Nearly six years after September 11, 2001, the Department of
Homeland Security (DHS) is still struggling to keep homeland
security grants from becoming just another federal entitlement
program. To make matters worse, Congress recently passed a bill (S.
4 and H.R. 1) that will make the DHS's job more difficult.
The bill's official purpose is to implement the reforms proposed
by the 9/11 Commission, but it also will proliferate new grants and
add additional requirements that will keep the department from
focusing grants on strategic priorities. In addition, new research
suggests that federal homeland security grants are largely just
supplanting state and local spending rather than promoting national
preparedness and raising standards.
Congress needs to start over by eliminating minimum grant
allocations, boosting matching requirements for grants,
consolidating grant categories, and requiring the DHS to conduct a
full assessment of national capabilities.
A Good Idea Gone
Funds distributed through the homeland security grant program
are intended to support the objectives outlined in the National
Preparedness Goal and related national preparedness doctrine, such
as the National Incident Management System, National Response Plan,
and National Infrastructure Protection Plan. The DHS
and representatives from various sectors and government levels
collaborated to lay the foundation for a national preparedness and
response system. In this endeavor, they created the Target
Capabilities List (TCL), which identifies 15 national planning
scenarios, hundreds of critical tasks, and 37 critical
capabilities. The TCL includes the definitions, requirements, and
responsibilities for each of the 37 capabilities, making it a vital
tool in the development of meaningful strategic planning.
While DHS has done yeoman's service in establishing
national standards for readiness, its efforts to tie grant funding
to the standards have been troubled at best. Since drafting
the TCL in 2005, the DHS has not taken any measures to ensure that
these plans are executed at the federal, state and local levels.
Today, nearly four years after its initial assessment, the DHS
has yet to conduct another national capabilities assessment,
making it virtually impossible to ascertain which critical
capabilities exist and which ones are still needed. Even if the
department was in a position to communicate new tasks and
responsibilities to state and local governments, the
recommendations would be based on obsolete criteria.
Consequently, there is no way to determine how best to target
resources to address the capabilities gap.
Not Another Entitlement
The 9/11 Commission warned in its report that homeland security
grants were in danger of becoming pork-barrel funding. The
warning proved prophetic. While federal spending on homeland
security has increased exponentially since 9/11, state spending on
homeland security has remained almost flat as a percentage of total
state appropriations. Studies suggest that this trend may
indicate a more dangerous practice of federal grants
supplanting state spending on homeland security.
In 2006, The Heritage Foundation published a report examining
how intergovernmental grants affected recipient spending. The
report looked at Community Oriented Policing Services (COPS)
grants, which are administered through the U.S. Department of
Justice. Much like homeland security grants, COPS grants were
categorical grants intended to fund specific activities. Although
various regression models found that they had a statistically
significant effect in reducing violent and property crime rates,
COPS grants failed to stimulate local spending. This
strongly rebuts the theory that federal grants provide a powerful
incentive for state and local governments to increase their own
spending beyond what they would have spent without federal
The last thing the United States needs is another entitlement
program, particularly in homeland security. When state and local
officials can rely on federal money to finance projects that are
clearly local responsibilities, competing interests engender a
horde of unnecessary, wasteful projects that would probably never
be funded if the localities had been forced to bear the financial
burden themselves. Federal funds should be used to
supplement, not supplant, state and local spending.
Putting the Right Money
in the Right Place
For fiscal year (FY) 2007, the DHS allocated nearly $1.7 billion
in homeland security grants. These grants continue even though the
DHS has no effective oversight mechanism in place to ensure that
the money is being used properly.
Such lax measures have inevitable repercussions. For
example, a 2005 state audit of Colorado's homeland security system
revealed that 13 percent of the state's $15.8 million had been
misspent on office space, a bus, and other items. In 2007,
Governor Bill Ritter (D) ordered a system review, which found
that the state's homeland security structure was inadequate.
Responsibilities were so diffused that the system was considered
unable to handle a serious terrorist incident in Colorado.
Since FY 2003, the DHS has pumped over $1 billion into the
state of California. Because these funds were distributed through
various disconnected grant programs, too many projects were funded
and too few results were achieved.
To support local preparedness efforts to respond to all-hazards
mass casualty incidents, the Metropolitan Medical Response
System Program has awarded California nearly $20 million since
2003. Yet in a 2006 report published by Trust for America's
Health, a nonprofit organization, California tied with Iowa,
Maryland, and New Jersey for the lowest score among all 50 states
in its level of health preparedness. Specifically, the state failed
to meet adequate strategic stockpile levels, was considered
non-compatible with the CDC's National Electronic Disease
Surveillance System, and did not have sufficient hospital bed
surge capacity to respond to a moderate pandemic.
Fiscal responsibility is also needed in calculating the funding
amounts. This year, the DHS reserved 55 percent of Urban Areas
Security Initiative (UASI) funds for the six highest-risk urban
areas, known as Tier I urban areas. While the Tier I areas competed
for $411 million of the funding pie, the remaining 39 areas (Tier
II) competed for $336 million of funding. By restricting more than
half of the funding to a select number of grant recipients,
this policy will lead inevitably to disproportionate allocations
that defy the very function of need-based grants.
Until an assessment is completed, no one at the DHS can know
whether or not the preordained cap on the top six urban areas is
sufficient to meet the capability needs of those jurisdictions and
to address existing capability gaps. Setting an arbitrary funding
threshold-whether high or low-would prevent essential funds from
reaching their targets. One of the Tier I urban areas could take a
chunk of the $411 million and overinvest in one capability, while a
Tier II area could face an underinvestment in one of its
initiatives. The opposite is also possible. This would not only
distort the incentives for homeland security spending, but also
conceal the true vulnerabilities.
Homeland security funding should have a specific purpose:
reducing risk and preventing attacks and disasters. Arbitrary
funding floors and ceilings may simplify the arithmetic, but they
do not contribute to a sound homeland security structure.
The DHS should eliminate this formulaic grant policy and base
all funding allocations on an updated TCL. This would not only
serve as a valuable metric tool for assessing the nationwide
capabilities gap, but also help the nation to reach an overall
level of preparedness.
The Real Purpose:
Reducing Risk and Building a National System
The core function of homeland security grants and the DHS in
general is to integrate capabilities into a national system that is
grounded in principles of federalism and capable of preventing,
responding to, and recovering from attacks on the homeland. The
question that should be asked is how the effectiveness of
homeland security spending in reducing risk can be measured.
Since 9/11, the traditional rubric has been to aggregate a
target's threat, vulnerability, and consequence. The
likelihood of the threat, the target's susceptibility to the
threat, and the repercussions of the threat all contribute to the
target's risk index. States compile data along these guidelines and
submit them to the DHS with the understanding that this information
will be incorporated into a national threat assessment. However, a
DHS official has said that the department's methodology for
incorporating these data is underdeveloped, which means that
"the data [are] not currently incorporated into threat assessment
at the federal level in any systematic and meaningful
Determining the grant program's true value requires, first,
defining, conceptualizing, assessing, and managing the risk.
Second, the DHS must develop a methodology for indexing relative
risk and implementing a strategy to reduce it. Understandably,
this is a complex task with varying factors. Any tools that
attempt to quantify risk will always be off the mark.
Furthermore, DHS Secretary Michael Chertoff has conceded that
the country must accept some level of risk, given that protecting
the country against every real or perceived risk is simply not
feasible. However, this level of acceptable risk-the benchmark
for allocating federal resources-has not yet been defined. This
nebulous policymaking significantly impedes efforts to maintain a
respectable level of situational awareness.
The 9/11 Law Makes
The law passed by Congress does contain several provisions that
should advance national preparedness. Importantly, it endorses
multi-state projects that allow key states to work together to
develop critical regional capabilities with the aim of building a
layered, nationwide homeland security system. Regional capabilities
play a particularly important role in key densely populated areas
and areas that contain critical infrastructure.
The bill also adds some solid auditing and reporting
requirements to homeland security grants. Many state and local
grantees will resist these requirements, but given the DHS's
failure to institute an effective grant management system or build
a National Preparedness System after spending $20 billion,
these provisions will add some much-needed accountability and
transparency to the process.
Finally, the law would require a quadrennial review of homeland
security. Like the Quadrennial Defense Review, this document would
provide Congress, the President, and the American taxpayer
with a four-year view of the progress and challenges in homeland
Regrettably, the law also contains provisions that are steps
back. It would expand eligibility for the Urban Areas Security
Initiative grant program to the top 100 urban areas. Such an
expansion would greatly dilute the funding by diverting grants to
urban areas with little to no meaningful risk. Rather than
expanding this program, Congress should exercise the political will
to reduce the number of eligible urban areas, since the DHS has
been unwilling to limit the program to eligible urban areas
that face meaningful risks.
Originally, only seven urban areas were eligible. After
complaints from urban areas that were not included in the program,
the program was expanded to 30 areas. The next year, it was
expanded to 50 areas. Two years later, the DHS scaled eligibility
down to 35 urban areas, and another 11 areas were allowed to apply
for funds to finish projects. Those 11 areas were not eligible for
funds the following year unless they were in the top 35 list, but
this year, the number is back up to 46 fully eligible urban
However, the law's biggest problem is how it changes the funding
formula. While the bill reduces the state minimum in homeland
security grants to 0.375 percent for FY 2008, it applies that
minimum to the UASI grant program as well. The state minimum
has never before applied to the UASI grant program. This change
would be an enormous step back. Based on authorized funding levels,
the change would give each state a minimum of $6,750,000, which is
$200,000 more than the smallest states received this year.
As argued in a Heritage Foundation report, Congress needs
to eliminate all minimums and use the funds to close the
highest-priority gaps in TCL capability. Rather
than increasing the state minimum, Congress needs to
acknowledge that states with fewer TCL needs should receive less
funding. The bill also allows the states to retain 20 percent of
the UASI funds. Historically, the states were required to pass
through 100 percent of the funds. Given that urban areas face the
highest risks, allowing the states to retain up to 20
percent-thereby depriving urban areas of needed funds-is a
Another flaw in the law is that it still fails to include any
matching requirements for state and local governments. Whether the
matching requirement is 5 percent or 50 percent, Congress
should require recipients to dedicate a certain level of local
funds to meeting critical TCL needs. As noted, state and local
spending on homeland security after 9/11 has not increased in any
meaningful way, which indicates that the federal government is
supplanting local funds, not supplementing them. Compounding
this issue, the law allows localities to spend 50 percent of funds
on personnel costs, which moves the federal programs closer to
Congress should not fund personnel costs, and it should require
states and other recipients to match funds as a condition of
receiving federal funds. This mechanism has been used successfully
in the Port Security Program with private-sector applicants. In FY
2005, the 50 percent matching requirement for private-sector
applicants resulted in $33 million in matching spending, boosting
the funds used to secure U.S. ports by almost 25 percent.
Finally, the 749-page bill appears to authorize roughly $3.85
billion in state and local grants for FY 2008. The current
environment does not justify this enormous increase. Congress
should refuse to authorize more funds until a thorough national
capabilities assessment has been conducted to determine which TCL
capabilities the first $20 billion built. After the
assessment, Congress can put a more accurate price tag on closing
the remaining TCL capability gaps.
What the Federal
Government Should Do
State and local needs vary across the board. They need to be
identified and integrated into a national standards plan that
fulfills articulated goals. However, this plan must be a
dynamic list compiled from an established baseline of risks. The
goal is to create an adaptive, flexible system to fit homeland
security needs at all jurisdictional levels.
Congress and the DHS can take several actions to meet this goal.
Specifically, they should:
Conduct a national
capabilities assessment. Evaluating capabilities
is the starting point for understanding U.S. strengths and
weaknesses. Once the DHS executes this task, it will be in a
better position to justify future allocations of homeland
security grants and provide the government with a sense of what
still needs to be done.
Eliminate minimum and
maximum grant requirements. Placing caps on
homeland security grants distorts the purpose of these grants
and hinders state and local efforts to address their
highest-priority needs. Congress should revisit the original
language concerning homeland security grants in the Patriot
Act and replace the minimum requirements with a comprehensive
rubric based solely on risk and an updated TCL. The DHS should
eliminate the arbitrary 55 percent maximum cap as
Refocus grant programs
on core objectives. Congress needs to end
its addiction to proliferating grants. Both Congress and the
DHS need to restore the program's federalist functions. The DHS
needs to focus on truly national concerns in a way that lessens the
appeal of wasteful pork-barrel projects, and Congress needs to give
states enough latitude to access needed resources quickly and
It is unrealistic to expect homeland security grant levels to
continue to increase as federal budget concerns mount.
Furthermore, if previous funding has served its purpose, some
previously identified vulnerabilities have been addressed and no
longer require funding. The nation cannot afford to waste scarce
homeland security funds on unnecessary capabilities. It is
incumbent upon policymakers to begin fixing this broken
Matt A. Mayer, Chief Executive
Officer of Provisum Strategies LLC, is former Counselor to the
Deputy Secretary of the U.S. Department of Homeland Security
and former head of the DHS Office of Grants and Training. James Jay Carafano,
Ph.D., is Assistant Director of the Kathryn and Shelby Cullom
Davis Institute for International Studies and Senior Research
Fellow for National Security and Homeland Security in the
Douglas and Sarah Allison Center for Foreign Policy Studies at
The Heritage Foundation. Holly Sun, an intern at The Heritage
Foundation, helped to prepare this paper.
Commission on Terrorist Attacks Upon the United States, The 9/11
Commission Report: Final Report of the National Commission on
Terrorist Attacks Upon the United States (New York: W.W. Norton
and Company, 2004), p. 396, at www.9-11commission.gov/report/911Report.pdf
(August 1, 2007).
Masse, Siobhan O'Neil, and John Rollins, "The Department of
Homeland Security's Risk Assessment Methodology: Evolution, Issues,
and Options for Congress," Congressional Research Service Report
for Congress, February 2, 2007, p. 14, at www.fas.org/sgp/crs/homesec/RL33858.pdf
(July 15, 2007).
and Mayer, "Spending Smarter."