Senate Passes Maritime Security Program Funds, Enactment Expected

The U.S. Senate has passed a revised version of the National Defense Authorization Act (NDAA) for fiscal year 2016. The bill contains an increase in funding for the Maritime Security Program, which provides financial assistance to eligible American-flagged vessels.

The Maritime Security Program (MSP), enacted in 1996 and administered by MARAD, is intended to “establish a fleet of active, commercially viable, militarily useful, privately-owned vessels to meet national defense and other security requirements.” Some 60 vessels are currently enrolled and receive annual financial assistance from the government.

The revised $607 billion appropriations bill has been passed by both the House and Senate and will be reviewed by President Obama. If the bill is enacted, the MSP provision will increase the program's subsidy to $3.5 million for each program vessel during fiscal 2016, up from $3.1 million. Total program cost will increase by $24 million.

In its rationale for increased MSP funding, Congress stated that “dedicated and enhanced support is necessary to stabilize and preserve [the program] . . . [it] assures a United States-flag presence in international commerce, supports a pool of qualified United States merchant mariners needed to crew United States-flag vessels during times of war or national emergency, and serves as a critical component of our national security infrastructure.”

In October, the president vetoed the first version of the NDAA – including the same MSP appropriation – but it is believed he will sign the revised bill, largely because of a recent large scale budget deal.

In his rationale for vetoing the last edition of the bill, the president highlighted a section intended to block the closure of the Guantanamo Bay detention facility. The provision remains in the current version of the NDAA, but Democratic members of Congress have suggested that the president will look for alternative ways to phase out detention at Guantanamo.

Separately, MSP funding came up in an earlier – and so far unsuccessful – legislative effort to lift the American crude oil export ban. In October, opponents of the ban attached an MSP funding amendment to a House bill to permit oil exports. The controversial amendment would have raised MSP subsidies to $5 million per vessel in 2017.