May 21, 2019

Chairs DeFazio, Maloney Statements from Hearing to Examine Fiscal Year 2020 Coast Guard and Maritime Programs Budget Requests

Washington, D.C. — The following are opening remarks, as prepared for delivery, from Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), and Chair of the Subcommittee on Coast Guard and Maritime Transportation Sean Patrick Maloney (D-NY) during today’s hearing titled: “Review of Fiscal Year 2020 Budget for the Coast Guard and Maritime Transportation Programs.”

Chair DeFazio:

Thank you Chairman Maloney.  I intend to be brief in my remarks so that we might proceed to hear from our witnesses.

Tomorrow we will celebrate National Maritime Day, a time-honored tradition that recognizes one of our country’s most important industries.

I have to say, however, after reviewing the collective budget requests for the three Federal agencies responsible for the oversight, regulation, or promotion of the U.S. maritime industry – the U.S. Coast Guard, the Maritime Administration and the Federal Maritime Commission – I find very little to celebrate.

From our earliest origins as a nation, the U.S. Merchant Marine and the U.S. flag commercial fleet have been pillars in this country’s foundation of prosperity and security.  Regrettably, it would appear that this administration thinks otherwise.

For example, despite years of suffering under budgets cuts imposed by the Budget Control Act, the administration again has decided to cut the Coast Guard’s discretionary budget – this time by almost ten percent below what Congress appropriated for the Coast Guard in Fiscal Year 2019.

One has to wonder: how much more strain can we put the Coast Guard under before this exemplary military maritime law enforcement agency simply breaks and cannot be mended back together?

Even worse, coming on the heels of the Coast Guard not getting paid at all during the recent government shut-down – the only military service to not get paid I might add – the cuts proposed in this budget are not only wrongheaded, they are downright cruel to the hardworking men and women of the Coast Guard.

And so, here we are today with rumors flying around about the Coast Guard having to shift additional resources to the Southern Border; with the Coast Guard’s only heavy icebreaker, the Polar Star, barely remaining operational due only to the ingenuity and determination of her crew; and with the gap in the Coast Guard’s unmet budget needs growing wider each day.

These are important matters, and I expect to pursue these thoughts and more with Admiral Schultz later this morning.

I also am disappointed that the administration is proposing to cut funding for the Maritime Administration by almost thirty nine percent. 

If we want to remain a global maritime power, we cannot offer timid support for our own maritime industry, especially at a time when our trading partners, notably China, are investing billions of dollars to expand the global reach of their maritime industry.

I fail to see the logic behind not requesting any funding for Port Infrastructure Development Grants, or Small Shipyard Grants. These programs are desperately needed right now to infuse capital to improve the technological capability and competitiveness of U.S. ports and shipyards.

We need to be doing much, much more to support our maritime industry, and I hope that Admiral Buzby can provide more ideas than those put forth by the administration’s budget request for MARAD.

Allow me to say that there was one ray of modest good news: the small increase in the budget for the Federal Maritime Commission. 

Considering the Commission’s vital role in ensuring that shipping practices in the U.S. foreign trade abide by antitrust requirements, an increase was not only overdue, but also warranted in order to provide the Commission the resources it needs to implement new requirements to monitor carrier alliance agreements.

In closing, this budget is a disappointment and should serve as a catalyst for increasing support to our maritime industry. Let us use this hearing constructively and give ourselves something to celebrate when National Maritime Day rolls around next year. Thank you.  

Chair Maloney:

Welcome to this morning’s hearing to review the respective Fiscal Year 2020 budget requests of the United States Coast Guard, the Maritime Administration, and the Federal Maritime Commission.

At any given moment, more than 20 million shipping containers full of raw materials and finished products are transecting the ocean, neatly stacked on ships. They might cross the Atlantic, enter the bustling Port of New York/New Jersey, and make way up the Hudson River, past Manhattan, to my district.

The Hudson River, the 315-mile conduit of commerce that lies at the heart of my community, moves over 17 million tons of cargo, worth over $32 billion in state commerce, annually.

For hundreds of years this river facilitated trade and transit, by sloop, steamboat, and barge. Today, the Marine Transportation System, or “MTS,” is an almost invisible network that facilitates roughly $45.4 trillion in U.S. commerce across oceans and thousands of miles of inland waterways.

Yet, the MTS and the regulatory agencies that oversee its function are perpetually under-resourced. This is surprising considering the importance of the MTS to the U.S. supply chain, and moreover, fundamentally disappointing: this budget again underscores how little this administration understands or appreciates the importance of the U.S. shipbuilding and maritime industries and the agencies that regulate and facilitate, commerce.

Our Coast Guard stretches itself daily to execute its 11 statutory missions, from vessel safety inspections to search and rescue, despite budget cuts. It does so through its exemplary leadership. I’m pleased to welcome the Coast Guard Commandant, Admiral Karl Schultz, to his first budget hearing before this subcommittee.

Unfortunately, in my view, the FY 2020 Coast Guard budget goes so far as to walk back, and significantly reduce the funding appropriated by the Congress for the Coast Guard last year, and that simply makes no sense.

Coordinating and monitoring our maritime industries is the Maritime Administration, or “MARAD,” the agency whose programs and authorities foster and promote the American maritime industry to meet the economic and national security needs of our Nation.

In another unfortunate stroke, MARAD’s budget is short changed. Surprisingly, the administration makes no request for funding to carry forward progress made earlier this year when Congress appropriated almost $300 million to initiate a new Port Infrastructure Development Grant program.

The American Association of Port Authorities estimates that there is a $32 billion need to improve intermodal landside connections, hinterland connectivity, and facility infrastructure. Yet, the administration has turned its back on supporting these investments to improve the efficiency and global competitiveness of U.S. ports and marine terminals. We need to recognize the importance of the MTS to the national economy and be proactive in our federal investments.

The Federal Maritime Commission, or “FMC,” protects shippers and carriers from restrictive or unfair shipping practices of foreign-flagged carrier alliances operating in the U.S. foreign trade. And now with foreign carriers moving more than 95 percent of U.S. trade, the FMC’s job has never been more important

That is why we need to make sure the FMC has more than sufficient resources to implement changes made in last year’s Coast Guard Act to the Shipping Act, and make sure that U.S. port service providers at the Port of New York/New Jersey downriver from my district are able to compete and sustain good paying jobs for U.S. workers.

Our coasts are busier than ever. New uses emerge every day. It is the responsibility of these agencies testifying today to ensure that our maritime transportation system remains reliable, sustainable, efficient, and safe. I look forward to engaging our witnesses this morning to learn if the administration’s budget request comes close to meeting that challenge.