GOP seeks to trim Coast Guard, MarAd, FMC funds
Republican congressmen highlighted concerns about the need to rein in government spending during a hearing Tuesday on the Obama administration's budget requests for the Coast Guard, Maritime Administration and the Federal Maritime Commission.
Frank LoBiondo, R-N.J., chairman of the Coast Guard and Maritime Transportation Subcommittee, said resources have not kept pace with the Coast Guard's 'rapidly expanding mission portfolio in recent years,' and commended its commandant, Adm. Robert J. Papp, 'for publicly saying the service must closely evaluate whether they can continue to take on new missions in the current fiscal environment,' and 'uncovering some savings through efficiencies in operations and the consolidation of services.'
But LoBiondo wanted to know if additional savings could be found, and said he had concerns the Coast Guard 'continues to push off investments in the acquisition of assets.'
He also said the service's five-year capital improvement plan 'proposes a fantastic 66 percent increase in funding over the next three fiscal years. The service needs to stop burying its head in the sand and propose a fiscally sustainable long-term capital acquisition plan.'
He complained the Coast Guard and Department of Homeland Security has refused to provide the subcommittee with a fleet mix analysis that it requested 13 months ago.
Papp said the $1.4 billion in the budget for ships was the highest ever in a federal budget, but said the ships were badly needed.
'We cannot get these ships out there fast enough,' he said.
Meanwhile, Rep. Rick Larsen, D-Wash., ranking member of the subcommittee, said he was concerned 'that this budget will underinvest in the maritime infrastructure that can help the U.S. economy expand and flourish.'
Maritime Administrator David Matsuda said his agency is seeking $357.8 million, which includes $174 million for the Maritime Security Program, which he said when combined with carryover funds would allow funding for the program at full authorized level.
Another major item in MarAd's budget is $93 million for the U.S. Merchant Marine Academy, which Matsuda said included many long-postponed capital projects for World War II-era buildings, even simple things such as locker rooms and toilets for female cadets who were first admitted in 1974 to the once all-male school.
Rep. Andy Harris, R-Md., asked Matsuda how his agency might be able to reduce spending to 2008 levels, and Matsuda said if that was done, the most severe impact would be on the academy.
But Harris said state colleges and universities have had to cut their budgets and asked Matsuda, 'are you suggesting that somehow what you are responsible for should be exempt from doing more with less?'
LoBiondo said he was concerned with the 'tremendous amount of time' it takes MarAd to process applications for Title XI shipbuilding loan guarantees.
'This is even more concerning given the fact the budget proposes to rescind $54 million in unobligated Title XI loan guarantees when they have nearly $100 million worth of applications still to process. If all the applications were approved it would provide $1.5 billion to U.S. shipyards and create thousands of new jobs,' LoBiondo said.
Rep Steve Southerland, R-Fla., questioned Matsuda about a pending Title XI application for a $227 million loan guarantee to build five platform supply vessels for the company Boldini S.A. at Eastern Shipbuilding in Panama City, Fla. The loan was applied for on March 10, 2009 and is due to be heard by a credit committee on March 8, two days before the application expires.
'We treat every application as one that has the potential to be successful,' Matsuda said, but MarAd wants to ensure 'we put together a deal that meets the financial tests and to allows the federal government to put their guarantee behind the project.'
He noted in the past 'decisions were made where they maybe were not the best in terms of the risk.'
Matsuda said the application might be extended, but Southerland complained, 'in the business world, time is not just money, but speed is profit and therefore there is a sense of urgency in the private sector. If this deadline is not met I would tell you there is a better than average chance that this contract to build these vessels would go to a foreign country.'
'We are moving with all due haste,' Matsuda said, 'what we can't change is the merits of the deal.'
FMC Chairman Richard A. Lidinsky Jr. said his agency is asking for $26.3 million for fiscal year in 2012, $2.13 million more than in fiscal 2010, and seeks to increase the staff by two positions that will help beef up the FMC's Office of Consumer Affairs and Dispute Resolution Services (CADRS).
LoBiondo said that while the FMC was a small agency, asking for an increase 'sends the wrong signal in the current fiscal environment.'
Lidinsky said the Shipping Act of 1984 provides that disputes between shippers and carriers be resolved in state court, but that he wants more disputes to be resolved at no cost and confidentially at the FMC.
Noting that contracts for the coming year are being negotiated, 'if we find come this spring and summer that they have not voluntarily come to CADRS, I will come back to this subcommittee and request legislation that we change the Shipping Act.'
In the coming year, Lidinksy said the FMC will work to assist economic recovery and job growth in the shipping industry, be 'alert to foreign activities that may be harmful to our exporters, importers, the American industry that serves them, and above all the American consumer,' and work to 'green our ports and the shipping industry.' ' Chris Dupin