Copyright 2001 FDCHeMedia, Inc. All Rights Reserved.  
FDCH Political Transcripts
July 26, 2001, Thursday
TYPE: COMMITTEE HEARING

LENGTH: 1385 words

COMMITTEE: HOUSE ARMED SERVICES SPECIAL OVERSIGHT PANEL ON THE MERCHANT MARINE

HEADLINE: U.S. REPRESENTATIVE DUNCAN HUNTER (R-CA) HOLDS MARKUP OF FY 2002 APPROPRIATIONS BILL

SPEAKER:
U.S. REPRESENTATIVE DUNCAN HUNTER (R-CA), CHAIRMAN

LOCATION: WASHINGTON, D.C.

BODY:

 
HOUSE ARMED SERVICES SPECIAL OVERSIGHT PANEL ON THE MERCHANT
MARINE HOLDS MARKUP
 
JULY 26, 2001
 
SPEAKERS:
U.S. REPRESENTATIVE DUNCAN HUNTER (R-CA),
CHAIRMAN
U.S. REPRESENTATIVE CURT WELDON (R-PA)
U.S. REPRESENTATIVE JIM SAXTON (R-NJ)
U.S. REPRESENTATIVE WALTER JONES (R-NC)
U.S. REPRESENTATIVE ANDER CRENSHAW (R-FL)
U.S. REPRESENTATIVE JO ANN DAVIS (R-VA)
 
U.S. REPRESENTATIVE THOMAS H. ALLEN (D-ME),
RANKING MEMBER
U.S. REPRESENTATIVE GENE TAYLOR (D-MS)
U.S. REPRESENTATIVE ADAM SMITH (D-WA)
U.S. REPRESENTATIVE JAMES H. MALONEY (D-CT)
 
 


HUNTER: The panel will come to order.

My opening statement and the description of the mark is going to be brief this morning. And as members of the panel know, we've been presented with two major proposals in the administration's Maritime Administration budget request for fiscal year 2002.

Before I get to these proposals, let me describe several other provisions in the mark. First, we are proposing that we provide $89 million for operations and training. This $89 million funds the U.S. Merchant Marine Academy at Kings Point, New York, as well as scholarship and school ship maintenance expenses at the state maritime school. This is the amount requested by the president.

I have also proposed $10 million for obsolete ship disposal. This amount was also requested by the administration. I think we had a good discussion yesterday among members during the informal discussion with respect to the aspects of this ship disposal.

HUNTER: And several issues came up with respect to that that we're going to follow up on. But the administration has proposed $10 million, and we have that in our mark.

And finally, I've included two administrative-type provisions. The first would allow the maritime administrator to expand the definition of "war risk" insurance coverage that the United States can provide to operators when commercial insurance is not available at a reasonable cost. The new definition will be expanded to include confiscation, expropriation, nationalization and deprivation of the vessel.

The second provision would amendment Title XI to allow the Maritime Administration to hold and invest cash collateral derived from Title XI proceeds in the U.S. Treasury. It will further relieve obligors and the Maritime Administration from spending substantial time and money associated with negotiating depository agreements and preparing legal opinions in Title XI transactions.

With respect to Title XI, you each know that the administration has proposed terminating the program and, thus, had not requested any new funding. And I can't accept this proposal, and I think that's a feeling that is shared unanimously by members of the panel.

By all accounts, this is one of those government programs that has worked. There have been defaults over the years, as there has been whether the money was loaned by a private bank or by the government. But these defaults have been covered by the fees collected from the applicants, just as the program was designed to do. With strict adherence to the statutory loan approval guidelines, defaults can and should be kept to a minimum.

Literally hundreds-of-millions-of-dollars worth of ships, tugs and barges have been built in U.S. shipyards as a direct result of the program. And in my opinion, it's critical to the maintenance of our industrial base. I'm therefore proposing in the mark that we fund Title XI at $100 million in its upcoming fiscal year, plus an additional $3.9 million to cover administrative expenses.

Finally, on the proposal to transfer the Maritime Security Program from the Department of Transportation to the Department of Defense, I am recommending that we not accept the administration's proposal. The committee has not received sufficient justification to transfer a program that by all accounts has been managed effectively and efficiently, nor has the committee received any information that would suggest that DOD operational requirements dictate a transfer at this time. In addition, the committee has not been presented with any evidence that such a transfer would result in cost savings.

So having covered those basic issues that we've had a chance to discuss informally and that are manifest in this mark, I'd like now to recognize the gentleman from Maine and the ranking member of the panel, Congressman Tom Allen, for any comments he'd like to make.

ALLEN: Thank you, Mr. Chairman.

Let me say I'm pleased with the product we have before us, and I am grateful for the bipartisan spirit in which it was crafted.

I want to speak briefly about two of the more prominent aspects of this mark.

First, as you know, I heartily support the loan guarantee program authorized by Title XI of the Merchant Marine Act, and I am very pleased that the panel has decided to reject the administration's planned reduction in the amounts available for such loan guarantees. In fact, the $100 million in additional funds which would be authorized by this mark should send a clear signal to the administration that this program has solid, bipartisan congressional support.

ALLEN: Second, I am also pleased that the Maritime Security Program, another target of the administration, will remain with the Maritime Administration where it belongs, as this mark does not include the language which would have been necessary to move it to the Department of Defense. With no cost savings and no appreciable benefit associated with such a move, the panel made the correct decision to have the program remain where it is.

With that, I yield back the balance of my time. And I thank you, Mr. Chairman, for all you've done to move this mark along.

HUNTER: Well, thank you, Mr. Allen.

And is there any other discussion? Anybody who'd like to make a statement on this? I think Mr. Taylor would.

Mr. Taylor?

TAYLOR: Mr. Chairman, I really want to congratulate you, particularly for your move on Title XI. I happen to be a big fan of Senator McCain, but I think he's wrong on this one, and I think the president is wrong on this one.

But for the very small amount of money that we've been investing -- we started, as you know, in about 1993. We took $50 million out of the defense budget, set it aside for loan guarantees. In order to fund that program, to date we have done about $6 billion worth of shipbuilding in America that absolutely would not have been done without this program.

As the Department of Defense continues to ask for fewer and fewer ships to be built in our nation's shipyards, this is a way, a very cost-effective way, of keeping our nation's six major shipbuilders, as well as lots of second-tier shipbuilders, in business for the day that we will eventually need them.

So I want to commend you for the stand that you've taken on this. I think it is a very, very wise move. And on behalf of our nation's shipbuilders, I want to thank you for doing it -- and the people they employ.

HUNTER: Well, thank you, Mr. Taylor. And I think we on this panel work together as an effective team to keep this industrial base going, and I think we'll have more good news to report on Title XI as this program continues to play out.

Anybody else have any comments? And everybody has got a copy of the mark in front of him. So any discussion on any issues with respect to the mark?

Are there any amendments? Does anyone have any amendments to offer to the mark?

Well, we got things worked out, didn't we?

(CROSSTALK)

HUNTER: If there are no amendments, I would recognize Mr. Jones for the purpose of a motion.

JONES: Mr. Chairman, I move that the panel adopt the recommendations in the chairman's mark and report the same (inaudible) to the full committee.

HUNTER: The question now occurs on the motion of Mr. Jones. So many as are in favor will say aye.

SUBCOMMITTEE MEMBERS: Aye.

HUNTER: Those opposed, no.

The ayes have it. The motion is agreed to. And without objection, the motion to reconsider is laid upon the table.

If there is no further business -- does anybody have any other business they'd like to bring up at this time? Without objection, with no further business, the panel is adjourned at this time.

END

NOTES:
???? - Indicates Speaker Unknown
    -- - Indicates could not make out what was being said. off mike - Indicates could not make out what was being said.

PERSON:  JOHN DUNCAN JR (94%); CURT WELDON (72%); DUNCAN HUNTER (69%); WALTER B JONES (57%); THOMAS H ALLEN (57%); JO ANN DAVIS (56%); ANDER CRENSHAW (56%); WILLIAM M THOMAS (56%); ADAM SMITH (55%); JAMES H MALONEY (55%); GENE TAYLOR (55%); 

LOAD-DATE: July 27, 2001