Some Economics of Tsa Policies

Lynne Kiesling

As I’ve mentioned before, I am passionately and actively opposed to the TSA’s fear-based violations of the rights and dignity of individuals. But my opposition extends beyond the moral and philosophical into the economic … and some recent commentaries indicate that I am not the only one!

First let’s think about the cost of the scanners being installed at airports, most of which are x-ray scanners that bombard you with ionizing radiation that penetrates your skin and may increase your risk of skin cancer, particularly if you are already in a high-risk category, in addition to displaying a naked image of your body. Economically speaking, the U.S. government has already spent $80 million on these machines, with another $90 million request in for this year. Politically speaking, most of the x-ray scanner purchases, and therefore a big chunk of that $170 million, are from Rapiscan, a company that benefits from the lucrative relationships of its security advisor, former Department of Homeland Security head Michael Chertoff. Indeed, scanner companies employ many lobbyists, and 80% of the lobbyists for this industry are former Congress members or staffers.

But according to the GAO, the equipment purchase costs, while high, pale in comparison with the ongoing staffing costs that will have to ensue to use the whole-body imaging scanners, as reported in this Business Week article:

Staffing costs could add $2.4 billion to the overall expense of full-body scanners being deployed in airports in response to the attempted Christmas Day bombing, a congressional auditor said at a hearing today.

The U.S. Transportation Security Administration should figure out if the expense is worth it, said Stephen Lord, a director at the Government Accountability Office.

Lord also said it’s unclear if the machines would have detected an explosive device allegedly hidden in the underpants of Umar Farouk Abdulmutallab, the suspect in the Dec. 25 bombing attempt on a commercial jet landing in Detroit.

“While GAO recognizes that TSA is attempting to address a vulnerability exposed by the December 2009 attempted attack, a cost-benefit analysis is important,” Lord said.

The added staffing cost is a consequence of the TSA more than doubling its planned acquisition of scanners to 1,800 from 878 after Abdulmutallab allegedly tried to blow up the Northwest Airlines flight, Lord told a panel of the House Homeland Security Committee.

Note that the TSA proposes, and Congress has so far rolled over and accepted, this expenditure and use of this technology for primary screening, despite the TSA’s known unwillingness and/or inability to perform any sort of meaningful benefit-cost analysis on these whole-body imaging x-ray machines. The TSA willfully refuses to provide a benefit estimate to evaluate against the $170 million of equipment costs plus the $2.4 billion in operating costs, plus the unseen and unestimated cost of the stripping of individuals of their rights and dignity.

Quantifying these benefits will be difficult, particularly when you take into account that most airline terrorism threats originate outside of the U.S. and that even this invasive technology can be fooled easily with some putty, or by concealing PETN (plastic explosive) in one’s mouth. Not only does the technology fail to accomplish what its supporters claim; to paraphrase Bruce Schneier, TSA’s strategic approach to passenger searches is too fear-based and too focused on things and not focused enough on behavior. I’d be very surprised if these expenditures, or even the whole TSA budget more generally, could pass even a window-dressing cost-benefit analysis.

According to an article from Dominic Tierney in the Atlantic, more individuals and policymakers are becoming more aware of this fact with respect to DHS in general, not just the TSA:

DHS is ripe for savings and efficiencies. The fruit isn’t just low hanging–it’s boxed and ready to ship. But Republicans have excluded Homeland Security from any cuts (along with defense, veterans affairs, Social Security, and Medicare).

Politics and ideology combine to curtail a rational debate about the Department of Homeland Security. Cutting DHS funding offers few votes. Quite the opposite: any politician who calls for reduced funding will face the wrath of special interests. And if a future terrorist attack could be linked–even tangentially–to earlier cuts, it might be career ending (this is an even bigger problem for Democrats who live in dread of being labeled “weak on terror”).

Tierney is challenging Republicans to be intellectually consistent in their quest to reduce government expenditure to tackle the $14 trillion government debt and the $1.3 trillion annual budget deficit, but regardless of partisan accusations, the evidence is mounting that the TSA (and DHS more generally) does not provide good value for money, does not give us a good return on the taxpayer and “airport security fee” payments to support their apparently dubious and ineffective activities.

Even the commenters on this post on the WSJ travel blog are quick to point out that the TSA is an ineffective and unresponsive bureaucracy, so when the post’s author muses on the lack of recent TSA complaint volume, there’s an avalanche of comments along the line of “why bother to file a comment with the TSA? They don’t respond. So I’m just going to stop flying until this Orwellian nightmare is finished.”

That point raises another unseen economic cost to the TSA’s intrusive procedures and unresponsive bureaucracy. What’s the economic cost of the foregone productive activity that doesn’t take place when people stop flying? Conference calls, web videos, and Skype are not perfect substitutes for face-to-face, interpersonal interaction, whether for work or leisure. Some estimate of that lost economic activity (just what you want when coming out of a recession!) would have to be added to the cost side of the cost-benefit analysis.

So when Matt Kibbe and Dick Armey ask what expenditures Congress should cut, as they did in yesterday’s Wall Street Journal, here’s my top recommendation: Defund the $90 million request for additional x-ray scanner purchases. Pass a bill that picks up where H.R. 2200 did in the last Congress, by limiting the use of the x-ray scanners already purchased to secondary screening. Refocus the existing TSA budget on actually being able to deliver on actual cargo screening rather than passenger search policies that operate on the presumption that every person wanting to fly is a potential terrorist. Or, as Art Carden argued so eloquently in November, abolish the TSA, return the responsibility for airline security to the, you know, airlines, and direct those resources to some higher-value use, like paying down the $14 trillion national debt. With that kind of tradeoff, how can we afford not to do that?

But the invasive TSA policies and the widespread anger and aggravation they have generated have led to one piece of positive economic activity, although I think it technically still counts as a Bastiat-style broken window:

Elguji Software, LLC. released their second app for the iOS platform: TSAzr – Share Your TSA Experience.

TSAzr (pronounced “TAY-zer”), allows the flying public to share their TSA screening experience with the world.

Passengers can provide information such as if they went through a body scanner, received a pat down (and what the pat down experience was like), even if their “junk” was touched.

Now with the Apple iPhone, iPad or iPod Touch and the new TSAzr app, everyone can rate their experience with the TSA, airport by airport. Even post their TSA experience on their Facebook wall.

See which airports are performing the most body scans, which airports are doing the most pat downs, and which airports people are rating the highest and lowest. View real time data and graphics for each airport.

With a $14 trillion federal government debt, a $1.3 trillion annual federal government budget deficit, and government policies that are leading people to reduce their economically productive activity, we cannot afford the expensive and failed bureaucracy that the TSA provides. Nor can we afford to spend money on the TSA budget to cater to special interests peddling ineffectual and morally reprehensible technologies.

We cannot afford to maintain the TSA charade any longer, either economically or morally.