Obama Administration

  • The Harbor Maintenance Trust Fund (HMTF) has been misused and underutilized for years, leaving U.S. ports and harbors in subpar conditions and disadvantaging the very shippers that pay to modernize and maintain them – to the tune of nearly $2 billion per year. In May, the U.S. House of Representatives’ (House) Committee on Transportation and Infrastructure (Committee) took a major step in the right direction by passing the Water Resources Development Act of 2016, which among other things, ensures that port and harbor infrastructure maintenance projects have access to the funding they need … in 2027. 

     
    The HMTF is funded through an excise tax assessed at identified ports on the value of commercial cargo shipped (excluding exported product), or cruise tickets sold, at a rate of .125 percent. The revenues collected are intended solely for port and harbor maintenance and modernization activities, including dredging channels, maintaining jetties and breakwaters, and operating locks along the coasts and in the Great Lakes. There is one catch: none of the money can be spent without an annual appropriation from Congress. 
     
    In recent years, Congress has appropriated less than $1 billion of the roughly $2 billion collected each year, leaving the fund with more than $10 billion in excess cash. The blame does not lie with Congress alone. The Obama Administration, which oversees the Army Corps of Engineers (the federal body that performs port and harbor projects), is tasked with sending Congress an annual assessment of port and harbor funding needs, but the administration has specifically asked Congress to spend less than $1 billion per year in each of the President’s annual budget requests since assuming office in 2009. The net result is leaving some U.S. ports and harbors in a state of disrepair, and others with insufficient depths to accommodate cargo ships used for global trade.
     
    It is no surprise then that the American Society of Civil Engineers assigned U.S. ports and harbors a “C” grade in its most recent Infrastructure Report Card, and that the need for investment compounds with every passing day. Waterborne commerce already plays a major role in the U.S. economy, with approximately $1.4 trillion worth of goods moving through U.S. ports each year, generating $41 billion of federal, state, and local revenue annually. A nearly complete Panama Canal expansion project could push these numbers even higher – if we are ready. 
     
    The “new” Panama Canal will accommodate significantly larger ships, accommodating vessels weighing as much as 14,000 TEUs – nearly triple the maximum weight 5,000 TEUs currently able to pass through the canal. Many U.S. harbors have not been sufficiently dredged to accommodate the larger ships commonly used in international trade, not to mention the mega-ships that will pass through the newly expanded canal. If the U.S. does not invest sufficiently to deepen these harbors – especially in the Atlantic and Gulf coasts, which do not possess the naturally occurring deep harbors found on the Pacific Coast – the U.S. economy will not reap the benefits offered by such large-scale improvements.
     
    The obvious questions then are: 
    • Why do Congress and the Obama Administration agree each year to spend less than half of the $2 billion accrued annually, despite having a massive surplus?
    • If the Committee acknowledges the need for a change, why are they waiting until 2027?
     
    These two questions share one answer: very complicated budget rules. At first blush, this seems absurd, but there are two very real obstacles to fully funding harbor maintenance projects. First, “discretionary” budget caps and secondly, statutes and rules governing “mandatory” federal spending.
     
    By making this change effective in 2027, the Committee wisely sidestepped both politically thorny issues. The bill avoids discretionary budget caps by making the funds “available to the Secretary … without further appropriation…” This has the effect of changing how the spending is classified from “discretionary” to “mandatory.” Discretionary spending requires a specific appropriation from Congress each year, without which no funds can be spent from the relevant account. Conversely, mandatory spending is authorized to occur year after year on autopilot without Congressional approval unless and until Congress repeals such authority.
     
    The bill also escapes statutory “pay as you go,” or “Paygo” and “cut as you go,” or “Cutgo” rules by delaying the provision until 2027. Under Paygo laws, Congress must increase revenues (read: raise taxes) or cut spending in a sufficient amount to offset any new mandatory spending authorized by legislation. Paygo applies to the U.S. Senate (Senate) and the House. Similarly, Cutgo rules, which apply only to the House, require any new mandatory spending to be matched with an equal or greater amount of spending cuts. The primary difference being that in the House you cannot use new taxes to pay for new spending.
     
    However, these budgetary rules focus only on new spending authorized in a bill occurring in the first year, the aggregate of the first five years, and the total of the first ten years. Fiscal years 2027 and beyond are not within the scope of spending considered when applying these laws and rules (with certain exceptions) to a bill that passes in 2016. In other words, the Committee sidestepped the House budget rules by delaying the provision until 2027, outside the ten-year scoring window. Additional rules may be triggered when the Congressional Budget Office produces its official cost estimate for the bill, but for now it looks like the Committee threaded the needle. 
     
    There are a finite number of opportunities for the federal government to improve infrastructure without spending a dime of taxpayer money. This is one of them. The Transportation and Infrastructure Committee should be applauded for its creativity and its leadership on this issue. Now the full House and Senate must follow suit and pass the Water Resources Development Act with this provision fully intact. Further, Congress should ensure all port and harbor funding needs are met until this provision kicks in (in 2027) by providing the Army Corps with sufficient funding to meet all project needs so long as the cost doesn’t exceed HMTF receipts for the year. 
     
     
    The Author
    Shane Skelton is the Executive Director of the Alliance for Innovation and Infrastructure. He can be reached at [email protected]
     
     
    (As published in the July 2016 edition of Marine News)

  • & Marine Spatial Planning: two of the biggest issues you never heard of. It’s also far more complicated than you might think. This summer, the Obama Administration released the innocuously named “Guide to Regional Marine Planning,” and across town, the House of Representatives passed the latest in a string

  • operators go by the wayside, will we see foreign flagged vessels in U.S. inland waters? That’s not something too many would want to see, but if the Obama Administration has issued more Jones Act waivers in the past four years than have been granted the past six decades, then anything is possible. I’m just saying

  • without a clear explanation from the government on why it is has taken a leadership role and how the convention will impact U.S. businesses. The Obama Administration must reexamine its transparency policies. Billions of dollars have been spent funding FACA committees. Surely, some of this money could be spent

  • market.    One of the first steps in providing that environment is to guarantee lease sales in the Alaska Arctic, which will be no small feat. The Obama administration is finalizing the 2017 – 2022 offshore leasing plan and anti-fossil fuel activists, fresh off their success in the Atlantic, have made removing

  • has vowed to fight any reversal of President Obama’s unilateral decision at every step.   The same goes for undoing the myriad of harmful Obama administration regulatory actions imposed on the offshore oil and gas industry; there is no quick fix. However, even faced with these challenges, the outlook

  • data for the Atlantic OCS. This opens the door to a vital data-collection activity that has been kept off the table for more than 30 years. The Obama Administration deserves applause for taking this vital first step toward accurately assessing the resources of this new offshore area. However, some voices

  • National Determined Contribution to the UN Framework Convention on Climate Change in advance of the meetings in Paris, and in that document the Obama administration has set a formal goal of reducing emissions by 26% to 28% below 2005 levels by the year 2025. While government targets for carbon emission

  • chain. Flexibility in operation is an important aspect of barge design.” Natural gas, as a marine fuel, is strongly supported and endorsed by the Obama Administration. FMC Commissioner Doyle, speaking last month at the Vancouver-based LNG conference, also left no doubt as to where he thinks things are going

  • DOT, the Maritime Administration is funded at the FY2012 level minus the five percent cut attributable to sequestration, described below.  Since the Obama Administration has never included funding for the title XI loan guarantee program in its budget, it is unlikely that new funds have been appropriated for this

  • platforms have been reefed since 2010 while more than 200 platforms have been removed yearly since then, according to BSEE. Three years ago, the Obama Administration tightened rules for plugging unused wells and removing old platforms and pipelines in the Gulf as part of a crackdown following the 2010 BP

  • and charted much of the coastal waters of southern Greenland, but adequate charts for the northern portion of this large island are lacking. The Obama Administration published a National Strategy for the Arctic Region in 2013. The U.S. Coast Guard quickly complemented this with its Arctic Strategy. The U

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  • MN Apr-24#35 Capt. Josh Ferguson, master of the eWolf. Administration)
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    Capt. Josh Ferguson, master of the eWolf. Administration (MARAD), which all provided ? nancial support and other resources. “This tug becomes somewhat commercially viable be- cause of the grant process,” Manzi said. “Unlike a ferry service that’s paid for by tax dollars, we have to collect fares and

  • MN Apr-24#30 Feature Shipbuilding Crowley Crowley’s electric tug eWolf)
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    • Investment in Infrastructure and Onshoring Man- sharing best practices. Additionally, given the global nature ufacturing: The administration is committing over $20 of maritime operations, international cooperation is essen- billion towards U.S. port infrastructure over the next tial for establishing

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    OpEd Shipbuilding can industrial base. building, repairing, repowering and local communities at a time in which Second, the Congress must pri- maintaining ships, not to mention our maritime strength is needed more oritize stable and predictable budgets the massive supply chain that sup- than ever

  • MN Apr-24#14 Insights tion on a couple of issues, including engine room)
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  • MR Feb-24#17 METHANOL STORAGE provals from other classi? cation)
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  • MN Feb-24#42 People & Companies Rella Hired as Wiltshire Leading Port)
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    People & Companies Rella Hired as Wiltshire Leading Port Everglades St. Johns President Glenn A. Wiltshire has taken over as Joe Rella has been appointed as presi- acting director of Broward County’s Port Rella Barton dent of St. Johns Ship Building. Everglades Department. Barton Named Vineyard CEO New

  • MN Feb-24#38 Vessels Crowley’s All-electric Harbor Tug eWolf Delivered B)
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  • MN Feb-24#16 Column Going Green For Ferries to Go Green, Governments)
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