President's FY 2013 Budget Proposes Cuts for CBP Field Ops, Automation, C-TPAT, Etc.

On February 13, 2012, the President submitted to Congress his fiscal year 2013 budget proposal. According to the Office of Management and Budget, his FY 2013 budget proposes cuts and consolidations across the Federal government and includes more than $7.5 billion in administrative savings. The following are highlights from the President's budget proposal and annex, a DHS budget document, and other agency information.

(FY 2013 is from October 1, 2012 through September 30, 2013.)

Proposes $21M Less for CBP Field Ops Overtime

CBP's Office of Field Operations will reduce overtime costs by $21.1 million. This reduction will not impact operational staffing and CBP officers will continue the full range of inspection, intelligence analysis, examination, and law enforcement activities that relates to the arrival and departure of persons, conveyances, and merchandise at U.S. ports of entry.

President Proposes $7M Less for CBP's Automated Systems

The President’s budget proposal includes $327.5 million for U.S. Customs and Border Protection automated systems, $140.8 million of which would be for Automated Commercial Environment (ACE) development. Of the amount proposed, $25 million could not be obligated for ACE until the CBP Commissioner submits an ACE expenditure plan, etc. to specified Congressional committees.

(In FY 2012, the President requested $334.3 million for CBP automated systems.)

Proposes $37M Less for CBP's Legacy IT Infrastructure, Upgrades

The budget proposal contains a reduction of $36.8 million in information technology infrastructure, etc. funding which will require CBP to defer replacement of legacy equipment and technical upgrades. The Department of Homeland Security states that CBP will work to mitigate any potential network availability or system slow down and outages.

Proposal Reflects Savings from Extending the C-TPAT Validation Cycle to 4 Years

C-TPAT will extend the validation cycle to four years as mandated by the Security and Accountability for Every (SAFE) Port Act of 2006 (P.L. 109-347). In past years, CBP accelerated the re-validation schedule for certain importers, carriers, and foreign manufacturers. This extension to a four years cycle will yield a savings of $5 million.

Proposes $31M Savings by Using Currently Fielded NII Equipment

The non-intrusive inspection (NII) program will transition to an Operations & Maintenance (O&M) steady-state mode in FY 2013, resulting in a savings of $31.0 million due to the use of currently fielded equipment.

CBP Projects MPF and Other User Fee Receipts to Increase

According to budget documents, CBP expects an increase in revenue from U.S. Customs conveyance/passenger/other user fees, as well as Merchandise Processing Fees, in both FY 2012 and 2013.

Budget documents indicate that conveyance/passenger/other Customs user fees would increase from $406 million in FY 2011 (actual) to $495 million in FY 2012 (est) and $529 million in FY 2013 (est). MPF user fee receipts would increase from $1,555 million in FY 2011 (actual) to $1,595 million in FY 2012 (est) and $1,624 million in FY 2013 (est).

(In fall 2011, legislation was enacted which increased the MPF for formal entries to 0.3464% as of October 1, 2011 (through June 30, 2021). See ITT’s Online Archives 11102417 for summary.)

$26 Million for New Interagency Trade Enforcement Center

The President’s budget proposes a total of $26 million for a new Interagency Trade Enforcement Center (ITEC) ($24 million for the International Trade Administration and $2 million for the U.S. Trade Representative), which will significantly enhance the Administration’s capabilities to aggressively challenge unfair trade practices around the world, including China. The ITEC will represent a more aggressive “whole-of-government” approach to addressing unfair trade practices, and will serve as the primary forum within the federal government for executive departments and agencies to coordinate enforcement of international and domestic trade rules.

(The Trade Enforcement Center is the new term for the Administration's recently announced Trade Enforcement Unit. See ITT’s Online Archives 12012519 for summary on State of the Union Address, in which the President announced plans for this new trade enforcement unit. See here for mention of the Unit's new name.)

Funds for ITA for Export Promotion, Including NEI

The President proposes $517 million for the ITA, including several key initiatives. The Administration requests $30 million for critical investments in trade promotion to help more U.S. businesses reach the 95 percent of consumers who live outside our borders. This proposal also includes $30 million to send Foreign Commercial Service Officers and locally engaged staff to high-growth markets to help support the National Export Initiative to meet the President’s goal of doubling U.S. exports by the end of 2014.

Urges Consolidation/Reorganization of Trade Agencies

According to budget documents, the President is also urging the Congress to pass the Reforming and Consolidating Government Act that would enable him to submit plans to consolidate and reorganize executive branch departments and agencies. If given this authority, the President would submit a proposal to consolidate the six primary business and trade agencies as well other related programs, integrating into a single new Department the Government's core trade and competitiveness functions. According to the documents, these changes would not only produce savings of roughly $3 billion over the next 10 years, they also would cut waste; eliminate duplication, overlap, and unnecessary overhead costs; and more effectively and efficiently serve the American people.

(See ITT’s Online Archives 12011711 for summary of the President’s trade agency consolidation proposal.)

The Office of Management and Budget provides complete details on the President’s FY 2013 budget proposal here. OMB provides links to the President’s budget message to Congress, individual agency budget proposals, issue fact sheets, etc.

Commerce Dept blog article on FY 2013 budget request available here

House Ways and Means Committee Chairman's remarks on the President's budget proposal in which he expresses concerns about trade agency reorganization and the budget proposal's failure to mention the Trans-Pacific Partnership or other future trade negotiations available here

DHS "budget-in-brief" document available here