9/11 Hearing: Money & Terror

CBSNews.com's Jarrett Murphy reports from the 9/11 hearings in New York.

September 11 may have been a day of smoke and fire, heroism and sacrifice, but preparing America's states and cities for the next terrorist attack could be a matter of cold, hard cash.

On the second of two days of hearings in New York City, the commission probing the 2001 attacks heard that the current federal system for funding state and local homeland security is "aiding and abetting" terrorists, and subject to "grotesque distortion."

That emphasis on money matters marked a change from testimony focusing mainly on the events of the day of the attacks, particularly the emergency response.

New York City Mayor Michael Bloomberg said New York City remained "in the crosshairs" but was starved of funds.

"To people around the world, New York City embodies what makes this nation great. In short we embody the strengths of America's freedom, and that makes us an inevitable target for those who hate our country," he said.

Bloomberg lambasted the system under which New York State ranks 49th among the 50 states for homeland security funding per capita, with $5.40 per person compared to $40.42 per capita in North Dakota and $101.43 for each American Samoan.

"What does that say about our national resolve to combat terrorism?" Bloomberg asked, saying he has been warned the city's funding might be cut in half. According to the mayor, it "unfortunately has the effect of aiding and abetting those who hate us."

"We cannot allow this to happen or we will be right back where we started," Bloomberg said. "As a nation we must come to each other's aid in a manner that protects us all."

Appearing after Bloomberg, Homeland Security Secretary Tom Ridge praised President Bush's conduct of the war on terrorism, referring to Mr. Bush's visit to Ground Zero, where he put his arm around a firefighter, grasped a bullhorn and "put terrorists on notice with the words 'Never again. Never again.'"

"Our nation is better protected and more secure today that ever before, but of course there is still more that needs to be done," Ridge said. He highlighted efforts to get local agencies to adopt interoperable standards for equipment and share information better.

Commissioner John Lehman called the current funding system a "gross, grotesque distortion."

"I think the record shows that this is really a terrible misallocation," Lehman said.

Lehman singled out a decision by the Bush administration to expand the list of high-risk areas from seven to 80, which means New York City gets an even smaller share of the pie.

"We have advocated for two years that the funding formula be changed, with one caveat: There ought to be some dollars going to each state as they build up over time their capacity," he said.

But Ridge added, "population density, threat and critical infrastructure should drive most of the money not just some of it."

For his own budget, Ridge said he would like Congress to grant him "the ability to reprogram a little bit of the money" to meet evolving threats over a budget year.

By Jarrett Murphy