Mr. Chairman, Members of the Committee, it is with both sadness and resolve that I appear before you today. Obviously, our lives, and the life of our nation, changed dramatically as a result of the terrible attack of September 11.

Though we will never overcome the sorrow we feel for the families and friends who lost loved ones, we will be able to ensure public safety.

And, while it may take time to recreate comfortable confidence in air travel, I assure this committee that we can–and will–enjoy a transportation system that is safe, secure, and stable. The effort being expended by the government, the carriers, airport authorities, local police forces, and others on behalf of aviation will continue, and the traveling public can count on this.

That is the President’s commitment, and I will marshal all resources of the Department of Transportation to accomplish that fundamental goal.

I should begin by taking this public opportunity to express my profound gratitude and pride in the performance of the employees throughout the Department of Transportation. I want to emphasize particularly my appreciation for the professionalism displayed by the FAA from top-to-bottom since the attack. From Administrator Garvey on down, the FAA has performed magnificently, as have other crucial players in our Department, including the Coast Guard and all those who worked with the well-prepared DOT Crisis Management Center.

I hope here briefly to outline some of the key activities of our Department on September 11 and then to move to essential plans for our future.

On the morning of September 11th, on first word of the attack, I moved directly to the Presidential Emergency Operations Center in the White House. As soon as I was aware of the nature and scale of the attack, I called from the White House to order the air traffic system to land all aircraft, immediately and without exception. That was an unprecedented step. But with the risk of additional flights that might be used as terrorist weapons, I believe that it was the right and necessary step to take.

In the moments that followed my call, countless brave, tough, and smart Federal air traffic controllers worked with courageous and calm pilots and flight crews to land over 4,500 aircraft. Though all these emergency landings were entirely unplanned, they were safetly and successfully accomplished. That was an historic feat in crisis management, and it illustrated the magnificent skill of key players in our transportation systems.

This Committee should also be aware of the extraordinarily rapid response achieved with respect to all modes of transportation throughout our country on September 11th.

Thanks to elaborate simulation and preparation, the Department of Transportation’s Crisis Management Center took only minutes to kick into action. The first crash occurred at 8:46 am, and the Crisis Management Center was fully operational--with secure lines of communication, initiation of security procedures, and key contacts on line--by 9 am. Then, in a pre-planned fashion, the Department rapidly secured thousands of transportation hubs and corridors across the United States--including bridges and rail lines, roads and harbors.

Of course, as we move forward, we must dramatically alter our approach. As President Bush has said: the world has changed. I add: so too has the very nature of our national transportation system.

The events of the past several days require us to take new steps to move people and commerce safely and efficiently, despite the fact that the nature of the threat has clearly changed. It is a mission we cannot afford to leave for a later time.

This Administration is already moving to restore and enhance our air transportation system. On September 13th, I announced the gradual restoration of flights within the national airspace system. We took immediate steps to develop heightened security measures to ensure the safety of airline passengers as well as people on the ground.

All of the country’s major airports have resumed scheduled domestic commercial and cargo service operations, with the exception of Reagan National Airport, which remains temporarily closed. Scheduled passenger airline service is operating at about 78 percent of normal levels. General aviation operations have also resumed except for visual flight rules operations in the immediate vicinity of our nation's 30 largest airports. We are currently increasing access to international commercial and general aviation flights.

Because safety is of paramount importance, I required that heightened security measures be in place before any air service resumed. A thorough search and security check of all airplanes and airports took place before passengers are allowed to enter and board aircraft.

We discontinued curbside check-in at every airport. We discontinued off-airport check-in. We no longer allow passengers to check in for their flights at hotels or other locations. All passengers are now required to go to the ticket counters to check baggage. Only ticketed passengers and authorized personnel are allowed to proceed past airport screeners--well-wishers must stay out of the secured areas.

Let there be no doubt: we will soon be taking additional steps to increase security beyond those already taken.

Now we must deal more broadly with the aftermath of September 11th. We have already turned toward development of long-term, sustainable security improvements within our airports and on our aircraft to ensure American passengers are provided with the highest possible levels of safety.

Consistent with the strict security measures imposed upon startup last week, I announced on Sunday the creation of two Rapid Response teams to make specific recommendations for the further improvement of security within the national aviation system. Their conclusions are due October 1, at the latest. One team is focusing on ways to increase security at our nation’s airports. The other is focusing on aircraft integrity and security. Among those areas that will be addressed will be making airport screening a more credible deterrent, expanding the Federal Air Marshal program, and enhancing cockpit security. Both teams are now undertaking their tasks with a sense of urgency.

As they work on these teams, our own experts at the Federal Aviation Administration and Department of Transportation will have input from a distinguished group of Americans with a wide range of expertise in many different aspects of air transportation and law enforcement.

I understand the complexity of these issues, and I know there have been numerous studies on many of these issues. Yet the larger context has changed dramatically. We now face a different security threat not only in transportation, but in all aspects of American life. We have to be willing to meet that changed threat with additional counter-measures, and still find ways to keep our transportation systems the efficient and vital circulation system of our economy. We must therefore judge our security options in a different light than we might have judged them in the past.

What I expect now are good, unambiguous answers to the new questions and heightened risks. The Department of Transportation has acted promptly in response to the changed circumstances, and we will take further actions promptly.

Broader Security Concerns

We also need to keep a broad perspective as we address both security and commerce. The events of September 11th have focused media and public attention almost exclusively on aviation , which is understandable. Yet, as Vice President Cheney has noted, the odds are good that terrorists may use entirely new lines of attack. The Department I am honored to direct is focusing on all modes of transportation, including but not limited to airplanes and airports.

Thus, under authority from the Ports and Waterways Safety Act, we have taken action to control the movement of all vessels in the navigable waters of the United States.

All ports and waterways have remained open and secure since Sept. 12 with very limited exceptions. We put pipeline operators on alert. And with the resources provided to the U.S. Coast Guard, it has performed with monumental efficiency.

In the New York City area, our employees have worked selflessly for days to bring services back, provide alternative means of access to the City, and, at the same time, guard against possible further acts of terrorism.

I want to emphasize the over-arching threat we now face. The new security measures we have already implemented -- and those we will implement both publicly and discreetly -- are not designed simply to deal with threats of further attacks like those of September 11th.

For example, the President has asked our Department to help protect the integrity of our nation’s entire transportation infrastructure. And that is what we are doing. But we also have to recognize that we have to meet the challenge of new and different security threats not only in transportation, but throughout our society.

We will have to take precautions in transportation that we have never taken before, and we will have to do the same in virtually every aspect of American life. We will find ways to preserve the best of our transportation systems - the freedom of movement, the safe and efficient movement of goods and people that is so necessary to our economy. We will find ways to accomplish both heightened security and the benefits of efficient transportation system.

Economic Response

I turn now to another critical topic--maintaining the air transportation system in the face of severe financial problems. The current situation in the airline industry is that access to credit markets is greatly restricted and revenues dramatically diminished.

I would emphasize that the task at hand is not to prop up one or another of the carriers. It is not to "make whole" the industry as if September 11th had never occurred. Rather it is to recognize that this key part of the economy of this country requires new foundations in security and confidence as solid as they were once before. I believe the Federal Government has a responsibility for the safety of the public, airline passengers and crews in particular, and to ensure the foundation of security, insurance, and other necessities that will help this key part of the U.S. economy function. This nation needs a vital, viable, and competitive airline industry.

Accordingly, we are proposing on an expedited basis an initial package to provide strength, security, and confidence in air transportation.

Our proposal includes:

· $3 billion to airlines to help offset the substantial new costs they are incurring because of tightened security requirements.

· $5 billion in direct and immediate payments to airlines, roughly in proportion to their size.

· Authorization for the War Risk Insurance Program to be invoked, at the President’s discretion, in the domestic arena as well as the international.

· Limited modifications to certain aspects of collateral liability, in order to avert a near-term threat to the continued availability of insurance coverage. The main purpose is to give us a brief period of time in which to try to resolve that threat.

We have additional steps under consideration, some of would take additional time to fully sort out. We believe that on the measures we are now proposing, time is of the essence. We believe these proposals should move forward immediately, and we would then have additional days to consider and to consult with you on additional measures that may be needed.

I would like to close by taking this occasion to thank this Congress for its swift, bipartisan action last week in providing needed supplemental appropriations to get action underway across the Government. I look forward to of working closely with each of you as we face and meet the challenges ahead.

This completes my prepared statement. I would be pleased to respond to the Committee's questions.