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Posted: March 30, 2016

Congressional hearings highlight importance of U.S. merchant marine to military sealift capabilities, threats to readiness presented by declining job base for U.S. merchant mariners

During three separate hearings held in March in the House of Representatives and Senate, leading lawmakers, military leaders and administration officials highlighted the critical importance of the U.S. merchant marine to national defense and military sealift capabilities, and the threat posed to U.S. military readiness by the declining commercial job base for U.S. merchant mariners.

Hearings were held by the House Seapower and Projection Forces Subcommittee, led by Chairman J. Randy Forbes (R-VA) and Ranking Member Joe Courtney (D-CT), on March 22; the House Coast Guard and Maritime Transportation Subcommittee, led by Chairman Duncan Hunter (R-CA) and Ranking Member John Garamendi (D-CA), on March 15; and the Senate Surface Transportation and Merchant Marine Infrastructure, Safety and Security Subcommittee, led by Chairman Deb Fischer (R-NE) and Ranking Member Cory Booker (D-NJ), on March 8.

The significance of existing maritime statutes, policies and programs to military readiness, and concerns about the dwindling U.S.-flag commercial job base and the loss of U.S. merchant mariners from the industry were among the topics addressed to various extents at each of the hearings.

Among the key policy issues discussed during the hearings were the Jones Act, the Maritime Security Program and Food for Peace Title II, the latter of which provides U.S.-sourced food-aid cargoes for U.S.-flagged commercial vessels under U.S. cargo preference requirements. Also addressed in detail was the Maritime Administration's Ready Reserve Force and age of the vessels comprising this fleet.

The hearings drew focus on the discrepancies between the Obama administration's fiscal year 2017 budget proposal for funding the Maritime Security Program and Food for Peace Title II and actual military manpower needs for active U.S. merchant mariners to be available for defense sealift operations.

Drawing criticism from congressional leaders was the administration's proposal to fund the MSP at $186 million in fiscal year 2017, rather than the nearly $300 million authorized for the program. However, it was explained during the hearings that the Maritime Administration's budget request for fiscal year 2017 was based on the "program of record" at the time it was drafted and MARAD had not had time to adjust the request to reflect the increased MSP funding authorization contained in the omnibus Consolidated Appropriations Act of 2016, which was signed by the President in December 2015.

Another topic of concern was the reduction in funding for Food for Peace Title II contained in the budget request, and the administration's proposal to allocate 25 percent of the program's funding to 'local and regional' purchases of food aid, cash transfers and vouchers, rather than the purchase of U.S.-produced food aid for shipment overseas. Both aspects of the Food for Peace budget request would reduce cargoes for U.S.-flagged vessels.

Seapower and Projection Forces Subcommittee

The most recent of the three hearings held in March, a hearing that focused primarily on maritime policy issues directly affecting the U.S. merchant marine and its indispensable role in providing defense sealift services to the U.S. military, was held by the Seapower and Projection Forces Subcommittee led by Rep. Forbes. Witnesses testifying during the hearing included U.S. Navy Director, Strategic Mobility/Combat Logistics Division, Scott DiLisio; Maritime Administrator Paul "Chip" Jaenichen; and U.S. Transportation Command Deputy Commander Lt. Gen. Stephen Lyons.

"Between the years 2000 and 2014, our U.S. commercial fleet shrunk from 282 vessels to 179, a reduction of almost 40 percent," Rep. Forbes said. "This commercial fleet reduction is increasingly problematic for the U.S. military, and specifically for the U.S. Transportation Command, because these vessels support the military's maritime lift requirements and their crews provide the manning for the military's mobilization forces, according to MARAD's and TRANSCOM's assessments.

"A reduction in the overall U.S. commercial sector has severely jeopardized our ability to sustain any level of prolonged military logistics support," he said. "Furthermore, we are perilously close to not having sufficient mariners to support even the initial mobilization" of the Ready Reserve Force.

"Unfortunately, the administration's fiscal year 2017 budget request accelerates this decline and weakens our military," Rep. Forbes said.

In his opening remarks, Jaenichen testified the current population of U.S. merchant mariners with the required U.S. Coast Guard credentials to crew military and government sealift ships has declined, due in large part to the sharp drop in government-impelled cargoes available to U.S.-flagged ships and the subsequent flag-out of these ships to foreign registries. In his closing remarks, Jaenichen described the declining U.S. merchant mariner population as "a crisis in the making."

"The number of qualified and experienced mariners available will likely not be adequate in the very near future unless we take positive action to reverse this trend," Jaenichen said. "Current estimates show that we only have about 11,280 qualified mariners who have the necessary U.S. Coast Guard credentials to operate large seagoing ships.

"The Maritime Administration is taking action to address the issues that challenge the U.S. maritime industry through the development of a draft maritime strategy," he said.

Rep. Courtney questioned Jaenichen regarding the budget request for the MSP in fiscal year 2017, and about the age and viability of maritime academy training ships, specifically the Empire State VI, the training vessel of SUNY Maritime College in Fort Schuyler, N.Y.

Jaenichen explained the circumstances that led to the budget request being released before it could be adjusted to reflect the increased authorization for the MSP enacted in December 2015, and he thanked the panel for its support of the increased appropriation for the MSP in the current fiscal year to increase the stipend for each ship in the program to $3.5 million.

He also thanked the subcommittee for its support of MARAD's request for $5 million to create a design for new multi-purpose training ships. He addressed the age of the Empire State and the cost and prohibitive complications that would be involved in a service-life extension for the training vessel.

Rep. Courtney then asked Jaenichen what the effect of repealing the Jones Act would be.

"Repeal of the Jones Act would be traumatic for the U.S. merchant marine," Jaenichen said. He explained that it would "exponentially" increase ship construction costs for U.S. military and government vessels, result in the loss of critical U.S. shipbuilding capabilities, and decimate the job base for U.S. merchant mariners.

Rep. Rob Wittman (R-VA) asked Jaenichen what would happen if Congress funded the MSP at $3.1 million per ship, as opposed to the authorized amount of $5 million per ship in fiscal year 2017.

Throughout the hearing, and in response to Rep. Wittman's question, Jaenichen explained government-impelled cargoes available to U.S.-flagged ships had declined by 75 percent since 2011, the global commercial shipping market was depressed and suffered from over capacity, and the ships enrolled in the MSP need cargo to remain viable in commercial operations under the U.S. flag.

The loss of cargo for these ships "really leaves the stipend as the only place to go," he said. If the stipend were reduced to $3.1 million, MARAD cannot guarantee that the number and types of vessels needed for sealift operations would remain under the U.S. flag and enrolled in the MSP, he said.

Responding to concerns raised by Rep. Wittman regarding the number of available U.S. merchant mariners, Jaenichen highlighted the potential impact of STCW 2010 requirements, which take effect January 1, 2017. He pointed out, if U.S. mariners without the required STCW endorsements were employed for defense sealift operations, foreign port state control authorities might not allow the ships they were manning to enter foreign ports to discharge military cargoes.

Rep. Forbes questioned Jaenichen and Lyons on the nation's present capability to sustain a full-scale mobilization of the Ready Reserve Force fleet.

Both commented the pool of U.S. merchant mariners at present would be enough to surge the fleet, but sustained sealift operations could become problematic within a matter of months of the initial deployments. Both placed U.S. readiness levels - based on the number of U.S. merchant mariners currently working in the industry - "right on the margin between medium and high risk."

"In order to be comfortable with the number of mariners we have, with the STCW requirements that go into effect in January of 2017, we need an estimate of approximately 40 more ships to have a sufficient mariner pool that is sailing actively on a day-to-day basis to make sure we have the right number," Jaenichen said.

Rep. Forbes asked: "If we lost 200 mariners, would we be in high risk?"

"We would, sir," Jaenichen responded.

Rep. Forbes then questioned Lyons about the significance of the Ready Reserve Force fleet to the military's ability to support a full-scale mobilization.

"Chairman, it's extremely important," Lyons responded. "In fact, without that Ready Reserve Force fleet, we would be unable to deliver a significant portion of combat power globally. So we are absolutely reliant upon that capability - from the prepositioned ships that are forward positioned to the surge fleet to the Ready Reserve Force fleet - those are critical to our ability to project power."

Rep. Forbes asked if the administration's proposal for Food for Peace Title II would increase or decrease the number of U.S. merchant mariners.

"If we go back to the 25 percent reduction (to the cargo preference requirement for U.S. food-aid cargoes) that occurred in 2012 ... we estimated at that time we would lose somewhere between nine and 12 ships. We subsequently lost 28," Jaenichen said. "Now we also recognize that's coincident with all of the downward pressure on the DOD cargoes, the retrograde from Afghanistan and Iraq - those all occurred at the same time."

Jaenichen added: In the fiscal year 2017 budget proposal, $25 million was included "as a mitigating factor to make sure that we don't have an adverse effect on the mariner pool - we'll be able to maintain some ships, principally the ones that are carrying food-aid cargo that are not in the MSP. So $24 million of that would be dedicated to those non-MSP carriers and $1 million would be dedicated to the retraining of the mariners to make sure that we have that capability."

Rep. Forbes asked how the loss of mariners impacts the ability to support the Ready Reserve Force fleet.

"Chairman, the merchant mariner is inextricably linked to the Department of Defense's ability to project force," Lyons responded. "As I indicated earlier, the predominant cargoes, both equipment and supplies, go by sealift, and so without that merchant mariner capability, we don't have a DOD surge sealift capability."

Rep. Forbes concluded by addressing both Jaenichen and Lyons: "There are some in Congress who have indicated the United States should outsource our military maritime lift capacity to foreign nations and that U.S. crews should be replaced by foreign crews. Could you both explain the value of an organic lift capability and why Congress needs U.S. mariners in the MSP and the Ready Reserve Force?"

"The first thing I would say is the U.S. merchant marine and the mariners who are part of that active workforce have always responded to the call - they are patriotic, they have done what is needed to conduct our sealift requirement," Jaenichen responded. "They have never failed to carry our requirements - equipment, supplies, materials - to support the Department of Defense operations. I cannot say the same for foreign-flag crews. We have several instances in which they have not gone into the theater for fear of their own safety. We also run the risk, if you have foreign seafarers, that potentially we are at the risk of some political decision by another country that those mariners potentially are national citizens to, and I don't think that's a position we want to be in going forward."

Lyons responded along similar lines. "We believe that the case for a U.S.-flag fleet is compelling. There is no guarantee whatsoever that a foreign-flag fleet would sail into harm's way, as the administrator said. We have had cases of that in the past."

Responding to a question from Rep. Tulsi Gabbard (D-HI) as to whether enough mariners and vessels were available to meet military sealift requirements, Lyons responded that, presently, we have a capability sufficient to meet military strategy requirements with acceptable risk. "We believe we're in good shape now, but we do have some concerns about where we're headed - that as well as the age-out of the organic fleet."

Addressing the latter point, Jaenichen said the age of the Ready Reserve Force fleet presents challenges with vessel maintenance and readiness, including replacing parts on older steamships. "If that fleet is called, I'd like to say that I can guarantee every single time we'll be able to do it. But, as we get farther in time, and we have every intent to utilize the funding to be able to extend that service life to 60 years, I can't guarantee that they'll be able to carry the equipment we need."

As did other members of the subcommittee, Rep. Gabbard asked Jaenichen the specific fleet size requirement for the MSP to meet military sealift needs.

Jaenichen, as had Lyons previously, responded 60 is the number, and those commercial ships typically serve in a sustainment role following an initial sealift surge utilizing the Ready Reserve Force and Military Sealift Command prepositioned vessels. Jaenichen said all 60 ships are needed to meet the most comprehensive and challenging sealift scenarios the Defense Department has, and "it also makes the assumption that we have no losses."

Rep. Garamendi, ranking member on the Coast Guard and Maritime Transportation Subcommittee, attended the Seapower and Projection Forces Subcommittee's hearing and was recognized by Chairman Forbes and the panel to address those in attendance.

"This is the fourth hearing that I've been at in the last couple of months that deals with this issue ... all of those committees' hearings have all come to the same point, and that is we have a national security issue here, a very very serious one," Rep. Garamendi said.

Rep. Garamendi cited the decline in government-impelled cargoes - military, food-aid and Export-Import Bank. He posed the question to Jaenichen: "Is it about cargo?"

Jaenichen responded: "In every situation where we have talked to an operator who has re-flagged a ship, he has told us that it is the absence of cargo which has contributed significantly to the decision to re-flag or to scrap those vessels."

Rep. Garamendi said: "It seems to me that what we have is a government, an administration, that is not looking at all of the pieces of this puzzle and weaving them together in a way that is sensible, both for national security, for jobs, for the shipyards, and the like."

Rep. Garamendi questioned the effectiveness of the proposal to include $25 million in the budget to mitigate losses that would result from cuts to Food for Peace Title II funding and converting U.S.-sourced food aid to cash transfers and vouchers. He emphasized the importance of instead maintaining the U.S. food-aid shipments supported by the program.

"We know that there's a threat on the Jones Act, [about which there is] testimony already on the record today on the importance of the Jones Act for all of the pieces of this puzzle. We know that the USAID is determined to cash out the commodity portion of Food for Peace. We've had testimony here today about the downward pressure that puts on the maritime industry. We know that, at the moment, the Ex-Im Bank is not operable and that there are problems there. And thankfully we do not have the need at the moment for the military that we have had in the past.

"We need to get this together," Rep. Garamendi said. "Mr. Forbes, your hearing is extremely important, along with the other hearings. And, I think, as we go through the policy questions with the NDAA (National Defense Authorization Act), and as we talk to the Foreign Affairs Committee, we need to make it very very clear that this is a national security issue."