Chairman Rogers, Ranking Member Sabo, distinguished members of the Committee; I would like to thank the Committee for the opportunity to comment on the FY 2004 budget for the Department of Homeland Security (DHS) and specifically its impact on the DHS Bureau of Customs and Border Security (CBP).

As President of the National Treasury Employees Union (NTEU), I have the honor of leading a union that represents over 12,000 Customs employees who are stationed at 307 ports-of-entry across the United States. Customs inspectors, canine enforcement officers, and import specialists make up our nation’s first line of defense in the wars on terrorism and drugs as well as the facilitation of lawful trade into the United States. In addition, Customs personnel are responsible for ensuring compliance with import laws and regulations for over 40 federal agencies, as well as stemming the flow of illegal contraband such as child pornography, illegal arms, weapons of mass destruction and laundered money.

In 2002, Customs Service employees seized over 1.9 million pounds of cocaine, heroin, marijuana and other illegal narcotics – including over 10 million tablets of Ecstasy, triple the amount seized in 1999. Customs also processed over 500 million travelers last year, including over 1 million cars and trucks. These numbers continue to grow annually. Over the last decade trade has increased by 137%. U.S. Customs Service personnel facilitate more trade, and interdict more drugs than any other agency within the Customs and Border Protection Bureau. The Customs Service collects over $20 billion in revenue on over 25 million entries involving over $1.3 trillion in international trade every year. The Customs Service also provides the federal government with its second largest source of revenue. Last year, the Customs Service deposited over $22.1 billion into the U.S. Treasury.

FY 2004 Budget:

The President’s FY 2004 budget requests a funding level of $36.2 billion for the Department of Homeland Security and from that total $6.37 billion is requested for the Bureau of Customs and Border Protection (CBP). The CBP includes the inspection and border security personnel of the Customs Service, INS, Border Patrol and APHIS. The focus of the CBP will be security at and in-between ports-of-entry.

Unfortunately, the President’s request for the CBP represents a token increase from last year’s appropriations for all of the agencies transferred into the CBP. NTEU believes that this recommendation is simply inadequate to meet the needs of Customs and other border security personnel, especially in light of their additional homeland security missions such as the Customs Trade Partnership Against Terrorism (C-TPAT), the Container Security Initiative (CSI) and the 24-Hour Rule that requires advanced transmission of accurate cargo manifest information to the CBP.

In addition to annual appropriations, Customs also receives funds from a user fee account known as the COBRA account. This user fee account funds all inspectors’ and canine enforcement officers’ overtime pay as well as approximately 1200 Customs positions across the country. The COBRA account is funded with user fees collected from air and sea passengers entering the United States (except from the Caribbean and Mexico), commercial vehicles, commercial vessels/barges and rail cars.

The COBRA fund will expire on September 30, 2003, unless it is reauthorized by Congress before then. The President’s FY2004 budget does call for the reauthorization of COBRA. Simply put, the COBRA fund must be reauthorized or Congress must appropriate additional funds to make up for the loss of the user fees.

Despite the increased threats of terrorism, the dramatic increases in trade resulting from NAFTA, and new drug smuggling challenges, the Customs Service has confronted its rapidly increasing trade workload and homeland security missions with relatively static staffing levels and resources. While staffing was increased in last year’s supplemental and FY 2003 appropriations, in the last ten years, there simply has not been adequate increases in staffing and resource levels for inspectional personnel and import specialists to successfully conduct their missions. The events of September 11 brought attention to the fact that the Northern border, and especially the nations’ seaports, and the Southwest border are still in urgent need of additional personnel and resources. In fact, Customs’ recent internal review of staffing, known as the Resource Allocation Model or R.A.M., shows that Customs needed over 14,776 new hires just to fulfill its basic mission and that was before September 11.

For example, traffic volume at U.S. land ports-of-entry has steadily increased as our shared borders with Mexico and Canada have become more open as a result of the NAFTA and other trade initiatives. The steady increase of commercial and non-commercial traffic has led to increased wait times at many land ports-of-entry, particularly those along the Southwest border. Wait times along the Southwest border often extend to 45 minutes or more during peak hours. Such lengthy delays can be both irritating and costly to businesses and the traveling public.

The lack of resources at ports-of-entry is also a problem along the Northern Border and at seaports. Port security, largely overlooked in the Homeland Security Act passed last year, must also be a priority of this committee. The FY 2003 budget provided only $150 million for port security grants as part of the Transportation Security Administration appropriation, but there is no new grant money for ports in the President’s FY 2004 budget. Each year more than 16 million containers arrive in the United States by ship, truck and rail. In the last five years alone, Customs has witnessed a 60 percent increase in trade entries processed, and this rate is expected to grow an average of 8 to 10 percent a year. Port security must remain a high priority for the Department of Homeland Security.

With increased funding for personnel and resources, modern technologies, such as Vehicle and Cargo Inspection Systems (VACIS), which send gamma rays through the aluminum walls of shipping containers and vehicles to enable Customs inspectors to check for illegal drugs or weapons of mass destruction, as well as decreasing the amount of time shipping containers are out of the supply chain, could be acquired. However, adequate and consistent funding to purchase, operate and maintain these technologies has not been forthcoming. Other technologies, coupled with proper personnel funding, such as portable contraband detectors (a.k.a. Busters), optical fiber scopes and laser range finders can be invaluable to Customs personnel protecting our borders from terrorists and illegal drugs.

Included in the modern technology possibilities for Customs is the Automated Commercial Environment or (ACE). ACE could be an integral element for trade enforcement and in preventing cargo from becoming an instrument of terrorists. The current Automated Commercial System (ACS) is a 17 year old, outdated system that is subject to system crashes and freezes that wreak havoc on trade facilitation and employees' ability to do their jobs. Although a system upgrade is necessary for Customs to meet its modernization efforts, NTEU would oppose funding a new system that shifts funds away from critically important staffing needs.

In addition to providing increased resources and personnel to the CBP, Customs’ trade mission must be maintained as a priority within the Department of Homeland Security. Customs employees are involved in both the trade facilitation and law enforcement missions of the Customs Service. Trade enforcement functions are carried out by the same Customs personnel who ensure border security. Customs inspectors, import specialists, canine enforcement officers and agents work closely together to enforce trade and anti-smuggling laws. When an inspector makes a large illegal cash seizure at a border crossing, the case is given to an agent for a follow-up investigation to determine where the illegal funds came from and where they were going. The interaction between the law enforcement and trade facilitation missions of the Customs Service is also necessary to the discovery of counterfeit goods and intellectual property piracy, and terrorist activity.

Customs relies on the expertise of its trade enforcement personnel to recognize anomalies as they review the processing of commercial transaction information associated with the admissibility and entry of imported goods. This process assists law enforcement in developing targeting criteria as well as targeting suspect shipments and starting investigations.

Both the American public and the trade community expect the borders to be properly defended while at the same time being able to efficiently and safely facilitate trade across that border. The government must show the public that it is serious about protecting the borders and facilitating trade by fully funding CBP agencies such as the Customs Service who are tasked with defending the borders and enforcing the trade laws of the United States. No change in organizational structure will be successful, no matter how good it may look on paper, if the government does not provide proper funding for its border agencies.


The Administration was given new federal personnel “flexibilities” in a number of areas governing the current rights of federal employees as a part of the establishment of the DHS. While it is unclear exactly what is meant by “flexibilities”, NTEU fears that the “flexibilities” that will likely be proposed by the Administration will lead to many fewer dedicated personnel willing to work for the new Department. That would be a shame and I hope Congress will not let that happen. NTEU and other employee representatives are currently in discussions with DHS and OPM on laying the groundwork for possible “flexibility” changes to the rights of federal employees. Before, during, and after September 11, front line employees have acted heroically to protect our freedom. They do not deserve to lose theirs. I ask that Congress use the oversight authority given to it to ensure that the Title 5 rights and benefits that are currently available to the employees who have been merged into this new department are not lost.

Legislative actions that would help to ensure the retention of Customs and other CBP personnel could include granting law enforcement status for Customs Inspectors, Canine Enforcement Officers and other border security personnel in the CBP.

For example, Customs Service Inspectors and Canine Enforcement Officers continue to be the nation’s first line of defense against terrorism and the smuggling of illegal drugs and contraband at our borders and in our ports. Customs Service Inspectors have the authority to apprehend and detain those engaged in terrorism, drug smuggling and violations of other civil and criminal laws. Canine Enforcement Officers and Inspectors carry weapons, and at least three times a year they must qualify and maintain proficiency on a firearm range. Yet, they do not have law enforcement officer status. They are being denied the benefits given to other federal employees who they have been working beside to keep our country safe. Customs employees face real dangers on a daily basis, granting them law enforcement officer status would be an appropriate and long overdue step in recognizing and retaining the Customs personnel who continue to protect our borders from terrorism and drugs.

Thank you for the opportunity to share NTEU’s thoughts on these very important issues concerning the Department of Homeland Security and its FY 2004 Budget.