Budget Plan Sets Scene For New Battle Of Political Will

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Budget Plan Sets Scene For New Battle Of Political Will

By MICHAEL R. McKAY

      If the President's proposed fiscal 2002 budget is any indication, we have our political work cut out for us this spring and summer.
     According to a report in the on-line Journal Of Commerce on Feb. 21, the White House Office of Management and Budget wants to eliminate the Maritime Administration as part of its plan to reduce Department of Transportation funding by 11 percent, or $2.1 billion. The report, citing "several sources in Washington," said MARAD's jurisdiction over the Ready Reserve Force sealift fleet, the Maritime Security Program, and VISA--Voluntary Intermodal Sealift Agreements--would be transferred to the Department of Defense, presumably the Navy's Military Sealift Command.
     There was no word on what would happen to the U.S. Merchant Marine Academy budget administered by MARAD or the federal grants funneled through the agency to state-operated maritime academies in Maine, Massachusetts, New York, Texas, California and Michigan.
     In its broad budget "blueprint" a week later, OMB recommended no funding--zero, zip, nada--for the U.S. merchant ship construction loan and mortgage guarantee program authorized in Title XI of the 1936 Merchant Marine Act. "One proposal certain to stir controversy would end a program that guarantees roughly a billion dollars a year in fixed-rate loans to ship operators," said an account in The Wall Street Journal. "Mr. Bush's budget calls the guarantees 'corporate subsidies.'"
     The grim budget news defied the Bush-Cheney campaign statement in support of "a strong maritime industry." The OMB recommendations also defied the maritime policy experience of senior Executive Branch officials:

White House Chief of Staff Andrew Card, who served as Transportation Secretary in the first Bush administration. Card developed and actively promoted the first version of legislation that became the Maritime Security Act of 1996.
Labor Secretary Elaine Chao, who served as deputy administrator at MARAD in the first Bush administration. Chao was an articulate U.S.-flag fleet advocate in that post.
Vice President Dick Cheney, who served as Defense Secretary during Operations Desert Shield and Desert Storm in the Persian Gulf in 1990 and 1991. Cheney was witness to what is widely acknowledged as a triumphant performance by the U.S. merchant fleet and civilian seagoing labor during the Gulf crisis.
Secretary of State Colin Powell, who served as chairman of the Joint Chiefs of Staff during the Gulf war. As the leader of the Allied battle coalition supplied to a great extent by the American merchant marine, Powell developed a real respect for the fleet and for U.S. seafarers.

     OMB's recommendations also defied the consistent will of Congress, where many Republicans and Democrats understand the compelling need for a large and diverse U.S. merchant fleet and an American shipbuilding industry sustained by both commercial orders and naval contracts. Such understanding has led in recent years to House and Senate approval of the Maritime Security Act with little or no opposition, steady defense of the Jones Act and other cabotage laws, continued enforcement of U.S.-flag cargo preference statutes, and fair funding for Title XI.
     Title XI enjoys wide support because it works as intended. Contrary to OMB's characterization, Title XI is not a subsidy program, but a guarantee that eases private sector access to commercial credit for ship construction and fleet renewal in the U.S. Every dollar appropriated for Title XI frees up $20 from private investors.
     Current double-hull tanker and ocean-going cruise ship construction projects in the U.S. were made possible only through Title XI, and, as 10 Republican and Democratic Congressmen noted in a letter to the President in February, "America's shipyards are expecting orders for more cruise ships, double-hulled tankers, and ships to replace the dry cargo fleet of the Jones Act."
     In this shipbuilding mix are vessels that will employ AMO engine and deck officers--if the ships are actually completed and delivered under the emerging circumstance.
     "The economic and national security of America depends on its position as a maritime power," the Congressmen said in their letter, written five days before the budget outline was unveiled. "One program in particular that has been crucial in helping to sustain a U.S. maritime infrastructure is the Title XI ship loan guarantee program."
     Without continued Title XI funding, commercial credit will no longer be available, and "large ship construction programs will not go forward," the Congressmen warned. They also pointed out that Title XI projects have helped keep 9,080 shipbuilding and supply companies in business, and that the guarantees account for 879,014 jobs in 47 states.
     Signing the letter were Reps. Duncan Hunter (R-CA), Randy "Duke" Cunningham (R-CA), Gene Taylor (D-MS), James Moloney (D-CT), Ronnie Shows (D-MS), Jo Ann Davis (R-VA), Ed Schrock (R-VA), Tom Allen (D-ME), Walter Jones (R-NC), and Charles "Chip" Pickering (R-MS).
     Also responding to the very real threat was Cynthia Brown, president of the Washington-based American Shipbuilding Association. ASA represents the nation's six largest shipyards.
     "America will not be a maritime nation if it does not have a maritime industry," Brown warned. "The President's budget proposal calls for the dismantling of the Maritime Administration, which exists to oversee laws, policies, and programs to promote a strong maritime industry."
     The proposal to zero-out Title XI would "severely weaken a defense shipbuilding industrial base that has already been cut to the bone as a result of eight years of the lowest naval ship procurement rates since 1932," Brown continued. "Commercial ships financed with Title XI loan guarantees and built by ASA member companies have helped to sustain the companies and skilled workforce essential to building the ships that keep America free."
     U.S. shipyards, ship operators, and seagoing unions will unite in opposition to the OMB proposals, and AMO will certainly do its part. With that in mind, I urge AMO members in all trades to continue supporting the AMO Voluntary Political Action Fund, which helps guarantee access on Capitol Hill, where our case will be made and judged. I also urge each AMO family to write or call their Representatives and Senators to let them know what is at stake in the budget debate.

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