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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

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

JEB BRADLEY, New Hampshire 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

RIC KELLER, Florida 

TED POE, Texas 

MICHAEL SODREL, Indiana 

JEFF FORTENBERRY, Nebraska 

MICHAEL FITZPATRICK, Pennsylvania 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

DANIEL LIPINSKI, Illinois 

ENI FALEOMAVAEGA, American Samoa 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

RAU ́ L GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

JOHN BARROW, Georgia 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

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) 

(1)

BUILDING A WALL BETWEEN FRIENDS: 

PASSPORTS TO AND FROM CANADA? 

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 comVerDate 0ct 09 2002 16:53 Apr 06, 2006 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 G:\HEARINGS\25442.TXT MIKE
2

ments 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 

3

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 fiveminute 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 

4

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 crossborder 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. 

5

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 

6

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 travVerDate 0ct 09 2002 16:53 Apr 06, 2006 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 G:\HEARINGS\25442.TXT MIKE
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el 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 

8

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 secuVerDate 0ct 09 2002 16:53 Apr 06, 2006 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 G:\HEARINGS\25442.TXT MIKE
9

rity. 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 

10

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 

11

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. 

12

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. 

13

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-InTime 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 JefVerDate 0ct 09 2002 16:53 Apr 06, 2006 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 G:\HEARINGS\25442.TXT MIKE
14

ferson 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. 

15

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 

16

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. 

17

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. 

18

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 beVerDate 0ct 09 2002 16:53 Apr 06, 2006 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 G:\HEARINGS\25442.TXT MIKE
19

tween 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. 

20

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 

21

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. 

22

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. 

23

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 

24

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? 

25

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 

26

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 

27

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 

28

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? 

29

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 

30

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 

31

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 

32

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. 

33

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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