Administration to Dismantle U.S. Merchant Marine?

Reduction in cargo preference shipments just the first step.

Published Feb 27, 2013 4:24 PM by Tony Munoz

As the administration and Congress continue to batter the American psyche with doomsday terms like “debt ceiling,” “fiscal cliff” and “sequestration,” the White House Office of Management and Budget (OMB) has been busy behind the scenes dismantling the U.S. Merchant Marine. After funding a decade of war and bailing out Wall Street and the banks, a gridlocked and dysfunctional government’s only answer to deficit reduction appears to be the shutdown of basic services for its citizens and the gradual elimination of funding for the U.S. Merchant Marine (USSM).

The USMM has served the United States for more than two hundred years and has supported U.S. military operations around the world during every conflict this nation has been involved with. But, to no one’s surprise, the White House seems intent on ceasing operations of the USMM. Since taking office, the administration has provided more Jones Act waivers than any other administration and, just a few months ago, it hacked the USMM’s percentage of cargo preference shipments of food aid from 75% to 50% before any one even knew what hit them. Now it intends to write the final chapter of the USMM with the scribble of a pen on another backroom deal.

President Obama and DOT Secretary LaHood have never recognized the maritime sector as part of the U.S. infrastructure. They provided MARAD with $433 million while providing air, truck and rail an additional $495 billion to rebuild their systems. Furthermore, the administration ensured that America’s Marine Highway would be tabled until 2017 or at least pushed back to the next administration.

So How’s That Working Out…?

As part of its deficit reduction plan, the White House wants to send money to starving nations under a new food aid scheme, which includes NGOs overseeing the program.  OXFAM America, an NGO currently campaigning on Capitol Hill to cease buying food from American farmers and end cargo preference laws for U.S. flag operators, received $78 million in revenues and spent $28 million in organizational salaries in 2011.

OXFAM’s IRS report says its mission is to create lasting solutions to poverty, hunger and injustice with local groups in more than 90 nations, which includes giving them cash to buy food. And the NGO says it is campaigning for social justice by participating in meaningful discussions about issues affecting indigenous peoples’ families, livelihood and land. Additionally, OXFAM advocates investment in small-scale food producers and modernization of food aid programs as part of its campaign. 

USAID reports distribution of more than $2.3 billion in food to starving nations such as Pakistan. For more than 60 years, the U.S. has been providing aid to Pakistan, and in 2011 the country got another $1.5 billion in aid. And yet its people are starving? Egypt is another boondoggle for disappearing U.S. aid funds. It is estimated that almost $19 billion has disappeared due to corruption. Egypt has 80 million people and is the largest food importer in the world. The Egyptian government, which gets $1.3 billion in annual credits from the U.S., only gives cheap bread to its poor.

Countries like Sudan, Kenya, Uganda, Nigeria, Ethiopia and Colombia have been getting money in aid from the U.S., yet these countries have the most starving people in the world. When NGOs claim more than 25,000 tons of food aid reached the Haitian people almost instantly after the earthquake, they forget to mention the U.S. maritime sector delivered the vast majority of the tonnage.

Ending food aid by sending money and NGOs overseas to ensure that people are fed is another problem in itself. Since the U.S. began sending money to foreign governments to ensure democracy endures and its people are fed, it just hasn’t worked. 

Time to Reconsider

Buying food from U.S. farmers and transporting it under cargo preference laws may not be the most effective program, but it’s a lot better than sending cash to countries to buy food locally. Most of these nations’ farmers cannot produce enough food in the first place, so what is going to change in the future? The cash will be used for other purposes, and everyone will suffer.

The USMM is an institution with a long heritage and a vital role to play in America’s economic well-being and military readiness. To put an end to it because special interests believe money is faster and safer in order to feed the starving is a big mistake. The White House needs to reconsider its budgetary plans and keep American jobs where they belong – in America. – MarEx

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.