Trump's Budget Would Cut Harbor Maintenance Tax


By MarEx 2018-02-12 15:58:00

On Monday, the White House released President Donald Trump's budget proposal for 2019-2028. Though the House and Senate have already passed a two-year budget framework that extends through 2019, the White House budget is a reflection of the president's long-term priorities, including defense and homeland security funding. The budget would increase spending overall, and depending upon future tax receipts, it could double the federal deficit to $1.3 trillion per year by 2028.

Among other highlights, the president's Office of Management and Budget proposes:

- Raising the annual defense spending limit from $549 billion to $790 billion over ten years, with costs partially offset by reducing domestic spending from $516 billion to $388 billion. 

- Increasing the number of naval vessels acquired in 2019 to 10 ships, to include two Virginia class submarines, three Arleigh Burke class destroyers, one littoral combat ship, one Ford-class carrier, two fleet oilers and one expeditionary sea base.

- Providing a 2.6 percent military pay raise, the largest increase in nine years.

- Providing $70 million in additional resources for the Navy's surface fleet equipment and training. This would help the service to address the readiness shortfalls it identified in the aftermath of the USS McCain and USS Fitzgerald collisions last year.

- Reforming the laws governing the Inland Waterways Trust Fund, including an annual per vessel fee for commercial users to help finance future capital investments and a portion of the operations and maintenance costs.

- Reducing the Harbor Maintenance Tax in order to provide ports with "greater flexibility to finance their capital and operating costs on their own." This line item's net impact on the budget would be about $300 million per year. 

- Cutting the U.S. Army Corps of Engineers’ Civil Works budget by 22 percent, down to $4.8 billion from the FY2018 Senate Appropriations Committee’s funding level of $6.2 billion.

The Waterways Council Inc. (WCI) warned that the reduction in resources for marine infrastructure would be a mistake. "This dour FY2019 budget represents a clear disconnect from the encouraging rhetoric made by President Trump about the inland waterways in the State of Union address and at his historic visit to the Ohio River in June 2017,” said WCI President & CEO Mike Toohey.  “If accepted, this budget, like the infrastructure proposal issued earlier today, hamstrings America’s ability to compete in the world."