The maritime industry is no longer the oft-ignored stepchild in Washington, but increased pats on the head from Congress and President Obama have yet to translate to significant raises in allowance.
The drive to boost U.S. exports, and to a lesser extent, the push to reform the Harbor Maintenance Trust Fund, has lawmakers on the Hill saying the right things about ports: They create jobs and keep the country competitive. The message, however, hasn’t translated into the necessary level of action, nor has it sheltered U.S.-flag carriers from a cut in their share of food aid cargo.
The 25 percentage point reduction to 50 percent in food aid shipments reserved for U.S.-flag carriers, which will slash carrier revenues by an estimated $90 million annually, was part of an effort to plug funding gaps in the recently enacted surface transportation bill. The roughly two-year legislation also was remiss in including inland waterways in its vision for a national freight transportation plan.
Most disappointing, though, was the watering down of language calling for all of the Harbor Maintenance Tax to be spent on dredging, instead of using one-third of the funds collected on imports to fill budget gaps.
The fund collects approximately $1.5 billion annually and is projected to have a surplus of nearly $7 billion by the end of the fiscal 2013. On top of the hits through the transport bill, ports received less money in the most recent round of the TIGER grant program than in the round before. They did, however, gain a slightly bigger share of the grants.
The cargo preference cut was merely a casualty of a last-minute push to pass the transport bill, maritime advocates say. Rep. Elijah Cummings, D-Md., is considering introducing legislation that would restore the food aid contracts to U.S.-flag carriers, because the cuts quicken “the continuing decline of our fleet.”
The time-crunch, along with pressure from appropriators, also led to the dilution of the Realize America’s Maritime Promise Act, the main vehicle for HMTF reform, said Barry Holiday, executive director of Dredging Contractors of America. And the less-than-grand payout to ports through TIGER grants is likely just a one-off dip, not a sign of a longer-term retreat from the Obama administration.
All these sleights could be forgiven through the passage of a Water Resources Development Act that would authorize the deepening of East Coast ports and improving of inland maritime routes. Port advocates also would have another shot of pushing HMTF reform. The Senate could introduce its version of the bill by year-end if Republicans heed Sen. Barbara Boxer’s, D-Calif., call to begin a mark-up in the Environmental Public Works Committee, which she chairs, in mid-September. Transportation and Infrastructure Committee Chairman John Mica, R-Fla., wants to begin work on the Coast Guard bill, while Rep. Nick Rahall, D-W.Va., second-in-command on the committee, would rather begin work on WRDA, said Michael Toohey, president of the Waterways Council.
Beginning work on WRDA, last passed in 2007, is just the start to the challenges facing Congress. The current earmark ban will make it tricky, if not impossible, to authorize port projects. Funding for port projects is granted separately through the annual appropriations process. Harbor deepening projects in which the states are willing to provide the funding would have a better shot at authorization even if the earmark ban holds. That’s because legislators wouldn’t have to face criticism for spending federal dollars as the national deficit grows.
Toohey said the presidential administration could make a “baker’s dozen” of project authorization requests in an effort to circumvent the earmark ban. But Congress still would have to get on board with the authorization requests, said Susan Monteverde, vice president of government affairs at the American Association of Port Authorities.
“Some people are still hoping and speculating that the next Congress will provide a way of earmarking on a limited basis,” said Paul Bea, principal of maritime consultant PHB Public Affairs. “You are going to have a whole new Congress next year, so it’s not an outrageous thought that the rules will change.”
The Obama administration’s move to fast-track the review of seven port infrastructure projects on the East Coast could pressure Congress to begin work on WRDA (Story, page 37). Monteverde doesn’t see the move to speed up project reviews, a part of a broader federal effort to cut bureaucracy, as a sign of Obama using executive orders to authorize projects. “I don’t see the administration taking an independent step to build these projects unless Congress agrees with them,” he said.
The Obama administration’s recent expansion of a task force on developing a strategy to invest in port infrastructure is encouraging, “but it doesn’t talk about money,” she said. That makes WRDA the maritime industry’s best shot at getting more dollars, even though it would only approve projects, not fund them. Amid a tightening federal purse and a looming “fiscal cliff,” maritime advocates need to make the next bill count. The ports and inland waterways can’t wait another five years.