▶ 0:20:29Heat. Heat.
▶ 0:22:35Subcommittee on Coast Guard and Maritime Transportation will come to order. I ask unanimous consent that the chairman be authorized to declare recess at any time during today's hearing without objection so ordered. I also ask unanimous consent that members not on the subcommittee be permitted to sit with the subcommittee at today's hearing and ask questions. Without objection, so ordered.
▶ 0:23:02As a reminder, if members insert a document into the record, please also email it to documents tni I now recognize myself for the purpose of an opening statement for five minutes. Today, the subcommittee meets to review the budget request of the Maritime Administration and the Federal Maritime Commission. I welcome both of our witnesses for today's hearing.
▶ 0:23:31Captain Steven Carmeell, the maritime administrator, and Laura Debella, uh, the chairman of the Federal Maritime Commission. [clears throat] Today's hearing occurs at a moment when shipping, ocean link supply chains at, and the maritime industrial base are all topics of interest to the broader World events are once again reminding us that American companies and consumers are woven into global supply chains.
▶ 0:24:01These supply chains are susceptible to disruption and disrupted supply chains become expensive supply chains. Challenges exist in our nation's ability to respond to disruptions independently. United States flag deep sea merchant fleet is small and international in its ownership. Our commercial shipyards are in dire need of modernization in terms of both capacities and capabilities.
▶ 0:24:31The United States relies on global transportation networks. We do not control these routes. We do not build the ships that carry trade. We do not build the containers the ships carry or the cranes that load and unload the ships.
▶ 0:24:47Fortunately, the Trump administration and Congress are working to promote building ships domestically, training more mariners, increasing United States flag fleet, identifying new sources of cargo, and reinvigorating the American maritime industrial base. The ships act for America act is biccameal bipartisan legislation and has strong support. especially among members of this subcommittee.
▶ 0:25:14Similarly, the administration outlined a path forward with the release of America's maritime action plan earlier this year. I am proud to be a co-sponsor of the ship for America act and I am prepared to support legislation that implements parts of America's maritime action plan. Further, I welcome any ideas that ease regulations, reduce compliance burdens, or establish incentives to bring more ships into United States flag registry.
▶ 0:25:44The maritime administration is responsible for promoting United States maritime industry. We are fortunate. The current administration is an alumnest of Kingsport, has sailed as a merchant mariner, possesses extensive experience as a maritime executive, and most importantly of all has been thinking about these in in issues his entire Captain Carmel is joined this morning by Laura Debella, the chairman of the Federal Maritime
▶ 0:26:14Commission. This is Chairman Debella's first time testifying before the subcommittee. I congratulate you on your new role and look forward to working with you during your tenure. The ocean link supply chain exists to move cargo in the United States shippers benefit from the marketplace for ocean transportation is competitive. The Federal Maritime Commission is an independent agency. The mission of the FMC is to ensure competition for ocean liner services.
▶ 0:26:44I note that the quiet work of the office of the administrative law judge is resulting in accountability for carrier misconduct and is establishing precedent that will dictate reasonable practices for decades to Given the volume of cases before the administrative law judges and the consequences of those proceedings, I'm very interested in learning if if the office of the administrative law judge is being properly supported.
▶ 0:27:13The United States has not given the maritime industrial brace the necessary priority for far too long. The stars have aligned to create a broad consensus that is now is the time to address that neglect. We must not waste this moment or this And with that, I yield back. I now recognizing uh Mr. Carbajal for an opening statement for five minutes.
▶ 0:27:38Thank you, Mr. Chairman. I will yield uh to ranking member Larson. Mr. Larson.
▶ 0:27:44Thank you, chair and ranking member for scheduling today's hearing to review the fiscal year 2027 budget requests of the Maritime Administration and of the Federal Maritime Commission. These agencies work to support and develop the United States maritime industry and protect consumers and shippers against unfair practices across the globe. Before I turn to the president's budget request, I first need to address the ongoing Jones Act waiver. to mitigates to mitigate a gas price crisis of his own making.
▶ 0:28:11President Trump issued the longest Jones Act waiver in history. We all know that it has done nothing to lower gas prices. But what has it done? It has halted US ship building. It has stolen jobs from American mariners. It's allowed Chinese stateowned vessels to operate in an unprecedented fashion in US waters.
▶ 0:28:31So I would like to hear from administrator Carmel today on how in the widewide world of sports this waiver has supported the president's maritime action plan and I also want to hear about the ongoing initiatives that you will take to bolster the domestic maritime industry. Now from the impacts of the co 19 pandemic to the disruptions caused by ongoing international conflicts we continue to learn just how essential it is to maintain a robust and efficient maritime industry.
▶ 0:28:59Now is a time to strengthen and support the maritime sector, not to continue business as usual. Although the president's fiscal year 27 request includes 2.6 billion for MRAD, over half this funding is tied to the creation of a new trust fund that has not yet been approved by Congress. I'm concerned that the flat budget request for the FMC will mean the agency will not have the resources it needs to maintain a fair and competitive shipping industry.
▶ 0:29:25The Merad budget requests include $1.4 4 billion for a proposed maritime security trust fund without providing any substantial details about how the trust fund will operate or how it will be funded in the future. This ambiguity creates risks for funding MYAD needs to carry out its key role in safeguarding and advancing the maritime industry.
▶ 0:29:47While the $ 1.2 billion um while the $1.2 2 billion in discretionary funding represents a 10% increase from enacted fiscal year 2026 levels. It does fall short of what the agency needs and comes at the expense of important initiatives by proposing to fully eliminate funding for programs like the maritime environmental and technical assistance program. This budget request jeopardizes MYRAD's role in supporting emerging technologies which act to level the international playing field for the US.
▶ 0:30:18In addition to eliminating the cable security fleet program and the national defense reserve fleet recapitalization, the budget request also uh reduces funding for the port infrastructure development program and the state maritime academy operations. I'm disappointed to see that the PIDP faces a 51.6% cut in funding from 2026 enacted levels.
▶ 0:30:42This program invests in seapport infrastructure to strengthen the economy, safeguards our supply chains, create and sustain jobs, and keeps us competitive globally. PIDP funding supports small ports that are indispensable to local communities, strengthens local and regional economies, and eases congestion in our ports.
▶ 0:31:03While the budget attempts to supplement these cuts through the proposed maritime security trust fund, in reality it jeopardizes the funding by moving the request to a trust fund for which the administration has provided no details and that is currently unlikely Congress will approve by the time fiscal year 2027 appropriations are enacted. I do appreciate the budget request includes 105 million for the small shipyard grant program. Small shipyards are integral to the maritime industrial base. Although I want to be clear about my position.
▶ 0:31:34The small shipyard grant program must remain a small shipyard grant program and not an all shipyard grant program as the president's maritime action plan proposes. It's also unacceptable this budget requests flat funding levels for the FMC despite the growing need for more personnel to address its new responsibilities mandated in the bipartisan ocean shipping reform act of 2022.
▶ 0:31:59Since OSER's enactment, the FMC has used its investigative and prosec prosecuto prosecutorial authorities to improve shipping practices that have led to lower costs for consumers. However, the FMC is still understaffed in the legal and investigative departments, which prevents the agency from ensuring fair competition among ocean carriers transporting the nation's exports and imports.
▶ 0:32:22Simply put, short changing the FMC puts foreign shipping companies interests ahead of American consumers and threatens to raise prices even further. If the administration was serious about reducing costs for Americans, it would invest in the FMC. Congress has asked a lot from these two agencies and the budget does not include the funding required to ensure that MARAD and FMC are able to carry out their responsibilities.
▶ 0:32:45So, I look forward to engaging with our witnesses on MARAD and on FMC's ongoing work to strengthen supply chains, grow the US maritime industry, and discuss how we can work to ensure they receive the resources that they need. Thank you, Mr.
▶ 0:32:59Gentleman yields. I now recognize a ranking member Carbajal for an opening statement for five minutes.
▶ 0:33:06Thank you, Mr. Chairman, and thank you for calling today's hearing. Welcome, Administrator Carmel and Chairwoman Debella. I look forward to hearing from you both on the president's budget request and agency priorities for the upcoming year. The FMC is a vi is vital to ensuring fairness for American shippers, carriers, and consumers, safeguarding transparency, and enforcing equitable maritime commerce.
▶ 0:33:33The FMC's impact on US commerce may go unnoticed, but we know that the FMC keeps fair commerce flowing, which keeps shelves stocked and prices stable for American consumers. After the passage and implementation of the bipartisan ocean shipping reform act or Ozra, vessel congestion at ports has decreased.
▶ 0:33:54In the three years since the enactment of in 2022, more than $5.8 8 million in unfair fees have been waved or refunded to shippers. If the agency is funded and staffed, the agency works. The FMC is also currently undertaking a rule making aimed at ensuring that exporters are given fair access to cargo space. These are the kind of changes that we need to keep American jobs thriving.
▶ 0:34:22Last year, the FMC launched an investigation into practices of foreign governments. otherwise known as flags of convenience. These practices undermine flag states that employ rigorous standards, ensure fair pay, and provide basic human rights. After the president's disastrous Jones Act waiver, I believe we have shown why our robust flagging practices are necessary and why reliance on foreign flag vessels hurts Americans.
▶ 0:34:52I'm concerned that if this waiver is allowed to continue, we will quickly become fully reliant on foreign ships owned and crude by foreign companies for our econom economic security. American ships crewed by American mariners should be carrying American commerce. As prices have skyrocketed over the past year and a half, it is vitally important that American businesses and American consumers get some relief.
▶ 0:35:19The FMC must be properly funded so that it can conduct proper oversight. The Maritime Administration is vitally important to our national defense and economic security. By law, the agency is tasked with promoting the American maritime Unfortunately, it is unclear to me whether this administration supports the American maritime industry or not.
▶ 0:35:43Despite having issued the maritime action plan to grow the maritime industry, President Trump has levied the strongest attack on the domestic maritime industry ever. The unjustified 150day waiver of the Jones Act is the opposite of what we need to be done needs to be done to grow the industry and strengthen our national and economic security.
▶ 0:36:06From a budget standpoint, however, the president's proposal for merit looks like an increase in funding, but only if the new maritime trust fund is created. Otherwise, there's a significant decrease in funding for key programs like the port infrastructure development program. This is completely unacceptable.
▶ 0:36:28Furthermore, the budget zeros out funding for the Maritime Environmental and Technical Assistance Program, the Cable Security Program, and the National Defense Reserve Fleet This is not just questionable, but it really shows the lack of prioritization by this administration. I look forward to a robust discussion about how the FMC and the Maritime Administration's ongoing actions will ensure stronger maritime industry. With that, Mr. Chair, I yield back. Gentleman yields.
▶ 0:36:58I would like to now welcome our witnesses and thank them for being here today. I would also like to briefly explain the lighting system to our witnesses. There are three lights in front of you. Green means go, yellow means you run out of time, and red means put on brakes. I ask unanimous consent that the witness's full statements be included in the record. Without objection, so ordered. As your written testimony has been made part of the record, the committee asks that you limit your oral remarks to five minutes each.
▶ 0:37:28With that, Captain Carmel, you are recognized for five minutes for your testimony. Good morning, Chairman Isel, Ranking Member Carvajal, and members of the subcommittee. Thank you for the opportunity to testify today. There's a great deal happening at MARAD as we work on the issues we have discussed many times and begin implementing the maritime action plan. Challenges remain, but we have a vision, a path forward, and we are executing.
▶ 0:37:55The war with Iran highlighted some of our successes while we still have room to areas where we still have room to prove improve. The best example is the tanker security program. TSB tankers have been fueling both MSSE oilers and Navy carriers at sea, continuing the vital service they began in the Red Sea. This is not demonstrator operations. This is realworld contingency operations. Two of those ships are now being fitted with fuel delivery systems. Essentially a standard MSSE type tension refueling at Seigg.
▶ 0:38:25So they functions as oil function as oilers themselves. A little slower, a little fatter, but with twice the fuel capability at less than tenth the cost delivered in months of steady years. This is a huge plus up in MSSE And yet, for as much as they prove their value day in and day out, these tankers are short the one thing the whole fleet needs, cargo. There simply isn't enough to support more than the 10 ships in the program today, despite being authorized for 20. That is the heart of it.
▶ 0:38:54Any renewed maritime capability must be built on cargo, not just government cargo, because there isn't enough of that either. It must be built on access to our nation's commerce. A ship building program without structured act access to consistent cargo will not produce ships. We actually do have answers to the TSP cargo problem that do not rely on government cargo. We just need a coordinated all the government effort to make it happen and we look forward to working with you for that. There's there is also uh where ready resource force creates problems.
▶ 0:39:23We are in active conversation with General Reed and and Transcom on alternatives. But two issues stand out. First, every RF activation cannibalizes the cargo MSP carriers need to survive. MSP isn't hasn't been funded at the authorized level for some time. Preference cargo keeps shrinking and now the carriers are competing with the IRF for what's left. The MSP program is in trouble. Second, manpower.
▶ 0:39:48We are roughly inarent in balance for steadystate shipping today, which means by definition we do not have mariners to crew a sustained RF surge. This makes the current RF manpower structure untenable. On RF though, we published today an RFI that would fundamentally alter how we might approach RRF recap, leveraging private capital and accelerating the ship building agenda. This is a substantially new and innovative way of dealing with the IRF.
▶ 0:40:15We look forward to working with Transcom and U to find a path to make this and other innovative programs work. I also ask the committee to remember that as trade evolves, data itself is not cargo. The United States runs about a $660 billion data deliverable exports that rides on more on that more than rides on US flagships. It moves on stays willing to do it.
▶ 0:40:44This is a real strategic and economic vulnerability. Finally, MARAD has launched a program for small nuclear reactors and commercial ship program. It would be a serious mistake to treat SMRs as a technology trick. Same trade architecture, different ship type. For more than a century, the glo shape of global trade has been first set by the cost of fuel. How fast ships go, how they route, and how big they get. Where cargo concentrates. SMRs break that constraint.
▶ 0:41:10Take fuel cost out of the equation, and the whole network reoptimizes around something else. Speed and flexibility, for example. Optimal ship size will likely change as economies of scale calculations are upended. This could be as transformative as containerization and a real path to compete with China on terms we set. Whoever architects the new system will hold a dominant position in golden in global trade for decades. The intent of the RSI RFI is to ensure that it is us. These are just a few examples of things we have ongoing.
▶ 0:41:40For example, Title 11 is in the process of being overhauled and modernized, and the PIP grant process is next. We did outstanding work on war risk insurance during the war with 20 policies currently outstanding, valued at over $2 billion. We still have a ways to go on getting that program in final shape, but it is an active area effort. The larger point is this is a system. We cannot just focus on narrow segments. Today, we are totally reliant on China for containers and cranes, for example.
▶ 0:42:08with continuous which continues our US-built ships with containers on uh without containers. US-built ships are useless. So the question before us is bigger than any single program. We rebuild the American power as one integrated system. We design and control cargo ships, mariners, ports and technology underneath of it or keep operating inside a system someone else built. I look forward to your questions. Thank you.
▶ 0:42:32Gentleman yields. Chairman Debella, you are now recognized for five minutes. And again, once you're welcome.
▶ 0:42:40Good morning, Chairman Nazelle, Ranking Member Carvajal, and members of the subcommittee. Thank you for this opportunity to to appear before you today to present the Federal Maritime Commission's fiscal year 2027 budget request and to highlight our contributions to the administration's goal of revitalizing the US maritime industry. I would like to acknowledge all of my fellow commissioners in the room with me today, as well as staff and those watching online.
▶ 0:43:05President Trump has centered the conversation of America's maritime dominance where it has the most significance, the economic impact shipping has on Americans. The president's maritime action plan is helping restore America's position in the global maritime industry.
▶ 0:43:20The FNC's unique role in administering a program of competition enforcement distinct but parallel to antitrust law protects the American consumer from unfavorable and unlawful shipping conditions, promotes competition in the country's ocean supply chain, and mitigates any impacts resulting from disruptions to the supply chain.
▶ 0:43:42The commission will continue to vigorously use all its statutory enforcement authorities to aggressively protect US exporters and importers from potential anti-competitive behavior and promote port and marine terminal process I support the president's fiscal year 2027 budget of 40 million for the Federal Maritime Commission.
▶ 0:44:02This budget provides the agency the necessary resources to continue our mission critical work to assertively investigate practices that harm the American shipping public no matter where in the world those practices occur. Of this 40 million north of 80% is allocated for employees and critical IT infrastructure The remaining funds will cover the essential budgetary and operational I'm pleased to highlight for you the way our agency protects the US public from financial harm and defends
▶ 0:44:32the integrity, stability, and security of thei US supply chain and thus delivers the real results for the American The FMC has prioritized investigating and prosecuting violations of US shipping laws and regulations, thus putting foreign governments, foreign carriers, and other industry stakeholders on notice that we will not hesitate to use the authorities given to us by Congress.
▶ 0:44:57At present, we have five open investigations that cover the gamut of shipping interests and concerns both here and abroad. notably flags of convenience, choke points, discriminatory actions, and/or regulations by foreign governments and We're currently reviewing the comments that were submitted as part of these respective investigations, as well as actively monitoring the matters to determine whether shipping act violations may be occurring and what further action, if any, is warranted.
▶ 0:45:27The FMC prevailed in an enforcement proceeding against Mediterranean Shipping Company and imposed a penalty of 22,670,000. Even more recently, our enforcement program successfully executed a compromise agreement with Mayor for the total amount of 1.9 million in civil Pivoting now to Ozra 2022. I am pleased to report that nearly all the major rulemakings required by Ozra have been completed and when challenged upheld in federal court.
▶ 0:45:56Ozra 2022 deepened the FMC's commitment to providing free and expanded dispute resolutions to the public. These are important tools for shippers of any size. With demand for consu consumer assistance expected to increase, the FMC plans to strengthen its capabilities by investing in technology to enhance data analysis and case management. Approximately one month after the start of Operation Epic Fury, the FMC received several special permission requests from vessel operating common carriers.
▶ 0:46:27A rejection of these requests projected protected US shippers from sudden price spikes. Globally, only US shippers benefited from this market stability and Geopolitical forces are increasingly shaping global shipping, and these challenges will continue into fiscal year 2027 and beyond. Under the Trump administration, the FMC remains steadfast in fulfilling its commitment to US shippers and consumers, as evidenced by the significant increase in cases, investigations, and monitoring.
▶ 0:46:58As part of that commitment and our interest in ensuring stability in our US foreign trades, the FMC is thoroughly engaged with its government partners, supporting inter agency cooperation at every opportunity. As a consumer protection agency for the shipping public, we are dedicated to pursuing policies that bolster national and economic security for the US taxpayer. But there is more work to do. Thank you for the honor to serve and on behalf of my fellow commissioners and amazing FMC team.
▶ 0:47:25I appreciate your interest and look forward to answering any questions you may have.
▶ 0:47:29Thank you very much. Thank you all both of you for your testimony. We'll now turn to questions from the panel. I recognize myself for five minutes for questions. Mr. Caramel. The United States is blessed with abundant energy resources, but deep water port facilities are necessary for our energy products to reach world markets. The licensing process for deep water port facilities is lengthy and burdensome.
▶ 0:47:58Unleashing American energy production is a key part of creating economic opportunity for Americans. Section 7342 of the Coast Guard Authorization Act of 2025 clarifies authorities related to the regulatory approval of deep water port permits making clear that Merad is the lead agency to evaluate permits for NEPA compliance. How is MARAD preparing to undertake these authorities?
▶ 0:48:30Thank you, sir. Uh Mered and the Coast Guard executed anou earlier in the year uh that restructures the way the border p uh port licenses are issued and deals exactly with that issue and and so we have structurally already dealt with that and then uh like many programs we could stand a little modernization and that's one of them and we're we're working on that as well but the biggest impediment I think has been taken care
▶ 0:49:00Thank you. Over the past year, we've seen Marad approved several permits that languished in the previous administration. Can you explain how the Department of Transportation and the Maritime Administration reformed and streamlined the permitting process to move these permits forward?
▶ 0:49:17Uh if I if I heard the qu question correctly, yes, we are working uh right now on streamlining uh the application and approval process so that it moves quickly. We understand completely that uh these things represent business uh investment decisions and we need to be able to get the approvals done in a way that the circumstances and assumptions that they made at the time they put the application in remain valid when the approval is issued.
▶ 0:49:47That is fundamental business 101 and we intend to make sure that that happens.
▶ 0:49:52Very good. Putting aside your responsibilities for growing the US flag fleet, are there benefits to increasing the number of vessels owned by US citizens or companies even if flagged under another registry? If so, what are the advantages? Are the policies and incentives in place to make the asset of a vessel attractive for a US investor?
▶ 0:50:23The idea of effective US control has been around for a long time which if I understood your question correctly that's what we're talking about is effective US control. I have never believed in that. uh the structure of our industry is way too obscure and the ability to put a hook into that into into a ship in my opinion and I was in this business for a long time. is almost impossible to actually enforce.
▶ 0:50:51What you need is US flag uh owned by US citizens that you could actually enforce a requisition which I don't believe under US effective I just don't believe that that's a thing.
▶ 0:51:04Thank you. Beyond addressing the US specific requirements you testified earlier about earlier in the spring. Are there other ways the United States can modernize, reform or deregulate its registry to make it more attractive to opt more attractive option to ship Yes sir.
▶ 0:51:24There are uh we have uh been in conversations uh with with various uh members of the committee on ways that we might be able to go about that. We are also working on that uh internally on um processes for instance for reflag approvals. Um the the the other side of that is outflurdensome thing.
▶ 0:51:51uh and we have completely overhauled the way that works and that when somebody's bringing in a a US flagship in MSP for example, they need to be able to out flag the other one that's leaving otherwise the investment decision gets muddled. So we've worked on that. So it's not owning the the regulations that deal with the ship itself. It's the administrative process of getting ships in and out of US flag which we can control and we are working on that.
▶ 0:52:16Very good. Chairman Debellum. Uh, last month the Department of Justice issued indictments against four China based manufacturers of interotal shipping containers for price fixing. Was the Federal Maritime Commission involved in supporting the work of the DOJ?
▶ 0:52:37So, sorry. Thank you for the question. Uh, the the original product or shall we say factf finding did originate through the FMC.
▶ 0:52:50So, it was under uh uh Commissioner Carl Benzel did a factf finding uh uh mission uh to to investigate those uh that that particular matter and and there there the report is cited in the the GOJ uh uh findings. Yes,
▶ 0:53:13thank you. My time is out and uh I now recognize Mr. Carbajal.
▶ 0:53:18Thank you, Mr. Chair. I'll defer to Ranking Member Larson.
▶ 0:53:23Thank you. Uh thank [clears throat] you, Mr. Chair. Mr. Chair, I would like to note that all this deep water port work that was Congress's telling Congress telling the administration to do it. So, as much I want to thank the administration for doing it, I really want to appreciate my colleagues in Congress for passing the law to tell to tell the executive branch to do it. Um let's take credit for when we do our own work around here.
▶ 0:53:42Um, uh, Administrator Carmemell, uh, my first question is on the Jones Act, a pillar of domestic ship building industry, at least that that's what I've been told for 25 years, um, here in Congress, and I've believed it. You have the maritime action plan, which I would agree is, uh, brings everything together in maritime, uh, in order to, uh, now to take action. I'm not seeing a lot of action on the maritime action plan from the administration.
▶ 0:54:07Um, but I don't think a Jones Act waiver, an unending and frankly useless Jones Act waiver, is supporting the maritime action plan. It's kicking out one of the legs from under the table that the US has for domestic ship building. Uh, do you agree with that statement?
▶ 0:54:25Uh, thank you, sir. Um, the Jones Act waiver of course was done by uh by the Department of War and Homeland Security. We were not uh advised until the end that it was going to happen and we were not consulted. Um but uh you know the fact is it's the administration policy and and I support you know what I'm
▶ 0:54:47it's it's a horrible policy. It was done to cut gas prices and I gas prices have gone up since the waiver and I wouldn't make the ridiculous argument that the issuing the Jones Act waiver resulted in higher gas prices but it was designed or we were told it was put in place to decrease gas prices and it has not done that either.
▶ 0:55:08And in addition to that, as I understand um as well that the um uh the the president had to determine it was in the interest of national defense. Yet in Merad's posting of vessels that have taken advantage of the Jones Act waiver, several voyages list quote non-applicable in in the explanation of national defense interest.
▶ 0:55:31So why is the administration allowing vessels to take advantage of the waiver if the operator can't even bother to explain the national security interest of the waivers's use?
▶ 0:55:39Yes, sir. Again, the way this works under 501A, we are not involved in that process at all. Not not at all. We are not consulted before a waiver is issued. And in fact, we generally officially are not told about it until 10 days after the voyage ends. So that is
▶ 0:55:56sooner than Congress.
▶ 0:55:58I'm sorry. sooner than Congress.
▶ 0:56:01we we publish when we are notified 10 days after the voyage ends, we publish it within I forget the number of days, but number of days right after that and we've been successful at doing that.
▶ 0:56:11Yeah. So, um the uh the upside of your budget's $105 million for the small shipyards grant program. I'm a big fan of that. I have a lot of small shipyards. We've talked about this in my office. Um, the maritime action plan wants to change that to what I'd call an all shipyards grant program, which I think is a another bad idea. Large shipyards have other ways to capitalize, usually because they're with the doing work with the Pentagon.
▶ 0:56:38Um, uh, I'm certainly going to be working the rest of the year to be sure that the, uh, one, the $105 million stays, second, that it's still a small ship grant program. Um but uh can you talk about the value of the the small part of the small shipyards grant program?
▶ 0:56:56Yes sir. Uh I I am a strong supporter of small shipyards. Uh I I believe that small shipyard grants should go to small shipyards. There are other mechanisms in the maritime action plan to support uh large shipyards. Um I come from an area myself that had a lot of small shipyards in them. I think the small shipyard sector which is a repair sector as opposed to ship building is a fundamental part of the ecosystem that has to be supported.
▶ 0:57:24The the entire system will not work if the repair side of the equation is not also uh supported and there are ways to do that beyond grants that we are investigating. Um for instance you probably know that uh no MSP ships are repaired in the United States. There are a variety of reasons for that. Um I think that I think we can change that. It retires a lot of work.
▶ 0:57:50Thanks, Chair Deella. I I don't want you to get away without a question from me, but um so $40 million budget is flat uh from last year. It's a little less with inflation built in, but so without any budgetary increases with the um 80% of the budget going to the great work that your folks are doing there, how is FMC going to be able to conduct thorough investigations? um that you've done in the past especially given the fact you have direction from us with regards to the ocean shipping reform act of 2022.
▶ 0:58:20Sure. I I very much appreciate the question. We are we are deploying several we're doing several things actually to address that and and uh doing more with less shall we say now uh which is the posture of this administration and and and can absolutely positively be done.
▶ 0:58:36So on the administrative law judge Frenchwood which was uh addressed early on uh we have four uh judges on detail right now from the department of health and human services that are are helping us uh handle some of the the uh the case load uh that that we've been experiencing over the past couple years. I don't see that relationship changing. I actually see it expanding uh even further.
▶ 0:59:00At the same time, we're deploying um all all types of of technolog technological enhancements uh to to as additional tools for our team. So, e filing and and many other areas that that pretty much help from an efficiency standpoint uh and and act as a force multiplier to how we're handling these cases.
▶ 0:59:26Um, in addition to that, we have a a we're we're in establishing a bit more of a robust uh consumer affairs and and dispute resolution services team. So, to kind of get ahead of some of these matters before they have to go towards uh you know formal or informal complaint process, we encouraged carriers and also shippers to go try this route first.
▶ 0:59:51It's a mediation route to, you know, to put it simply, um, that will, it's a free free service to the the community to to shippers and it it's something that that we've actually been very successful in returning andor uh uh refunding or just completely waving uh some of the the charges or complaints that are there.
▶ 1:00:12So, it's a it's a variety of of ways that we are addressing a flat budget, but a lot of it has to do with technological enhancements that are just helping us do our work.
▶ 1:00:25You're out of time. Mr. McDow, you recognize for five minutes and you'll get a little extra if you need it.
▶ 1:00:30Thank you, Mr. Chairman, and thank you all for being here to testify before the subcommittee today. Um, Administrator Carmel, the cable security fleet exists to provide the federal government access to a fleet of US flagships that are capable of laying or repairing undersea internet cables. And so I'm just curious, why has your proposed budget cut this program?
▶ 1:00:56Thank you, sir. The uh cable ship security program uh consists of two ships which is a generous description of fleet. Um but uh that that said my understanding uh was that when the budget was put together there was sufficient carryover from previous years to fund the program for this year and that we would deal with it again when we put the g budget for 28 together which we are doing.
▶ 1:01:24So it would you would say that there we will still maintain vessels that are capable of um I guess we will maintain US flag cable vessels. Correct.
▶ 1:01:39Yes. Okay.
▶ 1:01:39That's true sir.
▶ 1:01:41Um your budget proposes a new um maritime security trust fund that will create a massive new funding stream for the maritime administration. And what will these new funds be used for?
▶ 1:01:56Uh the funds in the maritime action uh trust fund are used for a variety of things actually. They include a substantial component for PIDP for example. Uh money for Kings Point is in there. Uh small shipyard grants, big shipyard grants. There's a lot of things in the maritime action trust fund. Uh so a whole, you know, basically that covers the gamut of how we do things.
▶ 1:02:21There is a u large amount of legislative proposals that we've been working with our inter agency partners to advance and hopefully you'll be seeing those sometime soon that will clarify all this. So considering that this proposal would more than double MARAD's funding, what steps are you taking to ensure that that you would be able to efficiently administer these funds
▶ 1:02:46in internally? As we understand how the maritime action trust fund works, we are basically structuring ourselves to be able to execute as if it was in place. So, as you know,
▶ 1:02:58we have a contingency plan.
▶ 1:02:59As you know, President Trump has called for reinvigorating our domestic ship building uh capacity and protecting our maritime industrial base. How would the money from the new maritime security trust fund support those efforts?
▶ 1:03:13There are several areas uh aside from direct uh shipyard programs um uh efforts to at the end of the day any ship building program has to be based on a reliable consistent base of cargo so that owners of ships have confidence that if they place orders for ships they have something for them to do. That is a fundamental fact and uh legislative proposals advancing um with our inter inter agency partners uh address that as well as some other things.
▶ 1:03:43Uh the um strategic sea fleet is another example of it. Uh but at the end of the day the single biggest thing we can do is cargo. Is Mered taking any steps to ensure that a new fee on commercial vessels would not result in higher costs for American
▶ 1:04:04I think that's uh I would like to say that we are executing uh the fees the way uh the program is designed to be executed. How that flows through the economy I think is a little bit beyond my remitt.
▶ 1:04:22Uh, Chairman Diabella, in your written testimony, you discussed allegations that the government of Spain is barring port entry to US flag vessels and Spain is in NATO and we are committed to defending them and they won't even let our commercial ships dock in their ports. Why is the Spanish government denying access to these
▶ 1:04:49I keep forgetting to do that. I'm sorry. Uh thank you for the question. I uh I I wish I really knew but the answer truly is uh ideological reasons. It was their their their reasoning uh in the not one not two but three times that that uh that we are aware of and and it's an in active investigation.
▶ 1:05:10So, I uh I can only speak so much to that, but I can say that that we're aware of at least three instances and perhaps more uh that uh where uh there was denial vessels, not only ours, but others uh as it relates to um their ideological stance towards the Gaza war.
▶ 1:05:30How has the Spanish government reacted to the investigation that you all have I don't believe I'm I don't believe I can answer that question uh in its entirety because of the active investigation uh that it is. But I can say that we have received over 8,000 comments uh at to date uh the comment period is actually closed um but in response to that particular investigation which is very significant.
▶ 1:05:59So there and it would include their response as well. They did respond to it. So
▶ 1:06:05final question, are you aware of any other NATO countries that have denied US flag vessels from having access to their
▶ 1:06:16I've heard third person of of other other countries. Um I I have not received any credible evidence of it yet, shall we say. So it'll be five months June 6th. So perhaps I I will get receive that, but I have not yet.
▶ 1:06:33Thank you. yield back.
▶ 1:06:35Gentleman yields. Uh, chair now recognizes Mr. Carbajal.
▶ 1:06:39Thank you, Mr. Chair. I'm going to give you a softball question, very easy to answer. How does the Iran War, the building of a vanity arch, building a luxury barroom at the White House, painting the reflective pool on the mall? How does that help the maritime industry?
▶ 1:07:01Uh, thank you, sir. Yes indeed it is a softball question. I appreciate that. So I have no idea.
▶ 1:07:08Thank you. Uh Chairwoman Debella,
▶ 1:07:15thank you for the question. It's same same question. Would you like to answer?
▶ 1:07:19I I I too can't cannot answer, but I I I know we're doing
▶ 1:07:24That's good enough because if you want to go at it, we're going to debate all night or all day, should I say.
▶ 1:07:29Thank you.
▶ 1:07:30Thank you.
▶ 1:07:30Uh Mr. Carmel, as you are aware, this is the longest Joan Act waiver in history, and it is starting to have a serious impact on the industry. Since revitalizing the maritime industry takes a whole of government approach, how has the waiver helped support the president's maritime action plan?
▶ 1:07:55Thank you, sir. I can only answer in that um this this this was not a mer related industry uh decision. This was department of war and department of homeland together. We were advised at the end and not consulted and um you know so we can only focus on what it is we can do.
▶ 1:08:18Thank you. And that's a shame. You play such a crucial role in this area and you weren't consulted. Uh, Chair Debella, the FMC is requesting flat funding for fiscal year 27 given the administration administration's priorities in the maritime sector and the rising costs and disruptions associated with the president's military action in Iran.
▶ 1:08:42Why are we not increasing funding for the I appreciate the question and as as I had mentioned uh in in for an earlier question also in my testimony, we are we are deploying every tool available to us uh from a tech technological standpoint to help enhance uh and weaponize our staff to do more. Uh in enforcement is very data driven.
▶ 1:09:09Uh so about 60% of what we do does involve data. So there the much of our budget you know therefore reflects the need uh to to focus on data our resources that we are we are deploying online able to to access that way. So we're strengthening from within and empowering our staff as we have them today.
▶ 1:09:34Uh and with time, you know, just just as the the maritime space is evolving, our enforcement is evolving. But right now, we're seeing the most need uh right now to to enhance what we have the tools technologically to make to help us do our job better because it's it's that the enforcement is becoming that much more sophisticated.
▶ 1:09:55Could you imagine all the money we could be utilizing here from the luxury ballroom, the reflective pool, and the arch that is attempted to be built by this administration? We could actually do some really good work here if we could have more resources. Mr. Carmel, I remain a steadfast supporter of the Ships Act, which proposed a dedicated maritime trust fund to provide long-term predictable investments in our maritime infrastructure and workforce.
▶ 1:10:25However, absent congressional action on the ships act, merit remains reliant on annual appropriations. A key programs key programs face significant funding uncertainty since the president cannot create a trust fund out of thin air as he has tried to do on many other things and the House and the Senate leadership seem uninterested in moving the ships act.
▶ 1:10:48How do you plan to reconcile the impeding f impending fiscal cliff that merit is on, especially as it relates to the PIDP? Can and can ports remain competitive internationally with just $50 million in the PIDP funding?
▶ 1:11:06Thank you, sir. Yes. Uh there's 50 million in in P in the line item PP. The other money uh 500 million I believe is in the maritime action trust fund. And as I uh mentioned we have a significant package of legislative proposals that we are working with our inter agency partners uh to advance uh that deals with all of this and uh hopefully you'll see that in the not too distant future.
▶ 1:11:33Thank you Mr. Chair. I'm out of time. I yield back.
▶ 1:11:35Gentleman yields. Chair now recognized Mr. Begg for his five minutes of
▶ 1:11:40Thank you Mr. Chair, Administrator Carmel, uh, the Port of Alaska is the economic lifeline for the majority of Alaskans and a critical piece of military logistics in the Pacific. Port needs roughly $1.7 billion in reconstruction, and rising port fees are already beginning to show up in Alaska grocery bills.
▶ 1:12:01As MARAD implements the maritime action plan, what tools can MARAD bring to bear to help make the port of Alaska reconstruction more affordable and ensure that this critical national security asset gets the federal investment that it needs.
▶ 1:12:16Thank you, sir. Actually, I was just there uh not too long ago. So, I appreciate deeply the importance of the Port of Alaska. Um there are several avenues uh that can be done. We are actively working with the port to find ways uh to to deal with their infrastructure investment programs. Uh am maritime prosperity zone is one of the first that comes to mind uh accelerated PIDP grants.
▶ 1:12:41If there was a way because of the central importance of the port of Alaska to joint air base Eldorf uh there may be ways we can work with the department of war. We are re researching all of those. That's great and I appreciate uh your uh personal attention to that matter and and traveling to the state of Alaska uh to see for yourself the importance of that infrastructure investment and just how critical it is not just uh for the state of Alaska but for the entire nation.
▶ 1:13:09Um the small shipyard grant program is tripling in the fiscal year 2027 request. Are Alaska shipyards in Ketchacan and Kodiak, Wrangler and Juno positioned to compete in your view? And what out outreach is Merad doing to ensure remote yards like these can access uh these important funds?
▶ 1:13:29Thank you, sir. And and in fact, I was just there again. I toured not just Port of Alaska, but I was in many of those places. Jed, for instance, does outstanding work. So, yes, I believe they're very much positioned to be able to take advantage of uh small shipyard grants and u and those sorts of things. There's some great yards there. No
▶ 1:13:49That's great. And um I I appreciate your your travel to some of our remote uh shipyards as well. Uh not remote by our standards, but certainly by uh the the standards of the lower 48. Um they are important and they're important for uh for all of our industries in coastal Alaska and uh and for our Coast Guard mission as well. Um question uh for Chairman Debella.
▶ 1:14:14Alaska fishing communities generate significant export volume that moves through the international ocean shipping system. Are Alaska exporters among those using the Federal Maritime Commission informal dispute resolution services? And is the FMC doing outreach to ensure small and remote shippers know that these free services exist?
▶ 1:14:37I very much appreciate the question because I too was in Alaska not very long not too long ago uh two weeks ago in fact um and did meet with the fisheries uh while I was there. So uh 100% wholeheartedly we're we're identifying the issues that they are experiencing especially specific to um the regulations that are coming out of the EU uh for the fisheries.
▶ 1:15:03So we're uh awaiting actually information to come back from them to to help us uh to help us identify the best course of action uh in that particular area. But but yes, we we had a roundt discussion uh on the Friday before Memorial Day weekend and uh and heard everything. So we plan on on reinforcing the message that that the FMC is there uh you know specific specific to all their needs.
▶ 1:15:32Um but from uh from an enforcement standpoint um there's many directions that we could potentially go but but uh we're we're unpacking that as we speak.
▶ 1:15:40Fantastic. Again, appreciate uh your uh personal travel to the state of Alaska, see this in person and speak with the stakeholders in person. Uh you know, at the end of the day, Alaska has more than half the nation's coastline. uh we are at the gateway to the Pacific and uh and I appreciate that that both of you have spent time seeing this in person, understanding our issues in person and we appreciate the partnership that uh that we're developing together. And with that, I yield back.
▶ 1:16:10Gentleman yields. Chair recognized Mr. Garam Mandy for his five minutes. Mr. Chairman, based upon the most recent questions, I'm wondering why we are not holding a hearing in Alaska. Perhaps we should do that. I agree. So, let's move on here. Um, thank you very much, Administrator Cornell and Chair Debell. Your essential advocacy for strong investment in Americans maritime industries.
▶ 1:16:40We look forward to the future of our country's maritime sector. I'm encouraged that you both share our commitment and my commitment to rebuilding the domestic ship building capacity. Mr. Chairman, I appreciate your opening remarks on the issue of the ships act as well as the ranking member on that same point.
▶ 1:16:59Unfortunately, the current Jones Act waiver is wrecking havoc on our maritime industry and undermining the confidence of the future of the US merchant marine. The Jones Act is the cornerstone of American maritime industry, and it protects hundreds of thousands of American jobs, sustains American shipyards, and maintains the maritime transportation capabilities that are critical to our national security.
▶ 1:17:28Already waving the Jones Act has disrupted domestic commercial vessel contracts, prompting shippers to favor foreign flag vessels such as the one behind me, which happens to be owned by the Chinese military, which presumably we have some issues with. So where do we go from here? Uh these are domestic trips even when there are Jones Act compliant vessels available.
▶ 1:17:56Additionally, the waiver is endangering the private investment in the ship building, including a planned $1 billion capital raise. The private sector is closely monitoring whether our government is truly truly committed to an Americanbuilt crude, owned, and flagged maritime industry. If the government's commitment seems shaky and is arbitrarily opens the market to foreign competitors, private investors will not commit.
▶ 1:18:29Private investors will not commit the billions necessary to rebuild our revitalize our maritime base. This waiver was issued with the claim that it would lower gas prices. It has not done that. Unfortunately, what it has done is totally disrupt the maritime industry.
▶ 1:18:50Now, even more concerning, data reveals that 95% of the completed waiver voyages primarily benefit foreign maritime operators that do not pay US taxes or comply with Coastg Guard safety This waiver isn't benefiting American mariners, workers, consumers. The only one who are profiting from this disastrous waiver are foreign operators. For example, the ship behind us.
▶ 1:19:19It completed a voyage transporting asphalt from Louisiana to Connecticut, which I understand is a critical national security um product. So, the testimony, Mr. Carmemell that you have put forward today indicates that you have had nothing to do with these waiverss. Is that correct? I'm sorry.
▶ 1:19:41That is correct, sir. Under a 501A waiver, which these are, we're not involved in that.
▶ 1:19:45Who does have the authority?
▶ 1:19:47Under a 501A waiver, the Department of War requests the waiver and Department of Homeland Department of War. I'm not familiar with that. Is that Department of Defense?
▶ 1:19:56Yes, sir.
▶ 1:19:57Thank you.
▶ 1:19:58Department of Defense.
▶ 1:19:59Uh, so the waiver They request the waiver. They are the ones that requested the waiver and the Department of Homeland Security issues the waiver.
▶ 1:20:07Very good. I note that tomorrow we're taking up the NDAA. There's going to be an amendment about this issue that's going to be proposed by one or another of the members of that committee. I'm pleased to hear that you have nothing to do with it. And I'm quite sure, chairman, you have nothing to do with it either. Is that correct?
▶ 1:20:27That is correct. Well, I was all prepared to beat you up, but since you have nothing to do with it, we'll move on here. Um, so what are we going to do here about this uh problem? We'll do it tomorrow in the NDAA and uh ask the Department of Defense how they can deal with it.
▶ 1:20:47Now, going forward, the ships act provides the opportunity to rebuild and to answer many of the questions that were raised with regard to small shipyards. Uh, as well as the funding mechanisms that are unclear in your budget, Mr. Carmel. Uh, you're asking for more than 50% of your budget to come from something that doesn't now exist until such time as the ship acts become law.
▶ 1:21:15And there is a mechanism in that ships act for funding. Are you familiar with that?
▶ 1:21:20Yes, sir.
▶ 1:21:21Would it work to relieve your financial
▶ 1:21:26I'm sorry I didn't hear you, sir.
▶ 1:21:27Well, the question is if that becomes law, is that a funding mechanism that you could then count on to address the requirements that you have?
▶ 1:21:36Yes, sir.
▶ 1:21:37Okay. So, uh, I note that the Coast Guard reauthorization is in the Senate. It may be that the ships act could be attached to that and move forward with that. I think we've gone to the fundamental issues here and that is that this waiver has to end. And heads up, Department of Defense.
▶ 1:22:04There's going to be a big to-do tomorrow about the waiverss that you have authorized together with Homeland Security. Guaranteed it's going to happen. Thank you, Mr. Chairman. You're back.
▶ 1:22:15Gentleman yields. Chairman, I recognize Mr. Patronis for his five minutes
▶ 1:22:20Thank you, Mr. Chairman. Uh, this meeting is uh this is an important one for me. I um I want to thank President Trump for his leadership in restoring America and maritime industry. For generations, the Gulf of America has been key driver for our region. I'm proud to be from Northwest Florida, already home to shipyards all along the Gulf Coast, encouraged by the industry's investment in the region.
▶ 1:22:45These yards bring high-paying jobs, protect the country's capacity to build ships, protect itself, also diversifies our workforce. Beyond ship building capacity, the Federal Maritime Commission plays a key role in ensuring the market is open and addressing unfavorable conditions which harm businesses. And I'm eager to hear about these and the work that is happening today. Um I'm a I'm a big believer if you want to get something done, you put a Floridaian in charge. Laura, it's great to see you. Thank you for making the trip up here.
▶ 1:23:14Very proud of what you're doing for our nation. Um and um administrator, thank you for being here. Also, uh I got a couple questions. I I'll start with uh with the administrator. Um in your mind, give me a little more details about maritime prosperity zones and some of the the opportunities that we could have with The concept is that uh uh the maritime industry functions as an ecosystem
▶ 1:23:44and that uh and and that's not unusual. It's what like a Silicon Valley thing. a bunch of related industries that support each other are colllocated next to appropriate transportation nodes so that economies of scale can can accumulate and efficiencies and transportation costs, labor development, all those sorts of things can happen in one regional area. That's the concept.
▶ 1:24:09The Department of Commerce is the one that designates uh where uh marine prosperity zones happen. Um but uh we would certainly coordinate those activities with grant activity, PIDP, small ship air grants, that sort of thing. But the intent is to elomerate um activities supporting the maritime industry in areas where we can get economies of scale.
▶ 1:24:31Gotcha. Um and what challenges are are you dealing with that make it attractive to register vessels in the United Well, the fundamental uh challenge of of course is lack of cargo uh on on one hand. Uh that's probably one of the biggest.
▶ 1:24:52We don't have a coordinated coherent ladder that establishes dependable um uh basis of cargo for ship owners to use as when they do a business case to to flag in the United States. We certainly have other things. regulatory issues are are a problem. Uh we we have a cost basis.
▶ 1:25:15For instance, the tax structure that US flag operators have to contend with is radically different than uh uh other jurisdictions. Um and that's a meaning meaningful meaningful distance difference. Uh so we have a lot of those sorts of things that we can attack. Um but I would again come back to starting with Cargo.
▶ 1:25:35Thank you, Chairman Debella. Welcome. Um, so tell me, what can the Federal Maritime Commission do to support the administration's efforts to restore American maritime dominance?
▶ 1:25:48I appreciate the question. Administrator Carmemell and I, Captain Carmel, are are working very closely together uh in this effort uh to he speaks to as he has many times uh in in this committee hearing today. The answer is cargo. That's our lane. Our lane is cargo. So, how are we going to help, you know, within the enforcement realm to support more cargo, more US cargo and US flagships, therefore being the demand driver in that arena.
▶ 1:26:18So, those are discussions that obviously we're we're working on as we speak. Um but also just being being that voice and and and helping elevate the industry through through better regulation is really where where we you know can operate today you know in in a in tandem with with these discussions moving forward uh as as how we can react. So I often say you know we we're we're raising the bar we're raising the bar in terms of enforcement um because we want the industry to be better.
▶ 1:26:47We need to be better uh altogether. So this is uh this is our job. This is our role and and I'm I'm just proud to be here and be part of
▶ 1:26:55We're proud to have you here.
▶ 1:26:56Thank you,
▶ 1:26:56Mr. Chairman. I yield.
▶ 1:26:59Gentleman yields. Chair now recognize Miss Schultton. Five minutes. Your
▶ 1:27:03Thank you so much. Uh Chair Isel and Ranking Member Carbajal and welcome to our witnesses. There's a reason we are all talking so much uh about the importance of the Jones Act. This fundamental law is critical to all economies, but especially in our Great Lakes region, uh to protect American jobs, support economic growth, and ensure vessels are built up to the world's highest safety standards, environmental and operational.
▶ 1:27:32However, this administration recently extended its Jones Act waiver, one of the broadest, longest Jones Act waiverss ever. Truly ironic when you think about an administration that purports to be committed to closing our borders and yet we have open borders visav the Jones Act waiver all over this country. My understanding is that this waiver sought to reduce gas prices but we have seen no relief only staggering gas prices all over the country.
▶ 1:28:02All the while the waiver means foreign ships with foreign crewmen can operate in US domestic commerce. Administrator Carmel, can you help me reconcile how on the one hand the administration has waved the Jones Act and on the other hand, the administration has emphasized the need for a revitalized domestic maritime in industry?
▶ 1:28:26More directly, how does waving a law that mandates the use of US-built and operated ships for transporting goods between US ports bolster our domestic maritime industry? Help me out Uh thank you ma'am for that question. Um again I I have to come back to the notion that uh the department of transportation the maritime administration are outside of that process.
▶ 1:28:51It's a 501A waiver which means it's done by the department of war and the department of homeland security. We are not consulted and we are uh advised at the end of a voyage uh when when when a wavered uh voyage has happened. So,
▶ 1:29:07and sorry, I'm sorry to interrupt. You know, I I hear you saying this is sort of outside of my scope of control, right? But but there is a single administration which is making these decisions, right? And do you think the American people understand the division of this agency, that agency that you're you're talking about there?
▶ 1:29:29Well, uh, ma'am, whether or not the American people understand it is in fact, you know, it's it's how we operate. So all I can say is it's
▶ 1:29:38but I mean that it's it's the taxpayers, right? I mean how do we explain to them what what's going on with this policy
▶ 1:29:47that is between Department of Homeland Security and the Department of War, Department of Defense. We uh were not involved. I mean that's just that's all I can say. I can echo what Secretary Duffy said in his ThUD uh uh testimony that uh Secretary Duffy said if we don't have the Jones Act, we would not have a maritime industry at all. I 100% support that statement.
▶ 1:30:12Absolutely. And so this waiver is it is just truly truly mind-boggling. uh you know we we don't understand it from a you know a domestic maritime uh support perspective from a perspective of of truly being committed to not having open poorest borders. Uh you know we we we got to do something about this.
▶ 1:30:33I I want to talk uh also as our you know we we have some more time I want to talk about the port infrastructure development program which funds a variety of projects dock improvements facility construction and modernization uh equipment acquisition all of which make port stronger especially in my home uh in West Michigan. That's why I'm concerned that the president's FY27 budget request slashes this program slashes it by over 50%. Can you speak to the value of port infrastructure development?
▶ 1:31:03uh that that program in the Great Lakes region uh in
▶ 1:31:09Uh thank you ma'am. Actually I was just up uh your way at the uh uh Great Lakes Maritime Academy graduation and uh am intimately familiar with the importance of the Great Lake region to our to our economy. Um uh the PP program was I I think a better characterization would be we shifted extensive amounts of funding. There are um uh um $500 million has been
▶ 1:31:37but funding to projects that also help port development in in the same way.
▶ 1:31:41They are they are
▶ 1:31:43it is funding intended for PIDP programs that it now sits in the maritime security trust fund rather than as a line item under PP.
▶ 1:31:52Well, we'd love to see those numbers and and you know because from from our understanding this is an overall loss for port development. But if you have numbers that say differently, we we do invite you to share them and we would love to take a look at them. I see that my time is expired. So so I will yield back. But again, I I do thank you for coming before the committee today and answering our questions. Take care.
▶ 1:32:13Gentle lady yields. Cherry recognizes Mr. Van Drew. Five minutes.
▶ 1:32:17I thank you, Chairman. Let me just clarify one thing before we go on. First of all, thank both of you for being here. I appreciate you. I'm a supporter of the Jones Act and you're going to hear that a lot today and I'm going to go into that a little bit as well. But in no way should we correlate the waiver on the Jones Act with the poorest open borders that existed in the United States of America. Tens of millions of illegals were able to cross those borders and stay in the country.
▶ 1:32:47Millions of them were criminals. Many of them were rapists, murderers, child abusers, and domestic abusers. That in no way relates to the issue we're speaking about at the Jones Act. Two totally, completely significantly different issues. And again, thank you for being here. You can watch everybody go back and forth.
▶ 1:33:11Um, as you know, the president president's maritime action plan, it lays out a bold vision to rebuild American ship building capacity, strengthen the maritime industrial base, expand the US fleet, and ensure long-term economic expan e ex economic and national security resilience. It's a good thing. It's long overdue. These requests are intended to reverse decades, and it was decades.
▶ 1:33:39And I gotta be honest, under administrations both Republican and Democrat of decline and disrepair and we're rebuilding Americans maritime capability. So damn important. Thank you for that. We must therefore be serious about rebuilding America's maritime strength. And I and I mean this too by protecting the policies that sustain it. And I know that you can't comment on all this. I know that you don't make the decisions. I'm aware of that. And I just want you to hear it's something to take back.
▶ 1:34:09something that we say as well to know how strongly and I think that's a little bit bipartisan the Jones Act issue on the committee none is more critical than the Jones Act for more than a century it's a long time the Jones Act has ensured that domestic waterborne commerce is carried by Americanbuilt Americanowned American flagged and American crude vessels that's what we want America first this ensures protections for American shipyards American mariners parters
▶ 1:34:39and our sea lift capabilities during times of war and national emergency. As you both know only too well, the current reality is that every Jones Act waiver creates an incentive to rely on foreign vessels rather than investing in American capacity and that's what worries me so much. I know we're in a tight spot and I know this isn't easy right now, but it is a serious issue. So, Administrator Carmel, thank you for being here today.
▶ 1:35:04Uh the maritime action plan identifies rebuilding American ship building and strengthening the maritime industrial base as a cornerstone objective. Um and I know you can't this is hard for you to answer, but do you think broadening the Jones Act helps or hinders those objectives? Answer the best you can. I know you didn't make the decision. I get it.
▶ 1:35:30Yes, sir. Uh thank you. I I I think probably the I I'll characterize it this way. Ship building uh is not a smart spot market business. It's a long cycle capital investment. Owners, yards, lenders, suppliers um make decisions based on whether or not they believe the law will be stable and the market will uh over time.
▶ 1:35:53So uh the more we can do at the end of the day investments at that scale are psychological as much as a spreadsheet activity.
▶ 1:36:05Would I be correct if I said it's going to get a lot better?
▶ 1:36:09Yes, sir. It's going to get better.
▶ 1:36:11And even as related to the Jones Act, this is a temporary issue to the best of our knowledge.
▶ 1:36:16Best of my knowledge. Yes, sir.
▶ 1:36:17Okay. Thank you. Um, I know we're requesting significant investments in the maritime security program and tanker security program, small shipyards and other maritime initiatives. Um, this question is for you. How could you comment on that a little bit? What we need, what we're doing, how you see this through your eyes.
▶ 1:36:39I forgive me as far as the the maritime security program.
▶ 1:36:43How do I how do I feel about the maritime security program?
▶ 1:36:45Yes. How do you I I know we're requesting additional investments in that as you know to do more with it. How do you feel about that?
▶ 1:36:55Merid is requesting.
▶ 1:36:57That's me.
▶ 1:36:58Yes. But I'm asking I just thought you might want to comment too. I was trying to be equal opportunity employer here.
▶ 1:37:03Thank you. Thank you. No, I I I
▶ 1:37:06didn't want you to take all the heat. I'm sorry.
▶ 1:37:07I support it though. That's all right. That's okay. He can take it all. So, no, I'm just kidding. I I support it. I I certainly support it. I it's a it's an important part important uh component of you know of of our our government of our of our national security. I I I back
▶ 1:37:24without know being being inside on the inside I I
▶ 1:37:27I'm going to yield back but my point here is from your perspective both of you are we are we not trying to do really good things and make up for years and years of not doing what we should
▶ 1:37:41A yes on both of your part.
▶ 1:37:45We're trying to make up for all these
▶ 1:37:48Okay. Thank you. I yield back. Chairman.
▶ 1:37:50Gentleman yields. Miss Gillan, you're recognized for five minutes.
▶ 1:37:53Thank you, Mr. Chairman, and thank you to our witnesses today. Nassau County, New York, uh is home to the US Merchant Marine Academy at Kings Point, one of our nation's five servicemies. For more than 80 years, the Merchant Marine Academy has been the pride of Long Island, preparing generations of Americans to serve our country and strengthen our maritime and national security industries. As many uh as you may know, the campus is in dire need of investment and upgrades.
▶ 1:38:22Last December, I wrote to the chairman and ranking member of the Transportation Infrastructure Committee asking them to organize a visit for members to come and see the campus. I'm thankful to both of them as well as to Secretary Duffy for heeding my call and organizing a congressional delegation to Kings Point earlier this spring. My colleagues and I had the opportunity to speak with academy leadership and students and visually see the need for repairs and gain a greater understanding of what our midshipman need.
▶ 1:38:51I'm proud to have led the co-partisan uh the bipartisan delegation introduc and legislation introduced by my colleague from Long Island, Representative Andrew Garberino to authorize more than $1 billion for a full-scale campus modernization for the academy. And I'm glad that Secretary Duffy and the Trump administration have made it a priority to help secure these muchneeded upgrades.
▶ 1:39:14So, Administrator Carmel, I'm glad to see that the budget request acknowledges the need for improvements and provides the funding needed to carry these improvements out. So, could you just walk us through the request a little bit and explain how critical this investment is to our defense readiness and a strong commercial maritime industry?
▶ 1:39:33Uh, thank you, ma'am. And and yes, Secretary Duffy has taken a very personal and interest in in King's Point, and uh I'm heartened by that because I'm a graduate myself. So, um, Kings Point does play a critical role in the nation's, uh, uh, uh, economic and and national security. Kings Point is a primary source, for instance, of strategic seal lift officers. Uh, graduates from Kings Point are all SSOs if they don't go active duty somewhere.
▶ 1:40:02Um and so that's where the leadership uh a variety of areas uh in our industry and the military come from. Uh in order to attract the right caliber of students, we need to be able to attract uh we uh the right caliber of faculty and we need to have the appropriate facilities for them to flourish in their academic endeavors and be able to learn in a way that's that's important.
▶ 1:40:27they shouldn't have to wake up in the morning and worry about whether or not their hot water is going to work, which is where we were. Um, and so Secretary Duffy's work there and your work there and and work of the committee is indispensable in in uh getting us there. Funny thing about money, you always need more and so we'll certainly look to to move on that down the road. But um Kings Point as an institution is extremely important uh as important as the other fourmmies are.
▶ 1:40:57uh to the to the economic and security interest of the United States.
▶ 1:41:01Thank you. Well, I thank you for your support. Some of my colleagues may not be aware that many of the barracks at this academy were put up in the 40s as temporary structures and those are still the structures that are standing there today. There's another building that is literally about to fall into the sea and you can't even go into it. So, we really need these repairs. I I appreciate your support for this project. Um, moving on.
▶ 1:41:27One of the top issues that I hear about on Long Island and of I think my colleagues across the country are hearing about it is the cost of living. Uh, in Long Island, the cost of everything has explo exploded and shipping costs spiking has caused us to feel the effects of that um at the checkout line faster and harder than a lot of other parts of the country. In 2022, Congress gave the Federal Maritime Commission new tools to crack down on unfair shipping practices and rising costs.
▶ 1:41:56These included the authority to selfinitiate investigations into business practices without having to wait for a formal complaint to be filed filed. Chair Debella, can you point to some of the results that these new authorities have produced for shippers and for consumers on Long Island and across the country and let us know what else Congress can do to help lower costs for American people? Thank you for the question. Uh and as you are 100% correct, uh Azer 22 strengthened us immensely.
▶ 1:42:26It strengthened the the US taxpayer truthfully through through us through our efforts and standing up the ability to address charge complaints immediately uh was one of the areas that we've seen a tremendous amount of of productivity and support um you know rather instantaneously uh and and only continues to grow. I think uh since since we initiated charge the charge complaint process, we've uh we've responded to 524 complaints thus far. So, and it's only only expanding from there.
▶ 1:42:56So, that that is one area. Again, going back to uh to our consumer affairs and dispute resolution services, the onbudsman services that we that that we provide free of charge to the public. Uh again, very very popular. it.
▶ 1:43:12We are sending our teams out uh to the shipping community, you know, to to trade um uh trade shows and and the like so that they're having a tremendous amount of facetime understanding that the FMC is a resource for them, a free resource to them. So, um being able to to settle those disputes, you know, outside of of any any uh you know, formal matter and and obviously a cost related to that is incredibly helpful.
▶ 1:43:40and and we we're just seeing so much success there. So, it's a it's a continuous process, but but we're very very happy with with the results of of what we the tools that we've been given.
▶ 1:43:50Excellent. Thank you. I yield back.
▶ 1:43:52Gentle lady yields. I understand that Mr. Carbajal has a request.
▶ 1:43:56Thank you, Mr. Chairman. Uh on behalf of Representative Gari, I'd like to submit uh a document uh regarding the Jones Act waiver uh update into the record.
▶ 1:44:07Without objection, so ordered. Are there any other members that wish to uh ask any questions or have any final Without seeing any, um uh this concludes the hearing for today. I would like to thank each of you for coming especially on your first trip and uh the subcommittee stands adjourned.