Executive Summary: Improving Efficiency and Reducing Costs

Report Homeland Security

Executive Summary: Improving Efficiency and Reducing Costs

September 24, 2002 4 min read

Authors: Rea Hederman and Michael Scardaville

The two bills Congress is currently debating to create a new Department of Homeland Security (DHS) have vastly different visions and would have vastly different costs and effects. On July 26, the House passed the National Homeland Security Act of 2002 (H.R. 5005), which was based on the President's proposal and introduced by Representative Dick Armey (R-TX). That same day, the Senate Governmental Affairs Committee approved the National Homeland Security and Combating Terrorism Act of 2002 (S. 2452), introduced by its chairman, Senator Joseph Lieberman (D-CT).

Both bills have provisions of merit, such as the creation of the National Bio-Weapons Defense Analysis Center. But according to estimates of both plans by the Congressional Budget Office (CBO), S. 2452 would cost the American taxpayer up to $7 billion more than the President's proposal between 2003 and 2007, primarily in funding various new programs--including some that have little to do with homeland security. The President's plan, by comparison, emphasizes the consolidation of existing federal homeland security programs, rather than creating new ones, and focuses on improving the efficiency of the government's effort to strengthen security while keeping costs down.

S. 2452, which is now being debated by the full Senate, also would severely limit the Secretary of Homeland Security's authority to eliminate the fragmentation and duplication of functions that exist among the current programs and agencies that would be transferred to the new department. Its prohibition on consolidating redundant federal roles is likely to increase overhead costs dramatically while reducing overall effectiveness in the foreseeable future.

Instead of rushing a bad bill out of the Senate, Members should learn from the experience of the private sector, where the success of large mergers and acquisitions often hinges on the effective and efficient consolidation of redundant or overlapping functions. In that realm, some of the cost savings from consolidation efforts can run as high as 25 percent, according to the consulting firm Booz-Allen & Hamilton.

The President's proposal for the new DHS sought to build on this experience. It provides a unified command structure for the DHS leadership to oversee and consolidate the maze of duplicative programs that exist in the areas of first responder assistance, critical infrastructure protection, and border security. The President's proposal seeks not only to eliminate duplicative functions among the transferred agencies, but also to standardize practices and procurements. No agency or program would retain its independent status or its own bureaucratic processes and practices. Merging them into the directorates of the new department would reduce the fragmentation that has bogged down the federal homeland security effort, making that effort more unitary and effective. As in the business world, a streamlined chain of command over a coherent effort would lead to significant budgetary savings.

The longer Congress takes to debate the final legislation to enact this responsible plan, the further it seems to get from its critical objective of quickly improving homeland security. The department outlined in S. 2452 would increase costs with numerous new and unnecessary programs and restrict the Administration's ability to break down existing barriers and consolidate duplicative and overlapping programs and functions throughout the government.

As the full Senate debates what kind of Department of Homeland Security to create, S. 2452 should be revised and modified to:

  • Allow for the complete consolidation and rationalization of functions transferred to the new department. Congress should legislate which existing federal agencies, programs, and functions should be transferred to the DHS, but it should leave the bureaucratic structure of the department up to the President. Reducing redundancy and overlapping functions will prove vital to the effort to improve the effectiveness and efficiency of America's homeland security policies and programs.
  • Remove unnecessary new programs and spending. Programs to repair Amtrak's cars and tunnels or to assist child immigrants will not directly make the United States safer from terrorism and, thus, should not be part of homeland security spending. In the new reality of global terrorism, the U.S. taxpayer should not be burdened with non-germane spending in the name of homeland security.

Conclusion. President George W. Bush proposed the establishment of a new Department of Homeland Security in order to improve the effectiveness and efficiency of federal efforts to combat terrorism and protect American lives. Congress should provide the new department with a solid foundation for success, one that not only would improve homeland security in the near future but also make the government's use of the resources dedicated to this important task more effective and efficient, thereby reducing the overall cost to American taxpayers.

Meeting these twin objectives will require Congress to allow the Secretary of Homeland Security to consolidate redundant and overlapping federal agencies and programs, rather than creating numerous new programs, particularly any that are unrelated to homeland security. S. 2452 fails to achieve the twin objectives and will likely cost at least $7 billion more than the President's plan over the next five years. During the debate on S. 2452, the Senate should remove the current prohibition on consolidating programs and agencies and eliminate any unnecessary new programs not directly related to security.

--Michael Scardaville is Policy Analyst for Homeland Security in the Kathryn and Shelby Cullom Davis Institute for International Studies, and Rea S. Hederman, Jr., is Manager for Operations in the Center for Data Analysis, at The Heritage Foundation.


Rea Hederman

Former Director, Center for Data Analysis and Lazof Family Fellow

Michael Scardaville

Former Policy Analyst