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House, Senate In Funding Clash

Industry says deep cuts would damage chemical facility antiterrorism program

by Glenn Hess
June 25, 2012 | A version of this story appeared in Volume 90, Issue 26

DHS chemical facility antiterrorism program’s budget has been falling since 2010. Source: Department of Homeland Security
A table showing CFATS funding from 2007 to 2012.
DHS chemical facility antiterrorism program’s budget has been falling since 2010. Source: Department of Homeland Security

As lawmakers look to cut spending in the face of continuing massive federal budget deficits, funding for the Department of Homeland Security (DHS) is expected to be reduced for the third year in a row. However, appropriators in the House of Representatives and the Senate are miles apart over how far to pare down the budget for the department’s beleaguered chemical facility security program.

The GOP-controlled House has approved a drastic 51% cut in spending for the Chemical Facility Anti-Terrorism Standards (CFATS) program in the next fiscal year, which starts on Oct 1. In the Democratic-led Senate, the Appropriations Committee is proposing only an 8% reduction.

House Republicans have been highly critical of CFATS since an internal DHS memo surfaced late last year (C&EN, Jan. 9, page 6). The memo details a litany of management and personnel problems that have slowed implementation of the effort to better secure high-risk chemical facilities that are considered prime potential terrorist targets.

On June 7, the House voted 234-182 in favor of a $39.1 billion DHS funding package (H.R. 5855) for fiscal 2013, about $484 million below the level enacted for 2012. But the bill would provide only $45 million for CFATS, $48 million less than the amount Congress allotted for this year and $29 million below the amount requested by President Barack Obama in his proposed 2013 budget.

The Senate Appropriations Committee approved a fiscal 2013 DHS spending bill (S. 3216) on May 22 that totals $45.2 billion. The legislation, sponsored by Sen. Mary L. Landrieu (D-La.), chair of the Homeland Security Appropriations Subcommittee, would provide nearly $87 million for CFATS. That amount is $7 million below the program’s current budget authority but $12 million above the President’s request. The full Senate has not yet taken the bill up for debate.

CFATS was launched by DHS in June 2007. Under the congressionally mandated program, facilities that make, use, or store threshold amounts of 322 “chemicals of interest” are required to conduct vulnerability assessments, develop site security plans, and submit those plans to DHS for review and approval. Facilities must then put in place protective measures that address their unique security challenges. DHS, in turn, validates compliance through inspections and audits.

In a legislative report accompanying S. 3216, the Senate Appropriations Committee acknowledges that CFATS needs significant improvement. However, it also notes that a survey published in September 2011 found that companies have made substantial investments in security upgrades as a result of CFATS and that they are “actively engaged in knowing, assessing, and managing their risks.”

The survey, which was commissioned by the American Chemistry Council, an industry trade association, says that since the program’s inception, more than 1,670 facilities have completely removed their chemicals of interest and more than 700 facilities have reduced the quantity of stored chemicals for better security.

“These findings emphasize the accomplishments made by government and industry working together and the need to continue the program,” according to the Senate committee’s report.

However, the 2011 internal DHS memo revealed that the program has been hindered by deeply rooted problems such as the hiring of a largely unqualified workforce and improper classification of facilities as high risk when they were not.

As a result, the memo noted that the DHS office that oversees CFATS had not conducted any compliance inspections and had only recently begun to approve security plans.

At two House oversight hearings earlier this year, DHS Undersecretary Rand Beers told lawmakers that an “action plan” has been developed to address each of the problems identified in the internal assessment (C&EN, March 5, page 28).

However, the House Appropriations Committee observes in its report accompanying H.R. 5855 that “even with the changes that are currently being implemented, it will still be more than a year before the CFATS regulatory process authorizes, approves, and inspects even a single facility of the over 4,500 facilities that are part of the program.” In addition, the committee says it could take “almost seven years before all facilities will be fully authorized, approved, and inspected. This type of timeline and lack of progress is unacceptable.”

But gutting funding for CFATS “is an ill-advised way for Congress to help ensure that DHS implements this important security program,” says William E. Allmond IV, vice president of government affairs for the Society of Chemical Manufacturers & Affiliates (SOCMA), which represents the specialty chemicals industry. Slashing program funds will guarantee that the program’s implementation falls further behind, he says.

The clash over funding comes as Congress has been unable to agree on legislation that would permanently authorize CFATS, leaving the program dependent on the annual appropriations process for its continued existence. The House-passed DHS funding bill would extend the chemical security program for another year, through Oct. 4, 2013.

Because DHS is still in the process of implementing the current regulations, some lawmakers have pushed for a simple extension without changes to any of CFAT’s statutory requirements. Making the existing law permanent, they argue, would provide consistency in authority and remove the pressure to reauthorize the program.

But the Obama Administration and many congressional Democrats believe the scope of CFATS should be expanded to include a mandate for facilities to adopt or consider adopting so-called inherently safer technologies.

They contend that making changes such as reducing the amount of chemicals stored on-site or switching to less hazardous substances could minimize the consequences of a terrorist attack.

Allmond asserts that regulatory uncertainty resulting from Congress’ inability to pass a long-term authorization—not an excess of funding—has contributed to DHS’s implementation challenges. The key to fixing CFATS, he says, is “vigorous oversight, not budgetary uncertainty or budget cuts.

“Rather than allow committees properly focused on homeland security to encourage better program management, House appropriators have instead decided to send DHS a message,” Allmond remarks. “Consequently, this could lead some to believe that this Congress isn’t serious about securing a critical sector of American infrastructure.”

Rep. Robert B. Aderholt (R-Ala.), chair of the House Appropriations Homeland Security Subcommittee and chief author of the DHS spending bill, says passage of the DHS budget measure “marks another important step in getting the federal government’s fiscal house in order by reducing discretionary spending.”

The CFATS funding proposal was developed before DHS completed its corrective action plan for improving the performance of the security program. Since then, Aderholt says, the department has provided additional information, which he is currently reviewing.

Aderholt says he plans to “evaluate the program’s funding level again at conference time” with the Senate. “I hope my colleagues in the Senate will take swift action by passing their version of the bill so that we can work through the conference committee process and enact this bill into law,” he says.

When House and Senate lawmakers meet to hammer out differences, Allmond expects that Landrieu and other lawmakers from states where the chemical industry has a strong presence will insist on reasonable funding for CFATS. “To what level, I’m not sure,” he tells C&EN.

But ultimately, Allmond contends, “Congress will punt on the 2013 budget and operate on a continuing resolution,” which will essentially keep spending flat with 2012 levels.


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