[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
BUILDING A WALL BETWEEN FRIENDS: PASSPORTS TO AND FROM CANADA?
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC, NOVEMBER 17, 2005
__________
Serial No. 109-37
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
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COMMITTEE ON SMALL BUSINESS
DONALD A. MANZULLO, Illinois, Chairman
ROSCOE BARTLETT, Maryland, Vice NYDIA VELAZQUEZ, New York
Chairman JUANITA MILLENDER-McDONALD,
SUE KELLY, New York California
STEVE CHABOT, Ohio TOM UDALL, New Mexico
SAM GRAVES, Missouri DANIEL LIPINSKI, Illinois
TODD AKIN, Missouri ENI FALEOMAVAEGA, American Samoa
BILL SHUSTER, Pennsylvania DONNA CHRISTENSEN, Virgin Islands
MARILYN MUSGRAVE, Colorado DANNY DAVIS, Illinois
JEB BRADLEY, New Hampshire ED CASE, Hawaii
STEVE KING, Iowa MADELEINE BORDALLO, Guam
THADDEUS McCOTTER, Michigan RAUL GRIJALVA, Arizona
RIC KELLER, Florida MICHAEL MICHAUD, Maine
TED POE, Texas LINDA SANCHEZ, California
MICHAEL SODREL, Indiana JOHN BARROW, Georgia
JEFF FORTENBERRY, Nebraska MELISSA BEAN, Illinois
MICHAEL FITZPATRICK, Pennsylvania GWEN MOORE, Wisconsin
LYNN WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
J. Matthew Szymanski, Chief of Staff
Phil Eskeland, Deputy Chief of Staff/Policy Director
Michael Day, Minority Staff Director
(ii)
C O N T E N T S
----------
Witnesses
Page
Slaughter, The Honorable Louise (NY-28), Congresswoman, U.S.
House of Representatives....................................... 4
Engler, The Honorable John, President and CEO, National
Association of Manufacturers................................... 6
Kephart, Ms. Janice L., Former Counsel, 9/11 Commission.......... 8
Staub, Mr. Ken, Vice President, Riverside Service Corporation.... 11
Cook, Mr. William, Senior Manager, Worldwide Transport Design &
Procurement, DiamlerChrysler................................... 13
Chestnut, Mr. H. Thomas, President & CEO, AAA of Western and
Central New York............................................... 15
Zemsky, Mr. Howard, Managing Partners, Taurus Partners, LLC...... 18
Appendix
Opening statements:
Manzullo, Hon. Donald A...................................... 34
Velazquez, Hon. Nydia........................................ 36
Grijalva, Hon. Raul.......................................... 38
Prepared statements:
Slaughter, The Honorable Louise (NY-28), Congresswoman, U.S.
House of Representatives................................... 40
Engler, The Honorable John, President and CEO, National
Association of Manufacturers............................... 54
Kephart, Ms. Janice L., Former Counsel, 9/11 Commission...... 62
Staub, Mr. Ken, Vice President, Riverside Service Corporation 82
Cook, Mr. William, Senior Manager, Worldwide Transport Design
& Procurement, DiamlerChrysler............................. 96
Chestnut, Mr. H. Thomas, President & CEO, AAA of Western and
Central New York........................................... 99
Zemsky, Mr. Howard, Managing Partners, Taurus Partners, LLC.. 101
Additional items for the Record:
Reynolds, Hon. Tom (NY-26), Congressman, U.S. House of
Representatives............................................ 105
Chestnut, Mr. H. Thomas, President & CEO, AAA Western and
Central New York........................................... 109
Letters from interested parties.............................. 110
(iii)
BUILDING A WALL BETWEEN FRIENDS: PASSPORTS TO AND FROM CANADA?
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THURSDAY, NOVEMBER 17, 2005
House of Representatives
Committee on Small Business
Washington, DC
The Committee met, pursuant to call, at 9:00 a.m., in Room
2360, Rayburn House Office Building, Hon. Donald A. Manzullo
(Chairman) presiding.
Present: Representatives Manzullo, Velazquez, King,
McCotter, Poe, Bordallo, and Higgins.
Chairman Manzullo. Good morning and welcome to this
hearing. There is a looming crisis at our borders and if the
enhanced documentation requirement for travel to cross our land
borders is not handled correctly, it could spell trouble for
many of the manufacturing and tourism sectors of the economy.
Obviously there are hundreds of thousands of small businesses
in both those sectors.
This problem is especially acute for our neighbors to the
north. The Intelligence Reform and Terrorism Prevention Act of
2004 requires that the Department of Homeland Security and the
State develop and implement a plan for U.S. citizens and
foreign nationals to present a passport or other appropriate
security identity and citizen documentation when entering the
U.S.
As of January 1, 2008, this enhanced documentation is
supposed to apply to all land border crossings including
Canada. For years, Americans and Canadians have been used to
simply showing a driver's license to cross the border. Now this
will change.
The impact of the enhanced documentation efforts on the
economies of Canada and the U.S. is still unclear. What is
clear is that the legislation also contains another mandate not
frequently mentioned that it, ``Seek to expedite the travelers
or frequent travelers including those who reside in border
communities.''
I have worked with officials from Departments of State and
Homeland Security in the past on visa issues and I am impressed
with the quality and competence of the people involved in this
discussion. They are all senior career officials.
Earlier this year we worked out a one-year multiple entry
visa for Chinese business persons wishing to come to the United
States to attend a trade show or inspect or be trained on a
U.S. product. The same people are working on the Western
Hemisphere Travel Initiative. They are taking this mandate very
seriously.
This is evidenced by their effort to go through all the
appropriate steps in the rule making process including issuing
an Advanced Notice of Proposed Rule Making in which DHS and
State seek comments and assistance on how to best go about
enhancing security at our border while not impeding legitimate
commerce.
I commend DHS and State for going through this process. It
may seem difficult and slow at the outset but the final
regulation will be a better product if the Agencies seriously
take into account the legitimate concerns of small businesses.
As part of that process I strongly encourage DHS and State
to prepare an initial regulatory flexibility analysis to
accompany the Advanced Notice of Proposed Rule Making. I am
pleased that the Chief Counsel of the Office of Advocacy at the
Small Business Administration, Tom Sullivan, agrees with my
request in order to minimize the impact of this proposal on
small entitles.
There are no Government witnesses testifying at this
hearing today because they know the intensity of the trade with
North America and the difficulty of the task ahead of them in
balancing economic and security interest. This hearing is part
of an effort to help DHS and State collect information that
will assist them in completing an accurate and comprehensive
economic analysis.
The main purpose of this hearing is to demonstrate that the
maximum amount of commerce within the Western Hemisphere,
particularly between the U.S. and Canada, and the complexities
of trade between the two countries, may make it next to
impossible to fulfill the statutory mandate to require this
enhanced documentation and not dampen the economies of the U.S.
and Canada.
Few people know that Canada is our largest trading partner
with $1.2 billion in trade crossing the longest non-militarized
border in the world every day. This 4,000-mile border stretches
across 11 states and eight provinces encompassing an economic
sphere affecting 51 million Americans and 30 million Canadians.
Directly or indirectly the U.S./Canadian border is integral
to 5.2 million jobs. Travel and tourism alone create a $10.3
billion economic benefit to the United States. I fear that this
proposal would have the most negative consequences for the
casual or infrequent tourist, particularly families with minor
children who would rather vacation in their own country rather
than pay $95 for a passport or $40 for security identity card
to cross the border.
For example, my sons go to Grove City College in Grove
City, Pennsylvania. They are both English majors. One weekend
on a whim they decided to go to Niagara on the Lake in Canada
for the George Bernard Shaw Festival. Five college students
went there. Neil and Noel have passports. Their passports are
at home and were not in their possession. I am sure those two
could have gotten through with a passport. Are the other three
college kids going to pay $40 for a card that would take six to
eight weeks to get? No.
That is the problem. This would severely hamper travel
between Mrs. Slaughter's district and the Niagara on the Lake.
This proposal affects not just tourism but also manufacturing.
Few people realize our two nation's automobile industries are
virtually integrated comprised of nearly 23 percent of total
U.S. exports to Canada with parts and finished goods crossing
the border multiple times.
We don't need another reason for American manufacturers to
leave our shores or for direct foreign investment to dry up if
it becomes more difficult to trade with Canada. I believe there
is a way to accomplish goals of enhanced security at our land
borders and not disrupt commerce.
What I would like you to do is when testifying tell your
story. You can touch upon proposed problems and proposed
resolutions, and many are out there, but don't overload it on
the latter. The purpose of this hearing is to give additional
information to the wonderful people we have been working with
at the Department of State and Department of Homeland Security
to give them even more of a bird's eye view as to the intensity
of the problem.
If you load up on problems, lighten up on possible
solutions. That would help, but obviously use your own
discretion. We use a five-minute clock. Our first witness after
Ms. Velazquez' opening statement will be Congresswoman
Slaughter.
Louise, you can testify and then you can leave anytime that
you would like.
Ms. Slaughter. Thank you, Mr. Chair.
Chairman Manzullo. I now yield for an opening statement to
the gentlelady from New York, Ms. Velazquez.
[Chairman Manzullo's opening statement may be found in the
appendix.]
Ms. Velazquez. Thank you, Mr. Chairman. As time as told us,
our nation's security should not be taken lightly. The
terrorist attacks of September 11 taught us this important
lesson and made it clear that America needs to step up its
efforts to prevent terrorists from entering the confines of our
borders.
Many strides have been taken to make this country safer
following the attacks. A variety of measures at the local,
state and federal level are now in place to secure our borders
and fight terrorism both at home and abroad.In an effort to
bolster security for our citizens, we must recognize that
America's borders whether by air, land, or sea are an entrance
for a host of people, goods and services that help fuel our
national economy.
In our fervor to strengthen these protections, some of
these security measures have had unintended consequences on
many sectors of the population including small
businesses.Today's hearing will give us a chance to look at the
ongoing rule making as established in a portion of the
Intelligence Reform and Terrorism Prevention Act. This
initiative, the Western Hemisphere Travel Initiative, will
require some additional forms of identification for cross-
border travel from Canada and Mexico.
While we can all agree that there is a responsibility to
regulate who crosses through these entry points, it needs to be
done in a manner that protects our borders with out harming
small businesses. There is no question that any regulatory
change in documentation required for cross-border travel as
suggested in the proposal will have a major impact on thousands
of small businesses.
With a significant portion of their customer base located
across the border, it is vital that any changes made to current
cross-border travel regulations take into account the needs of
these small businesses. Imposing steps such as passport
requirements for potential customers may greatly impede the
success these businesses, when less costly alternatives may be
available.
However, I think it is difficult for us to truly assess the
impact without the agencies responsible for implementation
Department of State and Department of Homeland Security even
present at this hearing today. How are we supposed to get the
full story, when the beautiful and wonderful people from these
two agencies are not even here?
We can sit here and talk about possible effects on
industries and the small business sector all day long but if
these departments are not here to engage in these discussions,
they still may go ahead with this proposal hurting small
businesses.
We need these agencies to perform a full economic analysis
taking the needs of entrepreneurs into account. This will allow
for a true determination of the impact and economic costs of
this cross-border identification proposal. Yes, we need to
secure our borders but America's small businesses, which
already face many challenges, deserve a less costly, less
burdensome plan that does not pose a threat to their success.
As we work to secure America's borders and thwart
terrorism, the need for increased security is certainly
warranted. However, too many of our nation's most prosperous
industries including travel, tourism, manufacturing, and local
border towns have been put at an unfair disadvantage. This is
especially true if these possible proposals are adopted and
enacted without adequate review.
When these policies go as far as to threaten the role small
businesses play in the economic recovery and future
competitiveness of our nation, it becomes clear that we need a
plan that offers a healthy balance between safety and commerce.
We simply cannot afford to damage the livelihood of our
economic security. Thank you, Mr. Chairman.
[Ranking Member Velazquez's opening statement may be found
in the appendix.]
Chairman Manzullo. Thank you for that statement. We are
delighted and grateful to have the Honorable Louise Slaughter
testify for us today. Ms. Slaughter represents the 28th
District of New York including the Niagara Falls area and the
city of Tonawanda, two of the most heavily trafficked border
crossing areas in the north east. I Chair the U.S./Canadian
interparliamentary exchange and Louise has been an active
member of that exchange ever since the time she was elected.
We look forward to your testimony and we have the five-
minute clock that applies to members also. When you see the
yellow, that means you have one minute. When you see red, I
start to get a little anxious.
Ms. Slaughter. Yes, sir.
Chairman Manzullo. We look forward to your testimony.
Louise, if you could pull the mic a little bit closer to you.
Ms. Slaughter. Is that better?
Chairman Manzullo. That is fine. Thank you very much.
STATEMENT BY THE HONORABLE LOUISE SLAUGHTER (NY-28), U.S. HOUSE
OF REPRESENTATIVES
Ms. Slaughter. Thank you, Mr. Chairman. I appreciate your
hospitality and also to Ranking Member Velazquez. Thank you for
holding for this hearing and I appreciate your staffs and all
the work they have done to put this important hearing together.
I will briefly summarize my written statement.
Mr. Chairman, the United States and Canada have always been
bound by the sheer geography and share culture, history, and
values. In many ways we are two truly intertwined communities
moving as one. In the northern border regions we depend upon
each other every day. The current Western Hemisphere trade
initiative plan as it stands before us jeopardizes that close
relationship. It will have an absolutely devastating affect on
the economic futures of our border communities, specially the
communities that I represent, as you mentioned, Buffalo,
Niagara Falls, and Rochester.
U.S./Canada supports 5.2 million jobs and it contributes
tens of billions of dollars to our respective economies. In my
district alone $160 million in trade and 20,000 vehicles cross
Buffalo's Peace Bridge every day. The Niagara frontier is the
gateway for millions of tourists each year.
Let me say that one of the things that we are most
concerned about is the numbers of people who come into the area
in northern New York who might suddenly decide that they would
like to take a jaunt over into Canada only to find that they
don't have a passport with them and they are not going to be
able to get back home. We are already seeing a chilling effect
because too many people believe that is already the case.
A report recently issued by the Canadian tourism agency
concluded that this passport requirement would result in an
annual loss of 3.5 million outbound trips by Canadians to the
United States. The estimated loss to the U.S. tourism industry,
just the tourism industry, $667 million per year, but the vast
majority of the people who cross that border on a daily basis
do it for work or for recreation or to see their family or to
go to mama's for supper, whatever it is that we do. The
Canadian and the U.S. populations are that intertwined. One
serious issue is that the British commissioners in my district
believe that this WHTI will increase the border delays and
decrease the crossings. One very important point already, the
fact that there have been fewer crossings at one of our bridges
has already cost $16 million in bonding capacity because of the
fewer people crossing on a daily basis. This money is necessary
for capital improvements. This is one point I really want to
bear down on that is very important on this bonding capacity.
Now, we all know that choosing between national security and
economic strength us a choice that we don't have to make and we
can't afford to make it and it simply is not fair for us to ask
the citizens of the border region to shoulder it on their own.
I do have five concrete recommendations to improve WHTI.
Because we are supposed to bear down on other things, I will be
very brief with those. One, I would like to push the NEXUS card
which I think is terribly important. It is already there. We
passed an amendment to Homeland Security that would even allow
us to use NEXUS on airplanes and on the water. That is an
important card for people who cross frequently. One of the
things that we are very concerned about is that there is no
economic analysis on any of this. GAO has agreed to do one for
us but, unfortunately, since State and DHS have not yet come up
with a concrete proposal they can't. Although we think that
from what we know already, particularly with the bonding
capacity and the fewer people crossing, that the economic
impact will be astonishing. We have not done anything to
promote NEXUS. As a matter of fact, in my part of the border
you can't even get a NEXUS card on the United States side. We
have made great strides, I think, in making some changes to
make it easier for people to get across using that NEXUS card
but now we have to push the card itself and ask the Government
to help us to sell that card. Certainly that will relieve the
congestion at the border as well as making it easier to cross.
Third recommendation is that if there is going to be a
border card, which the State Department is talking about, it
has to be inexpensive, it has to be easy to obtain and, as I
pointed out, NEXUS is not, and it has to be marketed across the
United States because we wanted to make sure that when people
do come up north and they decide they do want to go over to
Canada, as Chairman pointed out, up to this point all we ever
had to say to anybody at the border is where we were born.
The complication of it really has to be simplified as much
as possible. Further, we think DHS and State should consider
alternative documents that will satisfy citizenship and meet
requirements for crossing the border. Providing both options
and convenience for spontaneous travelers is critical. The
Department of State's current vision for the BCC, the card,
falls very short here and we think will result in a steep
decline in cross-border traffic. Now, if we are going to
consider enhanced driver's license, which has been talked
about, as an alternative --
Chairman Manzullo. Time, Louise.
Ms. Slaughter. -- of passports. Okay. We would sure like to
know if they are going to make it simple and good and please
don't hurt the U.S./Canada relationship. The border problems in
the United States are not on our border. Thank you so much and
thanks to all the members of the Committee.
[Congresswoman Slaughter's testimony may be found in the
appendix.]
Chairman Manzullo. Thank you. The written statements of all
the witnesses will be made part of the permanent record without
objection.
Chairman Manzullo. Our next witness is Governor John
Engler, President and CEO of National Association of
Manufacturers. Governor Engler negotiated and brokered and
U.S./Canadian Free Trade Agreement. He has a vast amount of
knowledge not only on the part -- that is not true, Governor? I
thought that was the case.
Mr. Engler. That is a bit more than deserved, believe me.
Chairman Manzullo. Well, whatever it is. It was there
during your watch. Okay. We will take that out of the biography
that wasn't in it. In any case, we appreciate your taking the
time. NAM obviously represents small and large manufacturers
across the country and we look forward to your testimony.
STATEMENT OF THE HONORABLE JOHN ENGLER, NATIONAL ASSOCIATION OF
MANUFACTURERS
Mr. Engler. Thank you very much, Mr. Chairman. I am
delighted to be here. And to Congresswoman Velazquez and to the
members of the Committee I am delighted to have this
opportunity. I appreciate the meeting concerning this Western
Hemisphere travel initiative and specifically this new
requirement, or new since 2004, that U.S. travelers present a
passport or other secure travel document to reenter the United
States from Canada.
Having served as Governor of Michigan for 12 years I have
seen first hand how important business, social, and cultural
links with Canada. The Congresswoman hit it right on the head
in her excellent testimony. This is a very close special
relationship that we have. Our border policies need to
recognize that special relationships. We certainly understand
the challenges the Government faces in seeking to improve the
security of the homeland after 9/11.
That is a priority and there has to be a clear and keen
focus on improving management of our borders. At the same time
trade with Canada and Mexico is vital for U.S. manufacturing
and the U.S. economy as a whole. Consumers, workers, businesses
derive immense benefits from these important and long-standing
trade relationships.
The NAM has been reassured by repeated statements to the
administration that it is seeking both to advance North
American security and streamline efficient movement of
legitimate low-risk traffic across shared borders. The proposed
initiative raises several key concerns.
Flexibility is a question on appropriate secure travel
documents. In addition to passports the proposed regulation
indicate they are likely to be quite limited, the NEXUS
identification cards that the Congresswoman would like to see
expanded issued jointly by Canadian and U.S. issuers, the FAST
driver's license, perhaps other special identification cards.
The problem is relatively few Americans, about 20 percent,
have passports. Only a small percentage of them have other what
would qualify as secure identification cards. There is the
question of cost for business, additional cost not just to
ensure that all relevant employees have passports, but also the
coordination that would now be required. Congressman McCotter
frequently would go to Windsor for lunch. If he were a business
employee he wouldn't be able to visit in Windsor so readily on
the spur of the moment. He would have to plan ahead.
As one NAM member and CEO pointed out, small business would
have to provide passports, not just for the few who are
directly involved but many other might be called to serve
customers in a variety of capacities. Maybe emergency repair.
Additional border cost may not seem like they are much compared
to other business cost but manufacturers today, particularly
the small manufacturers, are really challenged as never before
to control their cost in order to stay competitive.
In 2003 the NAM documented U.S. manufacturers faced
external overhead cost in the order of 22 percent higher than
major foreign competitors. Border related cost related to
Custom security compliance, border delays have increased
significantly since 9/11.
The third concern relates to a relatively short deadline
for requiring new travel documents. The WHTI would mandate use
of passports or any other new secure travel documents by
December 31, 2007. That actually while seemingly far away is a
short time to educate the millions of travelers who for years
have been accustomed to crossing the border.
In fact, I have to confess that since 9/11 twice I have
gone to Canada both times forgetting the passport and having to
talk my way in and out with the driver's license and such other
materials as I had with me. The NAM recommends much more
flexibility on travel documents that can be used in place of a
passport. We certainly would urge the departments involved to
consider allowing other types of documents that are more
readily available and less costly.
One option that has been discussed and discussed nicely in
some of the documentation in the congressional research that is
available for the committee and I think really deserves close
examination the Greater Detroit Chamber of Commerce has an
excellent paper on this is the REAL ID Act on how we can use
driver's licenses and their issuance under stricter standards
that could either stand alone or be used in combination with an
original birth certificate.
The REAL ID Act sets high security standards for the state
driver's license and other state identification cards starting
in May of 2008. That is almost the same deadline as WHTI. We
would support sort of harmonizing those if that were helpful.
We think that with the REAL ID Act, especially if there
were a voluntary part, much is made of whether or not states
have the authority to determine citizenship and I submit that
the states wouldn't be determining the citizenship. They would
be taking advantage of a predetermination made already through
the passport or other federal mechanism as manufacturers work
with you.
I am out of time so, Mr. Chairman, I will stop at that
point. I have submitted more detailed testimony for the
Committee. As always, we are ready to answer questions and work
with you.
[Governor Engler's testimony may be found in the appendix.]
Chairman Manzullo. Thank you, Governor Engler.
Our next witness is Janice Kephart, former counsel to 9/11
Commission. She is former Immigration counsel on the Commission
and will offer some good insight on border security
recommendations from that report. We look forward to your
testimony.
STATEMENT OF MS. JANICE KEPHART
Ms. Kephart. Thank you, Mr. Chairman. Thank you, Mr.
Ranking Member. Thank you for having me here today. I very much
appreciate your interest in the Western Hemisphere travel
initiative and why it is important for the security of the
United States and for our economy.
Although it is my viewpoint I represent here today, I
believe I am in step with my 9/11 Commission colleagues when I
asked this Committee and its constituency to work together to
help ensure that our Government implement the 9/11 Commission
recommendations regarding requiring a passport or equivalent
for entry from Canada, Mexico, and the Caribbean, a
recommendation based squarely on my border team's findings
about terrorist travel.
To achieve national security a responsible nation must
effectively scrutinize those who seek to enter and stay.
September 11 has taught us that securing U.S. borders are a
matter of national security. However, let me be clear we need
not give up privacy, nor give up commerce to attain border
security.
In fact, with efficient and streamline security privacy and
commerce are both enhanced. People and goods that should make
it through the system in an efficient manner are more likely to
do so when the acceptable forms of travel documents go from
dozens to few and these few are not state or local documents
but federally issued, biometrically based and vetted with a
handful of acceptable documents working alongside registered
traveler and commercial programs are ports of entry finally
have the opportunity to become efficient, well run, and more
secure.
With WHTI as envisioned today, unnecessary inspections and
the inconveniences that go along with them are less likely to
occur. That is a win for commerce, the commuter, the tourists
and, frankly, most importantly from our view point, the
American people. A win for the American people doesn't stop
there.
Right now my understanding is that the State Department and
DHS plan not only to accept the NEXUS, FAST, Century, and
border crossing cards as acceptable forms of ID for frequent
cross-border travel, but the State Department is also going to
be offering a North American travel card or equivalent. This
card will be about half the cost of a passport, fit into a
wallet like a driver's license, protect privacy, can be vetted
against national security information, and will be available at
the 7,000 passport offices across the United States.
This will help those in the border communities who do not
need a passport for international travel but, nonetheless, do
have an interest in crossing the border. Where does the
terrorist end up with WHTI? With a difficult choice. Under WHTI
the terrorist can no longer present an unauthenticated document
containing unverifiable information. Instead the terrorist has
to choose risk getting caught by attempting an illegal entry or
risk being detected by U.S. authorities at the border when
presenting a passport or by Canadian authorities when applying
for a passport.
So who are these terrorists? Let us start from what we know
from the Canadian Intelligence Agency. Canadian Intelligence
tells us that Canada has a significant terrorist community.
About 50 terrorist organizations actively operating there and
about 350 individuals being actively watched. Terrorist
financing more than doubled in Canada last year to the tune of
$2 billion.
Canadian anti-terrorist legislation passed after 9/11 is
not retroactive so that those trained in Afghan camps prior to
9/11 remain at large and Canadians have a significant concern
with ``second generation jihadists'' who can easily attain
passports and slip through the borders but right now don't even
need a passport to cross the border.
We know that LAX Millennium bomber Ahmed Ressam probably
would have gotten away with presenting a fake Canadian passport
if his behavior hadn't caught the attention of the Customs
officer on duty the evening he attempted entry. We know the FBI
seeks out a number of naturalized Canadian citizens that have
$5 million bounties on them.
For example, Abderraouf Jdey was originally slated to
participate in the 9/11 plot and he dropped out to be part of a
second wave of attacks. He is wanted to day. There is also Amer
Al-Maati, a trained pilot and Canadian citizen who has vowed to
crash a plane into a U.S. building. Then there is also a U.S.
legal permanent resident by the name of Adnan El-Shukrijumah
who is considered highly dangerous having been Jose Padilla's
original partner in the dirty bomb plot and believed to have a
false Canadian passport. He remains at large.
The point is we don't want these people to get into the
country. We need to see them found. With a regime like the
Western Hemisphere travel initiative they are less likely to
get in and, if they do, we are more likely to catch them. Of
course, there is never a guarantee. However, when border
officers can focus on high-risk applicants for admission they
will spend substantially less time on people that don't need to
be checked each time they come over the border to work or buy
or deliver something that enhances are economy. That means what
the American people end up with is security and facilitation
and the terrorists have a harder time traveling to carry out
their mission.
Chairman Manzullo. How are you doing on time?
Ms. Kephart. I thank you for your support and I hope that
is something we can all agree on at the conclusion of this
hearing. Thank you, sir.
Chairman Manzullo. I think you have testified at
Congressional hearings before, haven't you?
Ms. Kephart. A couple times.
Chairman Manzullo. There you are. Thank you very much.
Ms. Kephart. Thank you.
[Ms. Kephart's testimony may be found in the appendix.]
Chairman Manzullo. We have guest member here, Mr. Higgins
and your constituent is Howard Zemsky. Is that right? He is not
here yet? Is he coming? Does anybody know? All right. So he
will be coming in late.
Mr. Higgins, why don't you go ahead and introduce him even
though he is not here because I have no idea when he is going
to come.
Mr. Higgins. There is another gentleman here.
Chairman Manzullo. You want to do that? Why don't you
introduce both of them?
Mr. Higgins. Thank you, Mr. Chairman, for your leadership
and Ranking Member Velazquez, for your leadership on this issue
as well. We have several people from western New York including
Ken Staub who is representing the American Trucking
Association. He is Vice President of Riverside Service
Corporation. He has traveled from Buffalo today to tell us of
the impact of the proposed passport requirement on the trucking
industry and the movement of goods and commerce between the
United States and Canada, between western New York and southern
Ontario.
Additionally, Howard Zemsky, who we were told had some
travel difficulties today, is a western New York business
leader and civil leader for and from Buffalo and western New
York who has considerable investments in both the United States
and Canada. As I said, he is a business leader who has first-
hand knowledge of not only the adverse impact on commerce that
the proposed passport requirement would have, but also just the
rumor, the discussion of the impending passport requirement has
had an adverse impact on business relations between the United
States and Canada at western New York and southern Ontario at
the Peace Bridge so thank you very much, Mr. Chairman.
Chairman Manzullo. Thank you. On that note let us go to Mr.
Staub, Vice President of Riverside Service Corporation speaking
on behalf of his business and the Truckers Association. He is
also in business with his three sons who all work in the
transportation industry.
Mr. Staub, have you ever testified before Congress before?
Mr. Staub. No, I haven't sir.
Chairman Manzullo. Why don't you take a sip of water and
sit back. You look extremely nervous. We just want you to be
very relaxed and just tell us your story.
Mr. Staub. We will give it a try.
Chairman Manzullo. How does that sound?
Mr. Staub. Sounds good to me.
Chairman Manzullo. You are up.
STATEMENT OF MR. KEN STAUB, RIVERSIDE SERVICE CORPORATION
Mr. Staub. Mr. Chairman and members of the Committee, thank
you for inviting me to testify today on behalf of the American
Trucking Association, Inc. on the subject of the Western
Hemisphere travel initiative.
I am Ken Staub, of course, Vice President of Riverside
Service Corporation. We are headquartered in Buffalo, New York.
We are a truckload flatbed carrier with four tractors, six
trailers. We have another company, our sister company, Black
Rock Trucking, operates another 15 tractors and trailers.
We have 10 employees, 15 owner operators, and we service
the states of New York, Pennsylvania, Ohio, and Ontario,
Canada. ATA is a federation of motor carriers, state trucking
associations, and national trucking conferences that represent
over 34,000 companies and every type and class of motor
carrier.
In 2004 U.S/Canada total trade was $444 billion while U.S./
Mexico trade was $266 billion. Trucking plays a critical role
both domestically and internationally with Canada and Mexico.
Annually there are about 14 million truck crossings at our
international land borders and trucks carrying about 80 percent
of the freight value of North American surface transport or
trade.
The trucking industry has been working with various
Government agencies since 9/11 and a number of cross border
security programs have been implemented to improve such
operations. It is important to emphasize that security and
trade facilitation go hand in hand. You can't eliminate one at
the expense of the other.
Section 7209 of the Intelligence Reform and Terrorism
Prevention Act of 2004, or IRTPA as we refer to it, requires
anyone traveling into the U.S. to carry a passport or other
documents that identify and denote citizenship. Legislation
provides some flexibility for travelers to use a combination of
documents that establish this identity and citizenship.
Chairman Manzullo. Mr. Staub, could I interrupt you? Could
you tell us about your own experience in the crossings with
regard to your own company?
Mr. Staub. I can certainly do that.
Chairman Manzullo. I didn't see that in the testimony and
that is what I would like to have emphasized.
Mr. Staub. Well, if I took my trucking hat off and gave you
personal experience.
Chairman Manzullo. That is what we want. Go ahead.
Mr. Staub. What I do need to tell you about, though, is
that some of our alternative credentials that have been
developed in the trucking industry are really pretty important.
We have had some programs that actually have been developed by
Homeland Security.
You have the FAST card. The FAST card is designed for
trucking and it really expedites the travel and eliminates the
delays at the border. For us to take and have to have a
passport in addition to the other credentials that have already
been made available or mandated on us like the FAST card. NEXUS
is not a commercial endeavor, however it is available to us.
The I-94 program, the U.S. Visit program. This is about
$500 worth of investment in a driver to get these credentials.
If we had to take and get a passport in addition to them, it
would just raise the cost. Typically a driver pays for the
better part of these credentials.
Now, I might add this, too. The credentials I am talking
about I feel Homeland Security will probably endorse these as
alternative documents for the simple reason that they are of a
higher category than a passport. They require digital
photograph, fingerprints, and an interview. Passports don't do
that so I am confident from our perspective, the trucking
perspective, that these other documents that are either
available or mandated to us we probably won't have to have a
passport so we are probably safe in that respect.
In terms of taking the trucking hat off and putting on my
personal hat living on the border for 63 or 64 odd years I am
accustomed to going across and just saying, ``Born in
Buffalo.'' Typically the process going into Ontario is even
easier than it is coming back. We are typically kind of almost
waved through going in.
Coming back obviously today is a driver's license that we
have to take and produce. There is no question, and I see that
we are getting real close on time, so the NEXUS program should
be emphasized because that would really speed up the flow. We
are going to need an identity card in addition to our driver's
license. The NEXUS card would probably fill that niche and that
gap. Thank you very much for inviting me to testify.
[Mr. Staub's testimony may be found in the appendix.]
Chairman Manzullo. Thank you. Appreciate your testimony.
Mr. Staub. I got a little off course.
Chairman Manzullo. No, no, you didn't. The prepared remarks
will be made part of the permanent record.
Mr. Staub. Okay.
Chairman Manzullo. It is your personal on-hat and off-hat
that we are looking for. Otherwise, we could have just accepted
your testimony by fax. Thank you for coming down. Appreciate
it.
Mr. Staub. Thank you very much.
Chairman Manzullo. Our next witness is William Cook, Senior
Manager of Worldwide Transport Design and Procurement at
DiamlerChrysler.
Mr. Cook, your full statement will be included in the
record. What I would like the record to indicate is that the
second page at the bottom, the last paragraph, the first
sentence there if we just add the words ``per day'' that would
correct that.
Mr. Cook. That is correct.
Chairman Manzullo. Go ahead. We look forward to your
testimony.
STATEMENT OF MR. WILLIAM COOK, DIAMLERCHRYSLER
Mr. Cook. Chairman Manzullo, members of the Committee,
thank you for the opportunity to address you on this important
issue. The secure, safe, and efficient operations of the border
are critical to the DiamlerChrysler business model.
I would like to take this opportunity to highlight our
Just-In-Time shipment process. I think it is important in light
of the proposed passport requirements and what is going to
happen between the U.S. and Canada. I am submitting my written
statement.
Our Just-In-Time manufacturing process is a philosophy. It
is not a technique. It was originally referred to the
production of goods to meet customer demand exactly in the
desired quantity, desired time, and desired quality. It evolved
into a strategy or a philosophy that minimizes waste. Waste can
come in the form of wait time, transportation, inventory, and
poor quality.
What Just-In-Time management allows us to do is minimize
all of that. Wait time, particularly at the border crossings,
is critical to the whole manufacturing process of minimizing
the wait time. The whole process exposes bottlenecks and one of
the bottlenecks that we have experienced in the past is the
Customs process at the border both into Canada and out of
Canada. It is a risk that we have in our manufacturing process.
The whole process requires very close coordination between
our manufacturing and ourselves and our suppliers and our
suppliers are small trucking companies like Mr. Staub. Many of
our companies are family-owned businesses, $50 to $100 million
in total revenue, and we are a big portion of their business.
We support those companies actively.
Along with other OEMs and automotive suppliers have been
applying JIT manufacturing processes since the late '70s in
response to primarily the Japanese techniques that they
developed in the '50s and '60s. It has been enhanced by the
consolidation of production suppliers in general but also
facilitated by trucking deregulation which allowed us to be a
lot more flexible, train our carriers and have them operate in
regions where we want them to operate. The cross-border region
is critical to us.
DiamlerChrysler assembly plants typically are constrained
in the size and the amount of money we can spend to facilitate
them. We build 1,500 cars a day in the Chairman's district. We
are about to launch an assembly plant that will build 1,600 to
1,700 cars a day, three different models so there is a lot of
complexity. There is not a lot of room in that plant to store
inventory so we get multiple deliveries per day. I have an
example of an assembly plant in Jefferson North which is inside
Detroit. There is a supplier in Windsor that makes eight
deliveries a day across the Ambassador Bridge to the Jefferson
North assembly plant.
In the New Belvedere assembly plant in Illinois there will
be a supplier in Windsor that when we reach full production by
the end of next year will have eight shipments a day to
Belvedere to supply critical stamping, metal stamping
components to that assembly plant. Those shipments are timed
out to exact shipment windows and shipment deliveries and there
isn't room for a lot of extra material in the plant. It is
critical that, in fact, we meet the timing. Part of the supply
chain is the Customs process and the border.
The end result of our manufacturing process is a highly
integrated supply chain which, as I said, includes the Customs
processing. We have been a big supporter of the C-TPAT program,
FAST. We, as well as the other OEMs, have been at the forefront
of launching the FAST program supporting that. I can tell you
that has been difficult to find drivers and to find carriers
that can keep and retain drivers that have FAST cards.
The driver community as a whole comes from a socioeconomic
area that sometimes it is difficult for them to, one, pass the
application or fill out the paperwork as they are on the road.
It is very difficult to get the cards to the extent that we
want. We have been able to get our FAST shipments up to about
95 percent of the shipments on the northern border so we have
been very successful in doing that but it has been a struggle
all the way along to keep and retain drivers, I think, for our
carriers that have that FAST application.
As far of the border we obviously build vehicles that will
be--we are responsible on the northern border for about 700
truckloads across the Ambassador Bridge, 40 rail cars, and then
300 finished loads per day of about 2,700 cars and trucks. That
accounts for about 10 to 15 percent of the volume on the
Ambassador Bridge.
I would just like to end by saying the continued
implementation of the ACE program for Customs, the Automated
Commercial Environment, as well as improving the operations,
the impact on infrastructure security and cost of the new
program such as this Western Hemisphere travel initiative
should be clearly understood. It is important that the
Committee consider these factors and that we maintain
flexibility to ensure cross-border business travel as well as
cross-border trade. Thank you.
[Mr. Cook's testimony may be found in the appendix.]
Chairman Manzullo. Thank you.
Maybe we could have our staff prepare a place there for Mr.
Zemsky. You want to put his name tag there and then when he
comes in direct him to have a seat.
Our next witness is Tom Chestnut, President and CEO of AAA
of Western and Central New York representing almost a million
members over 25 counties. AAA is also, I think, the largest
travel agency in the United States. Tom is also an avid
basketball fan. He used to work for the Cleveland Cavaliers. Is
that correct?
Mr. Chestnut. Yes.
Chairman Manzullo. Okay. You are tall enough. Okay. You
played basketball in Europe, didn't you?
Mr. Chestnut. Yes.
Chairman Manzullo. Okay. Probably against the short
Sicilians like me. We look forward to your testimony. Thank
you.
STATEMENT OF MR. THOMAS CHESTNUT, AAA OF WESTERN AND CENTRAL
NEW YORK
Mr. Chestnut. Thank you very much. Good morning, Chairman
Manzullo and members of the Committee. Thank you for the
opportunity to appear before you today to discuss the potential
impact of the Western Hemisphere travel initiative. Our company
is the 12th largest AAA club headquartered in Buffalo
representing nearly 900,000 member motorists in upstate New
York providing automotive, travel, and financial services.
We are not only a member services organization but we are a
medium-sized business in the travel and tourism industry
located on the northern border. We are very interested and
involved in the economic well being of the communities we
serve.
The seamless border that has been driving commercial and
tourism development and job growth on both sides of the Niagara
River should not be threatened by the requirements of this
initiative. Tourism and casual travel between Canada and the
United States for entertainment, shopping, and cultural events
are critical to the vitality of our region, an area whose
economy is already challenged by a variety of forces.
How important is this cross-flow of people? Consider that
travel and tourism is one of the largest employers in New York
State accounting for nearly 400,000 jobs. Last year Canadians
visited New York State over 2 million times and spent almost
$500 million. A disruption of this flow could be catastrophic.
A good example of the Canadian's desire to visit the United
States is the fact that the Canadian Automobile Associations'
Central Ontario Automobile Club does about 100,000 TripTiks
annually with 70 percent of those travel routings being to the
United States.
Canadians want to visit our country and we very much want
the market to make that happen. Our border is unique since we
actually try to stimulate cross-border traffic. We must ensure
that any program balances security and economic issues
appropriately.
An illustration of the casual travel that happens between
Canada and the United States in our area is that approximately
15 percent of the attendance at home games of the NFL's Buffalo
Bills and approximately 20 percent of the fans at NHL's Buffalo
Sabres games are Canadians. Rumor has it that when the Toronto
Maple Leafs play that gets up to 50 percent.
As important as travel and tourism is to both countries, it
is also very fragile. Consider that cross-border trips have
fallen 20 percent since the tragic events of 9/11 due to wait
times, hassles, and perceptions. Confusion over further
changing of regulations will cause an additional decline. We
know that travelers want ease of mobility. We believe that
border regulations should facilitate safe and efficient
movement of travelers. The agencies must strike a balance to
avoid procedures that discourage leisure travel.
Specifically, the requirement that people show a passport
is problematic since it threatens this mobility. The concern is
that a passport is a special travel document that most North
Americans do not possess. Only 20 percent of American and 40
percent of Canadians have a passport. Interestingly, only 30
percent of Congressmen have a passport. Cost and processing
time are disincentives to obtaining a passport.
In conclusion, we believe the following should be
considered. Programs currently in place to manage frequent
cross-border travel such as NEXUS should be continued. The
agencies need to work with existing forms of identification
that have a broad application such as driver's licenses and
birth certificates which are identified by the REAL ID Act of
2005. The Act may provide an opportunity to accommodate the
initiative without requiring frequent cross-border travelers to
obtain passports.
The establishment of an advisory task force representing
experts from stakeholder groups including tourism should be
considered to study the regulations and to recommend solutions
to the executive branch in Congress. At this hearing today
experts from manufacturing industries are talking about the
importance of Just-In-Time delivery of goods. No matter what
system you have designed to facilitate delivery, they are only
as effective as the ability of trucks to actually cross the
border.
If the proposals are implemented, trucks could be sitting
in long lines of frustrated travelers trying to cross the
border without passport. This proposal threatens both travel
and trade industries. Mr. Chairman, thank you for your efforts
to get a travel and tourism industry perspective, an industry
critical to our nation's economy.
[Mr. Chestnut's testimony may be found in the appendix.]
Chairman Manzullo. Thank you. I guess my first question is
for you, Mr. Chestnut, and that would be about the statement
that is at the bottom of your first page. It says, ``Consider
that cross-border trips have already fallen 20 percent since
the tragic events of 9/11 due to wait times, hassles, and
certain imperceptions.'' Can you quantify that? Is there a
study on that or is it raw numbers you are looking at? What is
the source of that?
Mr. Chestnut. I will have to get back to you on the source
of that particular number. However, we do have documentation
for all the numbers.
Chairman Manzullo. Okay. Just by raw counts you could do
that. Okay. My next question is for Mr. Cook at Chrysler. All
you have to do is tell me the models of those three cars being
manufactured in Belvidere but that is a secret. At least at
this point. Mr. Cook, you had mentioned on the last page of
your testimony where it says ``future trends.'' Do you see
that?
Mr. Cook. Yes.
Chairman Manzullo. It says, ``Multiplicity requirements for
OEMs, suppliers, carriers will add confusion and congestion to
borders that do not have the infrastructure to support long
delays in the customs and immigration processing.'' You also
put in there at the beginning, ``Even though it is difficult to
predict the future, it is highly likely that the auto industry
is going to be more competitive as new entrants from developing
countries try to penetrate the North American market.''
Well, China is making a new car. I am trying to think of
the name of it. The Cherry. They have been sued by GM in China.
They plan to send a million of those to the United States each
year. That would be about 1/17th of the automobile market. Is
that what you have reference to is hurting the competition?
Mr. Cook. That is correct. What I reference here is it is
easy for a foreign manufacturer to ship a full vehicle into
Long Beach or into Baltimore. It is a finished vehicle that
goes directly to market. It is not so easy to build cars and to
have to move from suppliers resident in Canada or Mexico into
an assembly plant or in the U.S. into a Canadian assembly
plant. It is very easy to build a car overseas and ship a full
finished vehicle into the U.S.
Chairman Manzullo. Okay.
Mr. Cook. There is not many barriers to that.
Chairman Manzullo. Okay. Then with regard to the Belvidere,
Illinois facility could you do that supply chain again?
Remember you said that something will be done in Canada and
then shipped to Illinois?
Mr. Cook. Exactly. There is a metal stamping company in
Windsor that will produce body stampings for the Belvidere
assembly plant. Because of the volume of that assembly plant,
nearly 1,700 vehicles per day, it is going to require that we
make eight truckloads per day from that Windsor, Ontario area
supplier to Belvidere. The exact route is timed with a window
at 8:00 a.m. and 10:00 a.m. and 11:00 a.m. that he ships eight
times per day over three shifts. Then there will be the receipt
in Belvidere, Illinois for that.
Chairman Manzullo. So those will be stamped components.
Mr. Cook. Will be a stamped component. Right. There is not
enough capacity in the Belvidere stamping plant or in the
region to build that kind of component so we--
Chairman Manzullo. You might talk to me about that. I might
be able to help you out. Appreciate that.
I am going to defer to Mr. Zemsky. You got in late. Are you
ready to proceed with your testimony?
Mr. Zemsky. Yes, sir.
Chairman Manzullo. Would you like a glass of water or a
minute to sort of collect yourself?
Mr. Zemsky. No, no. I am good. I should apologize. We had a
little unexpected lake effect snow in Buffalo and they couldn't
find the plane.
Chairman Manzullo. Okay. You are here and that is all that
counts. The way it works is there is a clock in front of you,
Mr. Zemsky, that says green which means go. When it gets to
yellow it means you have one minute left. When it says red it
stops for a total of five minutes. Are you sure you are ready
to go?
Mr. Zemsky. I am sure.
Chairman Manzullo. All right. Let us do it. Mr. Zemsky is--
you have already been introduced by your Congressman, Mr.
Higgins.
Mr. Zemsky. Great.
Chairman Manzullo. Also from Buffalo. You represent Taurus
Partners which does a significant amount of work in real estate
development in the Buffalo area. Your entire written testimony
will be made part of the record. Our concern here today is for
you to tell us as much as possible your own personal story as
to the impact of the border crossings and any impact on that as
a result of increased security. Go ahead.
STATEMENT OF MR. HOWARD ZEMSKY, TAURUS PARTNERS, LLC.
Mr. Zemsky. Good morning, Chairman Manzullo, Ranking Member
Velazquez, members of the Committee. I am honored and pleased
to have the opportunity to testify before the Small Business
Committee. Buffalo is a patchwork quilt of small businesses,
home of precisely zero Fortune 500 headquarters. Small
businesses are our backbone.
I am personally engaged as the principal of several small
businesses on both sides of the U.S./Canadian border and I
bring that personal perspective to the discussion. I am also
here today representing a number of organizations in western
New York, the Director of the Greater Buffalo Partnership, our
region's largest business association, representing literally
thousands of small businesses.
I also represent Buffalo Place, a not-for-profit
organization dedicated to enhancing the economic health and
quality of life in downtown Buffalo. I serve on the board of
Buffalo State College. I am Director of the Binational Tourism
Alliance, a not-for-profit entity dedicated to reducing the
barriers along the Niagara River border crossings.
I suppose if you are looking for a silver lining in the
WHTI process to date, we have finally found the one issue that
has seemingly managed to unite virtually all public and private
organizations on both sides of our border in the Niagara
region, no easy task.
It speaks to the enormity of the issue for all of us in the
Niagara region. We are extremely concerned that the manner in
which WHTI is implemented could have a depressing effect on our
economies and our way of life. We are a binational region. The
Niagara River lies at the center of our binational region, not
at the perimeter. We see it as a river more than a boundary or
a border. It is a river in the way the Potomac is a river. You
cross it during the course of your day or week and some of you
cross it often.
In order to paint the proper picture for you, imagine
requiring a passport to cross the Potomac River. That is how
integrated our binational region is. The health of our cultural
organizations, many of our colleges and universities, our
shopping centers, our professional sports teams including the
Buffalo Bills and the Buffalo Sabres. At our Sabres games we
stand and we sing the Canadian National Anthem and then we sing
the American National Anthem. It is just integral to our
region.
We literally live, work, and play on both sides of the
river. Tourism is such a central part of our economy that when
you diminish the flow of people across the border, you diminish
our economy and a large portion of our small businesses.
There was a time in Buffalo's history when our geographic
location along the east/west axis was strategic to us. In the
modern era it is our geographic location along the north/south
access that is so vital to our present and our future. About 4
million Canadians visit New York State on an annual basis, many
hundreds of millions of dollars of impact. The majority comes
from Ontario, our northern neighbor.
Our economies are inextricably linked and interdependent
and that is particularly true of the trade and tourism
relationship between Ontario and New York. For the past many
years in western New York we have been building a tourism
economy based on the foundation provided by the millions and
millions of visitors to Niagara Falls. In our region on both
sides of the border projects that are recently completed are
under development related to tourism total $2 billion.
We have invested or are in the process of investing $100
million on bridge upgrades between the two most popular bridges
in our region, the Peace Bridge and the Queenston/Lewiston. We
are years down the road of designing potentially a new
signature bridge connecting Buffalo with Ontario. It is ironic
that we are both designing a new bridge and simultaneously
contemplating putting up a metaphoric wall between the U.S. and
Canada.
Buffalo is investing hundreds of millions of dollars in
tourism. We have lost so much of our industrial base and we
have really, really embraced tourism as the new economy for our
area.
The greater Toronto area has over 6 million people. It is
the 6th largest urban area in North America and it is right at
our doorstep. Additionally, seven million Canadians, about 25
percent of the country's population, live within 100 miles of
the greater Toronto area. The population is expected to grow by
100,000 annually. The growth of the GTA is the true bright spot
in our binational region and stands in some contrast to our
local western New York economy.
In our region we have to be thinking about how we can
safely facilitate more trade and tourism with Canada and not
putting up walls and restricting trade and tourism with Canada.
The passport requirement obviously concerns us knowing that
fewer than 40 percent of Canadians and 25 percent of Americans
have passports.
We know from consumer research passport requirements would
restrict trips across the border severely. We want to emphasize
with equal or perhaps greater weight that we are no less
concerned, and perhaps more concerned, that another new form of
ID may be proposed. This ID would like be confusing and no less
a barrier to tourism.
Much of the travel to our region is spontaneous motor
trips. We have already experienced diminished tourism as a
result of the ongoing confusion regarding WHTA. We urge you to
continue to take the time to find a way to use modern
technology to enhance current IDs such as driver's licenses.
This is obviously a binational relationship that is the
most peaceful and economic in the world. It would serve us all
well to be patient and to be collaborative so we don't turn the
war on terrorism into the war on tourism. It is the many small
businesses in our region that will bear the burden.
I want to thank Chairman Manzullo and Congresswoman
Velazquez for holding this hearing and for giving me the
opportunity to present this testimony.
[Mr. Zemsky's testimony may be found in the appendix.]
Chairman Manzullo. I want to thank you.
Ms. Velazquez.
Ms. Velazquez. Mr. Chairman, I would like to yield my time
to Congressman Higgins since his district is one of the most
impacted by this proposed rule.
Mr. Higgins. Thank you very much Ranking Member Velazquez
and Chairman for your leadership again on this issue. Thank you
all of those who have travelled from their various areas
including especially the people from Buffalo and western New
York to provide this important testimony.
I think what you have heard here is something that is very
clear and compelling, and that is that something that was
advanced to address a general problem is having a specific and
severe adverse impact on certain areas, particularly between
the northern border communities of this country, in particular
western New York.
My personal observation relative to western New York and
southern Ontario at the Peace Bridge is that the two
communities of western New York and southern Ontario have been
friends for over 100 years. Our economies are interdependent.
Our life qualities are interdependent.
It seems to me, particularly in this day and age of
explosive and unlimited information technology, Governor Engler
had made specific reference to dealing with a form of
identification that we already have, that being the driver's
license and being able to verify citizenship, being able to
verify country of origin, being able to use that piece of
information in an enhanced way to address what we are trying to
address here with respect to this passport requirement.
We have already seen in Buffalo and western New York not
only because of the physical barriers between commerce and life
quality between the United States and Canada, but now a
proposed administrative barrier, a drop off in business between
our two countries at that border. It is something that we
cannot sustain. It is something that I think the problem can be
addressed in a much more efficient and effective way without
imposing a very severe additional barrier between the United
States and Canada.
One question I would like to ask of Governor Engler. You
had made reference to an initiative in your state relative to
the driver's license that perhaps would offer a prescription
for what it is we are trying to address here.
Mr. Engler. Thank you, Congressman. I am happy to respond
to that because there is great interest on the part of the
Michigan Secretary of State, Secretary Terry Lynn Land. I know
that she has talked, as I have, with officials in Ontario and
there is great interest in Ontario in the Canadian part in
trying to harmonize. What happens with Michigan and Ontario is
we have five border crossing points in my own state of Michigan
with Ontario and to even get it down to some of the same
technologies there is this conversation.
Part of the frustration, I think, from the state level,
what is the purpose of the REAL ID Act? Where are we going with
that? We have so many different pieces of new identification we
are creating, friends with the trucking world and the business
world. We have TWIC cards eventually that are out there. We
have all of these different ways. What you have just
articulated is something that I am very supportive of.
How do we create a piece that we can kind of carry around
with us that has multiple purposes? Maybe it is a voluntary
thing if we want the minimalist driver's license or personal ID
card. We have seniors who just don't drive anymore like my
mother who has a personal ID card. The state issues it sort of
as a replacement ID card. She doesn't need all of this other
stuff perhaps but I would like to have that card work at the
airport as well as at the border. Why not have it work easier?
Then if you can take most of us whose identities can be
established who are happy to provide biometric, we will do
whatever you want. Just somebody in the federal government has
to tell us what you would like to have and sort of make up
their mind. I mean, we are four years after 9/11 and we still
don't have a transportation worker card out there yet. Part of
it is nobody in an agency wants to make the final call because
they might be wrong at some point in the future so we don't do
anything. That is clearly worse than trying to get it right.
Chairman Manzullo. Thank you.
Mr. Poe.
Mr. Poe. Thank you, Mr. Chairman. I want to welcome all of
you here today. I am from the opposite end of the United States
down in Texas. I do have in-laws that live in Niagara. We have
overcome the language barrier and are able to communicate
without an interpreter any longer. Thank you for being here.
A couple of comments and then I have some questions. It
seems to me that it is absurd to have multiple documents to
cross into the United States from either border, baptismal
certificates, driver's licenses, all of these different
documents, but yet we accept those in spite of the 9/11
Commission.
Down on the Texas border when we talk about entry into the
United States, Laredo is the No. 1 inland port in the United
States. 7,000 to 10,000 trucks a day come into Texas from
Mexico. About that many go the other direction. I am not
unfamiliar with the issue of commerce. I am a big supporter of
small business, especially the trucking industry. It seems to
me there are three issues. One, the frequent commercial travel
of trucks, for example, every day.
Then we have the frequent citizens from either country
coming into the United States on a daily basis crossing several
times a day. Then you have the infrequent travelers that come
into the United States. All three of those are really issues
that we have to find a solution to on lawful entry into each of
those countries.
My question first, Mr. Zemsky, what is your solution to
border crossing identification security? Very briefly what
would you say would be the solution?
Mr. Zemsky. Well, from the standpoint of ease we would
agree that it should be a piece of identification that people
otherwise carry with them. If there was a way of enhancing a
driver's license to the extent to which it would suit that
purpose, we would be very much in favor of that. I think of
Canada and the U.S. as having 4,000 miles of shared border.
It is hard for me to understand how gumming up 30 yards of
our bridges is going to really do that much for our security. I
think the same policy ought to be in effect for the northern
border as the southern border. I am not familiar at all really
of consequences with the issues of the southern border and the
complexity of that.
I live a mile from Canada and I am very familiar with the
issues related to the northern border. It is a culture that we
have so much in common. We literally live on both sides of the
border. We work on both sides of the border. We have businesses
on both sides of the border. We cross that border like you
cross the Potomac River. It is that integral to our region.
Mr. Poe. Thank you. Another question for Ms. Kephart.
Passports don't discriminate. They are not subject to the
discretion of the border guard that looks into the vehicle and
makes the determination based on somebody's affirmance that
they are American, Canadian, or Mexican National which is all
that is required at some of our border crossings.
Why would you suggest with the 9/11 Commission making the
recommendation of passports that provision in the 9/11
Commission's report that has been ignored having passports, I
guess for political reasons, why do you recommend passports
over all these other types of multiple documents?
Ms. Kephart. Okay. A couple of things. Just to make it
clear to the others on the panel, it is my understandingthat
NEXUS, FAST, Century Border Crossing Card, and the new North
American Travel Card will be considered an equivalent to the
passport. The new North American Travel Card will be an
equivalent to a passport you can carry with your driver's
license which may solve some of your problems.
But the passport is a federally issued document. It can be
backed up by diplomatic security when it looks for fraud. It
can be checked against national security databases. It is, in a
way, the hundreds of birth certificate issuing authorities, the
state driver's licenses all have different requirements. They
can't be authenticated. They can't be verified.
This puts the border officer at checking everybody instead
of just having a passport to check. The passport just to check
means that is all the border officer is looking for. That
facilitates people through quicker. He knows what he's looking
for. He knows forensically what to look for. That is a
facilitation means and a security means all at the same time.
You get your whole kit and caboodle at once.
Mr. Poe. Plus in a passport it has a bar card and you can
record who comes into the country.
Ms. Kephart. Right.
Mr. Poe. Now we don't record who comes into this country.
Ms. Kephart. Right. You have a U.S. VISIT activity there
when we get U.S. VISIT down at the land ports of entry. Thank
you.
Mr. Poe. Thank you.
Thank you, Mr. Chairman.
Chairman Manzullo. Congresswoman Bordallo.
Ms. Bordallo. Thank you very much, Mr. Chairman. I am sorry
I was a little bit late so I didn't hear everyone's testimony.
I think the gentleman, my colleague, from Texas mentioned he is
far away. Well, I am even further. I represent Guam. It is a
U.S. territory in the Pacific about 10,000 miles from the
Canada/U.S. borders that we are discussing today. We, too, are
very concerned in my particular about tight security around our
shores.
I am curious is the current NEXUS system something that you
approve or would you like to see changed and in what way?
Guam's economy is tourism very much like New York. Another
thing that I am very concerned about is about 80 percent of our
goods come in from the United States so you are talking
containers.
I probably would like to ask you first, Ms. Kephart, what
assurances--do you agree with the NEXUS system? Could it be
upgraded? Are there things that you think would be much better?
We are concerned about terrorism on Guam. We are neighbors to
the Philippines and the other areas where terrorism--you know,
there are terrorist cells. I am just curious what should we be
doing that we are not doing today?
Ms. Kephart. Okay. In terms of NEXUS, my understanding in
talking to the folks who have worked on the simulation models
for facilitating commerce through the ports of entry and others
is that NEXUS is working extremely well. There is never a
guarantee on our borders. There is never a guarantee, you know.
No terrorist has a T on their forehead. Anybody can get through
if they want to try really hard to do.
What we have to do is manage the risk. NEXUS and FAST and
Century and the Border Crossing Card and the State Department's
new North American Travel Card which they say they will be
offering, are ways in which we can facilitate those through who
we don't consider to be high risk. Those are very good programs
because then you are calling out the lower risk folks. You can
focus on the newer travelers, the higher risk.
My understanding is the RFID technology, the radio
frequency technology, is working extremely well. I don't know
what the other gentlemen here think who have experience with it
every day but that is my understanding from sort of the
Government side and from the private industry who is producing
those technologies.
Ms. Bordallo. I would like to ask the Governor if you would
comment on that. Are there ways that we could improve this
system or is the system working?
Mr. Engler. I think there are ways to improve it. I have
never actually seen a NEXUS card. I don't know if anyone in the
room has one on their person.
Ms. Kephart. I have one right here.
Mr. Engler. Is it yours?
Ms. Kephart. I got it sent to me by the committee who
produces them actually.
Mr. Engler. The vendors are having a field day but I am
just not sure--
Ms. Bordallo. Are there NEXUS lanes?
Ms. Kephart. Yes. I talk about it in my testimony.
Ms. Bordallo. Yes.
Mr. Engler. Where I think we need to go, let us try to
level set this. The TWIC card, which is finally coming along,
that is for transportation workers at large. That is sort of
a--I don't know if that is FAST plus just to try to sort that
out. There are three different cards and then there is a
hazardous endorsement and the commercial driver's license is
what we started with.
That is what states use to issue to truck drivers and bus
drivers, etc. All I think we would like to see is just simplify
this. Just some straightforward systems. Tell us what
information you want sort of like at the airport. What do you
need from us so we know who the travelers are and let the
frequent travelers move more rapidly through the system.
You are all frequent travelers. Let us cut out the lines
where we can so that TSA can focus on the risk where it can be
found and not try to--the way I look at this if we are trying
to reduce risk, you want the frequent and the--we have 3,000
Canadian nurses that work in southeast Michigan pretty much
every day.
They are coming back and forth. They are going to come
every day. It is the same person. We are going to get to know
them. The truck drivers driving that DiamlerChrysler truck is
making four runs a day across the border and we are getting to
know them.
Let us figure out how we can get those people over and then
the person we have never seen before who shows up in a truck
carrying something that we don't know what is in the back of
the truck, maybe that is where we ought to spend 10 minutes
with them and 10 seconds with the other. I think today it is
just not as rational as any of us would design it because
everybody is designing a piece of it and the pieces don't fit
very well.
Mr. Staub. Just to support the Governor's contention, I saw
the statistics somewhere in the comments that 2 percent of the
people crossing the border constitute 80 percent of the
movements. I mean, that tells you right there what you have to
concentrate on.
Mr. Engler. Thank you, Mr. Staub. The gentlelady's time has
expired.
Ms. Bordallo. Just one more question. Personally I really
feel that in reading about this NEXUS program that it would be
very helpful but I just wondered if there was something that
you would like to impart to Congress that we could improve it
even more.
Mr. Engler. Maybe we should ask the person from Homeland
Security Commission. It seems to me we need to work with our
state officials. Some of these programs actually could be--
there could be a form of joint delegation. In other words, who
has to check what? Is it a federal official? Is it an FBI
agent? Can it be a state policeman? Who checks what? Once that
is done, how can somebody issue? In other words, just sort that
out and tell us who.
I mean, we can use local law enforcement for part of this
working with federal agencies. It is supposed to be a seamless
integrated law enforcement system today. If I took my passport
in and showed it to a state official, could I put my passport
on my driver's license? Would that be helpful? It really just
needs somebody to make some decisions.
Ms. Bordallo. Yes. Thank you, Governor. Does it take time
to issue this NEXUS card? That is what I am curious about.
Mr. Zemsky. It does take time. I have a NEXUS card. I
travel across the border all the time. First of all, the irony
is you have to go across the border to get the card to get you
across the border and you have to interview. It is really quite
a long process. It is not easy or simple. It is not like going
to the post office and getting another form of ID of any kind.
It is used extremely infrequently.
Ms. Bordallo. Time frame?
Mr. Zemsky. It took a while to schedule the interview and
get a call back from the people, go over to Canada and get
interviewed and then get it issued. I mean, it was months. The
other thing--
Chairman Manzullo. I am going to have to cut you off and go
to Mr. King because he has to run to an Immigration
subcommittee hearing.
Mr. King. Thank you, Mr. Chairman. It is ironic that we
simultaneous Immigration hearings going on here. I sit on the
Judiciary Committee and the Subcommittee on Immigration which
is going on now talking about the southern border so I am
anxious to get over there. I very much appreciate everybody's
testimony here. I can feel in a sense the impact on the
economy.
Particularly, Governor Engler, I want to thank you for
being here. In your testimony the one thing that you said is,
``Make a decision and stick with it.'' It is true that there is
a scattered approach to this. We thought when we eliminated
American passport exception that we had made a decision. I
think there was an administrative decision not to burden people
with the difficulty of crossing the border with a passport.
Therefore, we have some of these other alternatives that are
here.
Just some thoughts that come to mind as I listen to the
testimony, one is if you go to Ireland and a baby calf is born,
when it hits the ground and a veterinarian shows up out there,
tags its ear, and gives it a passport. It is not a swipable
passport. It is a passport that requires the veterinarian to
write in that in ink each time that calf moves from pasture to
pasture or location to location. That is one measure of
difficulty that they have and they are still raising calves and
doing business.
Another thing that occurs to me is our perspective here is
the economic impact. I would submit that if we were sitting
here and this testimony today was testimony to the Keneset in
Israel and our perspective was the United States being Israel
and any of the surrounding countries being West Bank, Gaza, or
any of their neighboring countries there, that there wouldn't
be anyone sitting here at this panel advocating the things we
are advocating here today.
I think of it in terms of how do we get to the point of
getting the enforcement and the security we need at the border.
Do that part first and then address how we then start to make
accommodations for the very real economic needs that you have.
That is our difficulty here in Congress. That is why we have
other alternatives. That is why we had so much difficulty
passing the REAL ID Act because we didn't start with security
first and then open up our economics.
I would also submit, Governor Engler, I know this by
experience. I lost my passport in Jamaica so I can quote the
federal statutes that allowed you to come back into the United
States twice from Canada and that is you have to make a
credible allegation of United States citizenship. That was the
standard that we are trying to improve upon.
Another thing that occurs to me is that if members of
Congress only 30 percent have passports but American citizens
25 percent do, that seems to not quite fit with what I know.
Where I get to is this. The standard for getting a driver's
license first time in Michigan, Governor, what do you have to
produce in order to qualify for a Michigan driver's license,
say, as a 14-year-old or whatever age it is for a learning
permit?
Mr. Engler. I think it is pretty minimal. It probably is a
birth certificate, completing a driver's license course, that
kind of thing. If I might respond to the major point about--
Mr. King. I thought you wanted to.
Mr. Engler. I would love to. First of all, on the Irish
example the TSA has the cattle part down real good. They just
don't have the ID part worked out yet. I think with Keneset we
would be able to do the same thing here. In other words, I
think most citizens are happy to reach any level of assurance
or security that people want. Just tell us what it is and let
us do it one time.
I mean, most of us can qualify on this. I think the lengthy
interviews causes long delay but let us go in somewhere once
and establish--part of the REAL ID Act has been a bit if
hysteria about a national ID card. We kind of don't want to
have a national ID card but we know we need one so we are
trying to figure out how we can have one without call it such
so we come up with multiple means of doing that.
For those of us who don't mind, let me have a damn card so
I can do my travel. Let General Motors say to all their people
and let Daimler say, ``Look, this is the kind of card you are
going to have to have as an employee here. We will do this on
the front door on the way in.'' Set the security bar high. It
is fine but then let us qualify and get it over with.
Mr. King. Thank you, Governor. I am watching this clock
tick here. I would just submit that a requirement of birth
certificate and the other available ID that is required to get
a passport the first time is pretty close in most states to the
same standard to get a driver's license the first time. The
difficulty of achieving qualifying for a passport is
essentially the same.
Mr. Staub, in your testimony, and you are my kind of guy. I
change the tires and dispatch loads and get behind the truck
and come testify before Congress. I mean, that is the America I
know. Is there any check on the loads that you have, your van
trailers, reefers? What happens when you cross the border with
those? Does anybody go back and check that load? You mentioned
that you present a driver's license.
Mr. Staub. Well, it would take a half hour or more to
explain that program because you get into C-TPAT and things
like that and whether they are FAST qualified. FAST by itself,
the FAST card, is only part of a process. The importer has to
go through a certification process and the carrier. The
transiting carrier has to go through a process also. When you
get all done with that, the FAST card is still not a travel
document.
Unless Homeland Security changes their opinion of what the
FAST card is right now, the driver is still going to have to
have a supporting document to take and prove citizenship and
identity. Now, what will that be? The good thing about the
driver's license, the enhanced driver's license, REAL ID, would
be that you have it in your back pocket.
If you have a passport and you drive a truck and you have
two cars, where is that passport going to be? You are probably
going to leave the country, come back, and at some point in
time that passport is not going to be with you but your
driver's license would be. My credential of choice would be the
REAL ID but I agree with the Governor, you know, we have to
fish or cut bait.
We have to try and figure out which way we are going and go
there. The important thing is disseminate that information to
all border points because the confusion you can see right in
this room. Can you imagine the confusion at the border points
as to what credentials are or are not accepted.
Chairman Manzullo. Thank you, Mr. King. Mr. McCotter.
Mr. McCotter. Thank you, Mr. Chairman. I come from a
district in the northwest suburbs of Detroit in Michigan. As
Governor Engler pointed out, I would often go over to Windsor
to shop but it is not just a local issue for my district.
Everyone in Michigan has visited Canada at one time or another
or has a business relationship with our Canadian neighbors. In
fact, people have been known to drive from as far away as Beal
City in their Oldsmobiles to catch a matinee at some of
Windsor's more intimate venues.
My question is knowing that, I also listened to
Representative Poe and it becomes evident we have two borders
in this country, two long borders with two distinctly different
neighbors. One is a highly industrialized democracy and the
other is a developing democracy that is struggling in many
ways.
I come from a state with a border. We have multiple
crossings and very little difficulty with illegal immigration.
Mr. Poe comes from a state that has a very difficult time with
illegal immigration from his neighbor. The arguments that we
hear for and against what we are trying to do seem to fall upon
the crux and we never get any traction because we are trying to
address two entirely dissimilar borders, two entirely
dissimilar problems and we are trying to do it in one piece of
legislation.
When you hear his concerns you have to understand those are
legitimate concerns. He has a concern for a passport. Our War
of 1812 ended. We are done with that I would think. But the war
against illegal immigration continues and it strikes me that we
have to be honest about that before we can proceed.
Then if we are honest about that we have to find a
mechanism by which we can accommodate both borders' pressing
problems effectively. It would seem to me as a working thesis,
I suppose, working theory that one of the things we could look
at is the potential for a bilateral treaty with Canada to
rationalize our transborder crossings.
That seems to me that would avoid some of the
constitutional problems we may have with the actual creation of
a state generated document with national identification on it.
It would seem that we could then harmonize through the
constitutional way the treaty would provide with our Canadian
neighbors because we wouldn't have to have reciprocity in terms
of what comes across the border into their country vis-a-vis
what comes out of ours and back in.
Yet, it would still leave us able to deal with the pressing
problems of the southern border in an entirely different matter
through statute or perhaps another bilateral treaty. I just
throw that out for food for thought because that is one of the
things we keep running up against.
Secondly, one of the things that you learn from living in
Detroit is that during the bootlegging era you could not secure
that border. You could cross that border in a canoe. You could
that border in a Speedo if you are as athletic as the Governor.
It is impossible to totally close that border from people who
want to break the law and come in. In the end we have to be
ever mindful that whatever path we take the people who are
going to feel probably the biggest brunt of what we do through
statute, through law, are the people who are honorable enough
to follow it.
I would like that to be a consideration. I would like to
conclude with something the Governor has talked about and as a
former state legislator who was honored to serve with the
Governor when Michigan had an unemployment rate below the
national average and was attracting business, the heyday.
There is a lot of wisdom in state government that gets lost
when we get here. At least in my case. I think we should work
very carefully with our state and local elected officials from
the communities along the border to come up with this idea.
This should not be a federal decision made in a vacuum. I thank
the Chairman for having this hearing and for bringing this
distinguished together.
Chairman Manzullo. Thank you. I have some more questions.
First of all, Mr. Cook, Rockford Toolcraft has a brand new 28-
foot Minster 1,000 pound stamping press, the Heviblanker. It is
the first one to have a cast iron bed that Minster has ever
made. It is made in Dayton, Ohio, Mr. Turner's district. If you
could give that to him.
We set up in Rockford calling it the Manufacturing Alliance
of Rock River Valley and also the McHenry County Manufacturing
Alliance of Fox River Valley. They are two manufacturing
alliances that are trying to bring together over 2,000
factories, much on the order of the Lombardi Group in Milan,
Italy where I learned that process.
We have hired a professional engineer in Rockford and we
are going to hire another professional engineer in Fox River
Valley for the purpose of furnishing completed components or
portions thereof by piecing together these different people. If
you have any needs, talk to me. I will be glad to try to
fulfill Chrysler's stamping requirements.
Mr. Cook. Okay. Thank you for the information. I will make
sure the appropriate--
Chairman Manzullo. You bet. Then a question both to you and
to the Governor and anybody else that wants to join in. This is
the Small Business Committee. We are obviously concerned about
what happens to the little guys. Ken Staub has been quite
remarkable in his testimony as to the impact there. Also Mr.
Chestnut because you have about 600 employees. Is that correct?
Mr. Chestnut. That is correct.
Chairman Manzullo. That is a small business as far as I am
concerned. Up and down the supply chain just in the automotive
industry any ideas as to how many businesses are impacted, any
business entities?
Mr. Cook. No, I don't have the facts at my fingertips but I
know there is a multiplying effect for the manufacturing
business. I can certainly get that. Something on the order of
for every automotive job it is seven to 10 other jobs that are
created. Maybe the Governor has those facts more readily
available.
I know that we do support all sized businesses. Obviously
we do business with big first-tier companies but in the
transportation industry in particular we have continued to look
for small to medium-sized companies that can meet our need and
grow them into our network. We have grown some fairly small
companies into pretty good size or medium size firms. We have
done that over the years as they have accommodated and grown at
the pace they have grown.
As I mentioned, several trucking companies that we have
done business with over the years over the last decade have
grown from small companies of just a few trucks, a lot of them
minority or diversity supplier companies. We have very active
programs that have done a great job in supporting that
community and growing a $10 million total revenue company into
$100 million company over a period of years as they are able to
grow with us and we continue to do that.
Chairman Manzullo. Governor, did you want to take a stab at
that question?
Mr. Engler. Well, I am citing from a document that the
Detroit Regional Chamber of Commerce put together. I am not
sure I can get you the numbers. I can get dollars. One
estimated $1.2 billion in trade daily. It is the most important
economic dollars anywhere in the world. Forty percent of that,
$480 million of trade just with the five Michigan/Ontario
border crossings, and $234 million automotive related.
That is a daily basis. That is the value of sort of what is
being trucked back and forth. The number would run into the
hundreds of businesses impacted. Ontario surpassed a year ago,
or maybe it is two years now, Michigan as the number one state
in terms of auto assembly in North America. It had been
Michigan and the Canadian growth has been pretty impressive.
All of that is still supported by this incredible back and
forth all day long trucking of parts and components. There have
been some good things. I don't wish to be completely negative.
I mean, on the FAST program at the border I have been up there
when then Secretary Ridge was there with his Canadian
counterpart. A lot of work was done--I mean, DiamlerChrysler
has an interest in sealing a truck when it leaves a supplier in
Canada and comes across in the Jefferson plant.
They don't want anybody tampering with that. Nor do most
people so we can take a lot of the 7,000 trucks that weekly
cross Ambassador Bridge, Mr. Chairman, that are part of that
$234 million sort of daily trade, I mean, most of those we can
account for. The ones that we can't those are the ones we need
to check. That part of it has been improved.
We just need to work on the people part. You are correct,
that does hurt the small business guy more because he or she
has fewer people back there at the office to kind of take care
of all this stuff and it surprises them more than it might the
DiamlerChryslers of the world.
Chairman Manzullo. Mr. Staub, you had mentioned that the
present documents that your drivers need cost about $500 a
driver? Is that correct?
Mr. Staub. Well, if you had all of the documents, that is
what they would cost. A FAST card cost $50 U.S. or $70
Canadian. If you figure the driver's license in there and in
New York State it is really high. I am adding up all the
documents.
Chairman Manzullo. Okay.
Mr. Staub. If you added a passport in at $97, you get to
$500 and that is significant for a driver if the driver bears
the entire amount.
Chairman Manzullo. One of the things that the State
Department is trying to do is they are trying to take and
simplify the present system even if there were no new law out.
They have been working on this for a long period of time to try
to get to the ultimate simplification on it. Obviously we will
have another hearing and we will have several folks come in
from the Government side of it but it is going to be at that
point where they issue a regulatory flexibility analysis of the
impact on the small businesses. That is our jurisdiction. We
want to know how people like you would be hurt. Otherwise we
have a tendency without that study to talk in a vacuum and to
come up with policy in a vacuum so there will be subsequent
hearings on that.
Mrs. Velazquez.
Ms. Velazquez. Thank you, Mr. Chairman.
Ms. Kephart, I was interested in your testimony about the
North American Travel Card. Do you know if the State Department
and the Department of Homeland Security is going forward with
such a plan?
Ms. Kephart. My understanding from speaking with them is
that they are but if they were here at the hearing today, you
would be able to ask those questions so I can't really go
forward with that.
Ms. Velazquez. That is why in my opening statement I made
mention about the fact that they are not here. Let me ask you
since you apparently have access to them and you know what is
going on, wouldn't it have made more sense for State and the
Department of Homeland Security to have outlined this plan in
advance notice of proposed rule making so that commentators
could look at it and make suggestions? And they have not even
had time to review a portion of the comments yet, have they?
Ms. Kephart. I don't know. I know that the comments ended
on October 31. I believe this has been something in process for
a while because they have been trying very hard to take into
account the effect on the northern border communities. They
know it is a problem. They know it is an issue. That is what
they have told me. Therefore, they want to talk. I know they
have been in to see the Chairman's folks in regards to this.
Other than that you will have to ask them more questions.
Ms. Velazquez. Sure. But do you agree with me that given
the testimonies of all these people here they have provided an
incredible important information about the impact that this is
going to have in their businesses and in their communities?
That it really calls for the Department of Homeland Security
and the State Department to do regulatory flexibility analysis?
Ms. Kephart. I can't speak to the regulatory flexibility
analysis on this. My issue is security of the American people
and assuring border security. That is where I come from on
this. I believe that we can have the facilitation and security
together but once you get into the regulatory process, that is
not really where I am.
Ms. Velazquez. Sure. I understand.
Ms. Kephart. I am going to stand back and not answer that
question.
Ms. Velazquez. I submitted comments to both the State
Department and Homeland Security on behalf of myself and the
democratic members of this Committee. And I also requested for
them to conduct a regulatory flexibility analysis.
Mr. Cook, how many of your suppliers are small businesses?
Mr. Cook. I don't really have an exact figure. What I would
term as a small business would be probably fairly small
revenue. I think for a company our size we tend to work with
companies that because of the capital nature of the business
can afford to make large expenditures. However, they do employ
a lot of second and third tier companies that are smaller, are
family owned, a cleaning service or any kind of service that
are directly related to the business that we give them.
Ms. Velazquez. Okay.
Mr. Cook. A cascading effect. I did find some facts on how
many jobs we believe a direct job in the industry generates
something on the order of seven to 10 indirect jobs and that is
all through the supply chain.
Ms. Velazquez. Thank you. Governor, you mentioned the FAST
program and the NEXUS program. Why do you think that we don't
see more drivers using these programs?
Mr. Engler. Well, there is a difference. The FAST program
is full process. The plants have to be certified. The carrier,
the way the product is being--I mean, literally, as I
understand it, you seal it at one place and open it--
Mr. Cook. May I?
Ms. Velazquez. Sure.
Mr. Cook. The FAST program is a commercial program.
Ms. Velazquez. And the NEXUS is for the frequent travelers.
Mr. Cook. Is for frequent travelers and nonbusiness people
primarily. The FAST program has stringent requirements. There
is advance notice that goes to Customs so that the inspector at
the border exactly knows what is in the load. He has the
information about the driver as the driver pulls up. The
company that is involved has to assure that and give that
advanced information to Customs so there is a lot of up front
work that needs to be done.
The whole process that the driver goes through has been a
lengthy process of interviews and applications. The drivers
have to qualify. Their whole background is checked. There are
criminal records on both sides. You essentially have all four
agencies or four agencies, Customs in Canada and Immigration in
the U.S. and Canada that have to vet each driver. At any point
those drivers can fall out of the process and not be certified
and not get a FAST card. It is a rigorous process for them to
go through.
Ms. Velazquez. Mr. Chairman, if I may, just one more
question.
Mr. Staub. Just to comment on that, this morning in going
through some material, older material, looking it over, our
industry trade publication Transport Topics there is an article
in there from about a year ago that said that over 50,000 FAST
card applicants never showed up for their interviews.
It is a scheduling problem, okay? You have to have this
driver at an interview at a particular point in time and if
that driver is not based right at the border, which few of them
probably would be, you have to arrange for this guy to get up
there to take his interview but 50,000 drivers didn't show up
for their interviews. They have a 90-day window to do that.
They can reschedule the interview.
Mr. Cook. One of the reasons for that is that he is picking
up a load in Ontario. He is on a Just-In-Time schedule to
deliver to an assembly plant. He doesn't have an hour or two in
his schedule so he may be based in Kentucky or Tennessee. He
now has to get back to the border potentially to do this
interview which also is an intimidating process for someone to
go through.
Ms. Velazquez. Thank you. Mr. Chairman, I would like to ask
one last question to Mr. Staub.
You talk about the different driver's license, the FAST
card, the NEXUS clearance, transportation workers
identification. Most of those IDs require a $24 FBI check and a
host of other fees and this is why you mentioned that it could
cost close to $500. My question to you is has ATA ever
approached the Government about consolidating all those
overlapping requirements?
Mr. Staub. I am not aware that they have at this point.
They may have approached it. In a lot of cases, though, these
cards don't exactly overlap each other. For example, a FAST
card is a program for expedited processing through the border.
It is designed to get you through fast. That's why they call it
FAST.
Whereas the border crossing card that I am not real
familiar with is unique to the southern border and it has its
own special set of circumstances. It is not unique to the
southern border. It can be used on the northern border. One of
the expenses in the total cost of the application for these
cards is the time that the driver loses in going for his
interview. That is a day's pay so that has to be factored into
the cost. For a small business it could be significant.
Chairman Manzullo. We want to thank you for coming to the
hearing. Mr. Zemsky, you could have come all this way and
missed the hearing. Have you ever testified before a
Congressional hearing?
Mr. Zemsky. No.
Chairman Manzullo. Okay. Well, I am glad you made it.
Mr. Zemsky. Thank you.
Chairman Manzullo. I am glad you all made it. I want to
thank all of you for coming obviously, especially those of you
that traveled great distances to come here. This is extremely
important. We will be have more hearings on this. It is a very
difficult problem. Let me just say this.
I have been a member of Congress for 13 years and I have
never seen agencies involved in an issue, taking as much time
and patience trying to do the right thing, as I have seen in
this case. It is absolutely exemplary the quality of the people
that we are working with in the Government, the time they take,
the briefings. Every time something changes, they are in my
office to keep us up to date on it. As I said, we will have
more hearings on this and obviously they will be testifying.
The hearing is adjourned.
Ms. Velazquez. Mr. Chairman, I would like to ask unanimous
consent to submit for the record the opening statement on
behalf of Mr. Ray Hobbin.
Chairman Manzullo. Without objection.
[Whereupon, at 10:51 a.m. the Committee was adjourned.]
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