H.R. 1 comes with hefty price tag
The bill quickly passed by the U.S. House of Representatives last month to implement the homeland security recommendations of the 9/11 Commission could cost the private sector hundreds of millions of dollars during a five-year period, according to the Congressional Budget Office.
The agency estimated the direct implementation cost to the federal government at $21 billion over five years. The figure is nearly half the Department of Homeland Security's annual operating budget.
H.R. 1 would require, among many provisions, 100 percent scanning of cargo on passenger planes and prohibit ocean containers from entering the country unless they had been sealed with tamper-evident devices and scanned overseas.
Installing new X-ray machines to scan air cargo and other procedures would result in estimated government outlays of $3.1 billion, the CBO said.
Setting up systems at foreign ports to capture images of cargo containers before vessel loading overseas will cost the DHS $160 million between 2008-2012. Most of the money would be used to hire, equip, train and support an additional 300 to 400 DHS employees in the United States and at foreign ports to review container scans and enforce the security requirements.
The CBO said that in the first few years, much of the estimated outlays would be used to develop regulations and guidelines for the sealing and scanning mandate and to coordinate the development of electronic seal technology with the private sector and foreign governments. Funds would also be used to help foreign ports develop scanning systems and procedures, as well as software for DHS to help analyze the scans and device alarms. Personnel costs could decline in the out years as DHS becomes better at reviewing scans and inspecting seals, CBO said.
The money is in addition to the $140 million per year appropriated for the Container Security Initiative to assist foreign governments in inspecting high-risk outbound shipments by technical means.
The CBO estimates that the aggregate direct cost of complying with those, and several other mandates, would exceed the annual threshold for private-sector mandates of $131 million in at least one of the first five years of implementation.
The cost of container security devices would likely be borne by the private sector. The CBO cited industry estimates of $1.5 billion to outfit major ports with readers and communication networks to monitor transiting containers. The cost could be greater if small ports choose to install the equipment too, but the CBO said most small ports would opt to transship cargo through larger ports.
The annual impact of a container security device on shippers is estimated at $30 to $45 per shipment multiplied by 11 billion containers expected to enter the country in 2007. The figure would exceed the annual threshold for private-sector mandates in 2010, when the phased mandate goes into effect. The cost could decrease in subsequent years as the cost of container security devices/electronic seals goes down, but CBO said it had no basis for estimating the cost changes.
'Imposing such a mandate could effect the efficiency of the international transportation system and thus have a broad economic impact,' the report said.
The Senate is working on its version of the bill, which Hill watchers say is likely to pass in a much different form.
H.R. 1 comes with hefty price tag
