NASA's new space transportation "Initiative" should proceed. But, overall, its character gives further clear evidence that NASA does not yet appreciate that another long, very costly and even successful vehicle technology program simply cannot, by itself, provide us with the sufficiently improved space transportation that our Country so badly needs.

The Initiative's sole goal -- seeing that all of our non-military transportation of cargo and people to/from LEO is provided by our privately financed private sector at the earliest moment and least public cost--should be made explicitly clear. Two specific changes should be made in its conduct: other Federal offices, DOC/NIST and DOT/FAA, should become engaged in its conduct, and its "Alternative Access" portion should be markedly expanded by using some Shuttle program funds to prompt private sector vehicle acquisition and operation.

And one related fundamental change should be made in the conduct our civil space program. NASA should be prompted to work with our private sector to create and expand businesses seeing people in space, and be provided with a proportion of the new wealth so created for the conduct of human Moon-Mars activities. Doing so would modernize and clarify a fundamental goal of the program, see to its financing in a novel fashion, and advance the prospects of improving both space transportation and our Country's future in space.

The implementation of all of these steps should see improvements to surface-space transportation coming about to a greater extent and at an earlier date than is now expected. It should see the "creative destruction" of our Shuttle fleet soon underway; and assure the Country's transition from public to private non-military transportation service provision.

Neither the suggested changes nor the addition would increase the initiative's public cost by much if anything.

Before committing himself to be launched into space recently, in all likelihood Dennis Tito judged that he had a reasonably good chance of returning from his trip.

Mr. Chairman, when you and some/all of your Committee colleagues take your own space trips, you also will expect to return to the Earth's surface. I know that I will.

Therefore, it seems reasonable to me that the new NASA "Initiative" be renamed. That is, anticipating that round trip services as well as launch services will become available, it should become known as the Space Transportation Initiative (STI).

We all agree that seeing sharp decreases made in the unit cost (i.e., dollars per person and per pound) of surface- LEO transportation, and sharp increases made in its safety and reliability, must remain one of the highest space activity priorities of our national civil, military and private sector space programs. And these improvements should be made soon and at the least public cost..

For it is becoming increasingly embarrassing, indeed painful, to note that, some 40 years after the Wright brothers made their first flight, we had advanced to where we had over 40 commercial airlines using over 1,800 aircraft to carry over 50 million people and 600 million ton-miles of cargo per year.

For today, an analogous 40 years after Yuri Gagarin's space trip, we still have no U.S. commercial spacelines, carry no private passengers to/from space, and see only 1/1,000th of the ton-miles being transported. Passenger-carrying private sector revenues only began to be generated this year -- yet by another country, not ours; indeed, we tried to keep it from happening!

Yes! It took less than a decade after Sputnik for the first global satellite communications system to become operational -- and even that advance was preceded years earlier by the generation of private sector satellite communications business revenues.

We have just finished spending five years and over $1 billion to improve space transportation, and failed to do so. Now we are commencing another effort that does not anticipate improved vehicles becoming available for another decade -- some 50 years after Gagarin -- and our spending nearly another $5 billion in public funds on vehicle R&D. Even so, our national space transportation capability will still be orders of magnitude smaller than that of commercial aviation at the end of World War II. And additional public $ billions are now said to be needed to "bail out" subsequent private operational vehicle acquisition.

Were our 20th century professional airline and communications ancestors so much smarter than we are? I'm afraid so.

For we have yet to lay out a confident course that would see to the economically creative destruction of our government-operated Shuttle fleet. This extraordinary vehicle, of which we are all proud, will be a quarter of a century old when the new "Initiative" is concluded. But it is very, very, costly to operate and maintain in as safe a fashion as is possible. By then we should have a permanent International Space Station ( ISS) in full operation when, therefore, we should no longer need the Shuttle's laboratory capability and can use much smaller and less costly vehicles to serve the ISS.

And we have failed to create the possibility of a new vehicle fleet being financed and operated wholly by private sector interests in the service of very large markets -- steps that are mandatory if unit costs are ever to be markedly reduced through operating efficiencies so that space transportation's contribution to our economy can attain its potential.

We must appreciate that our earlier-this-century predecessors did not place the full responsibility of creating air travel and satellite communications upon a single government R&D organization, such as NASA, and its closely coupled contracting communities. The last decade has demonstrated, clearly, that NASA has very little experience in how our non-aerospace private sector really works and, unfortunately, has insufficient incentive to see it work. Our predecessors did not expect our government to reduce costs (can we really imagine that -- government reducing costs?) but turned naturally to our private sector. In the private sector cutting costs is an everyday occurrence in order to keep competitors away and to increase markets and create new ones in a search for profits. Have we forgotten that the communist planned economy lost out to the free enterprise one? Lost out to the competitive marketplace?

That is, we simply must focus all of our surface- LEO transportation improvement efforts in such a fashion as to see us replicate what we have achieved in aviation and satellite communications -- in both of which areas NASA was a major player.

Certainly, the Federal government does have crucial roles to play in space transportation development. It must do related basic and applied scientific research. It must accomplish early, risky and costly, vehicle technology development, engineering and demonstration. It should provide large early space transportation markets that, in seeing public needs met, also spur initial private sector investment to promote and meet economically sound private sector needs as well. And it is absolutely mandatory that it should assist our private sector to create new space transportation markets, particularly ones of potentially large size.

But the Space Transportation Initiative (STI) is concentrating almost entirely upon vehicle technology improvement to meet what the government now perceives as our private sector needs. To repeat: Unfortunately, even if successful 5 years hence, improved space vehicle technology by itself will not lead to sufficiently improved space transportation!

It is most important that we not forget that only two years ago a senior executive of a major U.S. aerospace corporation, then engaged in a vehicle improvement R&D program being paid for by the Federal government, testified to the Senate that "Wall Street" had informed his company that it would not, not, provide the private funds to finance the program's anticipated follow-on operational vehicle-fleet!

The X-33 program has since been cancelled. But its 5X as costly successor "Initiative" is not designed to meet Wall Street's objections!

In this context, the STI goal should be clearly understood and explicitly addressed through the kind of spending that it does with the nearly $5 billion that it expects to receive in public funding.

During recent years, NASA has said on several occasions that one of its most important programmatic and institutional goals is to see those space activities conducted up to and including LEO carried out, rather, by our private sector. It wants to see this come about so that NASA could then concentrate upon the conduct of more "far out" activities. The government has continued to play the predominant national role in the conduct of such space activities since the launching of V-2s well over a half century ago, using public funds to do so. Therefore, it certainly seems that this is a fundamental and timely enough matter to be seriously considered today.

But, unfortunately, until there are much larger space activity and infrastructure markets to be served there, and much lower unit cost goods and services available to do so, our private sector has little expectation of making a profit there (unless with government contracts) and therefore will not be able to take over from NASA.

Therefore, NASA must not only "talk the talk", it must "walk the walk".

For the good of Country, our civil space program, and NASA itself, the clear and explicit primary "Initiative" goal must be to see that our space transportation area acquires that privately financed capability required to provide essentially all non-military space transportation to/from LEO. And this public-to-private transition must take place at the earliest moment and with the least cost in public funds.

But, unfortunately, the "Initiative"'s contracts, and the reports of NASA leaders thereon, do not evidence this understanding. Here, for example, are two "for instances":

• Private vehicle-fleet financing is mandatory. But it cannot be obtained given the relatively small size of the present space transportation market. Therefore, present space transportation markets should be encouraged to expand, and new markets encouraged to come into being. Yet only some 0.2% of the"Initiative"'s first-year budget is described as a market-related.

• Various kinds of housing is available to travelers before and after an earthly trip, but short of the Moon it must be provided in space as part of the overall transportation "package". The acquisition of ISS Federal housing will cost us some $100 billion. Yet the "Initiative" is not spending anything at all on LEO storage, laboratories and residential volume technology efficiency improvements so that space trips/activities not confined to a vehicle can be made at a much lower price.

Therefore, to see that the attainment of the fundamental "Initiative" goal receives the imaginative and energetic attention that our Country requires, the first thing that should be done is to broaden the active Federal presence in the space transportation area. The new Rumsfeld report-related change in the National Security Council has seen the creation of an overarching Space Policy Coordinating Committee. This Committee should see that appropriate early attention is given to this Federal broadening.

1. The equivalent of two small fractions (say, 0.1 % each) of the STI budget should be provided to the Department of Commerce (DOC) and the Department of Transportation (DOT) to allow them to consider conducting some parallel private sector focussed studies.

   The DOC has a great deal of experience in the building construction and travel business support areas and is familiar with companies and activities in these two areas.

   The completed ISS will provide permanent habitable volume /housing in LEO for the first time, but at a cost of $ billions per person per year for acquisition and ongoing O.&M. We now need to think out how we can see a technology improvement program for the improvement of LEO volume needed for the conduct of LEO activities to complement surface- LEO transportation. DOC's National Institute of Standards and Technology (NIST) should be encouraged to think out how laboratory, warehouse and hotel business interests could be encouraged to provide these space-related assets at unit costs orders of magnitude lower than those of the ISS.

   Too, for years the DOC had a successful travel business support office. We now need to begin to think out how our enormously successful travel business (with revenues of $100s of billions per year) can be widened to include the surface- LEO domain, and what the Federal government could do to assist such a private sector activity.

   The space office in the DOT's Federal Aviation Administration (FAA) released a report early this year that articulated the great economic value that space transportation already provides our Country -- some $60 billion per year!

   Drawing upon its experience with our large private sector aviation business and the satellite launch business, the DOT/FAA should now study how new and markedly improved vehicles that could provide cargo- and passenger-carrying services at markedly lower prices, and much greater safety and reliability, could be used to offer the widest possible ensemble of private sector Earth- LEO transportation services. Specifically, what new vehicle, operations and financing requirements would have to be met in order to do so? And specifically, what should all of our space-interested Federal offices be doing to help see them met?

   DOT/FAA should also take the lead in thinking out how to approach reducing the time now spent in training -- reportedly 1-2 years -- by the astronauts/cosmonauts who take space trips and/or remain on the ISS. For, if it were ever seriously suggested by civil space offices that this amount of time would be required of the general public, this would eliminate the possibility of a large general public space travel business coming into being, to our great economic loss.

   They should also identify those passenger physical and social factors that can be measured objectively, easily and promptly that would disqualify a person from taking a space trip. Then these factors should be articulated in appropriate regulations. The DOT's Aerospace Medical Institute is well positioned to lead in the conduct of both passenger training and passenger/crew acceptance studies. Achieving the safety and reliability criteria in effect at, say, the end of World War II would seem to be a reasonable beginning point.

   And DOC and DOT should work cooperatively in thinking out how commercial spacelines could be prompted to come into being.

2. The "Initiative"'s "Alternative Access" element should be markedly enlarged.

   We must include the presence of "classical" free enterprise and competition in the entire process by which new space transportation vehicles are financed, produced, operated and used to provide various space transportation services. Free wheeling, imaginative, entrepreneurial, let's get rich, competition is called for, with essentially all of the business decisions being made outside of NASA.

Therefore, at the outset a no-more-than two page requirement document should be prepared by NASA that describes, very simply, how many people are to be transported to/from the ISS each year, and how much cargo, consumables and otherwise, to support them and their ISS activities.

In doing so NASA would demonstrate that it appreciates one of the fundamental reasons why we decided to acquire a LEO space station: that we would then be able to construct anything we wished to in orbit -- of any weight, size or sophistication -- almost independent of the surface- LEO vehicle payload-carrying capability. For, except for people, having an ISS and its crew allows us to assemble things in orbit, including satellites, that can be brought up in pieces, one or several at a time.

And it would demonstrate that all of the decisions regarding the vehicles, their crews, their operation, their financing and their use, are to be made by our private sector so that their utility and economic value to their owner-operators, their users, and the Country will be maximized -- just as we do with railroad trains, aircraft, cruise and cargo ships, automobiles, trucks, … .

This document would form the substantive basis for a request for competitive procurement of space transportation services to be provided by our private sector in meeting the basic U.S. ISS activity requirements.

Any and all U.S. transportation interests would be encouraged to acquire the vehicles and develop the operations that they decide could meet these surface- ISS (and other) transportation service needs. And to secure the private financing required to acquire and operate them.

Once any new vehicle-fleet owner-operator has satisfied the DOT's FAA that it can meet the NASA articulated ISS service needs while meeting appropriate FAA regulatory requirements, the Government would place an order with them for, say, the equivalent of one (perhaps more) Shuttle trip payload capability per year for, say, 5-10 years. And to pay for these services at the marginal cost ($100 million per trip) of such Shuttle trips. N.B. These funds would not come from the "Initiative"'s budget, but that of the Shuttle program's.

The first contract would be made with the first owner-operator to obtain FAA approval; then the second; etc. to the extent required by the ISS needs.

The owner-operator contractor(s) would agree to employ all of its new vehicle-fleet's large operating capacity not used in meeting the contracted ISS needs to seek out, diligently, other uses for their vehicle-fleet. And, each year, to negotiate downward the price to be paid by the Government for the services that it receives, with both parties taking into appropriate consideration the vehicle-fleet's additional revenues and profits from other than ISS payload carrying.

With the vehicle-fleet's large non- ISS unused capability in hand and a large guaranteed government payment arriving each year, the owner-operator can be expected to explore other potentially large space transportation markets such as the conduct of space sports; the use of low local-force-of-gravity laboratories by scientists to conduct studies related to the diseases and disabilities of our aging population; space tourism; the dispersal of today's 150,000,000 pounds of nuclear waste material far out into space; the orbiting of one or more large space solar power ( SSP) space segments installed for R&D / demonstration purposes; the DOD's needs; … .

Keeping the FAA's early 2001 space launch economic study in mind, and with reference to two recent passenger-carrying market studies, it is reasonable to judge that such additional space transportation markets could build up to provide trip revenues of $ billions, or even $10s of billions, per year relatively soon, plus additional $ billions per year for the provision of related surface-based infrastructure and services.

In brief, this course would be the modern space analogue of the 1920s role played by the Federal government to advance the prospects for aviation becoming soundly commercial -- it then created the Federal market of seeing the mail carried by air.

DOC, DOT, DOD and NASA, and related airline, package delivery, hotel, business school, "think tank", and other appropriate private sector interests should be brought together to see how best our Country can make the transition from today's ELV cum Shuttle cum large Federal government presence era to a next generation fully reusable vehicle primarily private sector era.

Now, in a broader and sensitive context . . .

A fundamental change must be made in our civil space program and its institutional setting in order for the Initiative's goal to have a truly good chance of being met reasonably soon and at low public funding cost.

For today, our whole human space flight area is approaching the crux of a deep and true dilemma. And this is reflected in a slow but seemingly inexorable "melt down" of our civil space program.

Since the outset of the human space flight era some 40 years ago our civil space program leaders have been wholly responsible for deciding who is to be allowed to travel to/from space, how people are to go and return, where they are to go, and what they are to do there. And they have expected that the taxpaying public and their representatives would supply the funds that they required to do all this.

In a decade or so, they helped to see that our national security was preserved in a great public contest with an implacable adversary. Many lives were risked and $100s of billions (in 2001 dollars) were spent. And truly extraordinary space strides have been taken in describing and opening up space to mankind.

But, of course, the world turns.

NASA is now being expected to complete the ISS and, some time soon thereafter, see it turned over to others for its operation, maintenance and use.

It is now expected to develop the technology with which, and an operational setting in which, our private sector will do all that is required to see people travel to/from LEO and reside and work there.

And it is now asked to see that the $100 billion ISS and $30 billion Shuttle (2001 dollars) were demonstrably fine economic investments, even though it (and nobody else) now knows precisely how to do so.

At the same time NASA must deal with, to it, the painful fact that, however pleased the general public is with our present civil space program, over the past near-decade the civil space program has nonetheless seen its purchasing power decrease by nearly 30%.

While the civil space activity that NASA is best suited in the world to undertake, and that it has expected to be asked to undertake from the civil space program's birth, i.e., to see its professionals explore the solar system and universe, and begin to settle there where possible, it is prohibited from doing.

By and large our NASA professionals are among the best professionals in our Country.

But, as do we all, they must exhibit their performance in the context of the human condition.

In effect, at the same time that they are not asked to take up the solar system exploration/settlement opportunity, they must make almost daily programmatic decisions (within the Initiative for instance) designed explicitly to hasten the day when they will no longer see their astronauts being engaged in surface- LEO activities either. So, the day is soon approaching when human space flight/astronaut activity, at least as they and we all now view it, is to be denied to them throughout all of space.

That is a most difficult burden to place on their shoulders!

Therefore, unless NASA is to be asked / expected to step back from leading the world's human space flight adventure -- and such stepping back is seemingly already beginning -- we must begin to take steps to modernize, fundamentally modernize our civil space program.

That is, our civil space program leaders in the White House, the Congress, NASA, DOT, and our space-related aerospace businesses and university offices now must finally set aside much of the basic manner by which our civil space program is conducted and financed in clear recognition that the Cold War is well over. The program must be

modernized, fundamentally, in recognition that the unique and powerful national security concern that drove its creation and subsequent multi-decade conduct is gone, forever -- a conduct that employs 1/3 - 1/2 of the NASA budget and its astronaut corps.

Two months ago this Committee received excellent testimony from Wes Huntress about why, and how, from a scientific-programmatic-operational point of view, the United States should see NASA and our astronauts again gradually begin to explore and start to spend time in various locations across the solar system. Personally, I find his reasoning persuasive.

But the consideration of any such civil space program modernization today is "dead upon arrival" because of the great public financial costs that it implies. For we are talking not about the use of technology that is already in hand; we are talking about enormous trip distances and enormous human risks; we are talking about not years but of at least scores of years, more likely centuries. And we have had the recent sobering example of the truly great ISS program cost enlargement.

That is, if asked about our Country now seeing NASA sending astronauts back to the Moon or on to Mars, a large fraction of us would probably respond: "Fine. I agree. That is, as long as I don't have to pay for it!"

But, at other times in our history we have faced the necessity of meeting great and unprecedented national needs and interests. And we then created such great and novel programs as the Morrill land grant-universities Act, Social Security, the Marshall Plan, … .

Now we should do so for the human space flight area. We should do so on the basis that doing so would be self-financing!

For instance:

• The Congress could add a new line item to the NASA program-budget that is identified as being for human Moon-Mars activities;

• For this long-awaited boon, our civil space leaders would pledge (a) to essentially vacate the Earth's lower space in favor of our private sector as soon as possible, and (b) to work with our private sector, and our other Federal space-related offices, imaginatively and energetically, to see new space-related businesses created that involve non-government people in space; and

• The Congress would fund the line item in proportion to the revenues generated by these new people-in-space businesses.

That is, NASA and our related human space flight private sector would create new wealth, a fraction of which would be used to fund NASA Moon-Mars human activities.

This would provide NASA and its university and aerospace contractors with a clear incentive to see technologies improved, markets created and expanded, unit costs reduced, … . in order to see new businesses advance our Country's economic prospects in the human space flight area.

Too, it would encourage them to keep their human Moon-Mars program costs down, because they would have to help earn the money to meet these costs.

Everyone would gain: space transportation -- vehicles, operations and markets; our civil space program and NASA; our space-related science, technology and engineering interests; our aerospace industry; our travel business; and our economy generally.

Thus, our national security would be strengthened.

And our taxpayers would not be called upon to fund human Moon-Mars activities with the funds that they now have and the income that they now receive. These activities would be paid for only to the extent that the creation of wholly new wealth allows. That is, the NASA human Moon-Mars program would only be as large, and would move forward only as quickly, as NASA is successful in helping to see private sector wealth created.

Our Country would finally begin to set aside the dependence upon the kind of old fashioned Cold War thinking that still undergirds the financing of our civil space program. In doing so we would create a novel new entitlement program to underwrite our astronauts striding across the solar system for the decades and centuries ahead. But, in a creative financing fashion that replicates the creative substance of this absolutely unique national program, it would expect the recipient of the entitlement payments, NASA, to lead in the creation the national wealth from which the entitlement payments were made! Our human Moon/Mars activities would thereby become economically focussed -- economically here on Earth!