Federal, industry officials at odds over maritime security funding

Government and industry officials aired their differences Tuesday on the issue of who should pay the billions of dollars needed to improve security in the shipping industry.

Starting Thursday, the federal government will require all vessels, maritime facilities and ports across the country to implement new domestic and international security standards. About 9,500 vessels, 3,200 facilities and 40 offshore oil and natural gas rigs are affected.

"This is the first time a security code will be imposed across the entire United States and indeed the entire world, changing the nature of how shipping occurs," said Rear Adm. Larry Hereth, the Coast Guard's director of port security. Hereth spoke at a panel discussion hosted by George Mason University's Critical Infrastructure Protection Program. Other experts said at the discussion that the problem will be finding funding to meet the new requirements. They argued that the federal government is shortchanging maritime security, especially compared to the $11 billion that has been poured into aviation security since the Sept. 11 attacks.

"Largely speaking, port security right now … is an unfunded requirement," said Philip Crowley, senior fellow and director of national defense and homeland security at the Center for American Progress.

He said port facilities and shipping companies need about $7.3 billion to meet the new standards during the next several years, but the Bush administration only requested $46 million for port security in its fiscal 2005 budget.

"If we are now mandating an appropriate but higher level of security than the just-in-time delivery world has required up until this point, is there a federal imperative to really lead this effort? If that's the case, right now the resources are not there," Crowley said.

The Port of Baltimore has invested about $4 million of its own money to improve security while receiving about $10 million in federal funds since 9/11, said Jim White, director of the Maryland Port Administration.

"The East Coast is so competitive that there's no way that ports on the East Coast can absorb this cost," he said. "We can't continue under that pace; the means just aren't there."

"It doesn't seem fair," White said, that airports have received so much federal funding compared to ports.

Asa Hutchinson, the Homeland Security Department's undersecretary for border and transportation security, said that airports and airlines have also invested their own money in improvements, but Congress mandated an intense focus on aviation security after the Sept. 11 attacks.

"You can always make a comparison, but I think the comparison is a little bit difficult to sustain when you're looking at a variety of modes of transportations with different characteristics," he said.

Hutchinson said maritime security should be viewed as a partnership that includes federal and private-sector investment, adding that many ports are owned by private companies.

"I believe that if you're going to enhance security, you have to have investment by the private sector," he said. "I think the federal role is that leadership role, that partnership role and helping to invest in technology."

Hutchinson said DHS port security grants have provided nearly $500 million for about 950 projects during the past three years. "This is a significant federal investment that spurs other private-sector investments. Is it enough? I think that is a debate that we continue to have."

Joseph Cox, president of the Chamber of Shipping of America, said his members do not view the cost of security as a problem. "From our standpoint, we are in a competitive arena, but if everybody has to do the same thing, than you have an equalization of the cost structure."

James Carafano, senior research fellow at the Heritage Foundation, said he is not opposed to port security grants but argued that the Coast Guard has more immediate funding needs.

"We have a Coast Guard that is grossly underfunded and grossly undermanned for the mission that it has," he said. "In my mind, until we fully fund the Coast Guard and until we really modernize and [get] the force we need--which is involved in all kinds of maritime security efforts--throwing money at any aspect of maritime security in a major way to me is just unwise."