Washington, D.C. – Today, Ranking Member of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) sent a letter to President-elect Donald J. Trump, urging him to keep his commitment to invest in infrastructure and take the necessary actions to make the $9 billion balance of the Harbor Maintenance Trust Fund immediately available to dredge the nation’s ports and inland harbors.
“Today, approximately $9 billion in already collected tax revenues sits idle in the Harbor Maintenance Trust Fund in the U.S. Treasury. At the same time, the U.S. Army Corps of Engineers (Corps) estimates that full channels at the Nation’s 59 busiest ports are available less than 35 percent of the time. With the opening of the expanded Panama Canal in June 2016, larger container ships will increasingly call on East and Gulf Coast ports, and the dredging needs of our ports will continue to grow. I urge you to take action to make the $9 billion balance of the Harbor Maintenance Trust Fund immediately available to dredge our ports and inland harbors. These funds will better enable U.S. businesses to export goods, level the playing field with our foreign competitors, and create and sustain family-wage jobs in the United States,” DeFazio wrote.
A video of Rep. DeFazio’s floor speech on the Harbor Maintenance Trust Fund can be found here.
A full copy of the letter can be found below.
January 4, 2017
The Honorable Donald J. Trump
The President-elect
1717 Pennsylvania Avenue, NW
Washington, D.C. 20006
Dear President-elect Trump:
As you consider actions to take in the first weeks of your presidency, I urge you to make an immediate down payment on your commitment to invest $1 trillion in infrastructure.
Today, approximately $9 billion in already collected tax revenues sits idle in the Harbor Maintenance Trust Fund in the U.S. Treasury. At the same time, the U.S. Army Corps of Engineers (Corps) estimates that full channels at the Nation’s 59 busiest ports are available less than 35 percent of the time. With the opening of the expanded Panama Canal in June 2016, larger container ships will increasingly call on East and Gulf Coast ports, and the dredging needs of our ports will continue to grow. I urge you to take action to make the $9 billion balance of the Harbor Maintenance Trust Fund immediately available to dredge our ports and inland harbors. These funds will better enable U.S. businesses to export goods, level the playing field with our foreign competitors, and create and sustain family-wage jobs in the United States.
In 1986, Congress enacted the Harbor Maintenance Tax to recover the operation and maintenance dredging costs for commercial ports from maritime shippers. The Harbor Maintenance Tax is directly levied on importers and domestic shippers using coastal or inland ports as a 0.125 percent ad valorem tax on the value of imported cargo (e.g., $1.25 per $1,000 value).[1] These tax revenues are deposited into a Harbor Maintenance Trust Fund within the U.S. Treasury from which Congress appropriates funds to the Corps for harbor dredging.
The Harbor Maintenance Trust Fund collects far more revenues from shippers than Congress has appropriated to the Corps to maintain our harbors. As a result, shippers continue to honor their commitment to pay for promised maintenance activities that the Federal Government then fails to carry out. To be clear, there are sufficient funds in the Trust Fund to meet the maintenance dredging needs of all Federally-authorized ports. The problem is that these funds, which were collected for this express purpose, are diverted to hide the size of the budget deficit.
Without change, this problem will only grow. According to the Congressional Budget Office (CBO), the balance in the Harbor Maintenance Trust Fund is approximately $9 billion. As the bar chart below demonstrates, if the rate of tax collections and inadequate expenditures continue on their current trend, CBO forecasts that the balance of the Trust Fund will almost double to more than $17 billion within a decade.
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At the same time, the very real needs of ports continue to go unmet. According to the American Society of Civil Engineers, our domestic ports serve as a critical link for U.S. manufacturers, farmers, and businesses to access foreign markets and compete in a global economy. Approximately 76 percent of America’s exports accessed global markets by water in 2010, valued at more than $460 billion.
Over the next decade, the total volume of U.S. exports is expected to surpass imports for the first time in a generation. Yet, if ports are not adequately maintained, the costs of shipping products to and from the U.S. will increase, diminishing the competitiveness of U.S. industry, and ultimately hurting the U.S. economy.
In recognition of our common desire to increase Federal investment in our Nation’s infrastructure, I urge you to take this easy first step and take the necessary actions to make the $9 billion balance of the Harbor Maintenance Trust Fund immediately available to dredge our ports and inland harbors.
Thank you for your consideration.
Sincerely,
PETER DeFAZIO
Ranking Member
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[1] United States v United States Shoe Corp., 523 U.S. 360 (1998). The Harbor Maintenance Tax initially applied to both imported and exported goods; however, the U.S. Supreme Court unanimously held that imposition of the tax on exported goods was a violation of the Export Clause of the U.S. Constitution.