CCAF SEEKS INTERNATIONAL TRADE EXEMPTION FROM PAYGO BUDGET PROCESS
The Coalition for Customs Automation Funding wants Congress to change how its current budget “PAYGO” system applies to international trade, including customs import and export processing, to improve funding levels to cover U.S. Customs’ modernization efforts.
Customs collects more than $20 billion in duties and about $1 billion in merchandise processing fees from the import industry each year. “Because of the PAYGO requirements, the budget of the United States has only been able to ‘find’ $130 million since 1995 to apply to funding needs for building a new modernized e-commerce Customs system,” said the CCAF in a letter to Jim Nussle, R-Iowa, chairman of House Budget Committee, on Friday.
CCAF, which represents a variety of U.S. businesses, such as retailers, manufacturers, customs brokers, agriculture and transportation companies, told the chairman about the urgent need to replace Customs’ aging Automated Commercial System with a system that accommodates future agency and business requirements.
“The Customs Service’s computer system is decades old,” the CCAF said. “It can no longer adequately serve the interests of either the U.S. economy or the U.S. government. It has experienced slowdowns and brownouts over the last few years, jeopardizing the flow of U.S. exports and the critical supply chain for imported products and parts.”
Customs estimates that it will cost about $1.5 billion to build its Automated Commercial Environment during the next four to five years. At a minimum, the CCAF said Customs should receive between $300 million and $400 million a year to stay on schedule with ACE development.
“In previous years, because of PAYGO, the Clinton Administration requested a new user fee to pay for this computer system,” the CCAF said. “Congress has consistently rejected a new user fee because importers already pay the hefty merchandise processing fee (MPF). In addition, because of PAYGO system, other interests regularly look to this merchandise processing fee as a source of revenue for their program.”