Let me just explain for your for a moment what I do in the Congress. This is my seventh term coming up. I've been on the National Security Committee the entire time and I am the chairman of the research and development subcommittee for national security and to give you some idea of what that subcommittee means. I oversee on my subcommittee about thirty seven billion dollars a year of your tax money that is spent is on military research in America. That's more than four ** agencies by the way . And my subcommittee is responsible for funding all of the six account lines in terms of research and technology that includes the 6-1 and 6-2 account** lines which are basic research. Much of the research funds that are used on most of our college campuses for the basic sciences for post-doc work for work involved in information technology, composite technology, materials technology all the way into the 6-2, 6-3 and 6-4 account lines where we get into developing proto types from that research and then into 65 66 account** lines where we actually begin to build new systems to meet the threats we see emerging on the horizon.

I also am a senior member of the science committee and on that committee I hope to oversee about 40 billion dollars of non-defense research funding which includes all the funding for NASA, N**, N**, NIH and all of those non-defense agencies. So between my subcommittee and my full committee I am involved in one way of the other in about 75 to 80 million dollars of your tax money that funds all of the research in this country from the standpoint of the federal government.

I also was named earlier this year, in the summer to a committee that was formed by the Congress as a result of incidents involving the M** cooperation and the Hughes cooperation* and China. And the select committee on security issues relative to China was formed by the Congress. There are 9 members. 4 republicans and 5 democrats. I am one of the republicans. We have been meeting since July, actually since early July, in closed sessions without any press so you haven't been reading about us in the paper. Very deliberate discussions, five days a week, heavily involved with the CIA the DIA and all of these cooperate individuals to assess whether or not we in fact have given significant technology to the Chinese, to the PLA in particular, and if so why was that technology transferred, what were the reasons behind it. That report will be issued on December the 31st of this year. We will not be able to give a comprehensive report. There's just too much to look at. Though we have gotten into the issue of high speed computing we've gotten into the whole issue of missile technology, the whole issue of technology involving weapons of mass destruction.

In January, in the new Congress, I expect to be the newest member of the house intelligence committee. That committee oversees all of our intelligence agencies. The funding for those agencies, by the way runs though my subcommittee. Anyway so I've been involved in that. But in that role I will have a formal responsibility in overseeing our country's intelligence. So I guess what you can see is that pretty much on a daily basis I am involved in monitoring what is happening in the world, looking at threats that are emerging, and then helping us make sure that we are being prepared to respond to those threats. As the Chairman of the R&D committee for the past four years, I wanted to make sure that the money that I was being asked to spend on behalf of you, all as the taxpayers, in fact was going to meet the right threats. Sometimes those threats are overstated by the military. Sometimes they are understated.

Now for the past twenty years my focus has predominantly been Russia. My undergraduate degree is in Russian studies. I speak the language. I have been there 16 times. I will lead my 17th delegation to Russia next week where I will meet with members of the Duma **. I am the US representative for the formal exchange between the Russian parliament and the US Congress. For the past twenty years, I have focused on what's happening in the former Soviet Union and the former Soviet States and monitoring the stability, and the proliferation, and the controls relative to Russia's military arsenal. But what I saw was that in our subcommittee much of our funding we were being asked to put into threats that supposedly were coming in from China and from North Korea. So for me to get a better hand on whether or not that was real, I figured I better learn some more about China and about North Korea and what our role is and what it should be.

So two years ago, I began to focus on China in a major way. I lead two delegations to China , gave the first American lecture at Fudan University in Shanghai following secretary Warren Christopher, and was the first elected official from America to speak twice at the PLA National Defense University in Beijing. Both times I went to China, I was a guest speaker at that institution addressing senior and mid-level career officers at the PLA and having a discussion with them about the future of the relations between our two countries. So I am pretty heavily involved now in what's happening in Asia.

My first trip to Korea was about ten years ago when I was member of a five member delegation and went over to Seoul, spent several days in Seoul, met with the leadership at that time in Seoul, and then took an official trip up to Panmunjum where we crossed the border, went into North Korea, and we brought back the first remains of Americans that were recovered from the Korean war, brought them back to the forensic lab in Honolulu before coming back to America. Very solemn occasion and for me, very moving event, One, to meet the North Koreans, had a brief period of time to interact with them and discuss with them situations. To see the demilitarized zone and if you've never taken a look at that border to see what it's like to see that vast open area which is patrolled by both sides you really really understand how close we come in the world to conflict. Perhaps no other area best represents that right now than the demilitarized zone. And then to spend time with our South Korean friends. That was my only trip to South Korea. I do hope to get back there sometime in the 106th Congress.

Let me give you some perspectives of where I think we are security wise and I'll try to tie in the Asian countries. First of all, the role is changing dramatically. It is changing almost overnight and unfortunately my perception is that the American people have partly been lulled into a sense of complacency to think that because the cold war ended and because there is no longer a Soviet Union that perhaps we no longer have reason to worry. I would make the case that as a student of Russia, that Russia is more destabilized today than at any point of time under communism. There is a lack of control of Russia's military hardware. There is a lack of discipline in the military. There are severe moral problems. In fact I was the one, who a year ago in May, sat down with General Alexander Levt** who you know is a retired two star general. Very heavily decorated as a general, now the governor of Kra***. He's a friend of mine. I meet with him every time I go to Moscow. I had him testify before my committee in Washington. We had a five member delegation sitting in his office a year ago in May and he was saying

"You know, you have to understand something, Congressmen. Russia's problems today are America's problems tomorrow because many of the most capable Soviet generals and admirals who are our best war fighters have been forced out of our military. They have not been given their back pay or their pensions. They've not been giving decent housing. They feel betrayed by the mother land and therefore, to get money for their families they are selling off that technology. So that concerns you in the West. They are selling off chemical biological. In some cases even nuclear technology that they know how to get access to to whoever will pay the right price. In Russia today you could buy anything you want."

What we see then today are threats emerging around the world. They are not typical of what we saw in the past. In fact, in my subcommittee, I have focused on three areas of what I call the 'threats of the 21st century.' And all of these will to one extent or another involve the Pacific rim. The first is the threat caused by missile proliferation. It is the number one threat here today. It is here right now. We have never seen missiles proliferate so quickly as we have in the past 5 years. Our national intelligence estimate on this issue three years ago in 1995 said that we would not have a direct threat to the US for at least 15 years and that we would not have a threat from Iran or Iraq for from 5 to 8 years. On July 22nd, Iran test fired the Shahab 3** missile. The Shahab 3** missile is a medium range missile that now can hit all of Israel, all of our Arab friends in that region, and all of our 25 thousand troops we have stationed there. And we have no defense against that system. The Shahab 3** was built with the direct cooperation of the Russian government and the Russian agencies. Now they have denied that they finally acknowledged there were cooperative agreements between the Russian space agency, ** agency, and Iran, Iran institutions. But the fact is that missile is now in deployment mode.

On August the 31st North Korea who had already deployed a system called the 'nodang**'. The nodang** system is a medium range missile that they deployed a year ago. That system can threaten and does threaten all of South Korea, all of Japan, and all of our troops which number about 75 thousand in that field. We have no system today that can defeat the nodang** missile. Nothing. We have no system in place today. So that's why General ** who is our safe commander in Korea two years ago, wired back to Washington and said that his number one priority was for the US to develop a ** missile system which we have been trying to build for the past 15 years.

Missile proliferation has gotten out of control. On August the 31st, North Korea again as a surprise to our intelligence community test fired the proto 'donwang'** missile we knew that they had a donwon**. We knew it was a follow up of the nodang*. And we know they were looking to build a long range missile. But we didn't think one, it would be 3 stage and we didn't think they would be able to test this for at least another 5 years, let alone deploy it. On August the 31st over the territorial water and land of Japan. North Korea fired the proto 'donwang' missile. We were shocked when we saw that it was a 3 stage rocket, when we saw there was solid fuel involved. And when we found out largely though some help from our allies not through our own intelligence that this missile was capable was launching a satellite, when the final analysis was done by the CIA experts, and I can tell you this now since it's been released publicly depending upon the **payload that would have been carried on that proto dowon** missile in the range of 100 to 200 kilograms, that missile could hit the heartland of the United States of America. That has never been the case before. So on August the 31st of this year, North Korea test fired a 3 stage rocket. When you do the mathematical calculations of the trajectory of that missile based on the payload** of the 100, 200 kilograms which could be a chemical biological nuclear war head. They in fact, could hit the mainland of the US. Not just Alaska and Hawaii. That is a shattering revelation. We have never seen that capability. We did not expect that capability to be capable of being used or being tested for a period of 10 to 15 years.

So missile proliferation has dominated our concerns in terms of what is here today. It's not just the country I have mentioned of North Korea, it's not just Iran, Iraq who have definitely been trying to build medium range missiles. We know they have a scud. We know they want to build a longer range missile and we know that they want to acquire the technology to assist them. We have seen significant interaction between Iraq, Iran, Russia, North Korea with Syria and Libya also on the development of medium range missiles. This past spring we saw India and Pakistan both fire medium range missiles which have the capability of hitting each other and the capability of putting on **** of weapons on those missiles. Over 70 nations have missile capability. Over 20 nations today are building cruise, medium, and long range missiles that threaten each other. It is the weapon of choice.

Now some people say we shouldn't focus on missiles because if we want to hurt someone I'm going to put a bomb on the back of a truck and I'm going to send that truck in or I'm going to put it on a barge and float it up on the water into the harbor. But that's not what happened. Saddam did not send a truck over to kill our troops in Saudi Arabia. He put a war head on a scud missile, fired into that barracks, and killed in the largest loss of life of American troops in this decade. Killed those American men and women, half of them from Pennsylvania, and we couldn't do a thing about it because we had not developed the capability to take out the scud missile.

Now we did use the patriot in Desert Storm. The patriot was not designed to shoot down missiles. It was built as a system to shoot down airplanes. It was modified at the 11th hour to give it an additional capability for it to go after missiles. We were at best 40% effective with the patriot system. But in most of the cases where we had the patriot, it was not successful because we would hit the patriot on the tail end or in the middle and the trajectory of the war head would continue on into the area it's intended. If you're going to have an effective missile defense system, you've got to take out that missile in the ascent phase so it's over the territorial land of the people who are firing it. So if North Korea wants to fire missiles over South Korea, we want to be able to knock out that missile as it's on the upward ascent over North Korea so North Korea feels the pain. In the case of Desert Storm almost all of the scuds that we did hit, and that was only 40% effective, continued on to Tel Aviv and continued on to kill the people of Israel. With travelne** and with pieces of material from that scud missile, we were not effective.

Unfortunately, I have to tell you seven years after Desert Storm we still do not have aggressive medium range missile defense capabilities. That's why you are seeing the nations of the world scramble. That's why Japan has been beating our doors down to assist them in developing a missile defense capability. That's why the Europeans have joined with the US in building a program called MEADS, medium extended air defense system. The Italians and the Germans have been funding that with us to give them a capability. But all of these systems will not be ready until at least 12 to 18 months away. So we are vulnerable from the threat of missile attacks. It is a major concern of us in Washington today .

The second major threat we see emerging is the use of weapons of mass destruction. And I said earlier, weapons of mass destruction and associated technology are being spread around the world not just from Russia. To some extent by China and especially by North Korea. One of the ways the administration thinks we can stop this from happening is through the implementation of arms control agreements. I am not against arms control agreements. But to have arms control agreements be effective you've got to enforce them. I did a floor speech three months ago on the floor of the house where I documented six years, 37 violations of arms control agreements by Russia and China. 37. The administration imposed the required sanctions only 3 times out of 37. And in each of those 3 cases, they waived the sanctions. So if you are going to base your control of proliferation on arch control regimes you better enforce them. And if you're not going to enforce them don't be shocked and surprised when India and Pakistan both have nuclear weapons and both have medium range missiles. Because we saw all the technology flowing there. We saw time and time again. We saw the Chinese send Pakistan M11** missiles the ringm***. And we saw them send the furnaces for their nuclear program. We saw the Russians send materials to the Indians and we did nothing about it to stop it or to call into the question the violations of the arms control regimes at play.

< We have a real problem with proliferation of weapons of mass destruction. The Congress is increasing funding over that significantly over the president's request. Both to help us detect these kinds of devices and to do what we call consequence management, if and when disaster occurs, so we can be prepared. In fact right now we are training and equipping every major city in America to be able to respond to a terrorist incident. Especially if it involves a chemical, nuclear, or biological contaminant. It's not a matter if it will occur. As John Armey**, our number two person in the Pentagon says, it's a matter of when as you saw in Japan when that saran gas attack occurred. It could happen in American. It will happen in America. It is a major concern for us.

Our third major area as we see as a threat in the 21st century is perhaps the most troublesome one. It is called 'informational warfare'. If I'm an adversary in the 21st century and I want to take away America's capability I am not going to try to compete with us weapon for weapon. That's impossible. It's too costly. However, if I have the ability to have super computing capability in my country, I will focus on trying to find a way to compromise America's smart capability. I will try to find a way to neutralize America's smart weapons. I will try to find a way to put bugs in American's smart systems. Because if I could do that, I could take away America's competitive advantage.

But I'll go beyond that because if I really want to cause problems in America, I will try to cause havoc among the general population. How would I do that? I would use my computers to find a way to compromise America's air traffic control system, our electric grid system. I would find a way to compromise inner city mass transit systems and to do that one only needs to understand that information age and the kinds of technology associated with information warfare. There are active information warfare programs in every nation we deal with around the world. We know them. We monitor them so what we have to do and we are doing is that we have to have in place a counter program to make sure we're putting into the place the system to protect out data, protect our defense systems but also to protect our civilian systems. So we can't be compromised. So that our quality of life can't be taken down by a rogue nation or a rogue group attempting to undermine American's quality of life . It's a major priority for us not just the Y2K problem. The whole problem of someone deliberately attempting to take out America's success in it's capabilities in the information arena.

Those our our three major areas that we see the vulnerability of the 21st century. That we have to address how they all require more money in some cases, some billions of dollars or in some cases just more commitment or coordination. The problem is, right now folks, is that we are facing a massive colossal train wreck. I in my ** as I said at my tabl,e I am not going to be partisan and I am not going to rail against the democrats because of this** this ** is Congress vs. the White House. There is a major fundamental battle that has been going on for the past 5 years between the Congress and the White House over our policies. And let me enumerate them for you briefly.

First of all, our funding for national security today is thin. It will go down in history for doing more to undermine our nation's security than any point in time in this century. And that's a pretty provocative statement. But let me tell you what the facts are. And let me compare our spending on military today to other periods of time. And I'm going to pick the 60s. I'm going to pick John Kennedy's era because we were at relative peace. It was after Korea and before Vietnam. In John Kennedy's tenure we were spending 52 cents of every federal tax dollar on our military. 9% of our country's gross national product on defense. In this year's budget we are spending 15 cents of your federal tax dollar on the military, 2.8% of our country' gross national product. We are now into our 14th consecutive year of real cuts. Not artificial cuts in the rate of inflation: real cuts in our defense budget. By the way, the only area of federal spending that has taken real cuts is defense. And they have been massive, 9% of our GNP to 2.8%. 52 cents of every federal tax dollar to 15 cents.

But things have changed since John Kennedy's era back in the 60s. You had a draft. We sucked young people out of high school. We paid them nothing. They served the country and they went on their way. Now we have a volunteer military. Many are college grads high school grads. All of them, many are married. Many have children so our cost associated with housing education and health care are a much larger portion of that smaller amount of money compared to the 60s when they were all young unmarried people. Primarily all males there were sucked in serving the country as draftees.

Today quality of life is a much larger part of our defense budget than back in the 60s when John Kennedy was president. We didn't spend any money on what we today call environmental mitigation** In this year's defense budget, we will spend 11 billion dollars on not on systems to provide security but on what we call environmental mitigation. 6 billion of that for nuclear which is **necessary 5 billion of that for cleaning up bases. Now that sounds like the right thing to do except there are some things somewhat illogical there. We have a military base open one day when the kids of the military personnel are going to school. We close the base down and all of the sudden the local folks say that that base is a toxic waste site. It wasn't toxic waste site when the kids were going to school there. But the day we closed the base down, all local officials wanted the federal government to pump tons of money so they could design reuse strategies for that military base. This year that's 5 billion dollars of defense money going in to new ways to spend money on old bases.

But there's one more significant thing that is really causing problems that are jeopardizing our ability to meet the needs of security around the world in the 21st century. And you have to think about this for a moment. In the 6 years under Bill Clinton who as the commander in chief, can commit our troops anytime anyplace that he wants, he has deployed our troops 27 times. 27 times in 6 years that includes the Iraqi deployment today. 27 times in 6 years. In the previous 40 years to Bill Clinton under democrat or republican presidents, 40 years since world war II there were 10 deployments. 10 deployments in 40 years, 27 deployments in 6 years **None of them were paid for. So every time we sent out troops to Macedonia, to Haiti, to Bosnia to Iraq, all of the cost had to come out of existing defense budgets that were already being cut decisively.

Now someone will say "Now wait a minute, didn't George Bush send our troops into Desert Storm?" Desert Storm cost the American tax payers, 52 billion dollars. George Bush got the allied nations of the world to contribute 53 billion dollars. The net cost dollar wise to the US tax payers from Desert Storm was zero. In the 27 deployments in the past 6 years we have not been reimbursed for that money. All of the contingency funds which right now are 18.7 billion dollars have come out of other defense budgets, prolonging modernization, cutting into quality of life. It has caused us massive problems today because of these costs and the fact that we haven't budgeted for these deployments.

We are facing a crisis. We are facing a crisis because as we cut defense budgets we have increased the training of the deployments of our troops all over the world at a level that we have not seen in the history of this country.

Now let's talk about what that means in terms of reality. Well right now, we used to have a navy of 585 ships today. Based on the ship building budget that we are funding in this year's defense budget, we are building toward a navy of 200 ships. We cannot man the carrier battle groups we have around the world with a 200 ship navy. It's impossible. Today our retention rates for fighter pilots in the navy and the air force is the worst it's been in the history of the country. Young fighter pilots are not reupping. And they are not reupping because they are going on back to back deployments. Because they are going to Bosnia to Haiti, from Haiti to Somalia from Somalia to the no-fly zone. And they are not getting the rest and relaxation time they need back with their families. Retention of pilots is terrible. We had to prolong replacing our aircraft. Our B-52 bombers will be 75 years old when we retire them. The helicopters we built during the Vietnam War the CH46** should have been replaced 5 years ago.They will be 55 years old before we replace them.

All of this is catching up to us at a time when deployment rates are so high that we can't keep funding them and yet we have three new challenges that we are supposed to be meeting. Missile proliferation information warfare and the use and spread of weapons of mass destruction and for those reasons we're facing a massive massive crisis now. The joint chiefs over the past 3 years have told the Congress repeatedly. "We don't have enough money. You've got to put more money into our systems." And in a bi-partisan way the Congress did. But that was resisted continuously by the White House. This year it was so bad that the chairman of the joins chiefs of staff, General Sheldon** publicly said, "We need 15 billion dollars now." We could only give them half of what they wanted. They got 8 billion dollars in a supplemental**. The supplemental passed about a month ago. That supplemental was designed to reimburse some of the cost that had been spent in Bosnia.

The point is that we have a crisis. We have a crisis because the world is very unstable right now. Our arms control process of controlling proliferation, I would say has been a dismal failure. And I don't say it in a vacuum. Let me give you an example of the Congress's feeling on that. When we found out last fall that Iran was cooperating with Russia to build this missile, the Congress was outraged. Democrats and republicans alike. In fact Ben Gilman joined with democrat Jane Harimen** and introduced an Iran ** missiles sanctions bill. It got bi-partisan support and as soon as the administration, your not enforcing arms control agreements, this bill which we are gong to pass into law is going to force you to do what you should be doing. According to the agreements, immediately over 150 members co-sponsored the bill. Vice President Gore in November, the last week of the session last year called 12 of us down to the White House. I was there. Senator John McCain**, Senator Carl Levin**, Senator John Kyle**, Congressman Ben Gilman, Congressman Lee Hamilton were all in the room together. And he pleaded with us, "Please don't bring this bill up in the house for a vote. It will embarrass and undermine our relationship with Russia." When he finished, the members of both parties said, "Mr. Vice President. You have to understand this. Congress has no confidence that this administration can control proliferation. You haven't enforced arms control agreements. You have allowed Russia to directly cooperate with Iran. It's too late." Two days later, the house voted on the bill. 398 members voted in favor of the bill, slapping the administration right across the face. That's never happened before. The break came for the holidays. We came back in January and the senate was about to take up the same bill. Vice President Gore again called us down to the White House. He had a top notch security council on one side and he had Leon Firth**, his chief of staff for security. He pleaded with the Congress. "Don't pass this legislation. It will embarrass the White House. Especially in our relations with Russia." When he was finished, members of the Senate said it was too late. The bill passed on the senate floor 96 to 4. Again embarrassing the administration, saying that their arms control policy was a dismal failure.

The point is folks, that we have a crisis right now. We have proliferation expanding around the world. We have our troops deployed at a higher level than we've had in the century. We are robbing the modernization of our military to keep those troops deployed. We don't have enough money to fund the programs to build the new systems to replace the ones we are using today. We have some carrier fighter wings** where one third of the air planes aren't flying. We're cannibalizing them for spare parts to keep the other two thirds flying. That's true over in Bosnia in the no-fly zone. That's true for some of our units here in America. The point is that we are facing a massive crisis that Congress has been saying to the administration for the past 4 years. If you will deploy our troops at this rate you've got to give us more money or you've got to find a way to help our allies bear more of the cost.

And because of these factors, we are unable to provide the kind of security that we think we need for our allied nations. We should be joining with our South Korean friends and our Japanese friends in an aggressive program of stability in the Far East. We should be joining with the Israelis to help them put into place, programs to protect them from the threat of these missiles that Iran and Iraq both have now. We can't do that because our dollar limitations are so severe. And we've got to enforce our arms control regimes. I was in Moscow in January of 1995, in the December of 1994. The Washington Post had just carried a front page story where they documented that Iraq had gotten excelerometors** and gyroscopes** from Russia. These are guidance systems used on missiles to provide accuracy. And with that we knew, that they had gotten a number of sets of them. The intelligence agencies from Jordan and Israel assisted us in finding this out. So I said to Ambassador Picerk**, "What was the Russian response when you asked them about the sale of these guidance systems, a violation of the missile technology control regime?" He said "Congressman. I haven't asked them." I said, "Why haven't you asked them?" It was in the Washington Post he said, That's got to come from the White House." I came back in January, went to the president and said, "Mr. President. What's the story the Washington Post ran? The story said it happened last June. If it happened. It's a violation of an arms control regime. We got to take action." He wrote me back in April, a three page letter, "Dear Mr. Congressman, What you say is true. It is very severe. We will take the steps. We are trying to find out now whether or not there is evidence that this transfer actually occurred." At most of the speeches I give around the country, I don't have them with me tonight, I carry two devices. They both have Russian markings on them. One's an accelerometer** and one's a gyroscope**. They were given to me by one of my intelligence agencies that I can use publicly. We have 120 sets of those devices that we intercepted. 3 times going from Russia to Iraq we did nothing. Nothing about that transfer. It occurred in direct violation of a treaty we were assured by the Russians that they would in fact go in and conduct a criminal investigation. That investigation ended last fall. No charges were brought and we don't know how many other of those devices got in the hands of Iraqis and Iranians to improve their missile systems.

If you don't enforce arms control agreements, they are worthless pieces of paper. If you don't understand the threats that are emerging, you can't deal with those threats. Some say don't worry about Russia. "Russia is not a threat to us anymore." No one thinks Russia is going to attack us. Certainly not me. The threat is not from an all out attack from Russia. The threat is from the instability inside of Russia. Same month, I was in Moscow with Pickerman**. Norway was about to launch a weather rocket. They notified Russia because they are their neighbor, that by cable they said, "Don't be alarmed. We're going to launch a 3 stage rocket to sample weather conditions." The day of the launch came. Because Russia's conventional military is in such a disarray, they misread the rocket launch. Their radar system picked it up and they thought it was an all out attack from an American nuclear submarine. Russia's offensive system went on full alert. They activated the *** which are the black boxes that are carried by Yeltzin, by the defense minister ,who that** item was Pavol Grachia*** and the general in charge of the command staff **. So the three of them had 15 minutes to allow a response to a Norwegian weather rocket against the US to occur. With 7 minutes left, Yeltzin overruled ** and ** called off the response. The next day when the media asked him where it occurred, he said it was a good test of our system. That was the first time that Russia, to our knowledge has ever activated the chikcets** for their nuclear systems in response to a real threat that they perceived to be real. That's the kind of threat we see in Russia today. An accident a sa** of technology. And we need to understand that there are people out there willing to pay the price.

My concerns for the Far East, as it is for Russia is that we need to be engaged. I am not one of those in my party that wants to isolate America. In fact, I don't think we do enough with Russia. That's why I'll make my 17th trip there next week. That's why I propose the establishment of a mortgage financing system for Russia to allow their people to buy homes modeled after our F** and Fanny Mae in this country. That's why I've established a Nuclear Waste Commission between Norway, the US, and Russia. I want to engage Russia. But I want them to know that there are certain levels of standards that they must adhere, to be citizens respected by other nations of the world. And the same thing applies to China. When we deal with China and Russia, it must be an enforced engagement. They must know there are certain standards that must be adhered to. And when they don't, that we are going to call them on those violations. It is not that we have to embarrass Jiang Zemin, or President Yeltzin, or Primakov** if in fact we see a violation. In fact, if we have a country in America that is illegally selling technology we punish them and we do it aggressively. But in my opinion, we've not done that and right now it has gotten out of control.

So we've got to change direction. We've got to aggressively engage those two countries and we've got to work with China to help develop a regional stability that China becomes a part of. We need China, in my opinion to help us deal with North Korea. We need China to understand that for the economy for the 21st century, China is going to be our largest global trading partner. It's the economy of the future so we don't have to keep pulling away from those nations but rather engaging them more. And we need to have a consistent coherent foreign policy.

You know I was embarrassed when I went to China with President, Vice Premier now Premier Shudong hui** and we talked about sending our carrier battle groups** up the straits of Taiwan. As I heard with General Powell** when I was at the Defense University, there he said, "You know congressman that this was a terrible mistake. That was an embarrassment to our leaders. You can't do those kind of things. You don't know how close you've brought us to the brink of war and confrontation." And I said, "I understand. And I understand the significance of that."Aand I came back to America and I said, "You know we were part of the reason why that problem occurred".

Look at one of the issues that brought along that confrontational mode with the Chinese leadership. President Clinton told Jiang Zemin that Lee Dong Wei** will not be given a visa to come to America to give the commencement speech at his alma mater, Cornell University. President Clinton without consulting Congress, told the leadership of China that President Lee Dong Wei** would not come to America to deliver that speech at Cornell University. The Chinese throught that if the President says it it must be true. After the Congress found out, the Congress said no way are you going to deny a graduate of an American institution from coming back to give a speech at his alma mater. The Senate voted 99 to 0. The house voted four hundred and something to 10! To say that you will give a visa to Lee Dong Wei**! What did that do to theChinese leadership? It made them think that America was deliberately trying to embarrass them. I heard it the whole time I was in China. "You deliberately embarrassed us. Your leadership." And it was simply a case in our country of not having the White House and the Congress communicate. Perhaps to have avoided that situation that led to enhance tension between China and Taiwan and which partially led to the deployment of a carrier battle group up the straits of Taiwan.

We can't afford those kind of situations in the 21st century. We need to be strong partners with both Russia and China and I'm convinced we can do that. We can't do it in a vacuum. In the case of Russia as I'm going to raise when I visit there next week, I'm going to ask them about Ural** mountain. They are building a monstrous underground site. It's larger than the entire beltway of Washington, under the Ural mountains. They've building it for 18 years. And I've asked them repeatedly, "What is the purpose of this site?" We know it can withstand a direct nuclear hit. The Russians will not tell us what it's being built for. The President has de**asked Yeltzin twice on this. No answer. The CIA does not know what it's for. Those kind of issues we have to confront directly. But it doesn't mean that we have to isolate it. It means we have to engage and we have to let them know that we're willing to be open with them .But they have to be open with us. And the same thing applies to China. We are not trying to take a strategic position over China. We don't want to be the provocateur in the Far East. We want to work with China in a stable regional relationship. But we need to have transparency. We need to stop the proliferation of technology to rogue states. We need to understand that Korea's integrity needs to be maintained under any and all circumstances. And if we do that we can have a stable lasting relationship. But I can tell you that there are going to be a lot of rocky roads along the way.

Budget wise we have severe problems. I have tried to outline them for you tonight and what we in the Congress will do again is this, democrats and republicans will try to continue to inform the American people of what we see the emerging threats to be and how we should best respond. Just one quick word about the regional initiatives we are doing. We're in the midst of building the first 'smart region'** in America. Over the past 3 years, we've taken the steps to link up every university, every college every business, every health care institution, and every industry in the 4 state region into the worlds' first smart region modeled after which Singapore has done. I got initial funding through 'the Next Generation Internet Project**' when Vice President Gore announced it earlier this year. This year under bi-partisan** leadership we are linking up the public school systems in the 4 states of Delaware, New Jersey, Pennsylvania, and Maryland. In this year's defense budget, there's 10 million dollars coming in for this project. You know I mentioned before that one of our biggest threats is information warfare and the ability of a nation to take down our civilian infrastructure. What we're doing is creating the first model in America to show that you can bring up a smart region**, interconnect all of its institutions and protect that data at the same time. So in this year's 10 million dollars, we're going to link up our hospitals and link up our defense and academic institutions to again provide a larger network sharing database. Our goal here is to link up all the major institutions in the 4 states so we can do real time collaboration. Be at the forefront of any new technology need America has.

This is coupled with two other initiatives. The fist one is to make us the R&D center for all military work and that's happening. In last year's defense budget, we brought 40% of the entire new surplus** up in defense R&D into institutions in our 4 states. Last week, we kicked off the second phase of this three stage initiative working with the ten largest health care institutions in the region. I kicked off our effort to market our health care system as the world's health care resource center. Our goal is to make this region the R&D region in America, the next silicon valley. In fact on April the 5th and 6th next year at the Convention Center in Philadelphia we will have the first conference of it's type where I will bring in the 70 federal agencies that fund our R&D in America to come to this site for 2 days. Their leaders from Dartmouth to NASA to** will showcase what kinds of technology they are buying what kinds of research they are funding. They will also prepare a summary of the kinds of research they expect to be funding over the next 15 years. To that event we will invite every university, every entrepreneur, every private company to come and network to see what kinds of cutting edge technologies America is going to be funding so our institutional base in this region can be on the cutting edge of getting at those R&D dollars. At that event we will also have people like Secretary Cohen, Dan Golden** and all the other major players in R&D come to Philadelphia to provide workshops and sessions on where we're our spending our research money. The bottom line initiative to deal with these three things is a political one. By making us the worlds' health care resource center, by making us the R&D driver for the military, and by becoming the first 'smart region' in America, we link up 4 states.

You know we have great institutions in this region, Penn, Drexel, John Hopkins, Delaware, Rutgers, Princeton. Treat institutions growing all over the place. Often times we can compete with anybody else, Stanford UCLA, but the difference is when a bureaucrat goes to fund a program they look at Pennsylvania and they look at California. California's got 51 House members, very powerful politically. So if you fund something in California you will have a political base that will support that program. And our bureaucrats know that in Washington, unfortunately Pennsylvania is losing power. We used to have 25 member of Congress from Pennsylvania but because of the stagnation of our population and the increase in the West and the South those seats are going to the West and the South. We now have 21 members of Congress from Pennsylvania and the next term** we'll probably lose two more seats. We'll drop to 19. How then do Pennsylvania institutions compete when they are equal in technological capability to those from the West or the South? You build a new political entity in America. And what we're doing with these three initiatives, the glue of technology is bringing together 4 states by linking together Maryland, Delaware, New Jersey and Pennsylvania. You form a political entity with 41 House members and 8 US Senators. There is no state in the union that has the political power that presence has, with 8 Senators and 41 House members all working together, democrats and republicans with a common agenda, focusing on technology. In doing that, we become the driving force of technology in America. Our institutions then have the backing of the leaders in both parties to make sure that we are always in competition and that we're equal. Every federal agency will want to come to our region to locate their new technology .Work with all of those initiatives are designed to make this region in the 21st century to be the leading research technology driver not just for America but for the entire world.

So you can see our agenda is a pretty aggressive one. Pretty comprehensive. It definitely involves Asia. It definitely involves China. It definitely involves Russia but also requires us to be vigilant. It's a dangerous world and there's a lot of instability. There's also a lot of opportunity. I think working together there's nothing we can't accomplish. In fact, I grew up the youngest of 9 children, about 20 miles form here in a poor town. One of the poorest in Pennsylvania. Neither parent went to high school. My father went to the 8th grade. My mother 6th grade. But to this day they are the two smartest people I ever met. They have common sense. They have moral decency and told us all that there was nothing that we couldn't accomplish if we worked hard. In fact, the advice my father gave me growing up as the first one to go right from high school to college, was "Kurt** it doesn't matter where you were born and raised." I was born and raised in a town called ***. "It doesn't matter if we didn't have a big house or a big lawn and that you are not going to an ivy league school. What matters is what you're willing to do with the talents and abilities you have been given. You know in America your only limitations in life are those that you self impose. Complain about things all of your life and there are a lot of people who do that or you can realize what can be accomplished." The same thing applies to our region. If we unite, if we work together, if we bring the assets that we have academically, industrially culturally together there's nothing that we can't accomplish. I'm convinced that we'll lead the world in the 21st century.