Future of U.S. Maritime: FY 2027 Maritime Administration and FMC Budget Requests

Subcommittee 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. 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. As a reminder, if members insert a document into the record, please also email it to documents TNI at mail dot house dot gov. 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, Captain Stephen Carmel, the Maritime Administrator, and Laura DiBella, uh the Chairman of the Federal Maritime Commission. Today's hearing occurs at a moment when shipping, ocean link supply chains, and and the maritime industrial base are all topics of interest to the broader public. World events are once again reminding us that American companies and consumers are woven into global supply chains. These supply chains are susceptible to disruption and disrupted supply chains become expensive supply chains. Challenges exist in our nation's ability to respond to disruption independently, United States' flag deeps, uh sea merchants fleet is small and international in its ownership. Our commercial shipyards are in dire need of modernization in terms of both capacities and capabilities. The United States relies on global transportation networks, but 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. Fortunately, 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 bicameral, bipartisan legislation and has strong support, especially among members of this subcommittee. Similarly, administration outlined a path forward with the release of America's Maritime Action Plan earlier this year. I am proud to be a cosponsor of the Ships 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. The Maritime Administration is responsible for promoting the United States maritime industry. We are fortunate the current administration is an alumnus of Kingsport, has sailed as a merchant mariner, possesses of extensive experience as a maritime executive, and most importantly, of all, has been thinking about these ins ins- issues his entire career. Captain Carmel is joined this morning by Laura DiBella, the Chairman of the Federal Maritime Commission. This is Chairman DiBella'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 and the United States shippers benefit from the marketplace where ocean transportation is competitive. The Federal Maritime Commission is an independent agency. The mission of the FMC is to ensure I 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 r- reasonable practices for decades to come. Given the volume of cases before the administrative law judges and the consequences of those proceedings I am very interested in learning if if the Office of the Administrative Law Judge is being The 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 opportunity. And with that, I yield back. I now recognizing uh, Mister Carbajal, for an opening statement for five minutes.

Thank you, Mr. Chairman. I will yield uh to Ranking Member Larsen.

Mister Larsen. Thank you, Chair and Ranking Member, for scheduling today's hearing to review the fiscal year twenty twenty-seven 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 mitigate a gas price crisis of its own making, President 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 shipbuilding. It has stolen jobs from American mariners. It's allowed Chinese state-owned vessels to operate in an unprecedented fashion in US waters. So I would like to hear from Administrator Carmel today on how in a wide, wide 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 COVID-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. Now is the time to strengthen and support the maritime sector, not to continue business as usual. Although the President's fiscal year twenty-seven requests includes two point six billion for MARAD, 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. The MARAD budget requests include one point four billion dollars 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 MARAD needs to carry out its key role in safeguarding and advancing the maritime industry. While the one point two billion dollar um while one point two billion dollars in discretionary funding represents a ten percent increase from enacted fiscal year twenty twenty-six 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 MARAB's role in supporting emerging technologies which act to level the international playing field for the U. S. In addition to eliminating the cable security fleet program and the National Defense Reserve fleet c- 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 fifty-one point six percent cut in funding from twenty to twenty-six enacted levels. This program invests in seaport infrastructure to strengthen the economy, safeguards our supply chains, creates sustained jobs, and keeps us competitive globally. PIDP PIDP funding supports small ports that are indispensable to local communities. strengthens local and regional economies and eases congestion in our ports. While 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 twenty twenty-seven appropriations are enacted. I do appreciate the budget request includes one hundred and five billion small shipyard grant program. Small shipyards are integral to the maritime industrial base. Although I want to be clear about my position, the 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 and the bipartisan Ocean Shipping Reform Act of twenty twenty two. Since Oster's enactment, the FMC has used its investigative and prosecutal prosecutorial 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. Simply put, shortchanging 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. So I look forward to engaging with our witnesses on MARAD and on FMC's ongoing work to strengthen supply chains, grow the U. S. maritime industry, and discuss how we can work to ensure they receive the resources that they need. Thank you, Mr. Chairman.

Gentlemen Yields, I now recognize our ranking member, Carber Hall, for an opening statement for five minutes.

Thank you, Mr. Chairman, and thank you for calling today's hearing. Welcome Administrator Carmel and Chairwoman DiBella. I look forward to hearing from you both on the President's budget requests, and agency priorities for the upcoming year. The FMC is a vit- is vital to ensuring fairness for American shippers, carriers, and consumers, safeguarding transparency and enforcing equitable maritime commerce. The FMC's impact on U. S. 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 imp- implementation of the bipartisan Ocean Shipping Reform Act, or ASRA, vessel congestion at ports has decreased. In the three years since the enactment of in twenty twenty-two, more than five point eight million dollars in unfair fees have been waived or refunded to shippers. If the agency is funded and staffed, the agency works. The FMC is also currently undertaking a rulemaking aimed at ensuring that exporters are given fair access to cargo space. These are the kind of changes that we need to keep American Last year, the FMC launched an investigation into flagging 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. I'm concerned that if this waiver is allowed to continue, we will quickly become fully reliant on foreign ships, owned and crewed by foreign companies, for our econ- 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. The 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 industry. Unfortunately, it is unclear to me whether this administration supports the American maritime industry or not. Despite having issued the Maritime Action Plan to grow the maritime President Trump has levied the strongest attack on the domestic maritime industry ever. The unjustified one hundred and fifty day 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. From 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 dig decrease in funding for key programs like the Port Infrastructure Development Program. This is completely unacceptable. Furthermore, the budget zeros out funding for the Maritime, Environmental and Technical Assistance Program, the Cable Security Program, and the National Defense Reserve Fleet Recapitalization. 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.

Gentlemen yields, I 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're running 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. With that, Captain Carmel, you are recognized for five minutes for your testimony.

Good morning, Chairman Azzill, ranking member Carbaugh, 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. The war with Iran highlighted some of our successes while we still have room to areas where we still have room to improve improve. The best example is the tanker security program. TSP tankers have been fueling both MSC oilers and Navy carriers at sea. continuing the vital service they began in the red sea this is not demonstrator operations this is real world contingency operations two of those ships are now being fitted with fuel delivery systems essentially a standard msc type tension refueling at searig so they functions as 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 msc capability 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 ten ships in the program today despite being authorized for twenty that is the heart of it any 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 shipbuilding program without structured 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 to coordinate 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 resort force creates problems we are in active conversation with general reid 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 rrf for what's left the msp program is in trouble second manpower we are roughly in barren in balance for steady state shipping today which means by definition we do not have mariners to crew a sustained rrf surge this makes the current rrf manpower structure untenable on rrf though we published today an rfi that would fundamentally alter how we might approach rrf recap leveraging private capital and accelerating the shipbuilding agenda this is a substantially new and innovative way of dealing with the rrf we look forward to working with transcom and you 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 six hundred and sixty billion dollar data deliverable exports that rides on more on that more than rides on us flagships it moves on subsea cables we have completely outsourced the ability to lay and repair that cable system. Outsourcing only works for as long as the other side stays willing to do it. This is a real strategic and economic vulnerability. Finally, Marat 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 globe shape of global trade has been first set by the cost of fuel, how fast ships go, how they root, and how big they get. where cargo concentrates. SMRs break that constraint, take fuel cost out of the equation, and the whole network re-optimizes 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 gold in in global trade for decades. the intent of the rsi rfi is to insure that it is us these are just a few examples of things we have ongoing for example title eleven is in the process of being overhauled and modernized and the pidp grant process is next we did outstanding work on war risk insurance during the war with twenty policies currently outstanding valued at over two billion dollars we still have uh ways to go in 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, with 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, mariner's ports and technology underneath of it, or keep operating inside a system someone else built. I look forward to your questions. Thank you.

Gentlemen Yales, Chairman DiBella, you are now recognized for five minutes and again wants your welcome.

Good morning.

Good morning, Chairman Nesil, Ranking Member Carbajal, 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 twenty twenty seven 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, President 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. The 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 inflationary inflationary impacts resulting from disruptions to the supply chain. The Commission will continue to vigorously use all its statutory enforcement authorities to aggressively protect U S exporters and importers from potential anti-competitive behavior and promote port and marine terminal process improvements. I support the President's fiscal year twenty twenty-seven budget of forty million for the Federal Maritime Commission. This 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 forty million, north of eighty percent is allocated for employees and critical IT infrastructure enhancements. The remaining funds will cover the essential budgetary and operational requirements. I am pleased to highlight for you the way our agency protects the US public from financial harm and defends the integrity stability and security of the UNIT- US supply chain and thus delivers the real results for the American people. 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. At present we have five open investigations that cover the gamut of shipping interests and concerns, both here and abroad, notably flags of convenience, chokepoints, discriminatory actions and or regulations by foreign governments, and chassis. We are 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. The FMC prevailed in an enforcement proceeding against Mediterranean shipping company and imposed a penalty of twenty-two million, six hundred and seventy thousand. Even more recently, our enforcement program successfully executed a compromise agreement with Maersk for the total amount of one point nine million in civil penalties. Pivoting now to ASRA twenty twenty-two, I am pleased to report that nearly all the major rulemakings required by ASRA have been completed and when challenged upheld in federal court. ASRA twenty twenty two 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- h- 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 A rejection of these requests projected protected US shippers from sudden price spikes. Globally, only US shippers benefited from this market stability and protection. Geopolitical forces are increasingly shaping global shipping, and these challenges will continue into fiscal year twenty twenty seven 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. As part of that commitment and our interest in ensuring stability in our US foreign trades the FNC 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, I appreciate your interest and look forward to answering any questions you may have.

Thank 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. Mister Carmel, 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. Unleashing American energy production is a key part of creating economic opportunity for Americans. Section seven three four two of the Coast Guard Authorization Act of twenty twenty-five clarifies authorities related to the regulatory approval of deep water port permits. making clear that MARAD is the lead agency to evaluate permits for NEPA compliance. How is MARAD preparing to undertake these authorities?

Thank you, sir. Uh, MARAD and the Coast Guard executed an MOU earlier in the year, uh, that restructures the way the border pi 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 of.

Thank you. Over the past year we've seen Marriott approve 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.

uh if i if i heard the 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 uh that the circumstances and assumptions that they made at the time they put the application

Very good. Putting aside your responsibilities for growing the U S flag fleet, are there benefits to increasing the number of vessels owned by U S 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.

The 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 so it is almost impossible to actually enforce what 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

thank 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 owners?

Yes, sir, there 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 accelerating um um uh processes for instance for reflag approvals um uh the the the other side of that is outflag approvals which used to be a very burdensome thing uh and we have completely overhauled the way that works in that when somebody is bringing in a a us flagship in msp for example they need to be able to outflag the other one that's leaving otherwise the investment decision gets muddled so we've worked on that so it's not only the the uh 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.

Very good. Chairman de Bellum, uh last month the Department of Justice issued indictments against four China-based manufacturers of intermodal shipping containers for price fixing was the Federal Maritime Commission involved in supporting the work of the DOJ?

So sorry, thank you for the question. Uh the r- the original product, or shall we say, of fact finding did originate through the FMC. So it was under uh uh Commissioner Carl Bentzel did a fact finding uh uh mission uh to to investigate those uh that that particular matter and and their their the report is cited in the the goj uh uh findings yes

thank you my time is out and uh i now recognize mr. carbajal

thank you mr. chair i'll defer to regular member larson

thank you uh thank you sir mr. chair i would like to note that all this deep water port work uh that was congress' telling congress telling the administration to do it so thank the administration for doing it. I really wanna appreciate my colleagues in Congress for passing a law to to tell to tell the executive branch to do it. Um, let's take credit for when we do our own work around here. Um, uh, Administrator Carmel, uh, my first question's on the Jones Act, a a pillar of domestic shipbuilding industry, at least that that's what I've been told for twenty five years, um, here in Congress, and I've believed it. You know, 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. Um, 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 shipbuilding. Uh, do you agree with that statement?

Uh, 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 well but uh you know the fact is it's the administration policy and and I support you know what I'm thinking.

No it's a it's a 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 uh 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 and in addition to that as i understand um uh as well that the um uh uh the the president had to determine it was in the interest of national defense yet in mered'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. So why is administration allowing vessels to take advantage of the waiver, if the operator can't even bother to explain the national security interest of the waiver's use?

Yes, sir. Again, the way this works under five O one A, 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 ten days after the voyage ends. so that is

uh sooner than congress

i'm sorry

uh sooner than congress sometimes

we we publish when we are notified ten 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

yeah so um the uh the upside of your budget's a hundred and five million dollars 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 uh just wants to change that to what I call an all shipyards grant program which I think is a a another bad idea uh large shipyards have other ways to capitalize usually because they're with the um doing work with the pentagon. Um uh I'm certainly gonna be working the rest of the year to be sure that the uh one, the hundred and five million dollar stay is second that it's still a small shipyards grant program. Um but uh can you talk about the value of this of the small part of the small ship shipyards grant program

yes 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 a repair sector as opposed to shipbuilding is a fundamental part of the ecosystem that has to be supported the 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 united states there are variety of reasons for that um i think that i think we can change that it requires a lot of work

Um, thanks. Chair DeBell, I I don't want you to get away without a question from me, but um, so forty million dollar budget is flat uh from last year's but a little less with inflation uh built in. But so without any budgetary increases with the um eighty percent of the budget going to the great work that your folks are doing there, uh how is FMC gonna 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 superannuation form act of twenty twenty two

sure i i very much appreciate the question we uh we are deploying several we are 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 so 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 caseload 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. At the same time we're deploying um w- all all types of of technologi- technological enhancements uh to to a 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 um in addition to that we have a 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 an informal complaint process we encouraged carriers and also shippers to go try this route first it's a mediation route to you know to put it simply um that will it it's a free free service to the the community it is to shippers and it is something that that we've been actually been very successful in returning and or uh uh refunding or just completely waiving uh some of the the charges or complaints that are there so 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.

Mm-hmm.

You're out of time. Mister McDowell, you're recognized for five minutes and you'll get a little extra if you need it.

Thank you, Mister 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 uh 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?

Thank 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 carryover from previous years to fund the program for this year and that we would deal with it again when we put the budget uh budget for twenty eight together, which we are doing.

So it would you would say that there we will still maintain uh vessels that are capable of um I guess we will maintain US flagged cable vessels, correct?

Yes, that's true, sir.

OK. Um, your budget proposes a new um maritime security trust fund that will create a massive new funding stream for the maritime administration. What will these new funds be used for?

Uh, 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 King's Point is in there. uh uh small shipyard grants uh big shipyard grants there's a lot of things in the maritime action trust fund uh so a whole you know basically that covers a gamut of how we do things there is a um 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 uh, Marriott's funding, what steps are you taking to ensure that - that you would be able to efficiently administer these funds?

In- 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,

So we - we have a contingency plan.

uh, as you know, President Trump has called for reinvigorating our domestic ship building uh, capacity and and protecting our maritime industrial base. How would the money from the new maritime security trust fund support those efforts?

There are several areas uh aside from direct uh shipyard programs um uh uh efforts to at the end of the day, any shipbuilding 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 uh some other things uh the the um uh uh strategic sealer fleet is another example of it uh but at the end of the day the single biggest thing we can do is uh cargo

is mayor had taken any steps to ensure that a new fee on commercial vessels would not result in higher costs for american consumers

I 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 remit.

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 ships?

I 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 is 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 inv- active investigation, so 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 of vessels, not only ours but others, uh as it relates to um their ideological stance towards the Gaza war.

How has the Spanish government reacted to the investigation that you all have done?

I'm I don't believe I'm I don't believe I can answer that question, uh, in its entirety because of the act of investigation, uh, that it is, but I can say that we have received over eight thousand comments, uh, at to date, uh, the comment period is actually closed, um, in response to that particular investigation, which is very significant. So there, and it would include their response as well. They did respond to it. So.

Uh, final question, are you aware of any other NATO countries that have denied US flagged vessels from having access to their ports?

I'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 sixth so perhaps i i will get receive that but i have not yet

thank you yield back

thank you

gentleman yields uh chair now recognize mister carbajal

thank you mister chair i'm gonna give you a softball question very easy to answer how does the iran war the building of a vanity arch building a luxury ballroom at the white house painting the reflective pole on the mall how does that help the maritime industry

uh thank you sir and yes indeed it is a softball question i appreciate that so i have no idea

thank you uh chairwoman de bella

thank you for the question it's same same question would you like me to answer

yes

i i i too can't cannot answer but i i i know we're do we're

uh that's good enough Well, we can, yes, yes. Because if you wanna go at it, we're gonna debate all night or all day, should I say. Thank you. Thank you. Thank you. Uh, Miss 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?

thank you sir uh i can only answer in that um uh this this this was not a marriott related industry uh decision this was department of warren to 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 so

thank you and that's a shame you play such a crucial role in this area and you weren't consulted. Uh, Chair DiBella, the FMC is requesting flat funding for fiscal year twenty-seven. Given the administrat- it's administration's priorities in the maritime sector and the rising costs and disruptions associated with the President's military action in Iran, why are we not increasing funding for the FMC?

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, and enforcement is very data driven, uh so about sixty percent 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, and able to to access that way. So, we're strengthening from within and empowering our good staff as we have them today. Uh, 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 uh to help us do our job better because it's it's the the enforcement is becoming that much more sophisticated

could 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 mister carmel i remain a steadfast supporter of the ship sack which proposed a dedicated maritime trust fund to provide long-term predictable investments in our maritime infrastructure and workforce. However, absent congressional action on the SHIPS Act, merit remains reliant on annual appropriations. The 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 leaderships seem uninterested in moving the ships, How do you plan to reconcile the impeding fi- impending fiscal cliff that merit is on, especially as it relates to the PIDP? Can and can ports remain competitive internationally with just fifty million dollars in the PIDP funding?