Two
vastly different bills before Congress, which seek to establish a
new Department of Homeland Security (DHS), will have significantly
different five-year costs, according to the Congressional Budget
Office (CBO). Implementing President Bush's plan, for example, will
cost the American taxpayer about $3.3 billion, while a bill
introduced by Senate Governmental Affairs Committee Chairman Joseph
Lieberman (D-CT) will cost about $10.7 billion. Both bills include
measures of merit, such as the National Bio-Weapons Defense
Analysis Center, and measures that may limit the overall
effectiveness of the federal effort. But the President's bill
offers the nation more flexibility and efficiency in improving
homeland security as well as savings of at least $7 billion through
2007, compared to the Senate bill.
On
June 24, President George W. Bush offered Congress a structure for
the new department that focuses on consolidating existing federal
functions to improve the efficiency and effectiveness of federal
programs. He also notified Congress that
he intended to pay for this massive reorganization of the
government with funds he included in his fiscal year 2003 budget
request. As the experience of
private-sector mergers and acquisitions shows, the President's
approach should increase the effectiveness of federal homeland
security programs and also reduce overhead costs associated with
bureaucracy. The House passed a modified version of the President's
plan (H.R. 5005) on July 26.
That
same day, however, the Senate Governmental Affairs Committee passed
out a bill (S. 2452) that takes a different, more costly approach.
The bill's language would prevent the President or Secretary of
Homeland Security from consolidating any programs or functions that
are transferred to the new department. S. 2452 also adds numerous
new programs to the department, including some that are not
directly related to and would not directly improve homeland
security, such as repairing Amtrak's cars and tunnels.
The
differences between these two approaches will dramatically affect
the total cost of implementing and operating the new department.
Overall, the Congressional Budget Office estimates that, between
fiscal years 2003 and 2007, implementing S. 2452 will cost
approximately $10.7 billion, about $7 billion more than the
President's proposal ($3.3 billion). In addition, the Senate bill
includes a prohibition on consolidating redundant federal roles,
which is likely to increase overhead costs significantly while
reducing the department's overall effectiveness in the foreseeable
future.
Congress should provide a solid foundation
for the new department that would not only improve security but
also would reduce the total cost of the homeland security effort.
Specifically, Congress should allow the Secretary of DHS to
consolidate redundant and overlapping federal agencies and programs
that are transferred to the new department, and it should refrain
from adding numerous new programs, particularly any that clearly
will not improve security against terrorism. S. 2452 fails to do
either and, in its current version, will cost billions of dollars
more over the next five years than would the President's plan.
Two different Approaches to Creating a
DHS
On
the same day that the Senate's Governmental Affairs Committee
approved the costly S. 2452, the U.S. House of Representatives
passed the National Homeland Security Act of 2002 (H.R. 5005),
which was based on and still closely mirrors the President's
initial proposal. The approach seeks to reduce redundancy and
improve efficiency by consolidating many of the homeland security
functions that are currently spread throughout the federal
government. Among the many changes made to the bill during the
legislative process, however, are detrimental provisions that would
prevent the consolidation of the Customs Service and the United
States Coast Guard--two of the most important agencies for border
security--into the proposed DHS Directorate of Border and
Transportation Security.
S.
2452, the National Homeland Security and Combating Terrorism Act
introduced by Senator Lieberman that is currently being debated by
the full Senate as a substitute to H.R. 5005, offers a radically
different structure for the new DHS. It includes billions of
dollars of new spending on many additional programs that are either
unnecessary or unrelated to homeland security, and it severely
limits the proposed Secretary of Homeland Security's authority to
eliminate fragmentation among the programs transferred to the new
department.
Such
differences in the two approaches are significant, and will have a
massive effect on the costs of both reorganizing the federal
government for homeland security and running the new department in
the foreseeable future.
CBO's Cost Estimates
This
summer, the Congressional Budget Office reviewed both the
President's proposed legislation (introduced as H.R. 5005) and the bill passed by the
Senate Government Affairs Committee (S. 2452). CBO's
scoring of S. 2452 shows an implementation cost between fiscal
years 2003 and 2007 of almost $10.7 billion, compared with a cost
of about $3.3 billion to implement the President's plan.
Both
estimates are of spending that is beyond what CBO projects the
federal government would have spent on the current federal
activities transferred to the new department. The baseline
estimates for these other activities were $31 billion for the
President's proposal, and $33 billion for the department under S.
2452. CBO's estimates do not include additional funds designed to
improve the effectiveness of the existing programs, nor does the
CBO estimate account for potential savings due to efficiency gains
through the President's proposal.
Most
of the additional cost of S. 2452 would come from the new programs
and policies that the Senate Government Affairs Committee wants to
add to the President's request. Between 2003 and 2007, CBO
estimates that these new programs would increase spending by about
$9.6 billion. (See Table 1.) Of this amount, $1.9 billion would be
for the Directorate for Science and Technology, $1.1 billion for
new refugee and asylum adjudication and ombudsman programs in the
Directorate for Immigration Affairs, and $1.2 billion for grants to
Amtrak (mostly for programs unrelated to security, with other
programmatic costs being distributed throughout the
department).
Most
of CBO's estimated $3.3 billion in additional spending over that
period for new programs in the President's proposal would be used
to establish a National Bio-Weapons Defense Analysis Center, also
an element of S. 2452.
