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Statement of Joseph I. Lieberman

Senate Committee on Governmental Affairs

"Cargo Containers: The Next Terrorist Target?"

March, 20 2003

Thank you, Madam Chairman, for holding this hearing today on a subject that should be of profound concern to anyone interested in safeguarding our nation from terrorist attack.

The vulnerability of our ports - and in particular the vulnerability of containers - to terrorist mayhem is one of the more sobering pieces of information to emerge from an array of security assessments conducted over the past few years. It is a vulnerability that the federal government - in partnership with state and local governments and the private sector - must turn to in earnest, with a commitment of adequate resources, to protect not just people and property, but the very heart of our economy.

We have a panel of knowledgeable witnesses here today - some like Commander Steve Flynn and Michael O’Hanlon who have established themselves as premier experts on maritime security and from whom we have received valuable advice in the past. I’m sure their testimony will once again aid the government’s efforts to prevent, prepare for, and respond in the event of a terrorist attack on our ports.

Our ports and borders must be securely defended because they are our main links to the global trade that has, without question, fueled our economic progress and provided all Americans with the highest quality of life in the world today.

According to the second report on national security produced by former Senators Gary Hart and Warren Rudman, 11 million containers carry 90 percent of the world’s cargo today. Yet, there are no required security standards governing the loading or transport of containers. In fact, the architects of the inter-modal transportation revolution never really took security into consideration. Their priorities were lowering costs, and increasing the speed and efficiency of operations. They achieved their goals brilliantly, which, ironically, now leaves us open to peril.

In December 2001, shortly after the shock of September 11^th, this Committee held a hearing on port security. One of the witnesses, F. Amanda DeBusk, a former commissioner of the Interagency Commission on Crime and Security at U.S. Seaports, laid out the challenges in coordinating port security. Most ports, she told us, are chartered by states or local government. Some are operated by public port authorities, some by private concerns. There were at least 15 federal agencies with jurisdiction at the seaports, in addition to state and local agencies and the private sector. Today, we have the Department of Homeland Security to coordinate this tangle of authority. But I hesitate to proclaim victory.

Each day, five million tons of goods cross our borders by ship, truck, or train. Much of it arrives in the 21,000 containers that enter U.S. ports daily. The Administration tells us that only 3.7 percent of those containers are physically inspected, which means that, at any given time, authorities still have very little idea about the contents of thousands of multi-ton containers traveling on trucks, trains, or barges, on roads, rails, and waterways throughout the country. The cunning with which a terrorist might smuggle chemical, biological or even, nuclear weapons into one of those containers, without being detected, knows no bounds. And it would be foolhardy to doubt that an interruption of the flow of commerce would have anything but catastrophic consequences for all of us.

Hypothetical scenarios have hinted at the potential impact of an attack through maritime trade. Listen to how one incident is played out by a group of experts from government and industry. On day one, an unknown number of dirty bombs enter the country through ship containers. One is found at the port of Los Angeles. And that port is closed. On day four, another dirty bomb is found while a container is being unloaded near Minneapolis. All ports and border crossings are closed, paralyzing the entire supply chain.

On day five, the Dow is down 500 points. On day eight, fuel deliveries stop, gas prices skyrocket, and supply chains report inventory shortages and plant closures. On the 20^th day, a freight car in Chicago explodes and half of all Fortune 500 companies issue earnings warnings. The experts conclude that port, shipping, and manufacturing activity will not return to normal for two months, at which point economic losses are estimated at $58 billion.

It’s scary stuff. But we can prevent a scenario like I just described if Congress, the Bush administration, and the private sector come to understand - before disaster occurs - the consequences of inattention, inaction, and under funding.

The President’s FY 2004 budget, regrettably, does not reflect an understanding of the risks at hand. As is the case in general with homeland security funding, the rhetoric simply is not matched by hard dollar commitments. One of the most glaring gaps - the physical security of our ports - is ignored by the Administration completely. The President’s budget contains no money for even the most basic improvements - like perimeter fencing, security patrols, employee background checks - which the Coast Guard has estimated will cost $4.4 billion. I believe $1.2 billion needs to be spent next year for these basic protections.

The Administration has done a better job at inspecting high-risk cargo before it reaches our ports. Its Container Security Initiative, which we will hear more about from our witnesses today, stations Customs officers overseas to inspect containers before they begin their voyage to the U.S., though they will need technology on site to address the new task. Once again, however, the Administration is providing only a fraction of the money needed to ensure success - $62 million for FY 04. I have called for an additional $100 million to expand this program to track containers as close as possible to their point of origin.

The Coast Guard has made a heroic effort - through Operation Noble Eagle and Enduring Freedom - to step up port supervision and still fulfill its other missions. But it has done so using antiquated equipment and limited resources. Before September 11^th, we were on track to modernize the Coast Guard over a period of 20 years, and the President has proposed spending $500 million in FY 2004 toward that effort. But that time frame and that level of funding is no longer practical. I have suggested an additional $700 million, for a total of $1.2 billion in FY 04, to complete the job in half the time.

Finally, the Transportation Security Administration, which has concentrated so far on improving airline security, has virtually ignored the security of other transportation systems. Unfortunately, the Administration’s proposed TSA budget of $4.8 billion is a 10 percent decrease from last year’s proposal. Only $85 million is requested for land security activities. I am urging an additional $500 million to restore the Administration’s proposed cuts and another $500 million specifically for freight and passenger rail security improvements.

No matter how you slice it, we need to make significant investments just to begin to bring our system of maritime trade security into the 21^st century. With the vast volume of merchandise passing through our ports and over our borders, we simply cannot inspect every container by hand. But we need to continue to work with the private sector and state and local authorities to use advanced technologies to make sure that all containers are scanned, coded, logged, and tracked with a transponder, and have their contents verified, starting as close as possible to their point of origin.

The best way to protect, ourselves, of course, is to stop terrorists before they act. But we have learned the hard way that we must also prepare for the worst. In the case of port security, that means directing people, technology, and yes, money, toward the goal of keeping dangerous materials from entering and traveling around the country. We have much work to do to get our entire system of importing and exporting to a point where it is not just efficient but physically and economically safe. I am hopeful that the testimony we hear today will put us on track toward a sensible and sound strategy to do just that.