Order Code RS21125
Updated July 1, 2004
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 Coast Guard’s FY2005 budget request includes $101 million to begin
implementing the Maritime Transportation Security Act (MTSA) of 2002. The House
and Senate Appropriations Committees, in their reports (H.Rept. 108-541 of June 15,
2004 and S.Rept. 108-280 of June 17, 2004) on the FY2005 Department of Homeland
Security (DHS) appropriations bill (H.R. 4567/S. 2537) both recommend fully funding
this request. A key issue for Congress is whether the Coast Guard’s resources are
sufficient to adequately perform both its homeland and non-homeland security missions.
This report will be updated as events warrant.
Background
The Coast Guard’s Role in Homeland Security. The Coast Guard, which is
a part of the Department of Homeland Security (DHS),1 is the lead federal agency for
maritime homeland security. The Homeland Security Act of 2002 (P.L. 107-296)
specifies five homeland security missions for the Coast Guard: (1) ports, waterways, and
coastal security, (2) defense readiness, (3) drug interdiction, (4) migrant interdiction, and
(5) other law enforcement, including foreign fishing vessel incursions.
With regard to port security, the Coast Guard is responsible for evaluating, boarding,
and inspecting commercial ships approaching U.S. waters, countering terrorist threats in
U.S. ports, and helping protect U.S. Navy ships in U.S. ports. A Coast Guard officer in
each port area is the Captain of the Port (COTP), who is the lead federal official for
security and safety of vessels and waterways in that area. Under the Ports and Waterways
Safety Act of 1972 (P.L. 92-340) and the Maritime Transportation Security Act (MTSA)
of 2002 (P.L. 107-295), the Coast Guard has responsibility to protect vessels and harbors
from subversive acts. The Coast Guard issued final rules implementing MTSA on
October 22, 2003 (see 68 Fed. Reg. 60448).
1 The Coast Guard is a military service and a branch of the armed forces. It 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 DHS (14 USC 3).
Congressional Research Service ˜ The Library of Congress

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During 2003, Coast Guard homeland security activities included the following:
conducting more than 36,000 port security patrols, 3,600 air patrols, 8,000 security
boardings, and 7,000 vessel escorts; maintaining more than 115 security zones; instituting
and enhancing new initiatives such as sea marshals and Maritime Safety and Security
Teams (MSSTs); and receiving more than 2.3 million volunteer hours from the Coast
Guard Auxiliary.2 Starting July 1, 2004, the Coast Guard is boarding every foreign-
flagged vessel approaching U.S. ports to verify their compliance with new international
maritime security regulations.3 Although the Coast Guard is a key player in port security,
other federal and local agencies, as well as industry, have important roles.4
Homeland Security Initiatives in Proposed FY2005 Budget. The Coast
Guard states that the proposed FY2005 Coast Guard budget
includes $101 million to begin implementing the Maritime Transportation Security
Act of 2002 [P.L. 107-295]. It provides for crucial field resources to review, approve
and verify implementation of over 10,000 domestic vessel, 5,000 domestic facility,
and 48 domestic port security plans as well as verification of security plan
implementation for 8,100 foreign vessels calling on U.S. ports. It provides for critical
increases in intelligence capabilities to enhance Maritime Domain Awareness (MDA).
MDA will provide comprehensive, timely and detailed visibility into events,
conditions and trends in the maritime domain that will assist Coast Guard operational
commanders in early detection of potential threats and optimizing allocation of
operational assets. The budget request provides for new and expanded capabilities,
including underwater threat detection for the highly successful Maritime Safety and
Security Teams, which were fielded immediately after the attacks of September 11th
to counter emerging maritime threats. Additionally, the request provides funding to
implement a comprehensive Liquified Natural Gas (LNG) deepwater port application
processing program. Finally, the request provides for critical funding for the
Deepwater, Rescue 21, Automatic Identification System and Response Boat-Medium
Projects. These projects are all vital to recapitalize operational assets needed for
America’s maritime homeland security not just today, but for decades to come.5
The $101 million to begin implementing MTSA 2002 includes funding for the
following: about 500 personnel to approve plans for all aspects of maritime security,
2 U.S. Department of Homeland Security, Coast Guard, United States Coast Guard Fiscal Year
2004 Report: Fiscal Year 2003 Performance Report [and] Fiscal Year 2004 Budget in Brief,
Washington, 2004, p. 3.
3 The regulations were adopted in December 2002 by the International Maritime Organization
(IMO) as a new chapter to the Safety of Life at Sea (SOLA) Convention entitled the International
Ship and Port Facility Security (ISPS) Code. (Fed. Reg., Nov. 2, 2002, pp. 70110-70112.) The
Code largely parallels requirements in MTSA. Signatories had until July 1, 2004 to implement
the regulations, require each ship to have a security officer, alarm system, automatic
identification system, access restrictions to the engine room and bridge, and way to check the
identification of those aboard. (See Leslie Miller, Coast Guard to Board Each Foreign Ship,
Associated Press, June 30, 2004.)
4 For more on port security, see CRS Report RL31733, Port and Maritime Security: Background
and Issues for Congress, by John F. Frittelli.
5 United States Coast Guard Fiscal Year 2004 Report, op cit. p. 5.

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ensure vessels and facilities are sustaining their security efforts, and perform port state
control on foreign vessels; 14 personnel to process new deepwater port permit
applications for natural gas; enhanced analytical and fusion capability for the Coast
Guard’s intelligence program; and underwater detection equipment for the MSSTs.
Proposed funding for MDA includes $4 million for Automatic Identification System
(AIS) shore-side equipment, and $2.2 million in operating expenses to coordinate all
MDA activities, including AIS, Deepwater, and Rescue 21.6
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. Some Coast Guard units had very
high operational tempos. The service experienced difficulties in retaining sufficient
numbers of experienced personnel and maintaining some of its aircraft at desired levels
of readiness. Insufficient funding to operate Coast Guard assets to their full potential was
a recurrent issue. And many of the service’s cutters are old, expensive to operate and
maintain, and not well suited for some of the missions they undertake. In the two years
prior to September 11, 2001, Coast Guard leaders and supporters attempted repeatedly to
draw attention to this missions-vs.-resources situation.
Issues for Congress
Missions vs. Resources. A key issue for the 108th Congress concerns the
adequacy of Coast Guard resources for carrying out the Coast Guard’s homeland and non-
homeland security missions. The terrorist attacks of September 11, 2001 increased Coast
Guard requirements for homeland-security missions without obviously reducing
requirements for other missions. After September 11, 2001, the Coast Guard significantly
increased homeland security operations while reducing operations in other missions. A
March 2004 General Accounting Office (GAO) report stated:
Since the September 11 terrorist attacks, the Coast Guard has experienced a 32
percent increase in its budget, a 9 percent increase in personnel, and major shifts in
the hours in which its ships, boats, and aircraft are used in the agency’s various
programs. Hours these resources are used for most homeland security programs
greatly exceed their pre-September 11 levels, in part because of an infusion of new
boats, with the number of hours for the ports, waterways, and coastal security program
up more than twelve-fold.... Conversely, with the exception of hours for ice
operations, hours dedicated to each non — homeland security program remained
below their pre-September 11 levels.....
The Coast Guard’s performance results — measures used to track each program’s
annual progress — generally did not mirror the trends in resource use. Instead, results
for programs GAO reviewed were generally stable or improved regardless of the
resources applied, and nearly all of the programs that GAO reviewed met their
performance targets — the goals they set out to achieve — in fiscal year 2003. Coast
6 Ibid, p. 13. For additional discussion of recent Coast Guard homeland security activities and
proposed FY2005 initiatives, see Department of Homeland Security, Statement of Admiral
Thomas H. Collins, Commandant, U.S. Coast Guard, Robert C. Bonner, Commissioner, Customs
and Border Protection, [and] Admiral David M. Stone, Acting Administrator, Transportation
Security Administration, on Maritime Security Status Before the Senate Committee on
Commerce, Science, and Transportation, Mar. 24, 2004.

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Guard officials said that various factors besides resources, such as increased operating
efficiencies or unexpected events, also affected performance results, but they have
limited information for assessing the impact of these factors. Initial steps have been
taken to better develop this capability, but many are in early stages, and the Coast
Guard does not have a time frame for completing the work or assurance that they will
result in a systematic approach for assessing the results.7
On April 7, 2004, the GAO testified that:
Resource usage for Coast Guard assets — its cutters, boats, and aircraft — was up
almost 40 percent from the pre-September 11th baseline. Homeland security
programs, such as the ports, waterways, and coastal security program, have been more
likely to see increases in usage, while non-homeland security programs, such as living
marine resources, remain below pre-September 11th levels. Although resource usage
changed substantially for many of these programs, performance results generally
improved or remained largely the same. The stable or improved performance results
were attributed mainly to operational efficiencies (e.g., improved technology,
improved tactics, stronger partnerships, and improved intelligence). However, the
Coast Guard has limited data and no systematic approach to explain or account for the
effects of these factors. Without such an approach and supporting data to link its
resources and performance results, the agency may be missing further opportunities
to increase productivity and efficiency to ensure best use of its funds.8
A September 2003 report by the RAND Corporation states that fully performing the
Coast Guard’s post-September 11, 2001 missions will require expanding the Coast
Guard’s Deepwater acquisition program well beyond its currently planned levels.9
Port and Vessel Security Plans. A second potential issue for Congress
concerns port and vessel security plans that were required to be submitted to the Coast
Guard by December 31, 2003. Of 3,200 port installations and 8,500 U.S.-flagged vessels,
as many as 300 port installations and 700 vessels missed the deadline.10 The security
plans were to be implemented by July 1, 2004. A June 2004 GAO report stated:
Owners and operators have made progress in developing security plans for their
port facilities and vessels. However, the extent to which the Coast Guard will have
reviewed and approved the approximately 12,300 individual plans by July 1, 2004,
varies considerably. About 5,900 plans were being developed under an option
allowing owners and operators to self-certify that they would develop and implement
plans by July 1, using industry-developed, Coast Guard-approved standards and
templates. These individual plans will not be reviewed before July 1 unless owners
or operators choose to submit them for review. The remaining 6,400 plans went
through a review process established by the Coast Guard. Every plan required
revisions, some of which were significant. As of June 2004 — 1 month before the
7 U.S. General Accounting Office, Coast Guard: Relationship between Resources Used and
Results Achieved Needs to Be Clearer, GAO-04-432, Mar. 2004.
8 U.S. General Accounting Office, Coast Guard: Key Management and Budget Challenges for
Fiscal Year 2005 and Beyond, GAO-04-636T, Apr. 2004.
9 For more on the Deepwater program and the RAND report, see CRS Report RS21019, Coast
Guard Deepwater Program: Background and Issues for Congress, by Ronald O’Rourke.
10 “Coast Guard Frustrated in Bid To Bar Terrorists,” Baltimore Sun, Feb. 8, 2004.

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deadline for implementation — more than half of the 6,400 plans were still in process.
The Coast Guard took steps to speed up the process and to allow facilities and vessels
to continue operating with less than full plan approval after July 1, as long as the
Coast Guard was satisfied with their progress.
The Coast Guard’s strategy for monitoring and overseeing security plan
implementation will face numerous challenges. Whether the Coast Guard will be able
to conduct timely on-site compliance inspections of all facilities and vessels is
uncertain because questions remain about whether the Coast Guard will have enough
inspectors; a training program sufficient to overcome major differences in experience
levels; and adequate guidance to help inspectors conduct thorough, consistent reviews.
Another challenge is to ensure inspections reflect assessments of the normal course
of business at facilities and aboard vessels.11
Coordination With Other Agencies. A third potential issue for Congress is
how effective DHS has been in achieving coordination between the Coast Guard and
other civilian agencies involved in homeland security,12 and between the Coast Guard and
the Navy, which also has a role in maritime homeland security.13
Automatic Identification System (AIS). A fourth potential issue for Congress
concerns AIS — a vessel-tracking system that the Coast Guard wants to implement as a
key part of its strategy for achieving MDA. Questions include the availability of a radio
frequency needed for AIS and whether the system as currently planned will adequately
cover all categories of ships that might pose a threat to U.S. homeland security.14
Legislative Activity in 2004
FY2005 DHS Appropriations Bill (H.R. 4567/S. 2537). The House and Senate
Appropriations Committees, in their reports (H.Rept. 108-541 of June 15, 2004 and
S.Rept. 108-280 of June 17, 2004) on the FY2005 DHS appropriations bill (H.R. 4567/S.
2537) both recommend fully funding the Coast Guard’s request for $101 million to begin
implementing the Maritime Transportation Security Act (MTSA) of 2002, key provisions
of which are to be implemented by July 1, 2004. The House included a provision (Section
516) requiring the Coast Guard to provide, at the time it submits its budget, a list of
approved but unfunded priorities and the funding needed for each priority. (The Army,
Air Force, Navy, and Marine Corps submit similar reports each year to the committees
that oversee the Department of Defense budget.) The House report stated:
11 U.S. General Accounting Office, Maritime Security: Substantial Work Remains to Translate
New Planning Requirements into Effective Port Security, GAO-04-838, June 2004.
12 For an article discussing this issue, see Jeremy Torobin, “Double Vision: Officials See
Progress, Critics See Holes, in Shipping Security," CQ Homeland Security — Border Security,
Mar. 29, 2004.
13 For more on Navy homeland security operations, see CRS Report RS21230, Homeland
Security: Navy Operations — Background and Issues for Congress, by Ronald O’Rourke.
14 For an article discussing this issue, see “Coast Guard Frustrated in Bid To Bar Terrorists,”
Baltimore Sun, Feb. 8, 2004.

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The Committee fully funds the budget request to aggressively implement the
Maritime Transportation Security Act (MTSA) of 2002, including 791 new personnel
(FTPs) to implement and enforce security plans, and for underwater detection
equipment for the maritime safety and security teams. The Committee expects that,
when these new personnel are hired and trained, they will replace approximately 450
reservists currently doing this work.
The Committee is concerned that the Coast Guard intends to rely on foreign
governments to review foreign vessel security plans. The Committee understands that
the Coast Guard may not even require that these security plans be translated into
English. Vessels flagged in Panama, Liberia, the Bahamas, and Cyprus represent 45
percent of all vessels entering United States ports. If the Coast Guard does not review
the vessel security plans required by MTSA, these plans have no independent U.S.
verification. Therefore, the Committee directs the Coast Guard to review all vessel
security plans. The Coast Guard shall report to the House Appropriations Committee
by October 15, 2004 on the results of its reviews and on the level of resources needed
to thoroughly conduct such reviews in the future. (Page 54)
The report also stated:
The aerial surveillance of our harbors, ports, and contiguous waterways
represents an urgent homeland security responsibility of the Coast Guard. While the
Coast Guard has fixed-wing aircraft to perform long-range surveillance activities,
currently there is a void in their medium to short-range aerial surveillance assets,
limiting the Coast Guard’s ability to cost-effectively perform its maritime domain
awareness mission. The Deepwater program does not anticipate procuring aircraft
devoted to maritime domain awareness until 2016. The Committee strongly believes
that this void must be addressed now. Therefore, the Committee directs the Coast
Guard to procure, test and evaluate a covert, multi-sensor, surveillance aircraft to
perform maritime domain awareness missions. (Page 59)
The Senate report stated:
Based on the Coast Guard’s most recent quarterly report to the Committee on
mission hours, Coast Guard hours dedicated to traditional, non-homeland security
missions, remain significantly below levels prior to September 11, 2001. However,
in most cases, the Coast Guard continues to meet or exceed performance goals in
those areas. The Committee is concerned with a recent General Accounting Office
assessment that the Coast Guard has not developed an approach to link resources and
performance results and that without such an approach, the Coast Guard may not be
using funds in the most efficient manner to maximize productivity. The Commandant
is expected to submit a report to the Committee, within 90 days of enactment of this
Act, on plans to develop a system that will provide an accurate representation of the
costs necessary to meet performance goals. The report shall include the concept of
the system; a timeline for implementation, including milestones and completion dates;
and how this system will enable the Coast Guard to tie funding levels to performance
results....
The Coast Guard has indicated that the next Maritime Safety and Security Team
[MSST] shall be located at the Port of Huntington, West Virginia. The Committee
expects funding for this MSST to be included in the President’s fiscal year 2006
budget submission. (Page 45)

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