Border and Transportation Security: Budget for FY2003 and FY2004

CRS Report for Congress
Border and Transportation Security:
Budget for FY2003 and FY2004
Updated January 15, 2004
Dennis Snook
Specialist in Social Legislation
Domestic Social Policy Division
Jennifer Lake
Analyst in Social Legislation
Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

Border and Transportation Security:
Budget for FY2003 and FY2004
Summary
A well-managed border is central to maintaining and improving the security of
the homeland against terrorist threats. Although the Department of Defense (DOD)
will continue to provide an umbrella of protection against potential foreign threats
to national security from other nations, the new Department of Homeland Security
(DHS) has been given primary responsibility for securing the nation’s borders and
for increasing the security of transportation, among other responsibilities.
On September 24, 2003, both the House and Senate passed H.R. 2555 the first
ever appropriation for DHS. P.L. 108-90 was signed into law October 1, 2003, and
provides $17.8 billion for border and transportation security functions for FY2004.
The Administration requested $17.3 billion for these functions, while the House
provided $17.6 billion and the Senate $18.1 billion.
The Omnibus Appropriations Resolution for FY2003 (P.L. 108-7) funded
activities transferred to DHS to secure the borders and increase transportation
security, but the Administration’s request for FY2004 was the first attempt to submit
an explicit, integrated estimate of the funds needed by DHS for those activities. The
total amount provided for DHS for FY2003 was $29.7 billion, of which 64% was for
the operations of border and transportation security, as identified in this report.
Of the amounts appropriated for FY2003 and requested for FY2004 for these
activities, Administration documents suggest that 27% of the funding for the
accounts would be used for functions other than security. For instance, the U.S.
Coast Guard has responsibilities for boat safety programs, including expenses for
rescuing passengers of distressed watercraft. Customs administers trade laws, many
of which are concerned with import and export operations unrelated to security
issues.
Major issues in border and transportation security include determination of the
optimum number of Air Marshals and airport screeners, port security measures, cargo
security initiatives, implementation of the Visitor & Immigrant Status Indicator
project (US VISIT) alien tracking system, border security efforts at the Northern
border with Canada, extension of Transportation Security Administration (TSA)
security efforts to other forms of transportation (trains, buses, trucks, and pipelines),
and funding for the Coast Guard’s Deepwater effort to replace its aging ships and
planes. Of special concern to House and Senate Appropriations conferees were
differences of $50 million for the US VISIT program; the Coast Guard’s Deepwater
program ($172 million); and the TSA ($224 million), where both houses provide
additional funding for the procurement and installation of explosive detection
systems (EDS). P.L. 108-90 provides $330 million for US VISIT; $668 million for
the Coast Guard’s Deepwater program; and $475 million for the installation of EDS.
This report draws its data from the reports of the Committees on Appropriations
(H.Rept. 108-169; S.Rept. 108-86); and the conference report H.Rept. 108-280. The
report will be updated as further information on border and transportation security
funding becomes available.

Key Policy Staff: Border and Transportation Security
Area of expertiseNamePhoneE-mail
CoauthorDenny W. Snook7-7314dsnook@crs.loc.gov
CoauthorJennifer E. Lake7-0620jlake@crs.loc.gov
Customs IssuesJennifer E. Lake7-0620 jlake@crs.loc.gov
Immigration IssuesLisa M. Seghetti7-4669lseghetti@crs.loc.gov
TransportationBartholomew Elias7-7771belias@crs.loc.gov
Security
Administration
Coast GuardRonald O’Rourke7-7610rorourke@crs.loc.gov
Port SecurityJohn Frittelli7-7033jfrittelli@crs.loc.gov
AgriculturalJames Monke7-9664jmonke@crs.loc.gov

Quarantine
Inspections

Contents
In troduction ..................................................1
Background ..................................................1
Operation Liberty Shield....................................2
Border Security.......................................3
Transportation Security.................................3
Budget for Homeland Security....................................3
FY2004 Appropriations P.L. 108-90...........................7
FY2004 Request...........................................7
FY2003 Appropriations.....................................7
Operational Components of Border and Transportation Security.........7
Directorate of Border and Transportation Security................8
Bureau of Customs and Border Protection (BCBP)............8
The Border Patrol Function.............................13
Agriculture Quarantine Inspection (AQI)..................14
Bureau of Immigration and Customs Enforcement (BICE).....15
Immigration Enforcement Programs......................17
Transportation Security Administration....................19
List of Tables
Key Policy Staff: Border and Transportation Security.....................4
Table 1. Summary of Appropriations: Border and Transportation Security,
FY2003-FY2004 ..............................................5
Table 2. Crosswalk to Border and Transportation Security
Functional Presentation.........................................6
Table 3. Selected Detail for Appropriations:
Border and Transportation Security, FY2003-2004....................9
Table 4. BCBP Account Detail......................................10
Table 5. Selected Detail on Accounts, Programs, and Activities of BCBP....11
Table 6. BICE Account Detail......................................16
Table 7. TSA Account Detail........................................19
Table 8. Selected Accounts, Programs, and Activities of TSA.............20
Table 9. Coast Guard Account Detail.................................25

Border and Transportation Security:
Budget for FY2003 and FY2004
Introduction
Increasing border and transportation security are essential strategies for
improving and maintaining homeland security. Border security entails regulating the
flow of goods and people across the borders so that dangerous and unwanted goods
or people are denied entry. Transportation security entails inspecting people and
goods as they move among different locations within the country to reduce the
possibility of terrorist attacks or the incursion of unwanted people or goods.
Determining which goods and people are permitted and which are denied entry
into the U.S. involves a system of good border management so that the distinctions
are recognized without interfering with essential commerce and the legitimate free
flow of citizens and authorized visitors across the borders. The system must be
capable of examining minute details of goods and people seeking entry, but still fit
within budget constraints and be administratively feasible.
Improving transportation security has meant an expanded federal role in
screening passengers and baggage traveling through airports, and increasing the
presence of federal officers aboard domestic and international flights, with plans to
extend that presence to other modes of transportation more intensively in the future.
Finally, these management systems must accomplish their functions with a minimum
of disruption of legitimate activities, and without unnecessary intrusion into the civil
liberties of persons affected by them.
Major issues in border and transportation security include: determination of the
optimum number of Air Marshals and airport screeners; port security
implementation; airline cargo security measures; implementation of the Visitor &
Immigrant Status Indicator project (US VISIT) alien tracking system, border security
efforts at the Northern border with Canada, extension of Transportation Security
Administration (TSA) border security efforts beyond airline security to other forms
of transportation (trains, buses, trucks, and pipelines), and funding for the Coast
Guard’s Deepwater effort to replace its aging ships and planes.
Background
The Homeland Security Act of 2002 (P.L. 107-296) transferred the functions,
relevant funding, and most of the personnel of 22 agencies and offices to the new
Department of Homeland Security (DHS) created by the Act. The DHS was
organized in four major directorates: Border and Transportation Security; Emergency

Preparedness and Response; Science and Technology; and Information Analysis and
Infrastructure Protection.
The first Directorate, Border and Transportation Security, along with its close
functional sibling, the U.S. Coast Guard, are responsible for the first line of defense
against terrorism, as well as remaining responsible for securing and managing the
nation’s borders. Included in this responsibility are the inspection, investigative and
enforcement operations of the former Immigration and Naturalization Service (INS),
which had been responsible for managing and coordinating entry into the U.S., and
enforcing immigration laws. DHS border and transportation security objectives also
include fulfilling the newly expanded federal role of the TSA in protecting the
nation’s transportation systems, initially involving airline passengers, baggage, and
freight.
The Customs function, previously the responsibility of the Department of the
Treasury’s U.S. Customs Service,¹ is now under the Directorate. The Customs
function administered by DHS, together with the U.S. Coast Guard, are expected to
effectively secure commercial traffic entering the nation’s ports. The Directorate
includes a planning office and a training activity to assist state and local entities with
homeland security objectives. The Directorate also assumes responsibility for
inspecting and monitoring plants and animals entering the U.S. to minimize the risk
that noxious pests and diseases will be introduced into the country.
On January 24, 2003 the Department of Homeland Security began operations
as a separate federal department. Web sites were launched, some employees given
different locations to report for duty, DHS managers began to issue directives to
employees, and preparations were made to begin the transfer of most functions,
including personnel and funds, on March 1, 2003. At the same time, federal officials
responsible for administering the new Department also had responsibility for
homeland security issues that could not await the full operations of an established
bureaucracy. Not only was there suspected evidence of terrorist plans against the
U.S. being developed around the world, but the U.S. was also preparing to use
military force to remove the existing rogue regime in the nation of Iraq, an effort that
some believed could lead to increased terrorist threats to the U.S. homeland.
Operation Liberty Shield. As the country anticipated the impending conflict
with Iraq, considerable attention inside and out of the Administration focused on the
possible increased terrorist threat that could be present as a result of the military
campaign. In response to the perceived increased threat, on March 17, 2003, the
Administration announced Operation Liberty Shield² as a “comprehensive national

¹ The U.S. Customs Service, among the first of federal functions at the origins of the
Republic, apparently remains in existence, but in name only. Official DHS documents
sometimes refer to operations pertaining to the Customs function and link them to the
bureaus of the Directorate. Some documents refer to the U.S. Customs Service, but without
reference to its location or operations. Some documents refer to DHS “inspectors,” without
distinguishing among their INS, Customs, or Animal and Plant Health responsibilities.
² For more detail on Operation Liberty Shield, see CRS Report RS21475, Operation Liberty
(continued...)

plan to increase protections for America’s citizens and infrastructure while
maintaining the free flow of goods and people across our border with minimal
disruption to our economy and way of life.” Although some of its enhanced security
steps will continue indefinitely, Operation Liberty Shield terminated on April 17, as
the threat appeared to diminish as hostilities in Iraq wound down.
In spite of its short duration as a plan of heightened security, Operation Liberty
Shield served as an example of the activities that could accompany any such alert.
Furthermore, the program served as an explanation of funds requested for DHS in a
bill requesting supplemental appropriations for Operation Iraqi Freedom. Some of
the requested funds could be expected to accomplish purposes that would remain in
place after Operation Liberty Shield was ended, including those directed to border
and transportation security.
Border Security. Land border security was increased by adding agents to the
Northern and Southern Border regions, including additional numbers between major
ports of entry. Maritime security was increased by adding patrols of major ports and
waterways, more escorts of passenger ships, and more Sea Marshals on board “high
interest vessels” with cargoes, crewmembers, or other characteristics that warrant
closer scrutiny. In addition, the Coast Guard enforced published “security zones” in
close proximity to critical infrastructure sites in key ports.
Transportation Security. Operation Liberty Shield implemented additional
airport security measures, increasing the presence of law enforcement officers on
patrol in and around airports. New flight restrictions were established for the
airspace over Washington, D.C., and New York City. DHS requested states to
provide additional police or National Guard forces at specified bridges. Railroads
(including AMTRAK) were asked to increase security at facilities and rail hubs, and
to improve the monitoring of hazardous materials (HAZMAT) and the trains carrying
such materials. Shipping companies, as well as trucking companies, were
encouraged to improve employee identification checks, communications systems,
improved operator awareness, and coordination between the U.S. and Canada on
cross-border shipments of HAZMAT.
Budget for Homeland Security
The effective date for shifting most of the responsibilities from former
departments and agencies to the new DHS was March 1, 2003. While the transfer
of functional lines of authority, and the personnel to carry out those functions was
relatively straightforward, problems arose with initial attempts to ascertain the
amount of the appropriated funds actually transferred.
Because functions now performed by DHS were previously performed by
predecessor agencies with somewhat different purposes than homeland security,
comparisons of responsibilities and analyses of requests for increased budget
authority were difficult to develop. The funding lines between FY2003 and FY2004

² (...continued)
Shield: Border, Transportation, and Domestic Security, updated by Jennifer Lake.

were not identical to lines of functional responsibility before and after transfer, a
problem made more difficult because the basic documentation of appropriations in
the President’s FY2004 Budget was prepared after the formation of DHS but before
final enactment of appropriations for the remainder of FY2003.
Furthermore, the FY2003 appropriations bill was developed using the pre-DHS
configuration of appropriations accounts and functions, while the President’s request
for FY2004 used DHS and its administrative layout as the basis for the requests in
the similar functional lines. The Administration’s request for additional
supplemental funds for Operation Liberty Shield also used the new configuration.
Given the different accounting purposes for appropriations lines before and after the
formation of DHS, amounts for the various functions of the new agency are not
always directly aligned with previous accounts from which those functions were
funded in their former agencies. With the completion of appropriations for FY2004,
a baseline will be established, making future appropriations decisions more easily
compared to the previous year’s levels. But at the moment, we have no comparable
numbers for FY2002, which would be the base for showing the large increase in
funding which has occurred in nearly all these programs for both 2003 and 2004.
Table 1 shows appropriations for various aspects of border and transportation
security for FY2003, requested amounts for FY2004, amounts approved by each
chamber and the Conference Committee as they completed work on H.R. 2555,
Appropriations for the Department of Homeland Security for FY2004. The
distinction between border and transportation security functions and other functions
funded through the same account lines is somewhat arbitrary. In this sense, our
analysis uses something akin to a functional classification for “border and
transportation security.” Consequently, it does not include activities in the
Directorate for Border and Transportation Security that have no direct bearing on that
function (such as the Office for Domestic Preparedness (ODP), Federal Building
Protection, and the Secret Service.)
On the other hand, this functional grouping does include the activities of the
Coast Guard, a separate agency in DHS not part of the Directorate for Border and
Transportation Security, but which has an essential role in providing “border and
transportation security” as those words are commonly understood.
As noted earlier, definitions are arbitrary, and some functions contained in other
accounts that are related to border and transportation security, such as those aspects
of the Science and Technology account which improve that security, are excluded
from this table. This table shows an approximation of costs for border and
transportation security, based on identifying the accounts for which such security
functions are the primary function involved, and do not reflect DHS breakdowns as
to estimated amounts specifically associated with the Directorate for Border and
Transportation Security.

Table 1. Summary of Appropriations: Border and
Transportation Security, FY2003-FY2004
($ in millions)
F Y 2003 F Y 2004 F Y 2004 F Y 2004 F Y 2004
Functional authorityenactedrequestHouseSenateConf.
Bureau of Customs and Border
Protection (BCBP)5,2375,6475,0814,9004,928
Bureau of Immigration &^a
Customs Enforcement (BICE)2,4442,4872,9972,8883,425
Transportation Security^a
Administration (TSA)5,4142,7423,0823,3262,522
Visitor & Immigrant Status^b
Indicator Project (US VISIT) — — — 380330
U.S. Coast Guard: 6,2546,6556,6816,8156,776
Federal Law Enforcement
Training Center (FLETC)170146169201193
Federal Protective Services
(FPS) (408) (424) (424) (424) (424)
Total: Border and
Transportation Security19,11117,25317,58618,08617,750
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^169;^S^.^R^e^pt^.108-^86;^C^oⁿ^f^eren^{ce R}^e^port^H^.^R^e^pt^{. 108-}^280.
^Note:^F^Y²⁰⁰⁴^con^f^eren^ce^am^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^{board redu}^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^dis^c^retion^a^ry^accouⁿ^t^s^,^as^called^fo^rⁱⁿ^th^{e con}^f^eren^{ce v}^e^rs^ion^of^H.R^.^{2763, pas}^s^e^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
^a^T^h^{e dif}^f^e^ren^ces^betw^een^th^{e Ho}^us^e^aⁿ^d^Sen^a^{te recom}^m^eⁿ^d^ation^s^f^o^{r B}^I^C^E^an^{d T}^S^A^,^an^{d th}^e
^am^ouⁿ^t^s^recom^m^eⁿ^d^{ed by}^th^e^C^oⁿ^f^eren^ce^R^e^port^ref^l^{ect th}^{e tran}^s^f^{er of}^th^{e Federal A}ⁱ^r^Mars^h^a^ls
^fr^o^m^T^S^{A t}^o^B^I^CE^.^b
^T^h^e^A^d^mⁱⁿⁱ^s^t^ration^’^s^requ^es^{t of}^{$480 m}^illion^f^o^{r US Vis}^{it w}^a^s^m^a^{de u}ⁿ^d^{er B}^C^B^P^;^th^e^Hou^s^e^lis^ts
^{$350 m}^illionⁱⁿ^th^{e A}^u^tom^a^tion^Modern^ization^A^cco^uⁿ^t^of^B^I^C^E^{; th}^{e Sen}^a^{te created a s}^e^parate
^accouⁿ^t^f^o^r^U^S^VISIT^,^an^{d recom}^m^eⁿ^d^{ed $380}^m^illion^;^th^{e C}^oⁿ^f^eren^{ce R}^e^{port f}^o^llow^s^th^e
^Sen^a^{te report an}^{d places}^{US VISIT}ⁱⁿ^{a s}^e^parate^accouⁿ^t^directly^uⁿ^d^{er th}^{e Un}^ders^ecretary^f^o^r
^B^o^{rder an}^{d T}^r^an^s^portation^Secu^rity^.
Table 2 illustrates how we arrived at the functional presentation contained in
Table 1. It also reflects the differing organization of both the Senate and House
recommendations; reconciles the different approaches and provides functional totals
which are comparable.
The conferees placed most border and transportation security functions into
Title II Security, Enforcement, and Investigations. Title II of the conference report
(H.Rept. 180-280) includes: the Under Secretary for DBTS, BCBP, BICE, TSA,
Coast Guard, and the Secret Service. Title II of the conference report does not
include FLETC, which is included in Title IV Research and Development, Training,
Assessments, and Services. The House offered its Border and Transportation
Security recommendations in Title II of H.Rept. 108-169. Title II includes: BCBP,

BICE, TSA, FLETC, and ODP. Title II of the House report does not include the
Coast Guard. In contrast, the Senate displayed its Border and Transportation Security
recommendations in Title III of S.Rept. 108-86. Title III includes: BCBP, BICE,
TSA, and the Coast Guard. Title III of the Senate report did not include FLETC.
Table 2 presents the information from the House, Senate, and conference reports in
a format that meets our functional approach and allows for comparison.
FY2004 Appropriations P.L. 108-90. On September 24, 2003 both the
House and Senate passed H.R. 2555, appropriations for FY2004 for the Department
of Homeland Security (DHS). P.L. 108-90 was signed into law October 1, 2003, and
provides $17.8 billion for the functions identified in this report as having a primary
function of providing for border and transportation security. On June 24, 2003, the
House passed its version of H.R. 2555 providing $17.6 billion; and on July 25, 2003,
the Senate approved its version of the bill providing $18.1 billion for these same
functions.
FY2004 Request. The Administration requested $17.3 billion for the
operations of border and transportation security as identified in this report.
FY2003 Appropriations. For FY2003, Congress provided $29.7 billion for
DHS activities, including $3.6 billion in supplemental appropriations, much of which
was used to fund the increased security measures entailed by Operation Liberty
Shield. Of the total provided to DHS, 64% funded accounts this report identifies as
primarily concerned with border and transportation security.

Table 2. Crosswalk to Border and Transportation Security
Functional Presentation
($ in millions)
F Y 2003 F Y 2004 F Y 2004 F Y 2004 F Y 2004
enacted request House Senat e Conf .
Bureau of Customs and Border 6,0546,4685,9025,7455,773
Protection (BCBP)
BCBP Fee Accounts(817)(821)(821)(845)(845)
BCBP Appropriation5,2375,6475,0814,9004,928
Bureau of Immigration and2,7992,7843,2943,1613,698
Customs Enforcement (BICE)
BICE Fee Accounts(355)(297)(297)(273)(273)
BICE Appropriation2,4442,4872,9972,888 ^a3,425 ^a
Transportation Security 5,414^g2,7423,0823,326 ^a2,522 ^a
Administration
Federal Law Enforcement170146169^bb
Training Center
Office for Domestic3,2363,5583,503^cc
Preparedness
U.S. Coast Guard6,2546,655^d6,8156,776
Under Secretary of Border — — — 9^e8 ^e
and Transportation Security
U.S. VISIT^f — — — 380330
Subtotal Border and22,75521,25814,85218,31817,989
Transportation Security
Subtract Federal Building(408)(424)(424)(424)(424)
Protection
Subtract Office for Domestic(3,236)(3,558)(3,503) — —
Preparedness
Subtract Under Secretary
Border and Transportation — — — (9)(8)
Security
Add Federal Law — — — 201193
Enforcement Training Center
Add U.S. Coast Guard — — 6,681 — —
Functional Total: Border and19,11117,25317,58618,08617,750
Transportation Security
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^169;^S^.^R^e^pt^.108-^86;^con^f^eren^{ce report}^H^.^R^e^pt^{. 108-}^280.
^Note:^F^Y²⁰⁰⁴^con^f^eren^{ce am}^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^board^redu^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^dis^c^retion^a^ry^accouⁿ^t^s^,^as^{called f}^o^{r in}^th^{e con}^f^eren^{ce v}^e^rs^ion^of^H.R^.^2763,^p^a^sse^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
^a^T^h^e^dⁱ^f^f^e^ren^ces^betw^een^th^{e Hou}^s^{e an}^{d Sen}^a^{te recom}^m^eⁿ^d^ation^s^f^o^{r B}^I^C^E^an^{d T}^S^A^,^an^{d th}^e
^am^ouⁿ^t^s^recom^m^eⁿ^d^{ed by}^th^{e C}^oⁿ^f^eren^{ce R}^e^{port ref}^l^ect^th^{e tr}^an^sf^er^o^f^th^e^Fed^e^r^a^l^Aⁱ^r^Mar^s^h^a^ls^f^r^o^m
^TS^A^t^o^B^I^C^E^.^b
^T^h^{e Sen}^a^{te d}ⁱ^dⁿ^o^{t in}^clu^d^{e FL}^ET^{C in}^T^{itle I}^I^I^,^th^{e co}ⁿ^f^er^en^{ce r}^e^p^o^r^{t in}^clu^d^{es FL}^ET^{C in}^T^{itle I}^V^.^c
^T^h^{e Sen}^a^{te did n}^o^{t in}^clu^d^{e ODP}ⁱⁿ^T^{itle III, th}^{e con}^f^eren^{ce report in}^clu^d^es^ODPⁱⁿ^T^{itle III.}

^d^T^h^{e Ho}^u^s^{e d}ⁱ^dⁿ^o^{t in}^clu^d^{e Co}^{ast Gu}^ar^dⁱⁿ^T^{itle I}^I^{, B}^o^r^d^er^an^d^T^r^an^sp^o^r^tatioⁿ^Secu^r^ity^.
^e^T^h^{e Sen}^a^{te in}^clu^d^{es th}^{e Un}^d^e^r^Secr^etar^y^o^f^B^o^r^d^er^an^d^T^r^an^sp^o^r^tatioⁿ^Secu^r^ityⁱⁿ^T^{itle I}^I^I^.
^f^T^h^e^A^d^mⁱⁿⁱ^s^t^ration^’^s^requ^es^{t of}^{$480 m}^illion^f^o^{r US VISIT}^w^a^s^m^a^{de u}ⁿ^d^{er B}^C^B^P^{; th}^{e Hou}^s^{e lis}^ts
^{$350 m}^illionⁱⁿ^th^{e A}^u^tom^a^tion^Modern^izati^oⁿ^Ac^couⁿ^t^of^B^I^C^E^{; th}^{e Sen}^a^{te recom}^m^eⁿ^d^ed
^{$380 m}^illion^;^th^{e con}^f^eren^{ce prov}^{ided $330 m}^illion^;^both^th^{e Sen}^a^{te an}^{d con}^f^eren^ce^{created a}
ⁿ^e^w^accouⁿ^t^directly^uⁿ^d^{er th}^{e Un}^{der Secretary}^f^o^{r DB}^T^S^.^g
^In^clu^d^es^{$2.4 billion}ⁱⁿ^g^r^an^ts^to^{air carriers}^prov^{ided by}^P^.^L^.^108-^11.
Operational Components of Border and Transportation
Security
While most observers indicate the need for additional funding in the area of
border and transportation security, the issue for Congress is to determine the
appropriate levels of such funding, in the context of the current budget situation and
competing claims for resources. The following sections of the report provide detail
concerning the operational components of border and transportation security. These
details include selected appropriation detail; issues of potential interest to the
conferees; and a discussion of some of the challenges facing the different
components of border and transportation security.
Securing the nation’s borders and transportation systems includes the regulation
of imports and exports; enforcement of laws pertaining to immigration and visitation;
border-related inspection of agriculture and livestock; oversight of the security of
ports; federal inspection of airline passengers and baggage; and comprehensive
approaches to improving overall transportation security. In addition to these explicit
activities associated with securing the borders are a set of disparate activities in
support of broader goals which have been collected under the title “border security.”
These ancillary activities include protection of federal buildings, training for law
enforcement personnel, and development of strategic plans and support assistance for
state and local first responders. This report excludes these ancillary activities from
both the numbers and discussion of border and transportation security that follows.³
Some observers might question the exclusion of the Bureau of Citizenship and
Immigration Services (BCIS) from the discussion of border and transportation
security. There is no question that homeland security is enhanced by the well
managed administration of routine immigration services. However, such services
would remain even in absence of any threats to the homeland. Immigration activities
would continue in any event, and including the cost of these activities would distort
the true summary costs of border and transportation security.⁴

³ For additional information on the Office for Domestic Preparedness (ODP), Secret Service
and the Federal Building Protection Service, see CRS Report RL31549, Department of
Homeland Security: Consolidation of Border and Transportation Security Agencies, by
Jennifer Lake. Additional information on ODP can be found in CRS Reports RL31490,
Department of Homeland Security: State and Local Preparedness Issues; and CRS Report
RL31475, First Responder Initiative: Policy Issues and Options, both by Ben Canada.
⁴ For more information on FY2004 funding for Immigration Activities please see CRS
Report RS21504 Immigration-Related Funding in the President’s FY2004 Budget Request,
by Karma Ester.

Table 3 provides more detail on appropriations for border and transportation
security functions, for FY2003, as requested for FY2004, and House and Senate
versions of H.R. 2555, and the final appropriated amounts signed into law.
Directorate of Border and Transportation Security. The DBTS is
organized into two bureaus that reflect a distinction between direct border inspection
and interior enforcement requirements and those that are more contingent, that is they
entail more investigation and evaluation in advance of enforcement activities.
Bureau of Customs and Border Protection (BCBP). Although border
security could be thought of as beginning with the procedures by which visas are
issued at consular posts around the world, border security functional responsibilities
are at their most vivid at the point at which goods or people are expected to cross
borders. The BCBP has responsibility for security at and between ports-of-entry
along the border. These responsibilities include inspecting people and goods to
determine that they are authorized entry, and maintaining border crossing stations to
process persons seeking entry to the U.S. The inspection and border-related
functions of the Customs Service; the border security functions of the former INS,
including the Border Patrol; and the inspection functions of the Agricultural
Quarantine Inspection (AQI) program are consolidated under the BCBP.
The Customs Function. In the past, the U.S. Customs Service processed
goods being imported into the U.S., and collected duties and tariffs. Upon passage
of the Homeland Security Act of 2002 (P.L. 107-296), the functions of the Customs
Service were transferred to Border and Transportation Security at DHS. The customs
function is the first line of defense against illegal drugs, contraband, and other illicit
goods entering the country, and administers export laws, including laws pertaining
to illegal currency transfers, exportation of sensitive and controlled commodities, and
other trans-border crimes, including those committed through use of the Internet.
Even before the events of September 11, 2001, the Customs Service was aware
of the difficulties inherent in performing its dual missions of enforcing laws to
protect U.S. borders against the illegal entry of goods and of regulating legitimate
commercial traffic. In FY2001, Customs officers processed 142 million
conveyances, 472 million land, sea, and air passengers, and over 23 million import⁵

entries with a value of over $1 trillion, while collecting $23.8 billion in revenues.
⁵ U.S. General Accounting Office, Major Management Challenges and Program Risks:
Department of Treasury, (Washington, D.C., Jan. 2003) GAO-03-109, p. 21.

Table 3. Selected Detail for Appropriations: Border and
Transportation Security, FY2003-2004
($ in millions)
^FY²⁰⁰³^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^Op^erati^on^al^com^p^onent^enacted^request^Hou^s^e^Sena^t^e^Co^nf.
^C^u^s^t^om^s^an^{d B}^o^r^d^er^Pr^ot^ectⁱ^oⁿ⁵^,237^5,647^5,081^4,900^4,928
^Aut^o^m^a^tⁱ^{on m}^oderⁿⁱ^z^atⁱ^oⁿ⁴³³^—⁴⁹⁴⁴⁴¹⁴⁴¹
^{Fee account}^s⁽⁸¹⁷⁾⁽⁸²¹⁾⁽⁸²¹⁾⁽⁸⁴⁵⁾⁽⁸⁴⁵⁾
^Vⁱ^sⁱ^t^o^r^{& I}^m^mⁱ^gr^an^t^S^t^at^u^s^Iⁿ^di^cat^o^r^pr^oj^ect^—^—^—³⁸⁰³³⁰
⁽^U^{S VISIT}⁾
^I^m^mⁱ^gr^atⁱ^oⁿ^an^{d C}^u^s^t^om^s^Eⁿ^for^cem^en^t²^,444^2,487^2,997^2,888^3,425
^Sal^arⁱ^e^s^{and expens}^e^s¹^,855^2,063^2,030^2,180^2,151
^Res^cⁱ^s^sⁱ^{on f}^r^om^s^a^l^a^rⁱ^es^{and expens}^e^s^—^—^—^—⁽⁵⁴⁾
^Feder^a^l^Pr^ot^ectⁱ^{ve Ser}^vⁱ^ces⁴⁰⁸⁴²⁴⁴²⁴⁴²⁴⁴²⁴
^Au^to^ma^tioⁿ^&ⁱⁿ^fra^s^tru^c^tu^{re mo}^d^e^rn^iza^tioⁿ^—^—³⁶⁸^—⁴⁰
^C^ons^t^r^uctⁱ^oⁿ^—^—^—²⁷²⁷
^Ai^r^{and m}^a^rⁱ^{ne i}ⁿ^t^e^r^dⁱ^c^tⁱ^oⁿ¹⁸¹^—¹⁷⁵²⁵⁷²¹⁰
^Feder^a^l^Ai^r^M^a^r^s^hal^s^—^—^—^—⁶²⁶
^{Fee account}^s⁽³⁵⁵⁾⁽²⁹⁷⁾⁽²⁹⁷⁾⁽²⁷³⁾⁽²⁷³⁾
^Tr^an^s^por^t^a^tⁱ^oⁿ^S^ecu^rⁱ^t^y^A^d^mⁱⁿⁱ^s^t^r^a^tⁱ^oⁿ⁵^,414^2,742^3,082^3,326^2,522
^Avi^a^tⁱ^{on s}^ecurⁱ^t^y⁽^t^ot^al^f^undi^ng)^4,486^3,597^3,679^4,524³⁷³³
^Admⁱⁿⁱ^s^t^r^a^tⁱ^oⁿ⁴²⁷
^G^r^ant^s^t^o^ai^r^lⁱⁿ^es⁽^one-tⁱ^m^{e appr}^oprⁱ^a^tⁱ^on)^2,396^—^—^—^—
^O^f^f^s^et^tⁱ^{ng col}^l^ectⁱ^ons⁽^e^s^tⁱ^m^at^ed)⁽^2,650)⁽²^,070)⁽²^,070)⁽²^,070)⁽²^,070)
^Reimbur^s^e^{. fr}^{om DOT}^{, FAA, fac. &}^equip.^-143^—^—^—^—
^Feder^a^l^Ai^r^M^a^r^s^hal^s^—⁶²⁰⁶³⁵^—^—
^Mar^{itime and land s}^ecur^ity²⁶³⁸⁶²³²²⁹⁵²⁶³
^Iⁿ^tellig^en^ce^—¹⁴¹⁴¹⁴¹⁴
^Res^e^ar^{ch and development}¹⁰⁹⁷⁵¹²⁶¹³⁰¹⁵⁵
^U^.^S^.^C^oas^t^G^u^ar^d⁶^,254^6,655^6,681^6,815^6,776
^O^p^er^atⁱ^{ng expens}^e^s⁴^,503^4,838^4,704^4,719^4,642
^Res^cⁱ^s^sⁱ^on^—^—^—⁽⁷¹⁾⁽⁷¹⁾
^Envi^r^onm^ent^a^l^com^p^lⁱ^{ance &}^r^e^s^t^or^atⁱ^oⁿ¹⁷^—¹⁷¹⁷¹⁷
^Res^e^r^{ve t}^r^aiⁿⁱ^ng⁸⁶^—⁹⁴⁹⁵⁹⁵
^Acqui^sⁱ^tⁱ^{on, cons}^t^r^uctⁱ^{on, &}ⁱ^m^pr^ovem^ent^s⁷²⁰⁷⁹⁷⁸⁰⁵^1,035⁹⁶⁷
^Al^t^e^r^a^tⁱ^{on of}^brⁱ^dges¹⁷^—²⁰^—¹⁹
^Res^e^ar^{ch, development, tes}^t^s^,^&^evaluation²²^—²²^—¹⁵
^Retir^{ed pay (}^m^andator^y,^entitlement)⁸⁸⁹^1,⁰²⁰^1,020^1,020^1,020
^Admⁱⁿⁱ^s^t^r^a^tⁱ^oⁿ³⁰⁷⁴²¹⁴⁸⁷⁴³³
^F^e^der^a^l^Law^Eⁿ^for^cem^en^t^Tr^aiⁿⁱⁿ^g^C^eⁿ^t^er¹⁷⁰¹⁴⁶¹⁶⁹²⁰¹¹⁹³
^F^e^der^a^l^Pr^ot^ectⁱ^{ve S}^e^r^vⁱ^ces⁽⁴⁰⁸⁾⁽⁴²⁴⁾⁽⁴²⁴⁾⁽⁴²⁴⁾⁽⁴²⁴⁾
^To^t^a^l:^DH^{S f}^unding^f^o^{r bo}^{rder a}ⁿ^d^19,111^17,253^17,586^18,086^17,750
^tran^s^p^ortati^on^s^ecu^ri^{ty fu}ⁿ^c^ti^on^s
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^169;^S^.^R^e^pt^{. 108-}^86;^C^oⁿ^f^eren^{ce R}^p^t^.^H^.^R^e^pt^{. 108-}²⁸⁰.

^Note:^F^Y²⁰⁰⁴^con^f^eren^{ce am}^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^board^redu^ctⁱ^oⁿ
ⁱⁿ^m^o^st^dⁱ^scretion^a^ry^accouⁿ^t^s^,^as^{called f}^o^{r in}^th^{e con}^f^eren^{ce v}^e^rs^ion^of^H.R^.^{2763, pas}^s^e^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
FY2004 BCBP Appropriation. P.L. 108-90 provides a total appropriation of
$4.9 billion for BCBP. The appropriation is allocated into three accounts: Salaries
and Expenses; Automation Modernization; and Construction. P.L. 108-90 provides
$4.4 billion to the Salaries and Expenses Account, of which:
^!$100.8 million is to remain available until September 30, 2005 for
inspection technology;
^!$1 million is to be used for compensation for informants;
^!$12.7 million is to be used to enforce laws against forced child
labor;
^!$4.75 million for textile transshipment enforcement;
^!$41 million for an additional 570 Border Patrol Agents;
The conference report further allocates specific amounts in the Salaries and
Expenses account; some of these are highlighted in Table 4.
P.L. 108-90 provides $441.1 million for the Automation Modernization
Account, of which $318.6 million are to be used for the development of the
Automated Commercial Environment (ACE) (discussed below), subject to the
Appropriations Committees approval of an expenditure plan prepared by the Under
Secretary for Border and Transportation Security. P.L. 108-90 also provides $90.3
million in the Construction Account. Table 4 provides the details on the accounts.
Table 4. BCBP Account Detail
($ millions)
F Y 2004 F Y 2004 F Y 2004 F Y 2004
BCBP AccountrequestHouseSenateConf.
Salaries and Expenses5,6444,5854,3664,393
Harbor Maintenance Fee3333
Automation Modernization —494441441
Construction — —9090
Total Direct Appropriations5,6475,0814,9004,927
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^169;^S^.^R^e^pt^.108-^86;^C^oⁿ^f^eren^{ce R}^e^pt^{. H}^.^R^e^pt^{. 108-}²⁸⁰.
^Note:^F^Y²⁰⁰⁴^con^f^eren^{ce am}^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^board^redu^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^dis^c^retion^a^ry^accouⁿ^t^s^,^as^{called f}^o^{r in}^th^{e c}^o^nfe^r^en^{ce v}^e^rs^ion^of^H.R^.^{2763, pas}^s^e^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
Table 5 provides detail on selected programs and activities of BCBP. The
conferees fully funded the Administration’s request (after adjusting for some
realignment of funding), and also added $17.9 million to fully fund 2003 pay
adjustments; $4.8 million to fund textile transshipment enforcement; and $10 million
for additional non-intrusive inspection technology. The Senate fully funded the

Administration’s request for critical equipment and inspection technologies, while
the House provided an additional $10 million in addition to the base request of $119
million.
Table 5. Selected Detail on Accounts, Programs,
and Activities of BCBP
($ millions)
F Y 2004 F Y 2004 F Y 2004 F Y 2004
Select programs and activitiesrequestHouseSenateConf.
Inspection Technologies:
Treasury Enforcement Communications14.514.515.514.5
System Wireless PDA’s
Radiation Detection System
(RDS)/Vehicle And Cargo Inspection57.867.863.863.8
System (VACIS)/Isotope Identifiers
Fiber Optic Scopes6.86.86.86.8
License Plate Readers6666
Customs Automated Operations System9.79.79.79.7
(CAOS)
Chemical/Detector Dogs17.517.517.517.5
Other, Including Inspector Staff6.76.7 — 6.7
Total Inspection Technologies119129119125
Customs -Trade Partnership Against18.018.015.314.1
Terrorism (C-TPAT)
Container Security Initiative (CSI)61.761.761.761.7
Automation Modernization — 493.7441.1441
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^169;^S^.^R^e^pt^.108-^86;^C^oⁿ^f^eren^{ce R}^p^t^.^H^.^R^e^pt^{. 108-}²⁸⁰.
^Note:^F^Y²⁰⁰⁴^con^f^eren^ce^am^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^{board redu}^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^dis^c^retion^a^ry^accouⁿ^t^s^,^as^{called f}^o^{r in}^th^{e con}^f^eren^{ce v}^e^rs^ion^o^f^H^.^R^.^{2763, pas}^s^e^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
Both the Container Security Initiative (CSI) and the Customs-Trade Partnership
Against Terrorism (C-TPAT) are programs initiated by Customs as a part of the
effort to ‘push the borders outward’ from the physical land border of the United
States. P.L. 108-90 provides $14.1 million for C-TPAT, and $61.7 million for CSI.
For a full discussion of recent initiatives to address cargo container and seaport
security, including the Container Security Initiative (CSI) and the Customs-Trade
Partnership Against Terrorism (C-TPAT) see CRS Report RL31733, Port and
Maritime Security: Background and Issues for Congress.
BCBP, and the U.S. Customs Service before it, has been engaged in a long-term
effort to modernize its commercial processing systems. These efforts are discussed
in more detail in the next section below. The House has created a separate account
for Automation Modernization with $493 million recommended; while the Senate
has included their recommended appropriation of $441 million in the salaries and

expenses account. The House Automation Modernization account fully funds the
Administration’s request, and realigns funding requested under the salaries and
expenses account. P.L. 108-90 reflects the House realignment, and funds the
Automation Modernization Account at $441 million. The House request includes
$30.2 million for the homeland security information technology transformation and
transition reserve, which is not funded by the Senate, as the committee notes that
significant technology infrastructure updates are funded through the US VISIT
project; P.L. 108-90 does not include funding for this reserve.
Challenges Facing the Administration of the Customs Function. A recent
General Accounting Office (GAO) report projects that trade volume will more than
double from $1 trillion in 1999 to more than $2 trillion in 2006.⁶ In addition, Title
VI of the North American Free Trade Agreement Implementation Act (P.L. 103-182)
shifted a portion of the responsibility for declaring the value, classifications, and rate
of duty on imports to importers. This system, known as “informed compliance” was
designed to expedite the processing of imports. Another GAO report found that the
customs function will entail a variety of challenges in carrying out its missions,
including improving differing international mail and package inspection processes;
ensuring that various illegal items, including weapons of mass destruction, do not
enter the country in cargo containers at seaports; and acquiring a new import
processing system.⁷
Shipping containers are a component of commerce that is potentially vulnerable
to terrorist interference. Moreover, two recent CRS Reports highlighted the serious
threats faced at seaports around the nation, including the possibility of the use of
weapons of mass destruction.⁸ Changes to international commerce to improve the
security of containers reflect the need to balance security objectives with expeditious
handling of containers to speed the flow of legitimate trade that fuels the world
economy. Eventually, international trade will be based on an automated import-
export system that will expedite secure containers while requiring only one filing of
the appropriate documentation, potentially reducing the opportunities for tampering
with containers between origin and destination.
DHS is now responsible for the administration of the customs function, and is
continuing with an effort to acquire a new trade processing system known as the
Automated Commercial Environment (ACE). ACE is a strategy for developing
commercial automation protocols and procedures so that expeditious tracking and
effective screening and monitoring can improve over time. This program is expected
to cost approximately $1.7 billion to replace the current Automated Commercial
System (ACS) that GAO testimony characterized as “paper-intensive, error-prone,
and transaction based, and out of step with just-in-time inventory practices of the

⁶ Ibid., p. 23.
⁷ Ibid., p. 23.
⁸ See, CRS Report RS21293, Terrorist Nuclear Attacks on Seaports, by John Medalia; and
CRS Report RL31733, Port and Maritime Security, by John F. Frittelli.

trade community.”⁹ A recent GAO report found that the Customs Service was
improving its operations as it moved toward an ACE alignment. However, GAO
cautions that many challenging tasks remain before the customs function will have
implemented full ACE capability.¹⁰ Improvements in the technology of detection are
being added to the trade process as they are developed. The International Trade Data
System (ITDS) is an interconnected database of all government agencies involved in
the trade process, and allows users to submit data to one agency database, and have
that data available to other agencies. ACE is the application of ITDS capability.
Container commerce is being streamlined to take advantage of more sophisticated
electronic capabilities, with the expectation that further changes will occur as new
technologies emerge.
In 1999, when the U.S. Customs Service was still at Treasury, GAO had
recommended that the Service initiate an evaluation of the effectiveness of the
informed compliance strategy, including its impact on compliance with trade laws.
The Customs’ Trade Compliance Strategy Study was completed on May 24, 2001.
According to GAO, the study concluded that while the informed compliance strategy
had proceeded logically, and its initiatives do improve compliance, the overall impact
on compliance rates remains small. GAO stressed that part of the challenge facing
the agency responsible for administering the customs functions is to not lose sight of
the trade compliance program in the midst of a continued focus on terrorism.¹¹
The Border Patrol Function.¹² Traditionally, the U.S. Border Patrol
enforced immigration and customs law at or along the borders. P.L. 107-296
transferred the function to DHS. Border Patrol agents often apprehend drug
smugglers and others engaged in criminal activities. The Border Patrol improves the
security of the border by diminishing illegal immigration between ports-of-entry, and
participates in ensuring that all goods and persons entering and exiting the country
do so legally.
Challenges Facing the Border Patrol. Recent GAO analyses continued to
express concern over the inability of the former INS (hereafter referred to simply as¹³
INS) to fully implement a border control strategy. In August 2001, GAO reported
that INS was in the seventh year, and in the second of four phases of implementing

⁹ U.S. General Accounting Service, U.S. Customs Service: Observations on Selected
Operations and Program Issues, T-GGD/AIMD-00-150 (Washington, Apr. 20, 2000), p. 6.
¹⁰ U.S. General Accounting Office, Major Management Challenges and Program Risks:
Department of the Treasury, (Washington, D.C., Jan. 2003) GAO-03-109, pp. 25-26.
¹¹ Ibid., p. 24.
¹² This section prepared with the assistance of Lisa Seghetti. For more information see CRS
Report RL31727, Border Security: Immigration Issues in the 108^th Congress, by Lisa M.
Seghetti.
¹³ U.S. General Accounting Office, INS’ Southwest Border Strategy: Resource and Impact
Issues Remain After Seven Years, (Washington: Aug. 2, 2001) GAO-01-842.; and
Management Challenges and Program Risks: Department of Justice, (Washington: Jan.

2003) GAO-03-105.

a border control strategy. This strategy was based on allocating resources first to
areas with the highest levels of illegal activity.
INS officials testified in 2001 that 334 border patrol agents and 498 inspectors
were assigned to the northern border, while over 9,500 border patrol agents and
inspectors were assigned to the smaller southwest border.¹⁴ A 2002 Department of
Justice (DOJ), Office of the Inspector General (OIG) report stated that a lack of
sufficient resources and staffing were creating significant enforcement challenges for
the border patrol along the northern border.¹⁵ The DOJ OIG report indicated that INS
had developed a northern border strategy, but that its implementation had been
delayed because of changes in INS administration and the events of September 11,

2001.

Moreover, according to GAO, INS’ preliminary estimate stated that it could take
an additional 5 years and a total of between 11,700 and 14,000 Border Patrol agents,
plus numerous other increases in support personnel and funding for technology and
infrastructure improvements to gain control of the southwest border. GAO reported
that the number of Border Patrol agents on the southwest border increased from
3,389 in FY1993 to 9,188 in FY2002; and the number of apprehensions increased
from 1.21 million in FY1993 to 1.64 million in FY2000. However, the number of
apprehensions declined to 0.93 million in FY2002.¹⁶
Staffing is a primary concern at both the northern and southern borders. P.L.
108-90 provides a total of $1.9 million for Border Patrol operations. P.L. 108-90 also
includes $6.7 million for additional staffing to support new inspection technology
and implement wireless personal data assistant database access; $41 million for an
additional 570 Border Patrol agents; and $9 million for additional inspectors. In an
effort to better understand the staffing needs of BCBP, the conference report to P.L.
108-90 directs CBP to submit a detailed staffing plan to the Committees on
Appropriations no later than December 1, 2003.
Both the House and Senate Committee reports expressed concern over the state
of the Northern Border. The Senate directs the Under Secretary of Border and
Transportation Security to provide a comprehensive report to the committee
describing the specific measures DHS has taken since September 11, 2001, to
increase security at the northern border, what Congressionally authorized
improvements have yet to be carried out, and which aspects of northern border
security require additional resources and focus.
Agriculture Quarantine Inspection (AQI). The AQI program, formerly
part of the Department of Agriculture’s Animal and Plant Health Inspection Service
(APHIS), is the first point of inspection for USDA- and FDA-regulated food imports,

¹⁴ Senate Hearing, Northern Border Security, 107^th Cong., 1^st Sess., Oct. 3, Dec. 5, 2001.
¹⁵ U.S. Department of Justice, Office of the Inspector General (OIG), Follow-Up Report on
the Border Patrol’s Efforts to Improve Northern Border Security. OIG report I-2002-004.
¹⁶ U.S. General Accounting Office, Management Challenges and Program Risks:
Department of Justice, (Washington: Jan. 2003), GAO-03-105, p. 14.

and is charged with determining the safety of agricultural products and livestock
entering the U.S. The mission of the AQI program is to “maintain the risk of
introduction of invasive species into the United States at acceptable levels to protect
American agricultural products, and to facilitate the movement of people and
commodities across the borders.”
Section 421 of P.L. 107-296 (the Homeland Security Act of 2002) authorized
the transfer of no more than 3,200 APHIS border inspection personnel to DHS out
of a staff of nearly 8,000. Although the AQI program has a federal appropriation, it
is primarily supported by user-fees collected from international air passengers and
aircraft, as well as commercial aircraft, vessels, trucks and railcars. Those user fees
support more than the border inspection functions transferred to DHS and will
continue to be collected by USDA to carry out those other activities. USDA will
transfer funds from the user fee account to cover DHS-related costs.
P.L. 108-90 provides a total of $42 million to fund AQI. Both the House and
Senate reports recommended fully funding the Administration’s request for an AQI
increase of $2.7 million for additional agricultural canine teams, and $2.8 million for
inspectors and x-ray machines for use in detecting the presence of agricultural pests
and diseases.
Bureau of Immigration and Customs Enforcement (BICE).¹⁷ BICE
focuses on enforcement of immigration and customs laws within the U.S., as well as
investigations into such activities as fraud, forced labor, trade agreement
noncompliance, smuggling and illegal transshipment of people and goods, and
vehicle and cargo theft. The Bureau will develop a nationwide anti-smuggling
program, and will enforce laws against money laundering, child pornography, and
trafficking in people. In addition, this bureau oversees the building security activities
of the Federal Protective Service, formerly of the General Services Administration.
The Bureau combined the investigations and intelligence functions of the U.S.
Customs Service and the former INS, the air and marine interdiction functions of
those agencies, and the immigration detention and removal programs (including the
operations of the Federal Protective Service). The BICE conducts investigations to
develop intelligence to reduce illegal entry into the U.S., and is responsible for
locating and removing illegal aliens by inspecting places of employment for
undocumented workers. BICE is responsible for identifying and finding persons who
have overstayed their visas, and the Bureau also develops intelligence to combat
terrorist financing and money laundering, and to enforce export laws against
smuggling and fraud. Table 6 provides account-level detail for BICE.

¹⁷ This section was prepared with the assistance of Lisa Seghetti.

Table 6. BICE Account Detail
($ millions)
F Y 2004 F Y 2004 F Y 2004 F Y 2004
BICE AccountrequestHouseSenateConf.
Salaries and Expenses2,0632,0302,1802,151
Rescission ^a — — —(54)
Federal Protective Service424424424424
Federal Air Marshals ^b — — —626
Automation Modernization —368^c —40
Air and Marine Interdiction—175257 210
Construction — —2727
Total Direct Appropriations2,4872,9972,8883,425
Total not Including FPS2,0632,5732,4643,001
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^{169, an}^{d S}^.^R^e^pt^.^108-^86;^C^oⁿ^f^eren^{ce R}^p^t^.^H^.^R^e^pt^{. 108-}^280.
^Note:^F^Y^{2004 con}^f^eren^{ce am}^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^board^redu^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^dis^c^retion^a^ry^accouⁿ^t^s^,^as^{called f}^o^rⁱⁿ^t^h^{e con}^f^eren^{ce v}^e^rs^ion^of^H.R^.^{2763, pas}^s^e^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
^{(a) T}^h^{e res}^c^is^sⁱ^on^is^of^f^uⁿ^d^s^origⁱⁿ^ally^prov^ided^by^P^.^L^.^108-^{11, f}^o^{r activ}^ities^{related to Operation}
^Lⁱ^berty^Sh^{ield, bu}^{t w}^h^ich^{are n}^o^lon^g^e^{r n}^{eeded f}^o^{r s}^u^ch^pu^rpos^es^.
^{(b) T}^h^{e con}^f^eren^{ce report}^an^{d P.L}^.^108-^{90 ref}^l^ect^t^h^e^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ^’^s^m^o^vⁱⁿ^g^t^h^{e F}^A^{M f}^r^om
^T^S^A^{to IC}^E^.^T^h^e^Ad^mⁱⁿⁱ^s^t^ration^h^a^{d requ}^es^{ted $600 m}^illion^f^o^{r FA}^{M; th}^{e Hou}^s^{e h}^a^d
^recom^m^eⁿ^d^{ed $635 m}^illion^an^{d th}^{e Sen}^a^{te $610 m}^illion^.
^{(c) T}^h^{e Hou}^s^{e recom}^m^eⁿ^d^ationⁱⁿ^clu^d^{ed $350 m}^illion^f^o^{r US VISIT}^.
FY2004 BICE Appropriation. P.L. 108-90 provides $3.4 billion for BICE
(including the rescission), or $3 billion not including $424 million appropriated for
FPS. The BICE appropriation is broken out into the following accounts: Salaries and
Expenses, Federal Air Marshals, Federal Protective Service, Automation
Modernization, Air and Marine Interdiction, and Construction.
The Salaries and Expenses account includes the following distributed amounts:
^!$1.09 billion for detention and removals;
^!$4.75 million for textile transshipment enforcement;
^!$3.0 million to enforce laws relating to forced or indentured child
labor;
^!$6.7 million for additional investigators, particularly for compliance
monitoring;
^!$5.4 million for personnel costs associated with establishing a
Northern Border Airwing; and
^!$6.4 million for the Intellectual Property Rights Center.
The BICE Salaries and expenses account also includes a $54 million rescission of
funds originally made available by P.L. 108-11 for activities related to Operation
Liberty Shield.

P.L. 108-90 provides $40 million in the BICE Automation Modernization
account, to fund major technology improvements for ICE including Atlas/Chimera
data modernization and connectivity. Atlas/Chimera is a series of seven information
technology (IT) infrastructure projects designed to improve the interoperability and
connectivity of DHS IT systems.
The Federal Air Marshals (FAM) were transferred to BICE September and as
a result, P.L. 108-90 funds FAM as a separate account within BICE. P.L. 108-90
provides $626 million for FAM.
P.L. 108-90 provides $210 million for the Air and Marine Interdiction account,
including $35 million for the establishment of a Northern Border Airwing, of which
$12.8 million is to available for the procurement of aircraft.
Immigration Enforcement Programs. Immigration enforcement activities
include: detention and removal; investigations; and immigration intelligence
activities. Through these activities, the former INS and now BICE: reduce
immigration benefit fraud and the employment of illegal aliens; identify and remove
criminal aliens; and combat the smuggling of aliens into the U.S.
Immigration Benefit Fraud. While INS officials noted the “pervasive and
serious” nature of immigration benefit fraud, according to GAO evaluations, INS was
not positioned to adequately deal with it. According to GAO, immigration benefit
fraud had a comparatively low priority within INS, and thus it suffered from a lack
of resources. For example, in 2000 INS had 40 positions dedicated to fraud and
detection, while the four service centers received millions of applications for¹⁸
immigration benefits.
Previous GAO reports had concluded that INS also lacked a comprehensive plan
to coordinate benefit fraud investigations, guidance to ensure the prioritization of
cases, an agency-wide case tracking and management capability to maintain data on
investigations, and that adjudicating staff did not have access to appropriate data.¹⁹
In response to these GAO concerns, INS developed a strategic plan for combating
immigration fraud, mandated that all investigative components use the agency-wide
Criminal Investigative Reporting System to track and manage all criminal
investigations, and required that all applications be checked against a federal law²⁰
enforcement database.
Reducing Employment of Illegal Aliens. GAO has reported that under the
former INS, resources allocated to work site enforcement were limited, and that as
a result employers who hired unauthorized workers were unlikely to be investigated.
The Census Bureau reported an estimated 8 million illegal aliens resided in the

¹⁸ Ibid.
¹⁹ U.S. General Accounting Office, Immigration Benefit Fraud: Focused Approach is
Needed to Address Problems, (Washington: Jan. 2002), GAO-02-66.
²⁰ U.S. General Accounting Office, Management Challenges and Program Risks:
Department of Justice, (Washington: Jan. 2003), GAO-03-105, p. 17.

United States, and GAO testified in June of 2002 that hundreds of thousands of
unauthorized aliens used fraudulent documents to obtain employment.²¹
In 1998, INS devoted roughly 300 work-years to work-site enforcement, but that
number had declined to roughly 124 work years by FY2002. After the September 11,
2001 terrorist attacks, INS shifted its work site enforcement priorities. Rather than
focusing on industries that traditionally rely on undocumented workers, INS focused
its enforcement efforts on industries critical to the nation’s infrastructure, such as
nuclear plants, airports and municipal water supplies. Operation Tarmac was
launched by INS to focus investigations on companies with direct access to
commercial aircraft or who provide airport security. According to recent INS
testimony, Operation Tarmac has resulted in the arrest of over 500 unauthorized
aliens and the filing of more than 20 criminal charges.²²
Identifying and Removing Criminal Aliens. GAO has reported on several
occasions that the former INS efforts to identify and remove criminal aliens required
improvement.²³ A recent Department of Justice, Office of the Inspector General
(OIG) report found that INS was not effectively managing the Institutional Removal
Program (IRP). The IRP is a national program that identifies removable criminal
aliens in federal and state correctional facilities, ensures they are not released into the
community, and deports them from the United States after they have completed their
sentences. GAO found that the INS had not determined the nationwide population
of foreign-born inmates, had not kept pace with an increasing workload, and that
staffing levels for the IRP actually decreased due to vacancies in the immigration
agent position.²⁴
Efforts to Combat the Smuggling of Aliens. Alien smuggling is a significant
and growing enforcement problem, and GAO found that INS’ ability to implement
and evaluate its anti-smuggling program has been impeded by a lack of coordination,
lack of an automated agency-wide case tracking system, and limited performance
measures. The former INS implemented a case tracking and management system,
and mandated that all investigative components begin using the Automated Criminal
Investigative Reporting System to track and manage criminal investigations.²⁵ The
former INS had also partially implemented or agreed to establish criteria for opening

²¹ Ibid.
²² Statement of Joseph R. Greene, Assistant Commissioner for Investigations, before the
House Subcommittee on Immigration and Claims, June 19, 2002.
²³ U.S. General Accounting Office, Criminal Aliens: INS’ Efforts to Identify and Remove
Imprisoned Aliens Need to be Improved, (Washington: July 15, 1997) GAO/T-GGD-97-
154; and U.S. General Accounting Office, Criminal Aliens: INS’ Efforts to Identify and
Remove Imprisoned Aliens Continue to Need Improvement, (Washington: Feb. 25, 1999)
GAO/ T -GGD-99-47.
²⁴ U.S. Department of Justice, Office of Inspector General, Immigration and Naturalization
Service Institutional Removal Program, Audit Report No. 02-41 (Washington: Sept. 2002),
p. ii.
²⁵ U.S. General Accounting Office, Management Challenges and Program Risks:
Department of Justice, (Washington: Jan. 2003), GAO-03-105, p. 20.

anti-smuggling cases to help focus resources on high priority cases, establish
performance measures, and examine coordination, program structure, and
communications issues.
Transportation Security Administration.²⁶ The Transportation Security
Administration (TSA),²⁷ created by the Aviation and Transportation Security Act
(ATSA; P.L. 107-71), was established to increase the protection of people and
commerce as they traveled into and through the U.S.
Table 7. TSA Account Detail
($ millions)
F Y 2004 F Y 2004 F Y 2004 F Y 2004
TSA AccountrequestHouseSenateConf.
Aviation Security3,6173,6593,9143,733
Federal Air Marshals600635610^a
Maritime and Land Security86232295263
Intelligence 14 14 14 14
Research and Development75126130155
Admi nistration 421 487 433 427
Subtotal TSA:4,8135,1535,3964,592
Offsetting Fee Collections(2,070)(2,070)(2,070)(2,070)
Total TSA2,7433,0823,3262,522
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^{169, an}^{d S}^.^R^e^pt^{. 108-}^86;^C^oⁿ^f^eren^ce^R^p^t^.^H^.^R^e^pt^{. 108-}^280.
^{(a) F}^e^deral^Aⁱ^{r Mars}^h^a^l^s^h^a^v^e^been^t^r^an^s^f^{erred t}^o^BIC^E^.
^Note:^F^Y^{2004 con}^f^eren^{ce am}^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^e^ef^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^{board redu}^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^di^s^c^retⁱ^oⁿ^a^ry^ac^c^o^unt^s^,^as^cal^l^e^{d f}^o^{r i}ⁿ^t^h^{e con}^f^eren^{ce v}^e^rsⁱ^oⁿ^of^H^.^R^.^{2763, pas}^s^e^{d by}^t^h^e
^Hou^s^{e on}^Decem^{ber 8, 2003. R}^o^uⁿ^dⁱⁿ^g^m^a^y^af^f^{ect totals}^.
FY2004 TSA Appropriation. P.L. 108-90 provides TSA with a total of $2.522
billion. The administration requested a total appropriation of $2.743 billion for TSA.
The House Committee recommended $3.083 billion, while the Senate recommended
$3.326 billion. The remainder of TSA’s funding ($2 billion) will come from
offsetting fee collections. The main account for the TSA is the Aviation Security
Account. This account accounts for the bulk of the TSA’s activities. P.L. 108-90
provides $3.733 billion in the Aviation Security account including:
^!$1.8 billion for passenger screening;
^!$1.3 billion for baggage screening;
^!$700 million for security direction and enforcement.

²⁶ This section was prepared with the assistance of Bartholomew Elias.
²⁷ For more detailed information, see CRS Report RL31308, Appropriations for FY2003:
Transportation and Related Agencies, coordinated by David Randall Petersen and John
Frittelli.

Table 9 illustrates selected differences, resolved in conference, between the
requested and recommended levels. Of interest to the conferees were the differences
in the amounts allocated for the procurement and installation of Explosive Detection
Systems (EDS). The Administration did not request funding for these items, and
differences between the House and Senate include: $50.5 million for EDS
procurement, and $74 million for installation and airport modifications. P.L. 108-90
provides $150 million for EDS procurement; $250 million for EDS installation; and
$75 million for EDS maintenance.
Recently, much attention has been focused on the Federal Air Marshals (FAM)
program. The FAM has been transferred to BICE. P.L. 108-90 provides a total
appropriation of $626 million for FAM, including $10 million for the requested Air-
to-Ground Communication System (AGCS). The House added an increase of $15
million to the administration’s request for the FAM program, for a total of $615
million for FAM itself; but did not fund the AGCS. The Senate, funded the FAM
program at the requested $600 million and funded the AGCS at $10 million.
Other issues resolved in conference include: port security grants funded at $125
million over the request; air cargo security funded at $35 million above the request;
Operation Safe Commerce funded at $14.5 million over the request; and intercity bus
funded at $10 million which was not requested.
The TSA was directed, by the end of calendar year 2002, to hire screeners and
purchase the necessary equipment to carry out its responsibilities. Initial estimates
projected a need for 25,000-35,000 screeners, and a total TSA workforce of 35,000-
40,000 employees. The FY2002 emergency supplemental capped TSA’s full-time
screener positions at 45,000 (this cap was extended for FY2003 by P.L. 108-7). In
deploying federal screeners to meet the mandate established under ATSA, the TSA
screener workforce grew to 54,600 employees despite the cap. TSA had initiated a
workforce realignment that resulted in a reduction of 6,000 screeners by the end of
FY2003. The conference report to P.L. 108-90 illustrates Congress’ continued
concern with the size of TSA’s workforce, and conferees direct TSA to have no more
than 45,000 full-time equivalent screeners on its rolls by the end of FY04.
The original TSA plan assumed that, for each checkpoint lane, seven screeners
would be required to screen passengers and carry-on baggage, plus one supervisor for
each checkpoint, and one manager for each airport, or in the case of larger airports,
each terminal. The staffing model has been adjusted down to an average of 6.5 per
lane at the larger airports, and three screeners per lane at the smaller airports, as
experience has yielded increases in efficiency.

Table 8. Selected Accounts, Programs, and Activities of TSA
($ millions)
F Y 2004 F Y 2004 F Y 2004 F Y 2004
Select programs and activitiesrequestHouseSenateConf.
Passenger Screening1,8011,6721,8071,806
Baggage Screening:9441,2851,3781,319
Baggage Screeners774780774774
Explosive Detection System (EDS):
EDS Procurement — 100150.5150
EDS Installation — 235309250
EDS Maintenance/Utilities1001007575
Total EDS100335535475
Next Generation EDS10404545
Federal Air Marshals (FAM)620635625626 ^a
Port Security Grants — 100150125
Air Cargo Security20203055
Intercity Bus Security — 101010
Transportation Worker Identification
Card (TWIC)55553550
Operation Safe Commerce (OSC)2.52.53017
Trucking Industry Grants — 222522
Hazardous Materials Permit Program — — 137
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^{169, an}^{d S}^.^R^e^pt^{. 108-}^86;^C^oⁿ^f^eren^ce^R^p^t^.^H^.^R^e^pt^{. 108-}^280.
^{(a) T}^h^{e C}^oⁿ^f^eren^{ce R}^e^{port appropriates}^f^uⁿ^dⁱⁿ^g^f^o^{r FA}^{M u}ⁿ^d^{er IC}^E.
^Note:^F^Y^{2004 con}^f^eren^{ce am}^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^e^0.59%^acros^s^-^t^h^e-^{board redu}^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^dis^c^retion^a^ry^accouⁿ^t^s,^a^s^{called f}^o^{r in}^th^{e con}^f^eren^{ce v}^e^rs^ion^of^H.R^.^{2763, pas}^s^e^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
At the time of ATSA’s passage, considerable attention was directed to the
question of whether screening of passengers and checked baggage could best be
conducted with federal workers or private sector employees under contracts
supervised by the federal government. The ATSA required TSA to conduct pilot
programs at five airports, in which contract employees would conduct the screening
tasks, under the management authority of a Federal Security Director. Whether part
time employees under contract can perform the screening tasks to standards
established by the TSA could become an issue, as TSA undergoes scrutiny over the
number of employees it employs, and whether it could perform the required tasks
with fewer employees on the federal payroll.
H.Rept. 108-55, a report accompanying the House version of the supplemental,
includes language requiring TSA to submit an operating plan by May 1, 2003 that
would show how the agency would meet FY2003 funding requirements, including
meeting the staffing cap of 45,000 employees enacted through P.L. 107-206. The
report said that the “Committee is aware that TSA is still exceeding the staffing cap”

which the report said was “unacceptable.” H. Rept 108-76 expands on the
requirement’s specificity.
TSA Progress on Improving Aviation Security.²⁸ GAO reported recently
that while TSA has made “considerable progress” in addressing aviation security,
significant challenges remain.²⁹ According to the GAO, TSA met the November
2002 deadline to hire and deploy more than 40,000 passenger screeners to screen
passengers at 429 airports nationwide.
GAO also reported that as of mid-December 2002, TSA had installed only 239
of the estimated 1,100 explosive detection machines, and only 1,951 of the estimated
6,000 trace detection machines needed to meet the requirements of ATSA. Many
airport operators need to redesign airport baggage handling systems to accommodate
and install inline EDS machines. In addition to the logistical challenges to
implementing inline EDS systems, funding for these projects remains a key issue.
Though ATSA authorized the use of Airport Improvement Program (AIP) funds for
airport security related projects, using these funds can have an impact on other airport
improvement projects. The Senate bill (S. 824) to reauthorize the Federal Aviation
Administration and related aviation programs contains a provision to establish a
separate Aviation Security Capital Fund that would use money derived from
passenger and air carrier security fees for these projects.
ATSA contains general provisions for the screening of cargo on passenger
aircraft, but does not specify how this objective is to be achieved. At, present,
security of cargo carried aboard passenger aircraft primarily relies on so-called
known shipper programs to detect and prevent the shipment of cargo from unknown
sources aboard passenger aircraft. To date, security of all-cargo operations has not
received much attention.³⁰ GAO reported that although the TSA uses the “known
shipper” program to meet these ATSA requirements, TSA lacked a comprehensive
plan with long-term goals and performance targets for cargo security, time frames for
implementing security improvements, and risked-based criteria for achieving these
goals. GAO recommended that TSA develop such a plan, and the TSA agreed.³¹
GAO also noted that TSA lacked reliable statistical data to estimate the nature,
frequency, and risk of shipments of undeclared dangerous goods. GAO
recommended that TSA determine whether it needed additional inspection authority
to develop such data. GAO also estimated that revenues from the new passenger
security fee would fund only approximately one-third of TSA’s budget, with the
remainder of the requirements dependent on appropriations. GAO noted concerns

²⁸ For more information see CRS Report RL31969, Aviation Security: Issues Before
Congress Since September 11, 2001, by Bartholomew Elias.
²⁹ GAO, Major Management Challenges and Program Risks: Department of Transportation.
Washington D.C., Jan. 2003, (GAO-03-108), p. 16.
³⁰ See CRS Report RL31969, Aviation Security: Issues Before Congress Since September

11, 2001, by Bartholomew Elias.

³¹ For more information see CRS Report RL32022 Air Cargo Security, by Bartholomew
Elias.

regarding the funding and implementation of planned security improvements to other
transportation facilities including seaports and mass transit facilities, each of which
will require significant outlays for infrastructure, technology, and personnel.
U.S. Coast Guard.³² The Coast Guard is the lead federal agency for the
maritime component of homeland security. As such, it is lead agency responsible for
border and transportation security as it applies to U.S. ports, coastal and inland
waterways, and territorial waters. The Coast Guard also performs other missions,
including some (such as fisheries enforcement) that are not related to homeland
security.
The Coast Guard was transferred from the Department of Transportation (DOT)
to the new Department of Homeland Security (DHS) on March 1, 2003. The law that
established DHS (P.L. 107-296) directed that the Coast Guard be maintained as a
distinct entity within DHS and that the Commandant of the Coast Guard report
directly to the Secretary of DHS. Accordingly, the Coast Guard exists as its own
agency with DHS and is not part of DHS’s border and transportation security
directorate. The Coast Guard does, however, work closely that directorate.³³
Mission vs. Resources in General.³⁴ A key issue for Congress regarding the
Coast Guard’s role in border and transportation security concerns the adequacy of the
Coast Guard’s resources for carrying out its various homeland and non-homeland
security missions. Even before September 11, 2001, the Coast Guard appeared hard-
pressed to perform all its missions at desired levels with available assets and
resources. In the 2 years prior to September 11, 2001, Coast Guard leaders and
supporters attempted repeatedly to draw attention to this missions vs. resources
situation.
Prior to September 11, 2001, both the Gilmore and the Hart-Rudman
commissions made specific recommendations regarding the Coast Guard. The Hart-
Rudman Commission noted that the Coast Guard’s ships and aircraft were “aging and
technologically obsolete” and that the Coast Guard cutter fleet was older than 39 of³⁵
the world’s other 41 coast-guard-like naval fleets. The commission noted that the
Coast Guard faced serious readiness issues because of increased operating and
maintenance costs, and a lack of essential capabilities in speed, sensors, and

³² This section was prepared with the assistance of Ronald O’Rourke.
³³ For more on the Coast Guard’s role in homeland security, see CRS Report RS21125,
Homeland Security: Coast Guard Operations — Background and Issues for Congress, by
Ronald O’Rourke. Some of the discussion below is adapted from this report.
³⁴ For a more detailed discussion of the issues surrounding the Coast Guard’s missions and
resources, see CRS Report RS21125 Homeland Security: Coast Guard Operations -
Background and Issues for Congress, by Ronald O’Rourke.
³⁵ Hart-Rudman Commission Phase III, p. 17. The Hart-Rudman Commission (The U.S.
Commission on National Security/21^st Century) cited in its analysis of the state of the Coast
Guard fleet the Report of the Interagency Task Force on U.S. Coast Guard Roles and
Missions. A Coast Guard for the Twenty-First Century. (Washington D.C., Dec. 1999).

interoperability of IT equipment and databases. The commission recommended
modernizing and rebuilding the Coast Guard.
The Gilmore Commission noted that the Coast Guard has taken on a number of
additional homeland security missions and that “Coast Guard resources to perform
its ordinary missions have been reduced in recent budget cycles, with no concomitant
reduction in mission.” As an example, the commission noted that the Coast Guard
lacked sufficient resources to conduct port vulnerability assessments at the more than
350 U.S. ports. The commission recommended increasing resources for the Coast
Guard’s homeland security missions, but did not suggest a level of appropriate
funding.³⁶
The terrorist attacks of September 11, 2001 increased Coast Guard requirements
for homeland-security missions, including border and transportation security, without
obviously reducing requirements for other missions. As a result, numerous observers
have expressed increased concern for the Coast Guard’s ability to perform all its
missions as desired levels. GAO testimony noted that levels of effort on homeland
security related functions remain at much higher levels than prior to September 11,
2001; while levels of efforts on missions including fisheries enforcement and drug
interdiction have dropped substantially. GAO also stated that the FY2004 budget
request for the Coast Guard “contains little that would substantially change levels of
effort for most missions,” and noted that if the FY2004 Coast Guard budget request
“is approved, about half of the agency’s operating expenses will be directed to
fulfilling homeland security responsibilities.”³⁷
Few observers appear to oppose the general notion that the Coast Guard’s
resources will need to be increased to bring them into better alignment with the
service’s post-September 11, 2001 mission requirements. The issue appears to center
more on the question of the size of the increase that will be needed.
Funding for Deepwater Program. A more specific Coast Guard budget issue
concerns funding for the Deepwater program — the Coast Guard’s 20-year
acquisition program to replace and modernize its current aging fleet of deepwater-
capable cutters, patrol boats, and aircraft. Among other things, these assets perform
the outermost portion of the Coast Guard’s border and transportation responsibilities

³⁶ Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving
Weapons of Mass Destruction (popularly referred to as The Gilmore Commission), Third
Annual Report, p. 40.
³⁷ U.S. General Accounting Office, Coast Guard[:] Comprehensive Blueprint Needed to
Balance and Monitor Resource Use and Measure Performance for All Missions.
Washington, 2003. (Testimony Before the Subcommittee on Oceans, Atmosphere, and
Fisheries, Committee on Commerce, Science, and Transportation, U.S. Senate, Mar. 12,

2003, GAO-03-544T) p. 1-3. Other recent GAO reports and testimony on the missions vs.

resources issue include GAO-03-467T, Feb. 12, 2003; GAO-03-155, Nov. 12, 2002; and
GAO-02-538T, Mar. 19, 2002.

and are also used closer to shore to perform close-in border and transportation
security missions.³⁸
In June 2002, the Coast Guard awarded a $17-billion, 20-year contract for the
Deepwater program to an industry team led by Lockheed Martin and Northrop
Grumman’s Ship Systems. Prior to the contract-award announcement, the Coast
Guard estimated that equipment acquisition for the Deepwater program was
estimated to require, over a 20-year period, an annual average of $530 million in
constant (i.e., inflation-adjusted) FY1998 dollars — $500 million for the contractor
and $30 million for Coast Guard administration of the program — for a total
equipment acquisition cost of about $10.6 billion in FY1998 dollars. The program
has received a total of $914.2 million to date, including $42.3 million in FY2001,
$320.2 million in FY2002, and $478 million in FY2003.
Some observers have long been concerned about the Coast Guard’s ability to
secure adequate funding for the Deepwater program. Deepwater supporters are
concerned that the annual funding requirement of $500 million in constant FY1998
dollars for the contractor is being reinterpreted in budget requests to mean a flat
figure $500 million per year in nominal dollars, which will result in less and less
actual purchasing power for the program each year due to inflation. They are also
concerned that the $500 million figure is being interpreted as including the annual
$30-million cost for Coast Guard administration of the program. Deepwater
supporters argue that unless the program is funded at the equivalent of about $530
million per year in constant FY1998 dollars, the Deepwater program will become
increasingly underfunded each year.
The Coast Guard estimates that funding the program at $500 million per year
in nominal dollars would stretch the planned Deepwater acquisition period from 20
years to about 27 years. On March 12, 2003, GAO testified that “under current
funding plans, the Coast Guard faces significant potential delays and cost increases,”
and that “if appropriations hold steady at $500 million (in nominal dollars) through
fiscal year 2008, the Coast Guard estimates that the cumulative shortfall will reach
$626 million.”³⁹
FY2004 Coast Guard Appropriation. The Administration’s proposed
FY2004 budget for DHS requests $6.655 billion for the Coast Guard. The House has
recommended an appropriation of $6.681 billion, or $26 million more than the
request, while the Senate has recommended an appropriation of $6.815 billion, or
$160 million more than the request.

³⁸ For more on the Deepwater program, see CRS Report RS21019, Coast Guard Deepwater
Program: Background and Issues for Congress, by Ronald O’Rourke. Some of the above
discussion is adapted from this report.
³⁹ For the full text of this discussion see, U.S. General Accounting Office, Coast Guard[:]
Comprehensive Blueprint Needed to Balance and Monitor Resource Use and Measure
Performance for All Missions, Washington, 2003. (Testimony Before the Subcommittee on
Oceans, Atmosphere, and Fisheries, Committee on Commerce, Science, and Transportation,
U.S. Senate, Mar. 12, 2003, GAO-03-544T) pp. 18-19.

Table 9. Coast Guard Account Detail
($ millions)
F Y 2004 F Y 2004 F Y 2004 F Y 2004
Coast Guard AccountrequestHouseSenateConf.
Operating Expenses4,8384,7044,6484,642
Environmental Compliance and
Restoration -- 17 17 17
Reserve Training--949595
Acquisition, Construction, and
Improvements 797 805 1,035 967
Alteration of Bridges--20--19
Research, Development, Test, and
Evaluation -- 22 -- 15
Retired Pay (Mandatory)1,0201,0201,0201,020
Total Coast Guard6,6556,6826,8156,776
^Source:^C^R^S^Aⁿ^al^y^sⁱ^s^of^H^.^R^e^pt^{. 108-}^{169, an}^{d S}^.^R^e^pt^{. 108-}^86;^C^oⁿ^f^eren^{ce R}^e^pt^{. H}^.^R^e^pt^{. 108-}^280.
^Note:^F^Y²⁰⁰⁴^con^f^eren^{ce am}^ouⁿ^t^s^{do n}^o^t^ref^l^ect^t^h^{e ef}^f^ect^s^of^t^h^{e 0.59%}^acros^s^-^t^h^e-^board^redu^ctⁱ^oⁿ
ⁱⁿ^m^o^s^t^dis^c^retion^a^ry^accouⁿ^t^s^,^as^{called fo}^rⁱⁿ^th^{e con}^f^eren^{ce v}^e^rs^ion^of^H.R^.^{2763, pas}^s^e^{d by}^th^e
^Hou^s^{e on}^Decem^{ber 8, 2003.}
P.L. 108-90 provides $668 million for the Coast Guard’s Deepwater program,
in the Acquisition, Construction, and Improvements account. This is $168 million
above the $500 million request for the Deepwater program. The House
recommended an appropriation of $530 million, or $30 million more than the
request, while the Senate recommended an appropriation of $702 million, or $202
million more than the request. Of the $202 million increase recommended by the
Senate, $84 million is for unmanned surveillance aircraft. P.L. 108-90 provides $50
million for unmanned air vehicles. The Senate-recommended appropriation of $702
million matches the figure that House and Senate authorization committees have⁴⁰

recommended for the program as part of the Coast Guard reauthorization process.
⁴⁰ The House Transportation and Infrastructure Committee recommended an authorization
of $702 million in its markup of H.R. 2443. The Senate Commerce, Science, and
Transportation Committee recommended an authorization of $702 million in its markup of
S. 733.