A better way to pay for homeland security

A better way to pay for homeland security

Security is everyone's business! That's been the rallying cry since Sept. 11, 2001. In fact, the federal government has "deputized" the business community to serve as the front line of defense in the war against terrorism. This deputization has taken place under a series of new homeland-security regulations impacting the global supply-chain management of all businesses and the operations of the airline and maritime industries. These new deputies have a unique financial challenge. They must use their own money to "provide for the common defense." Traditionally, this has been the primary mission of democratically elected governments.

The cost of compliance will be astronomical. Private industry is being forced to make massive investments in technology, training, staffing and re-engineering of existing processes to reduce the likelihood of nuclear, biological and chemical attacks by terrorists. This is certainly a necessary and worthwhile goal. Unfortunately, it comes with a hefty price tag.

Many of these regulations were written by government officials with no business experience. At a time when many businesses in the transportation industry are struggling to survive, they are being forced to redirect spending toward security. The costs will have to be passed on to consumers. This adverse financial impact challenges our government's initial priority of rebuilding our economy.

The costs of regulatory compliance are forcing some business leaders to develop a "wait and see" philosophy. This is reminiscent of Customs' Sea Carrier Initiative in the 1980s. Some carriers failed to invest in security until U.S. Customs seized ships and issued fines. Companies are again waiting to see if the new Department of Homeland Security will actually punish companies that do not spend heavily to comply with these new security requirements. In the meantime, these companies and our homeland remain vulnerable.

Perhaps even more disturbing is the government's financial strategy for protecting ports and vessels. The first challenge was the total lack of federal funding for security. After waiting for Congress to make funds available, the bureaucratic games began. The current process directs U.S. ports to submit port-security grant proposals to the federal government. Anyone familiar with the timelines associated with the grant award process should realize the fallacy of this approach. Many of the U.S. ports have publicly stated that after submitting grant proposals, they did not receive all the funds they needed. The government has told them to wait until the next grant cycle. In the meantime, the ports remain vulnerable.

Is there a better way to help the private sector "deputies" and the ports pay for the war against terrorism? If the government is serious about developing a partnership with the private sector and states, why not empower them to immediately make their own decisions about how to best use their financial resources to design and implement security strategies? I would propose that the government award "Homeland Security Tax Credits" to businesses. Every dollar spent on homeland security would be eligible for a tax credit.

On a smaller scale, the concept of rewarding investments in security has already proved successful. Many insurance companies reduce premium payments for homeowners who invest in home-security systems. In addition, some automobile insurers reduce premiums for vehicle owners who install anti-theft security systems. If the government can award tax credits for energy development, it can certainly award credits for the protection of our homeland.

The current government processes of expensive regulatory compliance and grant approval encourage delay and procrastination at a time when America's homeland is vulnerable to terrorist attack. In the 1980s, when I submitted this same idea to our elected officials in regard to tax credits for anti-drug security, I was told by a congressional leader: "Anti-drug security tax credits is a stupid idea. We have already lost the war against drugs." The government cannot afford to take such an attitude in the war against terrorism.

We can lose the war against terrorism by defeatism, by imagining that the contest is unwinnable or unworthy. We can lose by waking up too late to the importance of the conflict. We can lose by self-indulgence, by postponing hard decisions until the need becomes so obvious that the decision comes too late.

Ed Piper is a security and business management consultant in Baltimore and a faculty member at Johns Hopkins University, where he recently designed a business-and-security management degree program. He may be reached at (410) 377-8004, or via e-mail at edpip@aol.com.