OPENING STATEMENT OF DUNCAN
HUNTER Merchant Marine Panel
Markup |
As members of the panel know,
we have been presented with two major proposals in the
Administration's Maritime Administration's budget
request for fiscal year 2002. Before I get to these
proposals, let me describe several other provisions in
the mark. First, I am 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 schools. 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.
Finally, I have 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 amend 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 had proposed terminating
the program and thus had not requested any new funding.
I simply cannot accept that proposal.
By
all accounts this is one of those government programs
that have worked. There have been defaults over the
years - as there have been whether the money was loaned
by a private bank or by the government. But those
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 this program. In my
opinion, it is critical to the maintenance of our
industrial base. I am therefore proposing in my mark
that we fund Title XI at $100 million for this 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. In addition, the
committee has not been presented with any evidence that
such a transfer would result in cost
savings. |