Q: Space station assembly is going smoothly and, on the surface, you've got a program that appears to be doing everything right. Yet now NASA is wrestling with a projected $4 billion overrun that seemingly caught the agency by surprise. How did that happen?

Goldin: I don't know that it caught us by surprise. [Space station program manager] Tommy Holloway is a fabulous manager. What Tommy was doing was something very sensible. He and [Joseph Rothenberg, NASA associate administrator for spaceflight] really took a look at this. They said we have a couple years of operational experience. We’ve completed the major milestones on the station and up until now we have been using the same model for how much the operational activities cost. He said, "let's take 'actuals' and project forward with actuals now that we have a couple years of experience operating the station." I don’t think it’s a surprise. I think it is fabulous that they did this. Rather than waiting another year to build up the operational problem and not taking action, they sent up a warning signal.

Q: When did space station program managers discover the budget problem?

Goldin: They didn’t know the actual numbers in the fall, but sometime in December they saw the numbers. We worked with the new administration and rather than wait for problems we took immediate action. And Tommy and Joe and the whole human spaceflight team have defined a program that will avoid spending that money. Tough, tough things that we are doing, but I am optimistic that we are going to be able to meet our obligations, have a robust space station program and live within the budget.

Q: Whose idea was it to cut the United States' space station hardware contribution to save money -- NASA's or the White House Office of Management and Budget's (OMB)?

Goldin: I don't know. I know that there were discussions between our team and the OMB team. NASA is a great agency. We are completely open. I am sure that NASA put options on the table. I do not believe that OMB took unilateral punitive action. I saluted what the final action was. I think it was very, very good. I believe in large part -- and you'll have to talk to the OMB guys -- it was based upon inputs that they got from NASA. We, NASA, feel that this is good.

Q: So you agree with the solution....

Goldin: Absolutely. And we are moving out. Joe Rothenberg has been working with Roy Estess [acting director of NASA’s Johnson Space Center] and each day we are making great progress. There are things we are looking at that I think are wonderful. By the way, the other thing that Tommy did that I though was terrific was going with a conservative estimate. He said, "let's take the conservative approach that we use with the shuttle, which is time-critical." So we have what we call "24-seven" in terms of the people at NASA Johnson.

What we are finding on the station is it is not as time-critical as shuttle, because you don’t have to make instant decisions to come back. So we say, "we'll just have normal shifting."

Q: As opposed to 24-hour operations?

Goldin: Seven days a week. For all the backup people at least. What you do is you safe a situation on the station, and then you wait until a crew comes in the next morning and you start working. That’s one of the things we are doing which I think is very clever.

Q: By making changes like this, you hope to dissolve some of the projected overrun?

Goldin: Yes. Then we are taking a look at a whole series of equipment that we were working on. And another thing that was happening is that people were spread too thin. We were doing too much with not enough resources.

So if you take a look at our priority actions, right now a propulsion module is not a priority action. Because we now have the U.S. control momentum gyroscopes onboard, the fuel consumption is somewhat less. And we’ve been demonstrating that we can use the shuttle for orbit-raising as a backup to the other features the Russians have on the station. [Europe’s] automated transfer vehicle (ATV) is coming along -- and we are getting more and more confident in that -- and that could bring up fuel.

We said, "we’re dissipating our energies. Let’s stop working on the propulsion module. Then there’s the habitation module. We don’t need the hab module for three or four years. Why are we working on the hab module when we can use these resources on the critical path?"

Finally, the crew rescue vehicle (CRV). We have the X-38 program. We still have a few more years to really refine the design. So we said, "let’s not move out with the CRV until we refine the design of X-38." We are now talking about setting aside $2.5 billion worth of activity.

And another issue was that we had very talented people across NASA who were not part of the human spaceflight activity. So the people at NASA Johnson were getting spread thin. For example, on the X-38 NASA Dryden has the world’s experts on atmospheric flight testing. They had people available. Why should we spread the people thin at Johnson? We took a number of these tasks and set them aside. The point that the White House made was: "Resolve the technical risks and make sure you really understand the costs before proceeding." By doing those things, I think we are going to have a much better program. I have very high confidence that we are going to live within the budget.