Posted:
March 3, 2011
No funding for Title XI shipbuilding loan guarantees sought by administration
In its budget proposal for fiscal year 2012, the Maritime Administration seeks a large enough appropriation to fully fund the Maritime Security Program and the fleet of 60 U.S.-flagged ships it supports, as well as sufficient funds for the Ocean Freight Differential Program to securely support the 75 percent U.S.-flag cargo preference requirement for U.S. government impelled food-aid shipments.
However, MARAD's budget request for the next fiscal year fails to seek any funding for new shipbuilding loan guarantees under the Title XI program, which is a key element in commercial shipbuilding projects in U.S. shipyards. Further, the Maritime Administration is looking to reallocate to other programs about $54 million previously provided by Congress expressly for new Title XI loan guarantees.
The administration's budget request is a first but significant step in shaping government spending for the coming fiscal year. The budget proposal has now advanced to Congress, where a lengthy series of hearings and modifications will surround the federal spending plan prior to a final budget being produced - if one can be produced. Although the budget request is far from a final set of appropriations, programs included in the administration's proposal stand a stronger chance of being funded at levels requested by the agencies that administer them.
Independent of the administration's budget request, maritime trades affected by U.S. cargo preference requirements face a serious challenge in Congress with securing funding for U.S. food-aid programs and shipments. Although the 75 percent U.S.-flag requirement will apply to U.S. government food-aid shipments, the amount of food aid produced and shipped by the U.S. would drop sharply if Congress votes to cut funding for crucial U.S. food-aid programs.
A separate cargo preference issue recently moved toward resolution as the Department of Energy (DOE) reported U.S. cargo preference statutes will be applied to cargoes generated by projects supported by DOE loan guarantees. The Department of Transportation has correctly asserted the cargo preference requirements for the utilization of U.S.-flagged vessels apply to all ocean transportation of cargoes for projects supported by DOE loan guarantees. Under a 2008 amendment to the 1954 Cargo Preference Act, the secretary of transportation has exclusive authority to determine when the U.S.-flag cargo preference requirement applies, regardless of the cargo or the government agency involved. The legislative staff members of American Maritime Officers and American Maritime Officers Service continue to work with elected representatives on Capitol Hill on these and other issues vital to the AMO membership and U.S. merchant marine.
FY 2012 budget request includes full funding for MSP
No funding for Title XI shipbuilding loan guarantees sought by administration
In its budget proposal for fiscal year 2012, the Maritime Administration seeks a large enough appropriation to fully fund the Maritime Security Program and the fleet of 60 U.S.-flagged ships it supports, as well as sufficient funds for the Ocean Freight Differential Program to securely support the 75 percent U.S.-flag cargo preference requirement for U.S. government impelled food-aid shipments.
However, MARAD's budget request for the next fiscal year fails to seek any funding for new shipbuilding loan guarantees under the Title XI program, which is a key element in commercial shipbuilding projects in U.S. shipyards. Further, the Maritime Administration is looking to reallocate to other programs about $54 million previously provided by Congress expressly for new Title XI loan guarantees.
The administration's budget request is a first but significant step in shaping government spending for the coming fiscal year. The budget proposal has now advanced to Congress, where a lengthy series of hearings and modifications will surround the federal spending plan prior to a final budget being produced - if one can be produced. Although the budget request is far from a final set of appropriations, programs included in the administration's proposal stand a stronger chance of being funded at levels requested by the agencies that administer them.
Independent of the administration's budget request, maritime trades affected by U.S. cargo preference requirements face a serious challenge in Congress with securing funding for U.S. food-aid programs and shipments. Although the 75 percent U.S.-flag requirement will apply to U.S. government food-aid shipments, the amount of food aid produced and shipped by the U.S. would drop sharply if Congress votes to cut funding for crucial U.S. food-aid programs.
A separate cargo preference issue recently moved toward resolution as the Department of Energy (DOE) reported U.S. cargo preference statutes will be applied to cargoes generated by projects supported by DOE loan guarantees. The Department of Transportation has correctly asserted the cargo preference requirements for the utilization of U.S.-flagged vessels apply to all ocean transportation of cargoes for projects supported by DOE loan guarantees. Under a 2008 amendment to the 1954 Cargo Preference Act, the secretary of transportation has exclusive authority to determine when the U.S.-flag cargo preference requirement applies, regardless of the cargo or the government agency involved. The legislative staff members of American Maritime Officers and American Maritime Officers Service continue to work with elected representatives on Capitol Hill on these and other issues vital to the AMO membership and U.S. merchant marine.