FY 2005 Budget Priorities
However, increased spending on homeland
security alone is not the measure of success. Additional resources
are appropriate only if they can be invested efficiently and
effectively and contribute substantively to the strategic goals of
building a national homeland security system and better preparing
the nation to respond to catastrophic terrorist attacks. By these
measures, the FY 2005 budget proposal appears largely on the
following analysis looks at funding in each of the critical mission
areas established by the national strategy and proposes principles
to guide the consideration of investments in each category. In
light of these principles, several areas of concern are
Early Warning . This critical mission area includes
activities related to detecting terrorists and disseminating threat
information and warning. The key principle that should guide
investments is the development of programs that promote
intelligence sharing across the public and private sectors.
Effective intelligence sharing is a prerequisite for exploiting the
full potential of national capabilities to respond to potential
FY 2005, the Administration proposes to spend $500 million on
intelligence and early warning, an increase of 73 percent. While the lion's
share of this funding (61 percent) is for the DHS, significant
spending falls outside the department's purview. (See Table 2.)
This is appropriate given that intelligence and early warning must
be a national activity, not a task performed by the DHS in
However, greater consolidation of budget
authority might be justified in regard to the newly established
Terrorist Threat Integration Center (TTIC) and Terrorist Screening
Center (TSC). In the Administration's current proposal, the TTIC,
overseen by the Director of Central Intelligence, would be staffed
by an interagency group that would gather, assess, and disseminate
all terrorist-related information to federal agencies. The TSC, an
interagency staff overseen by the FBI director, would be
responsible for consolidating, deconflicting, and dispensing
terrorist watch list information. In both cases, the DHS would play
only a subordinate role.
Establishing critical programs such as the
TTIC and the TSC outside the oversight of the DHS is problematic.
The current arrangement appears to conflict with the intent of the
Homeland Security Act of 2002 and raises concerns over whether such
an approach will optimize intelligence sharing. It is deeply
troubling that the DHS, as the primary consumer of intelligence for
providing domestic security, does not have primary control over the
mechanisms for fusing and disbursing information.
current arrangement leaves the DHS as little more than just another
intelligence end user, competing with other members of the national
security community to ensure that its priority requirements are
met. For the near term, this concern might be ameliorated somewhat
by placing all appropriations for the TTIC and the TSC under the
purview of the DHS, giving the DHS secretary substantial
responsibility for determining the long-term development of these
capabilities. In addition, the DHS secretary should be given
oversight responsibilities for both the TTIC and the TSC.
DHS Homeland Security Advisory System (HSAS) is another critical
program that affects the sharing of intelligence and warning
information across the public and private sectors. The HSAS employs
a series of color codes to designate various levels of national
preparedness in anticipation of a terrorist attack.
$10 million requested for FY 2005 is not an issue of contention. On
the other hand, implementation of the system could have a
significant impact on future requirements for supplemental funding.
Increased security resulting from changing the alert level requires
an estimated $1 billion per week. Of significant concern is that
the system does not appear to work well in alerting state and local
governments, the private sector, and the general public. Funding should be
contingent on undertaking significant revisions.
effective alert system and better means of coordinating and
disseminating critical intelligence information are the
cornerstones of creating an effective intelligence and early
warning system. It is critical to get these programs right.
all appropriations for the TTIC and the TSC through the DHS.
- Appropriate additional funding to
overhaul the HSAS and make funding contingent on adopting major
reforms to overhaul the program.
Transportation Security. Protecting border and
transportation systems includes managing the border and ports of
entry, ensuring aviation and maritime security, and developing
guidelines and programs for protecting national transportation
systems. The key principle guiding federal investments in this area
should be ensuring the adoption of a layered security system: a
combination of effective, mutually supporting initiatives that
simultaneously provide useful counterterrorism measures, protect
civil liberties, and do not encumber the flow of travel and
Proposed spending for FY 2005 totals $17
billion. The recommended increases for border and transportation
security ($1.7 billion) represent a real increase of approximately
9 percent over the FY 2004 budget. The DHS appropriation accounts for 94
percent of the border and transportation security budget,
reflecting one of the key objectives of the Homeland Security Act:
consolidating responsibility for these functions under a single
federal entity. Most of the additional spending (88 percent) is
also within the DHS as part of the budgets of the Border and
Transportation Security (BTS) Directorate and the U.S. Coast Guard.
Passport and visa issuance programs within the Department of State
account for most of the remaining additional spending.
While the overall increase is substantial,
funding for the DHS role in maritime security is an issue of
concern. In particular, the appropriation for the U.S. Coast
Guard's Integrated Deepwater acquisition program--a long-term
modernization effort to recapitalize the service's fleet of
cutters, aircraft, sensors, and command and control--is
Coast Guard's fleet is old, expensive to operate and maintain, and
poorly suited for some homeland security missions. Deepwater was to be
funded at $330 million (in 1998 dollars) in the first year and $530
million (in constant dollars) per year in the following budgets,
but no annual budget before FY 2004 matched the required rate of
investment. Meanwhile, the Coast Guard's increased operational
tempo and expanded mission requirements since 9/11 have been
wearing out the fleet faster than anticipated, putting the
modernization program even farther behind schedule.
the Administration's FY 2005 budget, Deepwater would receive $678
million, an increase of $10 million. This level of funding is totally
inadequate to support rapidly building up an essential component of
the nation's homeland security system. Dramatically increasing the
budget for Deepwater would not only establish the capabilities
needed for a long-term security system sooner, but also garner
significant savings (perhaps as much as $4 billion) in lower
Reducing life-cycle expenses by retiring older and less capable
systems would realize additional savings.
While Deepwater funding should be greatly
accelerated, Congress should consider taking a "go slow" approach
on the United States Visitor and Immigrant Status Indicator
Technology (US-VISIT) program. The purpose of US-VISIT is to
establish a system that can collect, maintain, and share
biographic data on foreign nationals for border and immigration
enforcement. The goal of the system is to screen all foreign
nationals from non-visa-waiver countries entering and exiting the
Implementing US-VISIT is an enormous
challenge. While the program could become a valuable tool for
identifying terrorists or other inadmissible persons, poor
implementation could unnecessarily im-pede international travel and
compromise individual privacy while failing to function effectively
in identifying individuals who pose a security threat. In addition,
establishing the program will rely heavily on creating new systems
that employ cutting-edge biometric and information technologies.
Even if done effectively, establishing and operating the system
could eventually cost $10 billion. Failure to master the US-VISIT's
complex requirements could lead to ballooning costs or poor system
DHS proposes to fund US-VISIT at $340 million for FY 2005, an
increase of $12 million. However, substantially increasing the
program at this point may not be warranted. Key parameters, such as
how biometric data
would be employed, are not yet established. Until critical system
design parameters are addressed, accelerating the rollout of
US-VISIT would be imprudent.
sufficient additional resources for Deepwater acquisition to enable
the Coast Guard to speed up procurement and save more than $4
billion in procurement costs.
from increasing funding for US-VISIT until the program has
established an overall enterprise architecture that accounts for
controlling costs, protects individual privacy, minimizes impact on
international travel, and demonstrates effectiveness as a
Counterterrorism. This mission area comprises law
enforcement efforts--principally by the FBI and U.S. Immigration
and Customs Enforcement--to identify, thwart, and prosecute
terrorists. The guiding principle for enhancing this critical
mission area should be adopting programs that expand the capacity
to conduct counterterrorism operations without impinging on civil
liberties or detracting from other law enforcement priorities.
Administration proposes to spend $3.4 billion on domestic
counterterrorism in FY 2005, an increase of 10 percent.
Appropriately, 97 percent of the proposed appropriations is for the
DHS and the Department of Justice.
area in which capacity to conduct investigations might be expanded
to good effect is in cooperation among federal, state, and local
law enforcement agencies in immigration investigations that relate
to counterterrorism. Using state and local law enforcement officers
to enforce federal immigration laws has long been controversial,
and the issue has come under greater scrutiny since 9/11.
June 2002, the Immigration and Naturalization Service (INS) and the
state of Florida established a pilot program that could serve as a
model for enhanced and appropriate cooperation. Under the program,
select state and local law enforcement officers were trained to
assist in immigration domestic counterterrorism investigations. Florida officers had
to be members of the state counterterrorism task forces and were
permitted to engage in these activities only when they are taking
part in a counterterrorism operation supervised by INS
the DHS assumed the functions of INS, the memorandum of
understanding governing the program was renewed. The Florida pilot
program represents an ideal model for the limited and appropriate
use of state and local support in expanding the investigatory
capacity of the DHS.
sufficient resources to allow the DHS to offer programs based on
the Florida model to other states and U.S. territories.
- Appropriate funds for sustainment
training and support for state programs.
Critical Infrastructure and Key Assets. This critical
mission area includes national efforts to secure public and private
over 85 percent of the nation's critical infrastructure and key
assets are not federally owned, developing programs to ensure
responsible, efficient, and cost-effective cooperation between the
public and private sectors should be the principle guiding
investments in this area.
Administration has requested $14 billion for critical
infrastructure and key asset protection in FY 2005, a real increase
in budget authority of approximately 10 percent over the previous
Funding for this critical mission is
appropriately distributed among all federal agencies. The DHS
budget accounts for only 18 percent ($2.6 billion) of 2005 funding.
All federal agencies have responsibilities in protecting their own
infrastructure and coordinating with their counterparts in state
and local governments and the private sector.
security of U.S. ports is one area requiring particular
attention. The bulk
of U.S. exported or imported goods pass through American ports,
making their security vital to the national economy. Port security
also has a critical national security dimension. Making these challenges particularly
pressing is that U.S. ports must comply with new security
provisions detailed in the International Maritime Organization's
International Shipping and Port Security Standards (ISPS) and the
U.S. Maritime Security and Transportation Act of 2002.
However, in developing a funding strategy
to improve port security, the Administration should not become
overly "port-centric." Addressing all the critical infrastructure
concerns at U.S. ports could well require many billions of
dollars. On the
other hand, the DHS awarded only $245 million in port grants in FY
2003 (albeit the largest amount of any year to date).
restraint is appropriate. Addressing the considerable
vulnerabilities of maritime infrastructure does not necessarily
require a dramatic infusion of federal dollars. For example,
effective intelligence and early warning, domestic
counterterrorism, and border and transportation security programs
can help to reduce risks to critical infrastructure by limiting the
opportunities for terrorists to reach U.S. ports. In addition, the
overwhelming preponderance of maritime infrastructure is in private
hands. Initiatives that enable and encourage the private sector to
take a more expansive and proactive role should be central to any
Federal port grants should used sparingly,
as a tool to promote appropriate public-private sector solutions.
Therefore, despite the looming July 2004 deadline, the
Administration was right to limit port grants for FY 2005 to $50
addition, the Administration proposes to phase out Operation Safe
Commerce in FY 2005. Launched in November 2002, the program was
in-tended to use pilot projects in the ports of Seattle-Tacoma, Los
Angeles-Long Beach, and New York-New Jersey to test technologies
and practices, including cargo tracking, anti-tampering,
information protection, and real-time data reporting. However, it has shown
only limited results, and the research and development effort could
be performed better and more efficiently under a development
program in the DHS Science and Technology Directorate.
funding for port security as proposed by the Administration.
- Transfer Safe Commerce initiatives to
the DHS Science and Technology Directorate.
Against Catastrophic Threats. This critical mission area
includes developing better sensors and procedures to detect
smuggled nuclear, radiological, chemical, and biological weapons;
improving decontamination and medical responses to such weapons;
and harnessing scientific knowledge and tools for counterterrorism
efforts. The guiding principle for investments in this mission area
must be to focus funding on developing new means to prevent,
respond to, and mitigate the unprecedented dangers posed by
Administration proposes to spend $3.4 billion (an increase of 19
percent) on such measures in FY 2005, in addition to $2.5 billion
on Project BioShield. Appropriately, the DHS ($0.9 billion)
and the Department of Health and Human Services ($1.9 billion)
account for 82 percent of the homeland security research and
While the overall level of science and
technology funding appears appropriate, Project BioShield, in which
both the DHS and the Department of Health and Human Services (HHS)
participate, bears watching. Originally proposed by the
Administration in February 2003 as a 10-year, $6 billion program,
its goal is to develop new biomedical countermeasures. Both the management
and resources dedicated to the program are subjects that should be
program might benefit from the consolidation of responsibilities in
a single department. While the BioShield appropriations are
directed through the Federal Emergency Management Agency (FEMA) in
the DHS, HHS has far more expertise in managing large-scale medical
scope of resources dedicated to the program is also an issue. For
FY 2005, spending is authorized at $2.5 billion. It is unclear,
however, whether this funding will produce dramatic results. Major
pharmaceutical companies, like Merck and Pfizer, spend more than $6
billion a year to develop only a handful of new drugs. BioShield
may not be sufficiently attractive to the private sector to result
in significant new developments.
- Streamline management of the program by
placing all appropriations and responsibility for the program in
that metrics be established to evaluate progress in the
alternative strategies for the commercial development of biomedical
technologies in case BioShield fails.
The FY 2005 budget calls for spending $6.3 billion
for national preparedness, about the same amount as in FY 2004.
Approximately 92 percent is in the budgets of the DHS ($3.6
billion) and HHS ($2.2 billion). Consolidating most emergency
preparedness and response programs under the two agencies that bear
primary responsibility for organizing federal response efforts
makes sense. Concentrating effort also reduces the number of entry
points and requirements for state and local governments needing
federal assistance. In addition, bundling resources allows the DHS
and HHS to focus activities on addressing the greatest risks and