MANAGEMENT OF THE U.S. CUSTOMS SERVICE THURSDAY, FEBRUARY 26, 1987 U.S. SENATE, COMMITTEE ON FINANCE, The committee was convened, pursuant to notice, at 10:00 a.m. in room SD-215, Dirksen Senate Office Building, the Honorable Lloyd Bentsen (chairman) presiding. Present: Senators Bentsen, Bradley, Riegle, Danforth, and Durenberger. The CHAIRMAN. If you will cease your conversation, please, the hearing will begin. These hearings are being held today concerning the Administration's proposal to cut the Customs Service. Two weeks ago, we visited the border between the United States and Mexico to learn how those who live in that area feel about the job the Customs Service is doing. Now, these are people whose lives are touched by the Customs Service almost every day. They cross that border daily for their jobs, for education, and for commerce. At the same time, they depend on the Customs Service to protect their communities and their families from illegal drugs coming across that border and the devastating effects that can accompany drug usage. -a What I heard in talking to those people was a great concernconcern that traffic congestion along the border is creating a bottleneck to the flow of commerce between our two countries; a concern that the human resources Customs is devoting to border inspections are insufficient, either to facilitate commercial traffic or to prevent illegal traffic. I left there with a better understanding of their problems and a renewed belief that economizing on the Customs Service is a false economy. Since taking office, this Administration has consistently proposed to reduce the manpower of the Customs Service, year after year. We in the Congress have refused to agree to those cutbacks, and we have acted to increase Customs' manpower every year since 1984, recognizing the importance of the Customs Service and the fact that its workload has nearly doubled since 1980. The Administration has come forward again this year with a proposal to reduce the number of Customs employees. For fiscal year 1988, the Administration would cut back manpower by more than 13 percent from the levels Congress authorized for fiscal year 1987. Now, those drastic cuts are supposedly justified by a process of streamlining and automating the procedures used by the Service. But can it really be true that machines can so rapidly and totally (101) replace the skill and professional judgment of thousands of trained employees? Automation of the Customs Service is good to the extent that it improves the Service's efficiency, but many of Customs' functions are human functions. For these, there is no substitute for people. My concern is that the dedicated men and women of the Customs Service-the front line troops in our war on drugs and Customs enforcement-are being ill-served by a drive to economize just for the sake of economy without a full understanding of the true cost of what is being done. Today we will hear how other representatives of the business community feel about the job the Customs Service is doing. We will also hear directly from the employees of the Customs Service on how they feel about their ability to do their job. Now, our first witness is the representative from the Customs Service employees, Mr. Robert Tobias of the National Treasury Employees Union. Mr. Tobias, if you would come forward, please? STATEMENT OF ROBERT M. TOBIAS, NATIONAL PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION, WASHINGTON, DC Mr. TOBIAS. Good morning, Senator Bentsen. I appreciate very much the opportunity to testify at these most important hearings. I have a full statement which I would appreciate being inserted into the record. The CHAIRMAN. It will be. Mr. TOBIAS. Thank you. I believe that what you have seen along the border and what we have been saying for many years is that the Customs Service is an agency in crisis. This Administration, as you point out, seems to cut the number of positions each year. Congress has responded by restoring the cuts and adding positions, but OMB has ignored Congress, even when they have specifically mandated as they did last year-a staffing level. Second, the automated systems designed to assist the Customs Service have not increased efficiency, and most importantly, have not increased compliance. Third, qualified people are leaving the Customs Service in droves, the kind of people that have been the backbone of the Customs Service. Fourth, as you might expect in this kind of a situation, the morale of those who remain is abysmal. Fifth, you will find in our testimony on Table 2 that commercial fraud is still increasing each year, while at the same time the number of entries we examine is declining and the amount of merchandise we examine is declining. So, our enforcement efforts are declining at a time when commercial fraud is increasing. Sixth, we are losing an ever-increasing amount of revenue we could otherwise recover. And seventh, the drug problem is not abating; it is increasing. The Customs Service lacks the people and a plan to efficiently carry out its mission. The solution we suggest, first, is in the area of people and in planning. We suggest that Congress mandate the restoration of the positions sought to be cut in 1987-about 2,000— and we urge that Congress add an additional 2,000 positions. It would cost approximately $150 million next year, and we urge that 2,000 positions be added in 1989 and 1990, for a total of $450 mil lion. We urge that Congress appropriate that $450 million out of the commercial operation user fees, the 0.22 percent user fee that has been instituted. Until Congress acts, the money won't be appropriated and it won't be used. We urge that that $450 million be an addition to the $500 million that would be necessary to carry out the general operations. We urge that Customs be mandated to create a five-year plan, which would include such things as a goal of 70 percent of the entries being reviewed by import specialists; 25 percent of the fraud referrals from import specialists be examined by special agents; and that there be a study of the automated systems which have promised so much and delivered so little. We also urge that in the management area GAO be asked to review the Customs five-year plan. I recognize, Senator Bentsen, that what we are urging is certainly different from the way this committee treats most agencies. But I think the history of the management record of the Customs Service over the last six years requires some extraordinary efforts and extraordinary Congressional oversight, and that is why we are urging this drastic solution in mandating staffing levels, in mandating the areas where they would be filled, and also mandating the kind of a five-year plan which would allow the Congress to understand where the Customs is heading, as opposed to reacting on a crisis-by-crisis basis. Again, I want to thank you for allowing me to testify, and I will be prepared to answer any questions you might have about the summary I have just given you or the full testimony we have provided. The CHAIRMAN. Mr. Tobias, I can well recall my own personal experience in business, when I tried to bring out coordination between various facets of my business. I was able to do it, but there were a lot of glitches along the way and a lot of problems along the way. Mr. TOBIAS. The problem that we see is that the programs that were instituted were instituted without a great deal of long-range planning and long-range thought. They didn't have goals in mind and instead were an attempt to deal with the short staff position in which the Administration put the agency. So, instead of really having a concept of what the automation would do and how it would interrelate with the Customs employee, we don't have that. The CHAIRMAN. Surely, there must have been some kind of management study as to when it would come on stream, how much of it would be a particular point in the transfer, and how they would phase some people out, or if they would try to keep those people and give the kind of service from the increased traffic that was necessary-surely, they have some plan that has been shown to you. Mr. TOBIAS. Senator, there is no overall automation plan in the Customs Service that I am aware of. There are four or five programs that have been developed that are virtually independent without the overall coordination that would be necessary to put together a program to coordinate the role of the Customs inspector with the role of the Customs import specialist. The CHAIRMAN. Is this an in-service- - The CHAIRMAN. And they also called outside technicians to consult on it? Mr. TOBIAS. Not to my knowledge. The CHAIRMAN. It would be very unusual if the Service had that type of technical qualifications within their own employees? Mr. TOBIAS. I think, as I say, it is one thing when we are talking about the technical expertise; but at root- The CHAIRMAN. I am talking about automation. Mr. TOBIAS. I am talking about the lack of a plan. What is it that we want to do in 5 years? And as a businessman, I am sure that the greatest technician in the world can't supply a program if you don't tell that technician what it is you want to do in 5 years, and that is what is lacking. The CHAIRMAN. But if you were going to make a major change in the system, it would be highly unusual for any agency to have within its own ranks people that had that level of competence because it is not a continuing thing, is it? We are talking about a major revolution in the way services are handled within that agency. I will talk to some more Customs people, but if you can find out anything that buttresses what they have done in the way of organizing jobs-if there really is some long-range planningyou don't think they have it and you don't know of any? Mr. TOBIAS. No, I don't believe it exists. The CHAIRMAN. That is hard to accept. Mr. TOBIAS. That is why we are urging mandating the creation of a program that lasts from budget cycle to budget cycle. The CHAIRMAN. Now, you said there has been a wholesale leaving of experienced and knowledgeable people from the Service. What do you have to back that up? Mr. TOBIAS. We will supply you with the turnover statistics, but what I am talking about is the turnover among those people who have been around and who are trained, particularly The CHAIRMAN. That is what I am interested in. I am talking about the experienced people. Mr. TOBIAS. The people who have been around for more than 5 years, the people in the 10 to 15 year group; that is particularly true among the specialists. The CHAIRMAN. Now, are these people at the point of reaching retirement? Mr. TOBIAS. Oh, no. I am not talking about retirement. Mr. TOBIAS. Yes, mid-career people; I am not talking about the retirement. I am talking about people who are leaving because they are doing other things. The CHAIRMAN. Do you have any way of evaluating the effect on the morale? Is that totally subjective Mr. TOBIAS. Yes. That is based on the travels that I do around the country as the representative of the Customs employees. There is no formalized study with some sophisticated poll that has been taken. The CHAIRMAN. I am certainly not opposed to modernizing the system and trying to meet the additional load by additional automation and improving their procedures. What I am concerned about is a great loss in service in the process of trying to bring this |