foreign-born. So are we, do we have an intellectual transfer here, or are we just slowly transferring our intellectual property and our human property to foreign countries? A generation from now, are they going to need our universities to teach this, or are they going to have then established in place an ability to teach that engineering? Are we going to send our students there at some point? At what point do we reach that critical mass, that tipping point where they're not coming to the United States, not because we haven't set a climate that says, please come here and learn, but because they have now absorbed the science and technology necessary for them to be the world leaders? And if we're looking at a nation like China, for example, that has 1.3 billion people and the ability to mobilize all of them if they choose or skim the cream off of the crop, get that education, bring them back home again, have we already marketed some of America's future? And what if-and so within the context of that, that generational, what happens in 25 years or 30 or 50 years? I inject another question. And that is, are the Israelis educating Palestinians or Arabs in military or nuclear technology or missile technology? Do they have an exchange program going on with their neighbors, their people that are sworn to kill them and drive them into the sea? I mean, that's a little microcosm possibly of this, I'll say, the risk of an impending crisis with China and a generation from now. So if the Israelis see the wisdom in not doing that with their neighbors sworn to their annihilation—and I remember the Chinese general that threatened to nuke Los Angeles. And I wish Mr. Gohmert were here, because he had a conversation with their leadership over there last month to point that out. I pose then my question to Mr. Wortzel. Are we thinking generationally in this? And what would happen to the future of this country if we decided that we didn't want to take a security risk or intellectual property risk and wanted to mobilize the young people in this country like we did after Sputnik?

Mr. WORTZEL. Well, I would like very much to see scholarships targeted toward American students rather than bringing foreign students into American universities. Particularly when you're dealing with a country that has 790 something-or $43 billion in foreign reserves. They can afford to send their own students to American universities. But frankly, I would not keep them out. We do not know the ultimate result of our engagement policy with the People's Republic of China. It is a latent security threat, and it is certainly a real threat in the sense of its strategic nuclear forces programs not so much in its conventional forces. But I will tell you that there's great change there. The economic freedom is opening up. It hasn't resulted in a change in political freedom. You find the average, the average Chinese citizen in most urban areas, and now that's the majority of them, owns an apartment. They have a mortgage. You know, I mean, it's changing. So we don't know what the outcome will be. I think what we need to do, again, is to identify the most critical technologies and military systems-well, not military systems but military, dual-use technologies where the United States is so clearly ahead and ensure we protect them. But we should not be protectionist about keeping Chinese citizens out of this country or out of our universities.

Mr. KING. Thank you.

Dr. Wulf.

Mr. WULF. I think we all should put emphasis on how we get more U.S. students to study math and science. Just as you pointed out, post-Sputnik, it became a national priority, and by George, a whole bunch of people from my generation took math and science, became engineers and scientists. And we're living off of them now. The trouble seems to me, is that science and technology is not particularly a priority in this country right now. I just got a letter to make a nomination for the Millennium Prize. This is a million euro prize that's put up by the Finns. Now if I remember correctly, there are 4 million Finns. So it's kind of a third of New York City. And they put up a yearly million euro prize. We haven't awarded the National Medals in Science and Technology for the last 3 years. We've named them, but they haven't been awarded. It's not been enough of a priority for the President to do that. We have our funding for physical science and mathematics, engineering research has been flat or declining for 2 decades. Total research budget is going up, but it's all going into the life sciences-I just read this—as our society as a whole doesn't believe that is a priority. And boy that's communicated to the young kids, and they don't see that they should be doing all that hard work when there's no reward for it. Mr. KING. Thank you.

Thank you, Mr. Chairman. I yield back.

Mr. HOSTETTLER. I thank the Chairman.

Ms. JACKSON LEE. Mr. Chairman, would you yield for just a moment?

Mr. HOSTETTLER. Yes, I yield to the gentlelady.

Ms. JACKSON LEE. Dr. Wulf posed this question before, and I won't ask you to repeat it. I'll just make this statement because I heard your answer to Congressman King's comments. This is not the Science Committee. Both Congresswoman Lofgren and myself are Members of the Science Committee. And I would simply say that the dearth and the problem is even wider than you might have expressed here. There has to be a parallel effort in order to surpass or to overcome the dilemma that we're in. National security, more resources in intelligence, but over here, a ramping up of the training of Americans in the sciences and the mathematics and the encouragement of grad students and professors and researchers and more dollars in basic research. Thank you.

Mr. HOSTETTLER. The Chair feels compelled to make an addition to the record given my background. Being an engineering student in the late seventies and early eighties, I can't remember a single Federal Government program that encouraged me to become an engineer. I do remember the influence of family and community and of the economy and the fact that I was encouraged to follow my desire to study that which I enjoy which is math and physical sciences. It just so happened that my graduation also coincided with one of the largest build-ups of the United States military where there was a huge demand for the applied sciences. And the fact that I also graduated at a time when the nuclear industry was, had gained ground. But as a result of a very limited number of unfortunate incidents in that industry, caused that industry to almost evaporate from future growth. Virtually all of my encouragement came not from the Federal Government, but came from a robust

economy and a strong understanding of the strong national defense, which all of those needed engineers, and there was a tremendous demand for that. I think if we see a, I think we can-it's inversely proportional to the level of attendance that's been taken on by the Federal Government. Since I have been in Congress, as an engineer, I've heard continually about this, about the fact that we're spending more in the Federal Government on attention to science and engineering and that we are getting fewer American scientists and engineers. It made, once again-this is not, to reiterate, this is not the Science Committee. But this is a Committee that is going to look into in the coming months the issue, one of the issues that was touched on briefly here, and that is how wewhat is the relationship between foreign-born, foreign nationals and our institutes of higher learning with regard to engineering and science and why people aren't doing what they did in the late 1970's, and that is going into engineering in fairly large numbers. If I remember, the fact that there were a few people that were kept out of the programs because of restrictions on attendance at that time. So I just make that addition simply out of experience.

And I appreciate the input of all the members of the panel. Your testimony has been highly effective and highly beneficial to this discussion. All Members will be allowed 2 days to make additions to the record. The business before the Subcommittee being complete, we are adjourned.

[Whereupon, at 4:11 p.m., the Subcommittee was adjourned.]

APPENDIX

MATERIAL SUBMITTED FOR THE HEARING RECORD

GRATION, BORDER SECURITY, AND CLAIMS MAP ON THE "NUMBER OF PATENT APPLICATIONS AND FOREIGN STUDENTS PER COUNCONGRESS FROM THE STATE OF INDIANA, AND CHAIRMAN, SUBCOMMITTEE ON IMMITY," SUBMITTED BY THE HONORABLE JOHN HOSTETTLER, A REPRESENTATIVE IN

PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS, AND RANKING MEMBER, SUBCOMMITTEE ON IMMIGRATION, BORDER SECURITY, AND CLAIMS

The subject of this hearing is, "Foreign Nationals Engaged in Economic and Military Espionage." According to the National Counterintelligence Executive Office's report to Congress this year, individuals from almost 100 countries attempted to acquire sensitive United States technologies in FY2004. The report concludes that foreign access to sensitive information with both military and commercial applications has eroded the United States military advantage, degraded the U.S. Intelligence Community's ability to provide information to policymakers, and undercut U.S. industry.

The report states that we are vulnerable to such espionage because the openness of the United States has provided foreign entities with easy access to sophisticated American technologies. New electronic devices have vastly simplified the illegal retrieval, storage, and transportation of massive amounts of information, including trade secrets and proprietary data. Globalization has mixed foreign and American companies in ways that have made it difficult to protect the technologies these firms develop or acquire, particularly when that technology is required for overseas operations. Lastly, sophisticated information systems that create, store, and transmit sensitive information have become increasingly vulnerable to cyber attacks.

Apparently, the Counterintelligence (CI) Community is uncertain about exactly how much of the intelligence collection effort is directed by foreign governments and how much is carried out by private businessmen, academics, or scientists for purely commercial or scientific purposes. It is clear, however, that some foreign governments do employ state actors. This includes their intelligence services as well as commercial enterprises. Most of the foreign governments that are attempting to acquire American technology employ tools and techniques which are easy to use, inexpensive, low risk, and sometimes legal. In most cases, foreign collectors simply ask for the information via e-mail, a phone call, a FAX, a letter, or in person.

The report asserts further that increased demand for foreign labor in United States high-tech industries and the sharp rise in foreign investment in the United States over the past decade have given foreign governments increased access to American businesses and, consequently, to U.S. trade secrets. In addition, recognizing the mutual benefits of an unhindered exchange of information, the United States opens its military bases, national laboratories, and private defense suppliers to foreign visitors. There were more than 14,000 requested visits to official U.S. facilities in FY2004. Although facilities hosting foreign visitors generally employ security measures to minimize the loss of trade secrets and sensitive technologies during these visits, the CI Community continues to see reports of losses.

These are real concerns. Nevertheless, the visits from foreign nationals are valuable to American companies and the United States government. Also, many American industries need highly educated professionals from other countries. The employment of such foreign professionals has increased American productivity and resulted in more jobs for American workers. In the science-oriented sectors, for instance, employers often need a professional with cutting edge skills and unique expertise and find that qualified American workers are not always available to fill these positions. In other fields, such as education, shortages exist in specific areas of the country and positions continue to go unfilled.

Foreign students represent half of all United States graduate enrollments in engineering, mathematics, and computer science. We do not have enough United States students graduating with advanced degrees to fill the highly specialized positions and, according to the Bureau of Labor Statistics, the demand for these graduates will increase.

Foreign countries, such as Germany, have updated their immigration laws to attract highly educated talent. If our immigration laws do not allow these professionals with cutting edge knowledge to remain in the United States, they will go to work for our competitors and additional jobs that could have remained in the U.S. will follow them abroad. The result will be American jobs lost and American projects losing out to foreign competition.