Cargo Security

Senator Collins, Senator Lieberman, and other members of the committee, it is an honor to testify today on the important subject of cargo security. In my short testimony, I will offer up a “back of the envelope” calculation for estimating increased needs in traditional customs operations as well as the Coast Guard for homeland security purposes. This simple approach suggests that resource levels for homeland security are not yet adequate; indeed, going beyond the immediate cargo issue, our Brookings team supports a federal homeland security budget of about $50 billion rather than the $41 billion requested by the Bush administration for 2004.

First, let me say that I consider the cargo threat quite serious. The fact that al Qaeda and other terrorist organizations have not yet made major use of container shipping is not particularly reassuring. As the Bush administration rightly argues in its Homeland Security Strategy, and as we argued at Brookings in our study last spring, Protecting the American Homeland (my primary source for the following calculations), terrorists are strategic and adaptive actors. They can be expected to use new tactics—especially when they can identify glaring vulnerabilities in our defenses. Recent successes in the war on terrorism in Afghanistan and Pakistan and elsewhere have probably bought us some time. Dispersed cells of al Qaeda operatives would have a harder time imagining and orchestrating a new type of attack than would the cohesive organization we faced until eighteen months ago. But al Qaeda may find new leadership and may recover. We must make maximum use of its current relative and temporary weakness to protect the country before we are struck again in an innovative and catastrophic fashion.

With that as background, I now turn to two simple calculations. One asks how much larger the Coast Guard might need to be in order to patrol coastal regions and ports adequately, while also maintaining its other responsibilities. The Coast Guard is highly relevant to the topic at hand because it is responsible for verifying the origin and characteristics of ships coming into the United States, and it has the job of stopping ships that do not belong here. The second asks how much larger traditional customs inspections resources (now part of DHS’s directorate of border and transportation security, as you well know) should be. They must now screen cargo coming into the United States well enough to deter dangerous shipments, and failing that to detect the presence of nuclear materials, surface-to-air antiaircraft weapons, substantial quantities of chemical weapons, and other potential terrorist weapons.

THE COAST GUARD

The U.S. Coast Guard has received substantial additional resources since 9/11, but it remains a very small service, several times smaller for example than during World War II, and most added funds will do little to increase its fleet size or personnel strength. It is growing from roughly 35,000 active-duty personnel in early 2001 to about 40,000, pursuing its deepwater modernization plan, and adding a ship here and a ship there as the Navy is able to donate them. Its budget has grown by $1.5 billion or 36 percent, though much of that growth is to properly fund preexisting modernization plans that were chronically underfunded prior to 9/11. Moreover, its force structure has not been seriously reevaluated for the demands of the current strategic environment.

In the immediate aftermath of 9/11, more than half of the Coast Guard was devoted to port and waterway security against possible terrorist attacks. Even today, at least a quarter of Coast Guard assets are devoted to such missions. Other activities ranging from environmental protection to patrolling of U.S. maritime economic zones to counterdrug missions have suffered. My understanding is that, through herculean efforts, the Coast Guard has maintained its maritime search and rescue capabilities essentially unscathed, though even there strain may ultimately take a toll.

The Coast Guard needs more than a bigger budget; it needs a bigger fleet. Today’s Coast Guard includes almost 100 cutters, just over 300 smaller boats, about 90 special-purpose vessels such as icebreakers and buoytenders, and roughly 200 aircraft. Those numbers have changed little since 9/11. The 2004 budget will, for example, only fund 9 more coastal patrol boats.

It is difficult, absent a more detailed knowledge of Coast Guard operations and a more rigorous study, to know how these numbers should grow. In broadest brush, one might expect the fleet size and Coast Guard end-strength to increase 20 to 30 percent, given the demands placed on the fleet by homeland security efforts. However, as a practical matter, there are probably new and more efficient ways to do things. In addition, given the emphasis on coastal operations, increases are probably more important for smaller boats and aircraft than for cutters or special-purpose vessels.

As one notional alternative Coast Guard, one might imagine a service with 100 cutters, 400 smaller boats, 90 special-purpose vessels, and 250 aircraft. This reflects an average increase of about 15 percent in the four main categories of capital assets that I am examining here. A basic force structure of this size might be expected to require a Coast Guard of 45,000 active-duty personnel and an additional increase of $1 billion in the annual budget.

CUSTOMS ACTIVITIES

The main focus of this hearing is on the actual inspection of cargo, so I now turn to that topic. A similar type of calculation to that done above for the Coast Guard suggests that, within this part of the new Department of Homeland Security as well, substantially greater resources are needed. In fact, the needs here are perhaps even more glaring than for the Coast Guard.

Prior to 9/11, Customs had a budget of about $2.4 billion, a workforce of some 20,000 deployed mostly at roughly 300 points of entry to the country, and a capacity on balance to inspect about 2 percent of cargo entering the United States. After 9/11, Customs may have doubled that percentage, but even today, despite the dedicated and hard work of its employees, it still inspects less than 5 percent of all cargo reaching the country.

In one of the most creative and commendable government responses to the heightened terrorist threat, Customs also developed its container security initiative, by which it places U.S. inspectors in foreign ports to monitor ships as they are loaded prior to embarking for the United States. Its goal is eventually to work with the 20 world ports that together account for 50 percent of all containers shipped to this country.

Up to 4,000 more personnel have been hired since 9/11 to work in border enforcement operations, involving most or all of several former agencies—Customs, the Border Patrol, INS, and Agricultural Quarantine and Inspection program. That will make for a total strength of about 42,000 in the new Bureau of Customs and Border Protection.

It is difficult, given available documentation and new procedures at DHS, to know how many of these 42,000 individuals focus primarily on goods and how many on people. But since the overall magnitude of the personnel increase for this bureau is about 10 percent, I will assume that cargo inspection personnel have also gone up roughly 10 percent. These individuals will also benefit from an increase in capital investment accounts of about $500 million.

These steps are good, but most insufficient. Few would claim that cargo needs to be inspected with 100 percent completeness; ships from reputable companies and ports can be spot-checked from time to time, with the companies of interest providing most security and monitoring. This concept, inspired largely by Steve Flynn, is reflected as well in the Customs Trade Partnership Against Terrorism initiative. But even with such measures, my informal survey of experts suggests that we would be wise to aspire to inspections of 15 to 20 percent of all goods coming into the country—in other words, about a fourfold increase over current levels. Those who would doubt the need for such a growth in capacity should remember that, even when the container security initiative is fully realized, it will cover only 50 percent of all cargo headed for the United States.

What does this mean for budgets and workforce strength? A first blush guesstimate might simply take the pre-9/11 budget and personnel strength of Customs and scale upward by a factor of four. That implies an increased budget of about $7 billion and added personnel numbering 60,000 or so. Those numbers contrast with increases to date, for the Bureau of Customs and Border Protection, of $1.6 billion and 4,000 people.

Undoubtedly, my numbers are too high. The technology DHS is buying to monitor cargo will allow much more efficient inspections in many cases. Moreover, several thousand of Customs’ previous workforce of 20,000 was not involved in border functions but in internal investigations (pursuing smugglers and so on). Those latter numbers do not need to be scaled up by a factor of four for present purposes.

But on balance, using these admittedly crude estimating techniques, it appears to me that we need 10,000 to 20,000 more personnel inspecting cargo in this country, and additional budgetary resources of $1 billion to $2 billion for those purposes.

Thank you for the opportunity to testify. I look forward to your comments and questions.