Order Code RS21125
Updated June 7, 2002
CRS Report for Congress
Received through the CRS Web
Homeland Security: Coast Guard Operations–
Background and Issues for Congress
Ronald O’Rourke
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Summary
The Administration’s proposal, announced June 6, 2002, to create a new
Department of Homeland Security (DHLS) would, if implemented, transfer the Coast
Guard from the Department of Transportation (DoT) to DHLS. The Coast Guard, with
about 43,600 full-time uniformed and civilian personnel, would be the largest federal
agency absorbed into DHLS. The Administration’s proposal mirrors other bills
introduced in Congress prior to June 6, 2002 that would transfer the Coast Guard into
a new department or agency for homeland security. In addition to the issue of the Coast
Guard’s location in the executive branch, the Coast Guard’s homeland security
operations, particularly after September 11, 2001, raise other potential issues for
Congress. This report will be updated as events warrant.
Background
The Coast Guard in Brief. The Coast Guard, the federal government’s principal
maritime law-enforcement agency, is a military service and a branch of the armed forces
that normally operates within DoT.1 It has about 37,000 active-duty uniformed personnel,
about 6,000 civilian personnel, about 8,000 reserve uniformed personnel, and an FY2002
budget of $5.702 billion. It performs a variety of missions that it groups into four major
roles – maritime law enforcement, maritime safety, marine environmental protection, and
national defense. The Coast Guard and its predecessor agencies have participated in every
major U.S. conflict since the War of 1812.
Homeland-Security Operations After September 11, 2001. In response to
the terrorist attacks of September 11, 2001, the Coast Guard took actions to create the
largest port-security operation since World War II. Coast Guard cutters and aircraft were
diverted from more distant operating areas to patrol U.S. ports and coastal waters. The
Coast Guard established and enforced security zones to protect Navy ships and bases.
1 The Coast Guard is to operate as a service within the Navy upon declaration of war or when
the President directs, until the President by executive order transfers it back to DoT (14 USC 3).
Congressional Research Service ˜ The Library of Congress

---

CRS-2
Four of the Coast Guard’s 6 Port Security Units (PSUs)2 were activated and assigned to
help protect ports. Coast Guard personnel began boarding and inspecting inbound
vessels, escorting cruise ships into and out of port, and escorting oil tankers into and out
of Valdez, Alaska. The Coast Guard instituted new regulations requiring inbound ships
to provide 96-hour (as opposed to the previous 24-hour) advance notice of arrival, to
provide more time to board and inspect vessels. And Coast Guard sea marshals began
boarding and riding inbound commercial ships during transits of San Francisco Bay.
To help implement these actions, the Coast Guard initially activated 2,600 of its
8,000 reservists. The Coast Guard has since reduced this figure to about 1,600, which is
easier for the Coast Guard to sustain on a rotational basis over the long run.
The expansion of Coast Guard homeland-security operations led to a major
reshuffling of the service’s mission priorities. Port-security operations, which had
accounted for about 1%-2% of all Coast Guard operations prior to September 11, 2001
increased to 56% of all operations by October 9, 2001. To accommodate this expansion,
significant reductions were made to operations in other mission, including alien migrant
interception, recreational boating safety, fisheries-enforcement, counter-drug operations,
and aids to navigation. As part of its effort to move toward what Coast Guard officials
call the “new normalcy” in Coast Guard operations (i.e., the new, post-September 11,
2001 status quo for the service), the Coast Guard is reducing is port-security operations
toward a goal of 20%-25% of all operations. This reduction will permit the Coast Guard
to return assets to other Coast Guard missions, but performance of other missions in some
cases may remain below pre-September 11, 2001 levels.
Resources vs. Missions Prior to September 11, 2001. Even before
September 11, 2001, the Coast Guard appeared hard-pressed to perform all its missions
at desired levels with available assets and resources. Many of the service’s cutters are old,
expensive to operate and maintain, and not well suited for some of the missions they
undertake. Some Coast Guard units have very high operational tempos. The service has
experienced difficulties in recent years in retaining sufficient numbers of experienced
personnel and maintaining some of its aircraft at desired levels of readiness.
Prior to September 11, 2001 insufficient funding to operate Coast Guard assets to
their full potential was a recurrent issue – the Coast Guard has received seven emergency
supplemental appropriations in the past 10 years. Operations of some ships and aircraft
had to be reduced by 10% for part of FY2001 due to lack of sufficient funding for
operations. Some observers have expressed concerns or doubts about the Coast Guard’s
ability to finance key equipment modernization programs, such as its Deepwater
acquisition project for replacing aging cutters and aircraft.3 Inefficient use of available
resources by the Coast Guard does not appear to be a significant contributor to the
problem – the Coast Guard in March 2000 received an excellent review for financial
2 The PSUs are staffed mostly by Coast Guard reservists and have been used in recent years to
protect U.S. Navy ships overseas. At the time that the 4 PSUs were activated to protect U.S.
ports, a fifth PSU was guarding U.S. Navy ships overseas, and the sixth had recently returned
from such a deployment.
3 See CRS Report RS21019, Coast Guard Deepwater Program: Background and Issues for
Congress, by Ronald O’Rourke. Washington, 2002. (Updated periodically) 6 p.

---

CRS-3
management and stewardship of resources by the Government Performance Project of
Government Executive magazine.4
Prior to September 11, 2001, Coast Guard leaders and supporters attempted
repeatedly to draw attention to this missions-vs.-resources situation. They noted that the
Coast Guard today is smaller than it was several years ago, even though its responsibilities
have expanded considerably over the last 25 years as a result of substantial growth in
mission areas such as counter-drug operations, alien interception, pollution prevention,
and fisheries enforcement.
Port Security. Following the September 11, 2001 terrorist attacks, policymakers
have expressed strong concern for the security of the nation’s 361 ports, for which only
modest security procedures were in place prior to September 11, 2001. Several
congressional hearings dedicated partly or entirely to the issue of port security have been
held since September 11, 2001. Although the Coast Guard is a key player in maintaining
port security, particularly in terms of boarding and inspecting incoming commercial ships,
other federal and local agencies have important roles to play in port security. The
Customs Service, for example, inspects cargo containers, and local port authorities
participate in maintaining security perimeters around port facilities. Thus, while Coast
Guard homeland-security operations focus to a large degree on port security, the issue of
port security encompasses more than the Coast Guard.
FY2003 budget request. The Coast Guard’s requested budget for FY2003 is
$7.275 billion – a $1.573-billion, or 27.6%, increase over the FY2002 enacted figure.
This increase, however, includes a first-time $736-million retirement fund accrual
payment that the Office of Management and Budget is requiring the Coast Guard and
many other executive branch agencies to begin paying in FY2003. Subtracting out this
first-time payment, the “apples-to-apples” increase from the FY2002 enacted figure to the
FY2003 requested figure is $837 million, or 14.7%. Within this $837-million requested
increase, the Coast Guard’s Operating Expenses (OE) account is to increase by $733
million, or 18.8%, while the service’s Acquisition, Construction and Improvements
(AC&I) account is to increase by $91.9 million, or 14.3%.
The Coast Guard says that its FY2003 budget request includes a 5-element program
to improve the security of the nation’s ports, waterways and maritime borders. The five
elements, with requested funding for new initiatives with each element (funded mostly
from the OE account), are as follows:
! Building Maritime Domain Awareness, including efforts to increase
intelligence in ports, improve information about ship passengers, crews,
and cargoes, and establish intelligence fusion centers. ($69.4 million)
! Ensuring controlled movement of high-interest vessels, including
increased boarding and escort operations. ($18 million)
! Enhancing presence and response operations, including increased
harbor patrols and visibility. ($47.5 million)
4 Laurent, Anne. Measuring Up. Government Executive, March 2000: 10-15, and The Curse of
Can-Do. op cit, p. 41-42, 44, 46-49. See also Lunney, Kellie. Making the Case. Government
Executive, April 2001: 105-106.

---

CRS-4
! Protecting critical infrastructure and enhancing Coast Guard force
protection, including patrols and random inspections. ($37.7 million)
! Increasing domestic and international outreach, including working
with local authorities to prepare vessel and waterfront security plans,
preparing Coast Guard anti-terrorism contingency plans, and working
with the International Maritime Organization on international maritime
security actions. ($23.8 million)
In addition, the Coast Guard for FY2003 is requesting an increase in active-duty end
strength of 1,400 to 1,500 personnel, on top of an increase of 700 to 800 personnel for
FY2002, for a total increase across the two years of about 2,200 active-duty personnel.
The FY2003 budget also requests increasing the Coast Guard reserve end strength to
9,000 (a 1,000-person increase).
Issues for Congress
Location Within Executive Branch. The Administration’s proposal, announced
June 6, 2002, to create a new DHLS would, if implemented, transfer the Coast Guard
from DoT to DHLS. The Coast Guard would be the largest federal agency absorbed into
DHLS and would account for about 25.8% of all DHLS personnel. The Administration’s
proposal mirrors other bills introduced in Congress prior to June 6, 2002 that would
transfer the Coast Guard into a new department or agency for homeland security.
The Administration’s proposal puts additional emphasis on the issue of where in the
executive branch the Coast Guard should be located. This question existed prior to
September 11, 2001 but took on greater prominence afterward. Some Coast Guard
supporters, noting the Coast Guard’s national defense mission and that Coast Guard
programs currently must compete for limited DoT funding against highly popular highway
and transit projects, had proposed transferring the service to DoD. Other observers,
noting the Coast Guard’s homeland-security operations, had proposed incorporating the
service into a new department or agency for homeland security agency.
Prior to September 11, 2001, Coast Guard leaders argued that since the Coast
Guard’s operations are part transportation-related, part law-enforcement-related, and part
defense-related, the Coast Guard will not fit perfectly into any parent department, whether
that be DoT, the Department of Justice, DoD, or a new homeland security department, and
that consequently there was no overwhelming case for transferring the Coast Guard from
DoT to some other parent department. After September 11, 2001, but prior to the
Administration’s June 6, 2002 announcement of its proposal to create DHLS, Coast
Guard officials had argued that given the Coast Guard’s current focus on conducting
expanded homeland operations, now would not be a good time to transfer the Coast Guard
to another parent department. One potential issue for Congress is whether transferring the
Coast Guard from DoT to DHLS might temporarily disrupt the Coast Guard’s homeland
security (or other) operations. Another is how the transfer might affect, over the longer
run, the Coast Guard’s focus on, and resources for performing, maritime law enforcement,
maritime safety, and marine environmental protection missions that do not relate directly
to homeland security.
Missions vs. Resources. The terrorist attacks of September 11, 2001 increased
Coast Guard requirements for the homeland-security mission without obviously reducing

---

CRS-5
requirements for other, pre-September11, 2001 missions. (Some observers go further,
arguing that September 11, 2001, if anything, strengthened requirements for Coast Guard
counter-drug and alien migrant interception operations, since terrorists can use drug
profits to finance their activities and might try to enter the United States illegally by ship.)
Coast Guard leaders and supporters since September 11, 2001 have argued that the Coast
Guard’s budget needs to be increased at least to the point where it can make full use of
its existing ships and aircraft, and perhaps further, so as to finance an increase in size.
There appear to be few observers who oppose the general notion that the Coast Guard’s
resources will need to be increased to bring them into better alignment with the service’s
post-September 11, 2001 mission requirements. The issue appears to center more on the
question of the size of the increase that will be needed.
Legal Authorities. Coast Guard officials state that their legal authorities are quite
broad and are generally sufficient for conducting post-September 11, 2001 homeland-
security responsibilities. One change that the Coast Guard is seeking would expand its
authority to enforce rules and regulations for controlling vessels in U.S. territorial waters
so that the authority extends to U.S. waters up to 12 miles from shore (the current
definition of U.S. territorial waters, adopted in 1988), rather than its current statutory
authority, which extends out only to 3 miles from shore (the pre-1988 definition of U.S.
territorial waters). This change would be made by Section 119 of S. 1214/H.R. 3437, the
Port and Maritime Security Act of 2001, which passed the Senate on December 20, 2001.
Coordination With Other Agencies. A fourth potential issue for Congress is
coordination between the Coast Guard and other government agencies.
Coordination With Navy. The emerging homeland security concepts of
operations of the Coast Guard and Navy both view the Coast Guard as the primary service
for maritime homeland-security operations, with the Navy supporting the Coast Guard,
if needed, in specific areas where Coast Guard capabilities are very limited, such as air
defense or antisubmarine warfare.5 Are the Coast Guard and Navy taking adequate steps
to coordinate their homeland security operations? What steps have the Navy and Coast
Guard taken, or are planning to take, to improve coordination in maritime homeland
security operations? Have the two services reached agreement on their respective
responsibilities for maritime homeland security, and on command relationships, doctrine,
and tactics for such operations? Are the two services conducting sufficient joint training
in this area? Are Navy and Coast Guard systems sufficiently interoperable to reach
desired levels of coordination?
Coordination with Other Agencies. The Coast Guard has longstanding
working relationships with other federal, state, and local agencies (including port
authorities), and with Canadian agencies, that contribute to maritime homeland security,
including the Customs Service, the Immigration and Naturalization Service (INS), and
U.S. intelligence agencies. Coast Guard officials state, however, that after September 11,
2001, this coordination will need to be improved. For example, Coast Guard officials
would like the INS database on foreign individuals of concern to be computerized (much
5 For more on Navy homeland security operations, see CRS Report RS21230, Homeland
Security: Navy Operations – Background and Issues for Congress, by Ronald O’Rourke.
Washington, 2002. (Updated periodically) 6 p.

---

CRS-6
of it currently is in paper form only), so that Coast Guard officers can access it
electronically when inspecting crew manifests of ships they have boarded. The
Administration’s proposal to create DHLS is intended in part to improve coordination
between the Coast Guard and other federal civilian agencies. One issue for Congress is
how well the Administration’s proposed organization for DHLS would achieve this goal.
More broadly, the Coast Guard supports the creation of a fully networked
information environment among interested agencies to help achieve and maintain what
the Coast Guard calls “maritime domain awareness” (MDA). In essence, MDA refers to
having a continuous understanding of commercial shipping on a global basis, so that
commercial ships of potential concern can be identified at their foreign ports of origin,
long before they begin to approach the United States. Maritime homeland security, Coast
Guard officials argue, can be significantly increased if MDA can be implemented to
establish a de facto forward line of defense in overseas ports of origin.
Legislation in the 107th Congress
Numerous bills recently or currently before the 107th Congress relate to the Coast
Guard’s homeland-security operations. Among these are the following:
! bills authorizing Coast Guard programs, including H.R. 1699/S. 951,
the Coast Guard Authorization Act for FY2002; and H.R. 1099, the
Coast Guard Personnel and Maritime Safety Act of 2001;
! bills appropriating funds for Coast Guard programs, including the
FY2003 DoT and related agencies appropriations bill, which makes
regular appropriations for Coast Guard programs for FY2003; and the
FY2002 supplemental appropriations bill (H.R. 4775/S. 2551);
! bills to create a new homeland security department or agency, such
as S. 2452, H.R. 4660, H.R. 3026, H.R. 3078/S. 1449, S. 1462, and S.
1534; and
! bills relating to port security and terrorism, including S. 1214/H.R.
3437, the Port and Maritime Security Act of 2001, which passed the
Senate on December 20, 2001; H.R. 3432, a bill to require that the Coast
Guard Sea Marshal program be carried out in 20 U.S. ports most
vulnerable to terrorist attack by a commercial vessel, and to authorize
additional personnel and funds for such program; S. 1429, the Airport
and Seaport Terrorism Prevention Act; S. 1559; the Transparent Sea Act
of 2001; S. 1587, the Port Threat and Security Act; S. 1678; the
Maritime Security Advancement Act; H.R. 2960, a bill to require
inspection of all cargo on commercial trucks and vessels entering the
United States; and
! bills affecting policies for Coast Guard personnel, including the
FY2003 defense authorization act (H.R. 4546/S. 2514).
Coast Guard officials, in their discussions of homeland-security operations,
sometimes mention S. 1214/H.R. 3437, the Port and Maritime Security Act of 2001, as
a bill that would, in their view, specifically address a variety of homeland-security issues
of direct or indirect interest to the Coast Guard.

---