Bush budget overlooks Customs modernization

In what has become an annual rite of spring, business leaders on Thursday implored Congress to fully fund the U.S. Customs Service's efforts to modernize. Customs last year received $130 million toward its modernization efforts after a long fight. President Bush's fiscal 2002 budget keeps funding at the same level. The business leaders argued that the new system, the Automated Commercial Environment (ACE), will take 14 years to build at that level. They support Customs' efforts to build the system in five years. "Developing a system over 14 years is useless," said Caterpillar Inc.'s Ronald Schoof. "A 14-year implementation cycle is vastly more inefficient and possibly counterproductive," said Robert Cresanti, senior vice president of government affairs for the Information Technology Association of America. Sam Banks, the chief customs officer for Arzoon.com Inc. and a former deputy commissioner of Customs, said it is a "recipe for failure." ACE is intended to replace the Automated Commercial System (ACS), a 1970s-era system that has trouble keeping up with current trade levels. Congress last year appropriated more than $120 million in "life support" funding just to keep the system going. Schoof said that an ACS failure of just 24 hours would cause the construction equipment company to shut down production. And, he said, there would be a ripple effect that could cause work stoppages at construction sites across the country. "There are signs of collapse," Banks said. "When ACS experiences brownouts, international trade stops and Customs' enforcement activities, to a great extent, stop." The businessmen acknowledged that companies already pay a fee that was originally meant to cover the cost of new Customs systems. The Coalition for Customs Automation Funding estimates that private industry paid $953 million in these fees, called Merchandise Processing Fees (MPF), in 2000 and will pay $972 million in 2001. The money is deposited into the U.S. Treasury and is not used for new automation. The businessmen said they view the MPF as another tax. Cresanti said he expects Customs to award the $2 billion ACE contract April 25, 2001, but it remains to be seen whether the agency will have the money it needs to pay for the contract.