Homeland Security: A Costly Mess

In January 2003, the Bush administration drew 22 disparate agencies and some 170,000 employees into a new Department of Homeland Security (DHS). Proponents of the reorganization hoped a single department under a single cabinet secretary would foster unity of effort across a substantial portion of the federal activities related to domestic security.

A key tool would be the department's budget. With all the agencies beholden to him for their money, the secretary could promote and reward much-needed integration across the department. He could wield the budget tool to expand high priority activities, eliminate or defer the less important or redundant ones, and reallocate the workforce to fill gaps in high-risk areas.

A look at budgets since the department was established reflects little in the way of realignment, however. Department funding rose by more than 40 percent between 2003 and 2007, but there has been only minimal reallocation of budgets from areas of lower risk or priority to functions the department says are more important. With the exception of added spending to support the Secure Border Initiative announced by President Bush in November 2005, the department's main operating components each enjoy about the same share of the DHS budget today as they did when the department was created. The result is that -- despite the heavy cost in both dollars and institutional disruption -- the United States is not getting what it should out of the reorganization.

This article looks at annual DHS budgets for evidence of altered priorities or reallocation of resources. Finding little in the way of change, it considers several explanations for the persistent pattern and ends with recommendations for improving budgetary processes and outcomes in DHS.

The Money Trail: DHS Budgets Since 2003

DHS has seven main operating components: the Transportation Security Administration (TSA), Customs and Border Protection (CBP), Citizenship and Immigration Services (CIS), Immigration and Customs Enforcement (ICE), the Secret Service, the Federal Emergency Management Agency (FEMA), and the Coast Guard. These components together command a bit less than three-quarters of the DHS budget (see figure 1 below).

Remarkably, the share of the department's budget devoted to each of these components has varied little from the year the department opened until today (see table 1). From 2003 to 2007, no more than one percent of the DHS budget migrated into or out of the Secret Service, FEMA's internal operating accounts, the Coast Guard, or Citizenship and Immigration Services. Of the seven units, only TSA, Immigration and Customs Enforcement, and Customs and Border Protection acquired or lost more than one percent.

Much of the shift in budget shares between 2006 and 2007 is due to the administration's Secure Border Initiative. For example, the FY 2007 budget for CBP includes about $1.2 billion for SBInet, a program to develop and field technologies for border control. The FY 2007 budget for ICE includes funding provided under the initiative to expand detention capacity for illegal immigrants, intensify fugitive operations, and increase enforcement actions at workplaces around the country.

What Went Wrong?

The allocation of homeland security budgets based on nearly constant shares stands in stark contrast to early rhetoric. The National Strategy for Homeland Security, prepared in 2002 by the White House Office of Homeland Security, called for prioritizing activities most in need of additional resources and shifting resources to their most productive use. The authors of the strategy clearly envisioned that new money made available through steadily rising budgets for homeland security would go to mitigate risks that pose the greatest danger. Moreover, Tom Ridge, then the director of the Transition Planning Office for the department and later its first secretary, argued in 2002 that the new cabinet secretary would need great latitude in re-deploying resources. He believed eliminating redundant activities would offset the added costs of central administration and other core departmental functions.