BUSH BUDGET SLASHES MARAD FUNDING, TRANSFERS MSP TO DEFENSE
The Bush Administration’s final fiscal year 2002 budget calls for transferring the Maritime Administration Maritime Security Program to the U.S. Department of Defense.
The budget provides no funding for MSP at MarAd, but calls for $98 million to be spent by the DOD to cover the operation of 47 U.S.-flag liner vessels for the next fiscal year, beginning Oct. 1.
The Bush Administration slashed funding for MarAd’s Title XI shipbuilding loan guarantee program from $34 million last year to only $4 million in the upcoming fiscal year. However, a carryover of $10 million is expected to be available for fiscal 2002, the DOT said.
Maritime interests in Washington say they will fight the MSP transfer on grounds that it would take an act of Congress to carry out the transfer.
Secretary of Transportation Norman Y. Mineta stood by the transfer at a press briefing, and said the transfer could be done under an executive order.
Later, Jim Caponiti, MarAd’s acting deputy of the Office of Inland Waterways and Great Lakes, countered Mineta’s view, saying the transfer of the MSP fleet 'would take some kind of Congressional action. They could not do it without a Congressional mandate.”
' Caponiti said “we’re in discussions with DOD” to ensure a “smooth transition” if indeed the transfer does occur.
The Bush Administration “would prefer to eliminate the (Title XI) program, Mineta said. On the other hand, Mineta said the Administration “is feeling pressure” to maintain the program.
The budget slightly increases operations and training funds from $87 to $89 million. Of this total, $48 million is earmarked for the U.S. Merchant Marine Academy, including $13 million for “critical capital modernization projects, $7 million for State maritime schools, and $34 million to support MarAd operations. The latter includes funding to maintain MarAd headquarters in Washington and regional staffs; planning for coordination of U.S. maritime industry activities under emergency conditions; and, port and intermodal development activities.
The budget for the first time provides direct funding of $10 million to dispose of obsolete ships in the National Defense Reserve Fleet during fiscal 2002. With these funds, MarAd expects to dispose of at least three ships.
Overall, MarAd's budget dropped from $219 million in fiscal 2001 to $103 million requested for fiscal 2002.