Future of United States Maritime Part 1: Review of Fiscal Year 2026 Federal Maritime Commission Budget Request

Coast Guard and Maritime PolicyHouse · July 22, 2025 · 119th Congress
The Subcommittee on Coast Guard and Maritime Transportation held this hearing to review the Federal Maritime Commission's (FMC) proposed $40 million fiscal year 2026 budget, its implementation of the Ocean Shipping Reform Act (OSRA) of 2022, and its recently launched investigation into "flags of convenience" among foreign-flagged vessels. Begins at ▶ 0:19:18
Transcript
Highlights

Title

FMC Fiscal Year 2026 Budget and Ocean Shipping Reform Act Implementation

Purpose

The Subcommittee on Coast Guard and Maritime Transportation held this hearing to review the Federal Maritime Commission's (FMC) proposed $40 million fiscal year 2026 budget, its implementation of the Ocean Shipping Reform Act (OSRA) of 2022, and its recently launched investigation into "flags of convenience" among foreign-flagged vessels. Commissioner Rebecca Dye, the sole witness, testified about staffing losses, rulemaking progress, and enforcement efforts, while members from both parties raised concerns about flat funding and vacant commissioner seats. Begins at▶ 0:19:18

Who spoke

• Chairman (Subcommittee on Coast Guard and Maritime Transportation)▶ 0:19:18: Opened the hearing on the FMC's FY2026 budget request▶ 0:20:07, citing the agency's investigation into flags-of-convenience shipping practices▶ 0:20:56 and framing the hearing around restoring US maritime dominance▶ 0:21:42.

• Ranking Member Salud Carbajal (D-CA)▶ 0:22:12: Yielded his opening statement time to Ranking Member Larson▶ 0:22:12.

• Rep. John Larson (D-CT)▶ 0:22:12: Said FMC has lost nearly 20% of its workforce to the deferred resignation program and hiring freeze▶ 0:24:00, noted the agency lacks two commissioners and a chair▶ 0:24:28, and later questioned Dye on rulemaking timelines and OPM hiring exemptions▶ 0:39:54▶ 0:41:15.

• Mr. Carbal (subcommittee member)▶ 0:25:15: Delivered a statement citing that over 80% of world trade volume moves by ocean▶ 0:26:06 and that FMC has waived or refunded more than $5.8 million in undue port fees since OSRA's enactment▶ 0:27:17.

• Commissioner Rebecca Dye, Federal Maritime Commission▶ 0:29:43: Testified in support of the $40 million FY26 budget, level with FY25▶ 0:30:08; said $25.8 million is budgeted for salaries after 13 employees departed under deferred resignation▶ 0:30:51; described completed OSRA rulemakings on detention/demurrage and unreasonable refusal to deal▶ 0:32:26; addressed the flags-of-convenience investigation into open registries like Panama, the Marshall Islands, and Liberia▶ 0:38:16; and said five of six foreign-controlled ocean carriers are Chinese-controlled, with one Korean▶ 0:57:19▶ 0:59:47.

• Mr. McDow▶ 0:45:34: Asked why the budget shifts more funding to rent, security, and IT systems▶ 0:45:52, and pressed on how OSRA changed FMC operations▶ 0:47:32.

• Mr. Carbour Hall▶ 0:50:25: Focused questions on the flags-of-convenience investigation, asking what risks it poses to Americans and what remedies FMC could pursue, including barring vessels from US ports▶ 0:50:30▶ 0:53:33.

• Mr. Petronis▶ 0:55:47: Asked Dye to elaborate on unfair Chinese shipping practices and confirmed five of six foreign-controlled carriers are Chinese-controlled▶ 0:58:32.

• Mr. Shelton (subcommittee member, Michigan)▶ 1:00:33: Raised concerns about Canadian ballast water regulations affecting Great Lakes shippers ($36 billion industry)▶ 1:00:57, and pressed on whether flat funding and 20% staff cuts would hinder complaint response▶ 1:03:33.

• Mr. Bandrew (subcommittee member, New Jersey)▶ 1:06:16: Raised concerns about the Coast Guard's rapid removal of 350 navigational buoys under its "e-Aton" modernization plan, citing groundings and near-misses in his coastal district▶ 1:06:26▶ 1:07:21, and asked whether FMC has coordinated with the Coast Guard on the issue▶ 1:08:20.

• Rep. Garamendi▶ 1:09:12: Yielded his time to Mr. Johnson, then praised Commissioner Dye's tenure across multiple administrations▶ 1:10:05 and discussed the pending FMC reauthorization act raising authorized funding from $40 million toward $49 million and eventually $57 million over four years▶ 1:12:46.

• Rep. Johnson▶ 1:15:50: Lead sponsor of the FMC reauthorization bill; asked Dye for her general assessment of the bill▶ 1:15:54, discussed lessons from the OSRA charge-complaint process▶ 1:17:47, and noted the hearing was "the least sexy hearing" but reflected responsible bipartisan oversight▶ 1:20:24.

Key moments

• Dye testified FMC's FY26 budget request is $40 million, flat from FY25, with $25.8 million for salaries — a $2 million reduction after 13 employees left under the deferred resignation program▶ 0:30:36▶ 0:30:51.

• Larson noted the FMC has lost about 20% of its workforce and is seeking OPM approval for six exemptions to hire attorneys and economists to replace departed staff▶ 0:24:00▶ 0:41:15.

• Carbal said more than $5.8 million in undue port fees have been waived or refunded since OSRA's 2022 enactment, and Dye separately cited "a little over $5 million" returned through the charge-complaint process▶ 0:27:17▶ 0:43:38.

• Dye disclosed that five of six foreign government-controlled ocean carriers are Chinese-controlled and one is Korean-controlled, and said FMC monitors their pricing for below-cost subsidization▶ 0:57:36▶ 0:59:47.

• Shelton pressed Dye on whether flat funding and 20% staff reductions would hinder FMC's ability to respond to ballast-water and invasive-species complaints from Great Lakes shippers; Dye maintained the agency "still has a quorum" and is "in good shape"▶ 1:03:48▶ 1:04:12.

• Bandrew raised alarm over the Coast Guard's plan to remove 350 navigational buoys in the Northeast under an "e-Aton" modernization effort, citing groundings and near-misses; Dye said FMC has not yet coordinated with the Coast Guard on this specific initiative▶ 1:06:37▶ 1:08:20.

• Garamendi outlined the pending FMC reauthorization act's proposed funding increase from $40 million to $49 million initially, ramping to $57 million over four years▶ 1:12:46▶ 1:13:17.

• Carbajal/Larson's opening statement noted US-flag vessels comprise less than 2% of total US imports and exports▶ 0:22:38.

• Chairman's opening statement said the FMC's FY2026 budget request totals $40 million to fund salaries, operations, and capital needs▶ 0:20:07.

• Dye repeatedly declined to detail internal staffing reorganizations, saying only "we are in good shape today" when asked what rehiring 26 lost positions would mean for agency effectiveness▶ 0:54:47▶ 0:55:15.

Metadata

Committee—
Chamber / CongressHouse · 119th Congress
DateJuly 22, 2025
TypeHearing
Witnesses
The Honorable Rebecca Dye — Commissioner, Federal Maritime Commission
Videoyoutube
Transcript228 caption blocks · 8,577 words · 1:21:38 runtime
EventCongress.gov 118486