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White House Proposes Shifting Corps Dredging to DOT

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By MarEx 2018-06-22 14:17:40

On Thursday, the White House Office of Management and Budget released a sweeping proposal to overhaul the organization of the federal government, including the nation's maritime agencies. 

The proposal - titled "Delivering Government Solutions in the 21st Century" - calls for tectonic shift in the structure of the federal government, including a merger of the Departments of Labor and Education and the relocation of all public assistance programs into a new Department of Health and Public Welfare. It would also add several new functions to the portfolio of the Department of Transportation and its civilian maritime division, the Maritime Administration (MARAD). 

At present, MARAD administers the U.S. Merchant Marine Academy at Kings Point (USMMA), one of the nation's five federal service academies; the Ready Reserve Force fleet (RRF), a semi-active fleet of merchant ships that are maintained on standby for emergency sealifts; the National Defense Reserve Fleet of decommissioned government vessels, also known as the "mothball fleet"; and the Maritime Security Program (MSP), a subsidy program for U.S.-flagged deep sea merchant vessels. The agency also oversees a number of small grant programs. 

The White House proposal notes that at present, "MARAD has no safety regulatory function . . . which leaves DOT under-represented in commercial maritime issues." According to the plan, this means that "there are opportunities to add to DOT’s responsibilities for coastal ports, inland waterways, and navigation permitting activities" - especially the responsibilities currently housed under the U.S. Army Corps of Engineers. 

Under this proposal, the responsibility for coastal port dredging and operation of the inland waterway system, which is currently carried out by the Corps, would be shifted to DOT. The remaining Corps civil works missions (flood and storm damage reduction, aquatic ecosystem restoration, regulatory, and all other activities) would be moved to the Department of the Interior, which has comparable programs.

The Trump administration's OMB has previously proposed to reduce the Harbor Maintenance Trust Fund tax on cargo, and to impose an annual fee on the Western Rivers for the Inland Waterways Trust Fund - ideas that ran into opposition from industry. OMB suggested that transferring dredging to DOT would be another "opportunity to reassess the type of federal involvement in both sectors." This reappraisal is premised on the idea that "a new model of federal financial assistance to ports may be a more efficient project delivery mechanism than direct federal control, construction, and ongoing maintenance."

In addition to dredging, the plan would give DOT some of the U.S. Coast Guard's responsibility for Aids to Navigation, a function that has been performed by the Coast Guard and its predecessor agencies for 229 years. "Transferring current U.S. Coast Guard responsibilities for permitting alterations to bridges and aids to coastal navigation to DOT would better align those functions with similar functions already carried out by DOT’s [sic]," the proposal suggests. 

The "mission adjustments" for DOT also include one significant divestment: the locks along the Saint Lawrence Seaway, which would be spun off as a non-profit. This change would allow the seaway "to have better governance structures and insolation [sic] from the political system, and allow them to better assess fees based on actual usage of their systems," the plan suggests. 

The Office of Management and Budget's proposal would require an act of Congress to implement. OMB director Mick Mulvaney's previous guidance, including a 2017 proposal to reduce the Coast Guard's budget by 14 percent, has not always been well-received on Capitol Hill. The Coast Guard has struggled with under-funding for years, and the White House dropped the budget cut proposal after objections from Congress. Legislators ultimately gave the service a small budget increase in 2018, and the White House included an additional $1 billion increase in its FY2019 proposal.