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Vanishing Point for U.S. Maritime

Why has the Administration abandoned the maritime industry?

By Tony Munoz 2013-06-18 14:44:00

Since taking office in 2008, the Obama Administration has cut funding to the Maritime Administration, raided the Food for Peace (P.L. 480) budget for $1 billion, provided no funding for Title XI shipbuilding construction and, more recently, campaigned vigorously on Capitol Hill and in the media to end entirely the participation of U.S. citizens in the already stripped-down Food for Peace program.

But why? Why, when the Administration has been able to find $25 million in welfare for unemployed merchant mariners, is it so indifferent to the plight of the maritime sector generally?

Food for Peace

The President’s efforts to reform Food for Peace appear to be at the top of his 2014 budget agenda. He has sent emissaries to Congress to testify that the program’s inefficiencies allow people to die of starvation. Meanwhile, the White House media machine has been spinning that American farmers and merchant mariners are arcane special interest groups bogging the process down and that thousands more people could be fed around the planet.

In a sad display of politicized rhetoric, Rajiv Shah, Administrator of USAID, and Texas A&M Professor Andrew S. Natsios went before Congress and said people are dying while waiting for food aid to arrive. Their not-so-subtle insinuation was that special interests and the inefficiencies of the program were killing people. Natsios called the food aid program a subsidy for agribusiness, labor unions and maritime interests. He went on to say that P.L. 480 only accounts for 0.85% of U.S. agricultural exports and 0.56% of net farm income, and the only consequence of dismantling it will be on the unions and the U.S. Merchant Marine.

But Shah and Natsios are aware that the bags of food labeled “From the American People” have total transportation costs of just $350 million, and U.S.-flag vessels account for a meager $96 million of that. To put this in perspective, keep in mind that USAID’s annual budget is $14.1 billion or barely one percent of the entire federal budget. P.L. 480’s budget is one-tenth of that, or $1.4 billion.

Dismantling America’s Deepwater Sector 

In a related development, John Porcari, Deputy Secretary of Transportation, went before the House Subcommittee on Coast Guard & Maritime Transportation last month to offer the Administration’s support of the maritime industry. But, under questioning, Porcari acknowledged that the Administration has never had nor does it have a maritime policy or a funding plan for the industry.

As a matter of fact, the elephant in the room was the Administration’s complete indifference to – or even antipathy toward – the maritime sector itself. That indifference has manifested itself in a number of ways: the midnight raid on food aid, which reduced the portion carried in U.S. bottoms from 75% to 55%; the current efforts to turn P.L. 480 into a pure cash voucher system, leaving U.S. farmers and truckers and mariners out entirely; numerous Jones Act waivers (the most ever); no requests to Congress for Title XI funding, and the shelving of the American Marine Highway program until 2017.

In fact, the only advice Porcari could offer was for the industry to pivot forward and adjust to declining cargo preference tonnage and low ocean freight rates!

Ranking Member John Garamendi (D-CA) grilled Porcari about the Administration’s ability to find $25 million to provide enough welfare for unemployed mariners to retrain for new careers and yet its refusal to support the industry generally. Porcari responded that the Administration needs to reach out to its stakeholders, but the maritime industry needs to reengineer, and energy transportation might be a future opportunity.

The Future Is Already a Thing of the Past

The Obama Administration has not supported any maritime program whatsoever since taking office. While increasing USAID by 11% since 2008, it has raided Food for Peace for almost $1 billion. It excluded maritime from the $595 billion, six-year transportation infrastructure program and has defunded MARAD by over $150 million.

The Administration’s attacks on the U.S. Merchant Marine’s transporting of food aid have been ugly and filled with misinformation. The fact is there is not enough food produced in war-torn or drought-ridden regions. No matter where the additional food is purchased, it will be trucked, warehoused, and then transported on ships. The only difference will be the ecosystem of American farmers, truckers, inland barges, warehouses, port workers and mariners will not be involved.

The Administration must be stopped from reforming P.L. 480, and the maritime industry should begin educating the citizens of this nation about the significance of bags of food labeled “From the American People” and the strategic importance of deepwater mariners and ships for national security. Russia and China are investing in their militaries, and Asia Pacific will remain a vital strategic theater for the U.S. military. It will need to be supported by the Merchant Marine.

On a final note, when the President and his family visit sub-Saharan Africa at the end of the month, it will cost American taxpayers $60 to $100 million. Perhaps the President should hold a video-conference with African leaders instead and put the monies saved toward employing U.S. mariners on the high seas for a year, transporting food aid. – MarEx       

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