Hard Work Still Ahead for Homeland Defense ; Secretary Michael Chertoff Wants to Consolidate Bureaucracy and Adopt Risk-Based Approach to Funding

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Call it a midcourse correction in one of the most vital, and some say, troubled pillars in the nation's fortifications against terrorism.

When he announced an overhaul of the two year old Department of Homeland Security this week, Secretary Michael Chertoff essentially acknowledged the challenges the ungainly collection of 22 federal agencies still faces, from lack of coordination between agencies to ineffective intelligence operations.

At the same time, he laid down his own marker, charting a risk- based course that he believes will better equip the nation to prevent and react to future terrorist attacks.

Many security experts gave him high marks for both recognizing the weaknesses of DHS and addressing them forthrightly and aggressively. Others contend the proposed changes amount to little more than paper shuffling.

But across the spectrum, there is also praise for Chertoff's insistence that money and manpower go first to places that are most vulnerable to attack.

"He really believes in a risk-based approach in the way he envisions executing the department's missions," says Michael Wermuth, director of homeland security for the RAND Corp. in Washington. "That, hopefully, will allow him to use the resources he has most effectively."

Chertoff has already begun establishing "a baseline for preparedness" and has created what he calls an "analytic matrix" which will allow the DHS to analyze communities' vulnerabilities and set priorities "so that we build the right capabilities in the right places at the right level," he said Wednesday. He also plans to centralize all prevention functions in a "Directorate for Preparedness."

That leaves the Federal Emergency Management Agency dealing with disaster response, and creates a kind of one-stop-shop forthe billions of dollars in grants that go to local and state governments for protecting critical infrastructure.

Chertoff will also create a central office to guide policy, and appoint a new chief of intelligence to coordinate the disparate agencies' intelligence operations. That move won some of the highest praise, in part, because the DHS, originally tasked with coordinating domestic intelligence, has been criticized as ineffective in that role. …