount of money, but it is not, I think in terms of investment and in terms of our budget, it is a reasonable amount of money to spend. And you are talking about how we need to reallocate. We can get part of this by reallocating some funds within, I guess, our current budget. But I didn't see the section about what to allocate and what were those specifically. So if you have some suggestions in addition to reallocate, which ones we should reallocate, I would like to hear that today.

So with that in mind, again, I want to thank you. This is an important document. This is a document that we all need to wave and that we all need to charge forward with. It is important to our kids and our grandkids. So I thank you for it.

Again, my questions did not try to diminish what you did but to try to take this a step farther.

Thank you.

[The prepared statement of Mr. Gordon follows:]

PREPARED STATEMENT OF REPRESENTATIVE BART GORDON

I want to join Chairman Boehlert in welcoming everyone to this morning's hear

ing also want to thank our distinguished panel for not only taking the time to ap

pear before us today, but for their time and effort in preparing this report.

The title of this report, "Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future," summarizes the challenge before

us.

There is a general uncertainty about our country's future economic prospects and a desire for guidance on how to move forward. I think that the report provided by the Panel takes some steps towards providing that guidance.

A few disturbing facts from the report jumped out at me:

The large wage disparity between U.S.-based scientists and engineers and their competitors in China and India; and

The 110 chemical facilities that have closed or are slated for closure in the U.S. coupled with the 120 large chemical plants currently under construction globally-one new plant in the U.S. and 50 in China.

China is producing more than 600,000 engineers per year.

As the report notes, "Thanks to globalization, workers in virtually every sector must now face competitors who live just a mouse-click away, I'm left wondering where will the good high-paying jobs be for the next generation-in the U.S. or in some other country.

The report outlines a number of specific actions we can take to improve the innovation environment in the U.S. Many of these recommendations are familiar to us because they are what the Science Committee has advocated in legislation.

For example, substantial increases in funding for NSF and the Office of Science at DOE. In the area of science education, the Committee has authorized scholarships for math, science and engineering students to obtain teaching certificates as

well as the math and science partnership program to improve the training of new teachers.

There seems to be a broad consensus on what the U.S. should be doing, but the Administration has not followed through in its funding requests.

This report highlights that our current federal R&D investment strategies are not up to meeting the global competitive paradigm of the 21st century. The recommendations represent a challenge to the Administration and to Congress to take action now.

I am interested about one of the Panel's statements which is that some of its recommendations "require funds that would ideally come from the re-allocation of existing funds." What is not identified is what funds should be re-allocated or why. I hope our witnesses will provide some more detail into the Panel's thinking.

We can all agree that more R&D will result in more innovation, but one issue not addressed by this report is will it really generate more and better jobs in the U.S.? Or will the exploitation of these innovations quickly move to countries with lower cost labor?

I hope the panel has some thoughts on how to ensure that the development of new technologies leads to the creation of new jobs in the U.S. One only has to look at most types of consumer electronics-the history of VCR technology as an example-to see that we have often lost the economic payoff from technology invented here.

In closing, it seems that we understand the challenges we face and we have agreement on how to address these challenges. What is lacking is the political will to make the investment.

I would like to point out that his report represents a consensus of panelists representing business, academic, and education leaders. I would challenge the Panel to press the Administration and Congress to fund their recommendations. As a nation, we cannot afford not to.

[The prepared statement of Mr. Ehlers follows:]

PREPARED STATEMENT OF REPRESENTATIVE VERNON J. EHLERS

I am delighted with the Academy for producing this report, and am pleased that the Committee is taking the time to delve into the report's recommendations and proposed implementation.

For many years, I have stressed the need to increase our national investment in fundamental research and education. Despite passing an authorization bill to double the budget of the National Science Foundation (NSF) by 2008, we are still falling very short of that goal set by Congress in 2002. Each year, the chasm between the authorization and appropriation broadens, while at the same time the NSF education budget continues to diminish. But today there are an increasing number of voices joining the chorus recognizing the need for change. The voices are louder and clearer as the message begins to unify: build our science, technology, engineering and math skills, and we will maintain the strength and competitiveness of the United States. Business, industry and academic leaders are all drawing attention to the connection between our prosperity and a technically-skilled workforce. As we see the indications that our science and math education is slipping, we are jeopardizing our quality of life and national security, especially for our children and grandchildren. Without bolstering our science and technology infrastructure, we cannot expect these trends to change.

There are many challenging questions raised by the report; it will take the strong dedication of the Committee and Chair to share these recommendations with a variety of stakeholders. I thank the witnesses today for their good work, and encourage them and the others they represent to continue to publicize this problem and lobby Members of Congress to make national competitiveness a priority through their strong support of fundamental research and education. I commend the witnesses for being here today, and look forward to continuing to work with you to not only share your report recommendations, but to actively seek solutions.

[The prepared statement of Mr. Costello follows:]

PREPARED STATEMENT OF REPRESENTATIVE JERRY F. COSTELLO

Good morning. I want to thank the witnesses for appearing before our committee to discuss the report released by the National Academy of Sciences (NAS) on October 12, 2005 entitled, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future. I commend Chairman Boehlert and Ranking Member Gordon for holding this hearing today because the recommendations