[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



        THE FISCAL YEAR 2006 BUDGET FOR COAST GUARD AND MARITIME 
  TRANSPORTATION PROGRAMS, AND H.R. 889, THE COAST GUARD AND MARTIME 
                       TRANSPORTATION ACT OF 2005

=======================================================================

                                (109-4)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 3, 2005

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


                                   ____

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-    JAMES L. OBERSTAR, Minnesota
Chair                                NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
WAYNE T. GILCHREST, Maryland         Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
PETER HOEKSTRA, Michigan             ROBERT MENENDEZ, New Jersey
VERNON J. EHLERS, Michigan           CORRINE BROWN, Florida
SPENCER BACHUS, Alabama              BOB FILNER, California
STEVEN C. LaTOURETTE, Ohio           EDDIE BERNICE JOHNSON, Texas
SUE W. KELLY, New York               GENE TAYLOR, Mississippi
RICHARD H. BAKER, Louisiana          JUANITA MILLENDER-McDONALD, 
ROBERT W. NEY, Ohio                  California
FRANK A. LoBIONDO, New Jersey        ELIJAH E. CUMMINGS, Maryland
JERRY MORAN, Kansas                  EARL BLUMENAUER, Oregon
GARY G. MILLER, California           ELLEN O. TAUSCHER, California
ROBIN HAYES, North Carolina          BILL PASCRELL, Jr., New Jersey
ROB SIMMONS, Connecticut             LEONARD L. BOSWELL, Iowa
HENRY E. BROWN, Jr., South Carolina  TIM HOLDEN, Pennsylvania
TIMOTHY V. JOHNSON, Illinois         BRIAN BAIRD, Washington
TODD RUSSELL PLATTS, Pennsylvania    SHELLEY BERKLEY, Nevada
SAM GRAVES, Missouri                 JIM MATHESON, Utah
MARK R. KENNEDY, Minnesota           MICHAEL M. HONDA, California
BILL SHUSTER, Pennsylvania           RICK LARSEN, Washington
JOHN BOOZMAN, Arkansas               MICHAEL E. CAPUANO, Massachusetts
JIM GERLACH, Pennsylvania            ANTHONY D. WEINER, New York
MARIO DIAZ-BALART, Florida           JULIA CARSON, Indiana
JON C. PORTER, Nevada                TIMOTHY H. BISHOP, New York
TOM OSBORNE, Nebraska                MICHAEL H. MICHAUD, Maine
KENNY MARCHANT, Texas                LINCOLN DAVIS, Tennessee
MICHAEL E. SODREL, Indiana           BEN CHANDLER, Kentucky
CHARLES W. DENT, Pennsylvania        BRIAN HIGGINS, New York
TED POE, Texas                       RUSS CARNAHAN, Missouri
DAVID G. REICHERT, Washington        ALLYSON Y. SCHWARTZ, Pennsylvania
CONNIE MACK, Florida                 JOHN T. SALAZAR, Colorado
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
VACANCY

                                  (ii)




        SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

                FRANK A. LOBIONDO, New Jersey, Chairman

HOWARD COBLE, North Carolina         BOB FILNER, California, Ranking 
WAYNE T. GILCHREST, Maryland         Democrat
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
ROB SIMMONS, Connecticut             GENE TAYLOR, Mississippi
MARIO DIAZ-BALART, Florida           JUANITA MILLENDER-McDONALD, 
DAVID G. REICHERT, Washington,       California
Vice-Chair                           MICHAEL M. HONDA, California
CONNIE MACK, Florida                 ANTHONY D. WEINER, New York
LUIS G. FORTUNO, Puerto Rico         BRIAN HIGGINS, New York
CHARLES W. BOUSTANY, Jr., Louisiana  BRIAN BAIRD, Washington
DON YOUNG, Alaska                    JAMES L. OBERSTAR, Minnesota
  (Ex Officio)                         (Ex Officio)

                                 (iii)

                                CONTENTS

                               TESTIMONY

                                                                   Page
 Blust, Steven R., Chairman, Federal Maritime Commission.........     8
 Collins, Admiral Thomas H., Commandant, U.S. Coast Guard........     4
 Moravec, Joseph, Commissioner of Public Building Service, U.S. 
  General Services Administration................................    10
 Welch, Master Chief Franklin A., Master Chief Petty Officer, 
  U.S. Coast Guard...............................................     6

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

LoBiondo, Hon. Frank A., of New Jersey...........................    75
Young, Hon. Don, of Alaska.......................................    89

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Blust, Steven R.................................................    24
 Collins, Admiral Thomas H.......................................    31
 Moravec, Joseph.................................................    77
 Welch, Master Chief Franklin A..................................    84

                       SUBMISSIONS FOR THE RECORD

 Collins, Admiral Thomas H., Commandant, U.S. Coast Guard:

   Rescue 21 Project Summary-Deployment Schedule, chart..........    44
  Legacy National Distress Response System vs. Rescue 21, chart..    45
  Nationwide AIS (NAIS) Projected Deployment FY05-FY10 (FOC), 
    chart........................................................    46
  Responses to questions.........................................    47

                        ADDITIONS TO THE RECORD

Fleet Reserve Association, statement.............................    97
National Association of State Boating Law Administrators, 
  statement......................................................    94

 
        THE FISCAL YEAR 2006 BUDGET FOR COAST GUARD AND MARITIME 
  TRANSPORTATION PROGRAMS, AND H.R. 889, THE COAST GUARD AND MARITIME 
                       TRANSPORTATION ACT OF 2005

                              ----------                              


                        Thursday, March 3, 2005

        House of Representatives, Committee on 
            Transportation, Subcommittee on Coast Guard and 
            Maritime Transportation, Washington, D.C.
    The committee met, pursuant to other business, at 10:00 
a.m. in room 2167, Rayburn House Office Building, Hon. Frank 
LoBiondo [chairman of the subcommittee] presiding.
    Mr. LoBiondo. Good morning. The Subcommittee on Coast Guard 
and Maritime Transportation will now come to order. The 
Subcommittee is meeting today to hear testimony on the fiscal 
year 2006 budget for the Coast Guard and Maritime 
Transportation programs, and H.R. 889, the Coast Guard and 
Maritime Transportation Act of 2005.
    We are reviewing the President's fiscal year 2006 budget 
request for the Coast Guard and Department of Homeland 
Security's Port Security Grant Program and the Federal Maritime 
Commission. I am pleased to see that the Administration has 
recognized the critical work done by both the Coast Guard and 
the Federal Maritime Commission and is requesting increases in 
funding for both of these organizations in fiscal year 2006.
    Nevertheless, the Subcommittee has concerns with some areas 
of the Coast Guard budget that finds the amount requested for 
port security grants to be inadequate to meet our maritime 
security needs. The Administration has requested $8.1 billion 
for the Coast Guard in fiscal year 2006. That is an increase of 
$571 million or approximately 8 percent more than the amount 
appropriated for fiscal year 2005.
    This increase is divided between operating expenses and 
capital improvements. Under capital improvements, the 
Administration's request of $242 million is an increase for the 
Deepwater Program. While it is nice to see that we are finally 
making some progress, it is disappointing that this increase is 
still less than the amount needed to get the program back onto 
its original 20-year schedule.
    I am also very frustrated that we have yet to be provided 
with the program's re-baselined implementation plan. The plan 
provides the blueprint for changes in asset capabilities to 
reflect the post-9/11 environment. Before the Subcommittee can 
move forward with its annual authorization for the service, we 
need to be provided with this information. It is imperative 
that we have a complete understanding of what we are buying.
    I urge the Service, the Department and the Office of 
Management and Budget to work out their issues with the plan 
and get it to Congress as soon as possible. In the absence of 
the new implementation plan, the Committee and the Subcommittee 
leadership have introduced legislation to authorize $1.1 
billion for Deepwater acquisition. We believe that this level 
would allow the program to be completed in 15 years.
    We understand that number may change once we see the plan. 
Completing Deepwater in less than 20 years is critically 
important if the Coast Guard is expected to successfully carry 
out its missions. These aging assets are suffering operational 
failures at an alarming rate and putting the lives of their 
crews and the public they serve in grave danger. Accelerating 
the replacement of legacy assets will enhance mission 
performance and reduce rapidly escalating operational and 
maintenance costs.
    The homeland security mission of the Coast Guard continues 
its post-September 11 growth. This year, the service should 
complete the planning processes required under the Maritime 
Transportation Security Act and move forward with full 
implementation of the Act. The Subcommittee is still concerned 
that we are focusing on protecting our shores once vessels are 
here, rather than pushing out our oversight as far as possible 
and preventing terrorists and any dangerous materials in their 
possession from reaching our shores. Prevention is always 
easier and safer than response.
    Despite the particular attention placed on the Coast 
Guard's homeland security-related missions in recent years, the 
service continues to perform at a much broader range of 
responsibilities. In the past three months, much media 
attention has been focused on the Coast Guard's response to oil 
spills in the Delaware River and in Alaska. In Alaska, the 
service successfully rescued at great personal risk, 20 of 26 
members of a crew of a vessel drifting without power in the 
Bering Sea. The Coast Guard then immediately began an oil spill 
response once the vessel broke apart. In the Delaware River, 
the Coast Guard responded to the environmental damage from a 
spill when the hull of the Athos I was breached by an uncharted 
submerged object or objects. We are still not sure which.
    The subcommittee will be looking further in to the lessons 
we have learned from these spills and will pursue legislative 
remedies later this spring. These spills are a reminder that 
the Coast Guard's traditional missions must remain priorities 
for the service. The strength of America's commerce relies on 
waterborne trade and the Coast Guard protects that trade not 
only from terrorism, but also from other threats. We need to 
make sure these programs also receive the attention that they 
deserve in the budget.
    Of particular concern is the request to transfer Research 
and Development Test and Evaluation funds from the Coast Guard 
to the Science and Technology Directorate of the Department of 
Homeland Security. Congress rejected this flawed proposal last 
year, and this Subcommittee will lead the effort to do so again 
this year. We were assured initially that we would not have to 
face this kind of a challenge when the Coast Guard came under 
Homeland Security, but unfortunately we have to deal with it 
once again and we will be very vigorous in pursuit of this.
    The Maritime Transportation Security Act authorizes grants 
to help ports improve security. More than $735 million has been 
appropriated over the last four years under this provision. The 
Administration proposes a single multi-sector grant program for 
fiscal year 2006. I am concerned that such a program would pay 
little attention to the maritime needs. I hope we can protect 
funding for the Port Security Grant Program at no less than the 
fiscal year 2005 appropriated level of $150 million. I look 
forward to an explanation of the effects this proposal would 
have on implementing the port and facilities security plans 
called for under the Maritime Transportation Security Act.
    We will also hear this morning from the General Services 
Administration about the proposed move of the Coast Guard's 
headquarters to property formerly used by St. Elizabeths 
Hospital. I also look forward to learning more about this 
proposal.
    Finally, the President's fiscal year 2006 budget for the 
Federal Maritime Commission proposes $20.5 million, an increase 
of $1 million. This increase will allow the Commission to 
continue vigilant enforcement of foreign shipping rules and 
regulations to protect U.S. shipping concerns.
    I want to thank the witnesses for coming this morning. We 
look forward to your testimony. Now, I would ask Mr. Filner for 
any opening statement.
    Mr. Filner. Thank you, Mr. Chairman. I look forward to 
working with you and the other members of the committee this 
year in this session of Congress. We have the important role, 
now, of looking over the budget for the Coast Guard.
    Of course, the President's proposed budget is 8 percent 
higher than we appropriated last year. I wish he did equally 
well in other parts of the budget, but that is not a discussion 
here today. You have, I think, recommended increased funding 
for the Deepwater Acquisition Program. It may not be enough to 
accelerate the program as much as we have expressed in the 
past, and I am especially concerned that the Administration has 
not given to the Congress the so-called re-baselining of the 
Deepwater Program so that Congress will understand what changes 
need to be made to that program in the post-9/11 world. As it 
stands, it looks to us like we are buying new vessels and 
aircraft without a proper consideration of what is needed to 
meet the new challenges.
    Let me just mention a couple of other things which I have 
mentioned to the Admiral over time in personal conversations, 
and I appreciate the time, Admiral, you have given to us to 
explain the Coast Guard's budget and the programs.
    I have talked over the last couple of years about the 
HITRON helicopter. That is the fast-moving helicopters that 
could deal with drug interdiction. We have I guess not made the 
advances that I thought we should in terms of having more of 
those HITRON helicopters. I represent, of course, San Diego and 
we have through South America and the sea right off our coast 
many drug runners. The HITRON helicopters would be a great 
benefit to us. We know they have interdicted, in fact, up until 
this time $6 billion worth of drugs, so we know how effective 
they are. I still am not sure why we have not leased any 
additional ones to deal with this threat on the West Coast.
    Chairman LoBiondo and Chairman Young of the Appropriations 
Committee last year agreed that we put in $39 million in the 
Coast Guard and Maritime Transportation Act authorization to 
lease that additional squadron. Of course, it has not occurred.
    Another issue that I look at, Admiral, is that when you 
gave us the Budget in Brief with the pie charts here, we 
appropriated in fiscal year 2005 $2.48 billion for non-homeland 
security missions. The Coast Guard spent $2.05 billion. That 
is, over $430 million was put in the non-homeland security. It 
was shortchanged, perhaps the search and rescue, marine safety, 
aids to navigation kind of programs. Of course, we have the 
benefit up here of saying you are not spending enough on 
homeland security, and then if you spent more, we say you have 
not spent enough on non-homeland security, but that is our 
privilege, I guess, as Congress members. But I do not think 
Congress intended when we enacted the Homeland Security Act 
that there should be a decrease in the non-homeland or 
traditional missions of the Coast Guard. So I hope you may 
speak to that, too.
    So Mr. Chairman, thank you for your leadership on these 
issues. I look forward to working with you.
    Mr. LoBiondo. Okay, thank you, Mr. Filner.
    I would like to take this opportunity to welcome our new 
members that are here today. We have some new faces and we are 
thrilled that they are with us. We believe they can help us in 
what we are trying to do with authorization and oversight. On 
our side of the aisle, we have four new members to our 
Subcommittee. We have Vice Chairman Dave Reichert from the 
State of Washington. Thanks for being with us. We have Connie 
Mack from the great State of Florida. We have Louis Fortuno, 
who is on his way. Okay. And we also have Charles Boustany from 
the State of Louisiana.
    Mr. Filner, do you want to introduce?
    Mr. Filner. They have all given me their proxies.
    Mr. LoBiondo. Okay.
    Mr. Filner. We have only one true freshman on our 
committee, Congressman Higgins from upstate New York. We have 
two red shirt freshmen who are not true freshmen, but are new 
to this committee. That is Congressman Weiner of New York City 
and Congressman Honda from San Jose, California.
    Mr. LoBiondo. Okay.
    We will welcome our panel now. We have Admiral Collins, 
Commandant of the United States Coast Guard. We thank you for 
joining us again. We also have Master Chief Franklin A. Welsh, 
Master Chief Petty Officer of the United States Coast Guard. We 
have the Honorable Steven R. Blust, who is the Chairman of the 
Federal Maritime Commission. And we have Mr. Joseph Moravec, 
who is the Commissioner of Public Building Service for the U.S. 
General Services Administration.
    Admiral Collins, please start off.

  STATEMENT OF ADMIRAL THOMAS H. COLLINS, COMMANDANT, UNITED 
                       STATES COAST GUARD

    Admiral Collins. Thank you, Mr. Chairman.
    Good afternoon. It is a pleasure to be with you and 
distinguished members of the committee. Thanks for the 
invitation to be with you today to discuss issues that are near 
and dear to our heart, and that is the 2006 budget request. 
From our view, it is a great budget and will have a positive 
impact on how the Coast Guard delivers services across America 
for all our missions.
    Since 9/11, we have made great progress in securing 
America's waterways and making America's waterways safe at the 
same time. There is absolutely no doubt that there is a lot of 
work that remains, but there is also no doubt that we have 
improved maritime homeland security every day. That in large 
measure goes to the strong policy and budgetary support of the 
Administration and Congress, and very importantly, this 
committee. We appreciate that support.
    The Coast Guard 2006 budget continues our progress, 
proposing discretionary budget authority of $6.9 billion. This 
budget provides the necessary resources to continue 
recapitalizing, as you noted, Mr. Chairman, the Coast Guard's 
aging cutters, boats, aircraft and supporting infrastructure, 
while building up maritime safety and security capabilities 
essential to meeting present and future demands.
    The overarching goal here is to secure America's borders by 
managing and ultimately reducing risk. It is a very risk-based 
focus that we take, risk in the maritime domain. Doing so 
requires that we identify and intercept threats well before 
they reach our shores by conducting a layered, multi-agency 
security operation, while strengthening the security posture of 
our strategic economic and military ports. As we reduce 
maritime risk we continually balance, and we area always 
involved in this balance equation of each of the Coast Guard 
missions in how we deploy assets so there is no degradation in 
the service that America expects across our missions.
    The 2006 budget will positively impact our ability to 
deliver these type of services, both safety and security, to 
America. We have three priorities as reflected in the Budget in 
Brief document: recapitalizing the Coast Guard, primarily 
through the Deepwater Program, but there are other obviously 
capital initiatives within this budget; implementing or to help 
implement maritime security for homeland security; and 
enhancing mission performance across the board.
    Obviously, the central feature, as you mentioned and 
underscored, Mr. Chairman, is Deepwater. It not only serves to 
recapitalize the Coast Guard, it is the foundation for and 
necessary precursor to implementing the maritime strategy for 
homeland security and enhancing our mission performance across 
the board.
    I would be remiss if I failed to acknowledge the 
outstanding service provided by extremely dedicated Coast Guard 
work force, a total team of uniformed active duty, reserve, 
auxiliary personnel, dedicated civilian employees, and I would 
also add talented contractors, to help us do our job.
    My written statement that you have addresses the Coast 
Guard's many accomplishments of last year. I think from my 
perspective, they are impressive. Looking at those 
accomplishments, it is clear that Coast Guard men and women 
continue to rise to the challenge and deliver results across 
both homeland security and non-homeland security missions.
    Let me just give you up-to-date examples in addition to 
that annual total that is in the written statement. The events 
over the last four days of the past week give a great snapshot 
of the multi-mission Coast Guard at work. In 152 cases in those 
four days, our men and women saved 87 lives in distress. 
Protecting our homeland on both East Coast and the West Coast 
in 12 different cases, they interdicted a total of 308 migrants 
from four different countries who were attempting to enter this 
country illegally.
    In another hand, they investigated a Greek tanker carrying 
over 23 million gallons of crude oil which ran aground in the 
lower Mississippi. They detained four foreign-flag vessels for 
failing to comply with the Maritime Transportation Security 
Act. In two separate cases in the Caribbean, they interdicted 
more than 6,000 pounds of cocaine. That was just this past week 
in four days. It is typical of the type of across-the-board, 
multi-mission service that our Coast Guard is delivering to 
this Nation.
    Obviously, Coast Guard men and women are unwavering in 
their commitment to our service and our country. We still have 
six patrol boats, as you know, over in the Arabian Gulf 
providing service there. We ensure that they are properly 
compensated and that they develop both professionally and 
personally. That goal is my highest priority, my very highest 
priority. The budget before you is about placing the right 
tools, the right equipment, the right policy in the hands of 
our dedicated men and women. They have shown time and time 
again that when we do put the right equipment, right policy in 
their hands, they know just what to do with it.
    With your continued support, I am confident that we will be 
successful with our men and women, with our missions, and in 
service to America, and deliver the robust maritime safety and 
security America expects and that America deserves.
    Thank you, Mr. Chairman, for the opportunity to testify. I 
would be happy to answer any questions you have at the 
appropriate time. Thank you.
    Mr. LoBiondo. Thank you, Admiral.
    Master Chief, welcome.

STATEMENT OF MASTER CHIEF FRANKLIN A. WELCH, MASTER CHIEF PETTY 
               OFFICER, UNITED STATES COAST GUARD

    Master Chief Welch. Good afternoon, Mr. Chairman and 
distinguished members of the Subcommittee. Thank you for the 
opportunity to present my views in support of the service 
members and their families that I am very honored to represent.
    I am very proud of the national contributions made by our 
work force, and with your support we have benefitted greatly 
from the reductions made between military and private sector 
pay gaps of years past. The cumulative positive impact of 
military pay raises, coupled with significant reductions of 
housing expenses, has been both timely, as well as well 
deserved.
    Despite increased operational tempos experienced by all 
components of our work force, our recruiting and retention 
continue to remain impressive. In fiscal year 2004, we slightly 
exceeded our active duty recruiting mission, while making 
significant progress to further diversify our work force. 
Minority accessions totaled 36 percent of our overall 
recruiting efforts, representing an 11 percent increase from 
fiscal year 2003. Our reserve accessions were also equally 
successful.
    Retention rates also remain extremely high. The current 
retention rate within the enlisted work force is 89.6 percent, 
with 1.2 percent of those accessing to our officer corps. While 
there are many factors contributing to our high retention, I 
view our successes as being key and measurable results of our 
Commandant's commitment to our people.
    We have invested to nationally advertise and promote the 
roles and missions of the Coast Guard and we have made great 
strides in providing our people with enhanced professional 
development opportunities. Recent accomplishments include the 
establishment of a senior enlisted command master chief course 
and the introduction of a formal enlisted professional military 
education program, increased throughput of our leadership and 
management school, the establishment of a comprehensive unit 
leadership development program, and continued aggressive 
support of tuition assistance funding. We consider these human 
capital investments key to the continued development of our 
work force and essential for us to remain attractive to those 
contemplating military service.
    We also remain ever mindful of the quality of life needs of 
our people. Housing, for example, remains a chief concern of 
our service members and their families. While BAH reform has 
been successful in absorbing housing costs incurred by our 
people who reside in the private sector, we cannot claim total 
housing success until we can provide our people who reside in 
government-owned quarters with the same desirable and well 
maintained housing found on the economy. To that end, we have 
begun privatization in Hawaii and have privatization 
feasibility studies underway in Alaska, to be followed by Cape 
May, New Jersey.
    Child care is also an expensive and problematic issue for 
our service members with children. High child care costs impact 
our work force throughout all geographical areas, but 
particularly those assigned to location in accessible to Coast 
Guard or Department of Defense child care facilities. We have a 
child care study ongoing to assess the needs of our work force 
and to identify areas in which we may make appropriate 
interventions.
    Medical and dental care concerns remain widespread. The 
majority of our concerns are due to the fact that most of our 
personnel are assigned well beyond the bounds of military 
treatment facility catchment areas, thereby forcing our members 
to seek providers which are becoming increasingly difficult to 
secure. I believe that the principal contributing factor to 
limited provider access is that of provider dissatisfaction 
with health care reimbursement rates. We continue to work with 
the Department of Defense to resolve these challenges, and we 
look forward to the implementation of the new TRICARE contract 
which we hope will rectify some of the shortcomings experienced 
with TRICARE in the past.
    In addition to quality of life concerns, we also remain 
committed to the needs of our people in the workplace, 
specifically and most critically, our responsibility to provide 
our service members with safe, reliable and effective cutters 
and aircraft from which to operate. As I have testified before, 
our front line fleet of cutters continues to deteriorate, 
resulting in significantly degraded readiness capabilities and 
equally degraded crew morale. Fleet readiness issues are having 
an adverse impact on our presence in the maritime domain and 
are causing our good men and women to work even harder to 
overcome the deficiencies associated with our fleet.
    In fact, if it were not for the ingenuity, the 
professionalism, and the sacrifices made of our crews, our 
cutter fleet simply would not be in service today. The well-
predicted demise of our major cutter fleet can no longer be 
overcome at the expense of our people, though we are very 
grateful for your historical support and understanding of the 
urgency of need for our Deepwater recapitalization initiative.
    In conclusion, your continued support of our efforts to 
transform the United States Coast Guard is gratefully 
appreciated. We thank you all for your service, and I thank you 
for the opportunity to speak with you today. I look forward to 
answering any questions that you may have, sir.
    Mr. LoBiondo. Master Chief, thank you very much.
    A little bit of housekeeping. We have been notified that 
around 1:00 p.m., we are going to enter into a series of votes 
that could last up to one hour. So with that in mind, we will 
proceed to the next two members on our panel, and for the 
committee members when we get to the questions, try to think if 
you can narrow it down a little bit. Remember, that we can 
always submit questions in writing, so if you have something 
burning that you want to know about that we are not going to 
have time for, then we will take a pulse when the vote comes 
about whether we continue or come back or not.
    So Chairman Blust, thank you for being here.

   STATEMENT OF STEVEN R. BLUST, CHAIRMAN, FEDERAL MARITIME 
                           COMMISSION

    Mr. Blust. Thank you, Mr. Chairman. Good afternoon, Mr. 
Chairman and distinguished members of this Subcommittee. It is 
a pleasure to appear before you today to present the 
President's fiscal year 2006 budget for the Federal Maritime 
Commission.
    With me today I have two of my fellow commissioners: 
Commissioner Paul Anderson and Commissioner Hal Creel, and a 
number of our staff members who represent our whole 
organization and have done a great job during this last year.
    The President's budget for the commission provides for 
$20,499,000 for fiscal year 2006. This represents an increase 
of 6 percent or just over $1 million over fiscal year 2005 
appropriations. This amount will allow us to continue to 
perform our vital statutory functions and meet the 
responsibilities Congress has entrusted to the agency.
    I would like to highlight for you some of the commission's 
significant accomplishments of the last year. I am pleased to 
advise that on January 19 of this year, non-vessel operating 
common carriers, NVOs, are now permitted to enter into 
confidential arrangements with their shipper customers 
detailing the terms and conditions of their international ocean 
transportation. As you know, the Shipping Act permits ocean 
common carriers, or VOCCs, to enter into service contracts with 
one or more of their shipper customers, and the Ocean Reform 
Act of 1998 provides that these contracts are filed 
confidentially with the commission.
    While NVOs may enter into service contracts and shippers 
with ocean carriers, the Act does not grant the NVOs the right 
to offer service contracts in their capacity as carriers. As 
you might recall from last year's hearing, the commission had 
received eight petitions from seven individual NVOs and one 
trade association requesting relief from this disparity. We 
received at the commission hundreds of comments from the 
industry, as well as Congress. The petitions asked for a range 
of solutions, and it also raised the issue of whether the 
commission had the statutory authority to grant the relief that 
they were requesting.
    During the process last fall, several of the petitioners, 
along with the Transportation Intermediary Association and the 
National Industrial Transportation League, filed a joint 
proposal with the commission suggesting a unified approach to 
this issue which recognized the potential limitations that the 
commission had. After assessing the proposal, the commission 
issued a proposed rule to grant the relief the industry was 
seeking within the parameters of the Shipping Act. In order to 
grant an exemption from the requirements of the Shipping Act, 
the commission found that it did not result in a substantial 
reduction in competition or be detrimental to commerce.
    Based on these criteria, the proposed rule set forth in a 
conditional exemption from Sections 8 and 10 of the Shipping 
Act was put forth. After receiving comments from the industry, 
minor modifications were made to the proposed rulemaking and a 
final rule became effective in January. I am pleased to report 
that we have had a number of the NVOs take advantage of this 
new non-vessel service arrangement approach that they now have 
available. We have, I believe, over 250 NVOs who have signed up 
to take advantage of this new program. It has allowed parity 
and additional competitive activity within the marketplace, so 
it is a very good solution to a situation that had been out 
there for a number of years and is being well received and 
taken advantage of by the industry.
    Also in January, the commission implemented new regulations 
governing agreements among ocean common carriers and marine 
terminal operators. The new rules reduce the burden and cost of 
complying with the agreement filing requirements of the 
Shipping Act, while ensuring that the commission receives the 
information necessary for effective oversight. The rules 
provide the shipping industry with certainty as to the FMC 
requirements, continued flexibility in commercial 
relationships, and sufficient confidentiality for sensitive 
commercial information.
    The provisions governing modifications and exemptions have 
been clarified, including a new exemption for low market share 
agreements among ocean common carriers that do not contain 
pricing or capacity rationalization authority. It has provided 
flexibility and limited reduced requirements on their part, 
while still allowing us to maintain sufficient oversight.
    Finally, with respect to China, last year when I was here I 
advised you that there were several pending proceedings 
concerning China and that the Department of Transportation 
Maritime Administration and the Chinese Ministry of 
Communications had signed a bilateral agreement resolving a 
number of the issues that we had identified. Subsequent to last 
year's hearing, in April the bilateral agreement went into 
effect through the exchange of diplomatic notes. After the 
implementation, the commission requested comments from the 
industry to determine whether the bilateral agreement had met 
their needs and had satisfied their concerns. I am pleased to 
report that the feedback we have received from the industry, 
both from the vessel operators and the non-vessel operators has 
been very positive and what was agreed to in the agreement is 
being upheld. Both the carriers and the non-vessel operators 
are moving forward with opening their branch offices and taking 
over arrangements and taking advantage of the additional 
bonding capabilities that were put forth.
    In conclusion, I would like to thank you for the 
opportunity to testify before the committee today. I would be 
happy to answer any questions that you may have.
    Thank you.
    Mr. LoBiondo. Thank you.
    Commissioner Moravec, thank you for being here.

 STATEMENT OF JOSEPH MORAVEC, COMMISSIONER OF PUBLIC BUILDING 
         SERVICE, U.S. GENERAL SERVICES ADMINISTRATION

    Mr. Moravec. Good afternoon, Mr. Chairman and members of 
the Subcommittee. I am Joe Moravec. I am the Commissioner of 
Public Buildings Service at the General Services 
Administration.
    I am pleased to be here today to discuss the 
Administration's plan to consolidate elements of the U.S. Coast 
Guard on the West Campus of the former St. Elizabeth's Hospital 
in Southeast Washington, D.C. My prepared statement has been 
submitted for the record and should be before you. If you will 
allow me, I will briefly summarize its salient points and 
hopefully shed light on how the plan developed, how it fits 
into our overall plans for meeting the housing needs of our 
Federal agency customers in the National Capital Region, and 
what some of the challenges are to its successful 
implementation.
    GSA became the West Campus's landholding agency of record 
in December of last year. We recognize that the West Campus's 
182 acres was unique. It is the last parcel of Federally owned 
land in the District, with a capacity to house large agencies 
with high-level security requirements. As the Government's 
landlord, GSA has identified a potential need for about nine 
million square feet of such space over the next decade. Just as 
a matter of fact, we turn over about five or six million square 
feet of Federal leases in the National Capital Region every 
year. Our inventory is so large here, so there is no question 
of continuing need.
    The West Campus, given its size and its topography and its 
acres of open green space, providing secure stand-off distances 
from surrounding development, provides us with an unparalleled 
opportunity to build a secure, highly functional state-of-the-
art Federal campus facility at comparatively low cost within 
the District of Columbia, the seat of Government, near Capitol 
Hill and the central business district. It provides GSA with 
the opportunity to fulfill our mission of providing a superior 
workplace for the Federal workers and superior value for the 
American taxpayer.
    Of our customer agencies in need, the Coast Guard was 
deemed a particularly good fit, in fact the best fit for the 
West Campus, given Coast Guard's need for about one million 
square feet of workspace, which they in some cases are in 
desperate need of, given the timing of their expiring leases, 
given their present inadequate, functionally obsolescent 
facilities, especially at Transpoint, which is their main 
building in Southeast Washington, their present fragmented 
configuration in several buildings, which is diminishing 
operational efficiency, and especially given the urgency 
occasioned by their high-priority national security mission, 
and related to this, their highest level installation security 
criteria.
    Also especially given the long-term headquarters nature of 
the proposed facility for which there is no obvious private 
sector equivalent, the Coast Guard emerged as the ideal 
candidate to begin the renaissance that we envision will take 
place over the next decade at St. Elizabeth's West Campus.
    We will be able to meet their exacting state-of-the-art 
specifications that we feel, based on our cost-benefit 
analysis, represents a clear best value for the American 
taxpayer, over an $80 million present-value difference between 
the cost of leasing space for 30 years for the Coast Guard.
    Their requirement gives us an opportunity to design and 
build a distinctive, world-class hundred-year headquarters 
facility, while at the same time preserving and enhancing a 
unique national historic landmark. It also enables us to be, as 
we say, a good neighbor to the District of Columbia. Coast 
Guard will anchor with about 4,000 jobs, ultimately growing to 
over 10,000 Federal jobs as we build out the balance of the 
campus and economic revitalization of the Anacostia area, which 
is entirely supportive of the city's economic development 
plans.
    We plan to work closely with the Coast Guard to continue to 
develop and refine their program of requirements, which will 
translate into building blueprints and ultimately into bricks 
and mortar as part of an overall campus Master Plan that will 
invite input from the city, the historic preservation 
community, and the surrounding neighbors. We hope to break 
ground in fiscal year 2007 and begin moving the Coast Guard in 
in fiscal year 2010, and assuming adequate funding, complete 
the campus in the 2014 time frame.
    We have a number of challenges. The buildings and grounds 
on the West Campus have not been used in years and have been 
somewhat neglected. They have fallen into a state of disrepair. 
There is much deferred maintenance on the site. The 
infrastructure, which is to say the roadways and sidewalks and 
the sewer water utility conduits, lighting, signage, and 
landscaping all need extensive work to support occupancy by the 
Coast Guard.
    Also, the historic landmark status of the property will 
require special handling. Access to the site, both access to 
the two green line Metro stations to the north and south of the 
site, and vehicular access off of I-295 and the Suitland 
Parkway will require some careful consideration.
    However, in summary, we believe that the West Campus 
provides the best, most cost-efficient long-term solution for 
the Coast Guard and other high-security profile agencies that 
need to stay near the seat of Government.
    I would be pleased, of course, to answer, Mr. Chairman, 
whatever questions you or other members of the Subcommittee may 
have.
    Thank you.
    Mr. LoBiondo. Thank you, Commissioner, very much.
    In consultation with Mr. Filner, we are going to try to 
wind up before we have votes so we do not detain the panel for 
an unnecessary amount of time. So with that in mind, I will ask 
the committee members to please be mindful of colleagues who 
would like to ask questions.
    We will start off with you, Mr. Filner.
    Mr. Filner. Thank you, Mr. Chairman.
    Bienvienidos [Greeting given in native tongue]. Thank you 
to all of you for being here. Admiral, we have discussed an 
issue for a long time in public and in private. We have two 
persistent and stubborn people here, so I will keep trying. I 
do not give up.
    As you know, we have seen the capability of the so-called 
HITRON helicopter for drug interdiction. We authorized money 
for you to have another fleet and you did not take it. And now 
we are in the process, I take it, of re-engining these HH-65s. 
The Chairman and I had asked for basically data which would 
justify on a cost-effective basis that decision. I think we 
just got it and we have not had a chance to really read it yet.
    But it seems to me, still, that the data and the advice 
that you had as this decision was being made of re-engining the 
HH-65s rather than going out with a whole new generation of 
helicopters, as I read the ICGS report, it makes the 
recommendation that the dollar differential cost a little more 
for new ones, was more than made up for by an increase in 
capability. I was just wondering why you rejected that 
recommendation.
    Admiral Collins. I would be glad to answer that one, sir. 
We have supplied you with data on the H-65 and we have a report 
coming to you within a matter of a week or so, hopefully, as we 
clear it through the Administration, that details the analysis 
associated with a HITRON squadron in Jacksonville, a HITRON 
squadron on the West Coast, or one in Jacksonville and the 
cost-benefit of that. That is on its way, and I think you will 
see the numbers are pretty convincing.
    The issue at hand is on the 65, we had a fleet of 90-some 
helicopters, 84 operational, 11 support helicopters that had an 
engine that was beyond its day. It was not safe. It was not 
reliable. It was marginally safe, and we had to operate on the 
margins and we had to restrict operations. We have a force with 
a fleet that does the bulk of the Coast Guard's job, and we had 
an engine that did not service our men and women or the people 
that they rescued. They had to be changed. That was the IG, the 
GAO, all looking at it, said that was the absolute right 
decision for us to make.
    We had an existing fleet, the engine was not performing, it 
had to be replaced. We did not have the luxury of waiting for a 
six-or seven-or eight-year time frame to buy a new system. That 
is what it cost, at least that time frame, to define the 
requirement, get the performance specification, go through all 
the major systems acquisition, and get the thing awarded. We 
are looking at that way down the pike. It was a now issue that 
had to be resolved. And so we made the right decision and I 
think, again, most of the audits say that it was the right 
decision.
    So now we have a helicopter, we are investing over $350 
million in, that is structurally very, very sound helicopter. 
We have already received the first two re-engined helicopters 
that are magnificent in performance, great thumbs up from all 
our operators. We are making this investment, let's get the 
return on investment for the taxpayer out of it. That is the 
basic answer there. We were caught up in a time thing and had 
to make the right decision. I think we made the right one.
    Mr. Filner. Again, we have discussed this before. I am not 
sure that the time frame is exactly as you laid out, but we 
have put in a French engine in a French helicopter. There are 
no American engines that do this job?
    Admiral Collins. We of course went out with the 
solicitation, an invitation for information, request for 
information. That was the best fit and the best value.
    Mr. Filner. You went out with a public competition on that?
    Admiral Collins. We went through
    Mr. Filner. You went to the French manufacturer.
    Admiral Collins. No, we went to our Deepwater contractor, 
because this is a Deepwater asset. It has to be integrated in 
the Deepwater system now and into the future. It made great 
sense to use that system as integrated. That is what we are 
paying for them to do is integrate.
    Mr. Filner. I understand that. It looked to me that the 
people who have some vested interest in that decision made the 
recommendation and there was not really a public competition 
over that. We are going to spend $500 million in the re-
engining versus buying in a full transparent competition of 
maybe a new generation. Something does not make sense still 
with me.
    We have tried. We have talked about this for a while. We do 
not have time, giving respect to my colleagues, to really go 
over this. I still think, Mr. Chairman, something is fishy 
about this, if I can use that metaphor. We are spending a lot 
of money and a lot of time re-engining helicopters. There are 
available now a newer generation. There was not an open 
competition as it were, recommendations down the line seemed to 
recommend something else. So I still am going to look further 
into this with your permission and help, Mr. Chairman.
    Thank you.
    Mr. LoBiondo. Thank you, Mr. Filner.
    Mr. Simmons?
    Mr. Simmons. Thank you, Mr. Chairman, and thank you 
gentlemen for your testimony.
    Admiral, it is great to see you. I drive by the Coast Guard 
Academy almost every day that I am in the district, and it 
looks great. I cannot wait for the renovations on Chase Hall. 
It always looks good on the outside, but it needs work on the 
inside. I commend you on that.
    Two issues: one, R&D money. When we transferred the Coast 
Guard to the Department of Homeland Security, the understanding 
was it would be transferred intact. A couple of years ago, or 
at least in the last Congress, R&D money was taken out of Coast 
Guard line-item budget and placed in Department of Homeland 
Security with the idea that the R&D Center would compete for 
those dollars. This subcommittee and the T&I Committee felt 
that that violated that agreement and we restored those dollars 
back into the Coast Guard.
    Now, the Administration has submitted once again where the 
Coast Guard R&D is zeroed out with the idea that we compete. In 
an effort to cover my bases, Mr. Chairman, I have gotten on the 
Homeland Security Committee so I can watch this issue from both 
sides. Kind of like watching tennis, and bouncing back and 
forth.
    Mr. LoBiondo. Well, we considered it solved then, if you 
are on that committee.
    [Laughter.]
    Mr. Simmons. Well, I will be your lead man because I 
believe those dollars ought to go to Coast Guard. Do you have a 
comment to make on that issue?
    Admiral Collins. I think the intent here within the 
Administration is to try to build a very cohesive, synergistic, 
coordinated approach to R&D within the Department of Homeland 
Security. Certainly, that is the mission of the Under Secretary 
for Science and Technology, is that over-arching kind of 
coordination, let's make sure we are all rowing in the same 
direction with R&D. I think the intent is right there.
    From our perspective, I have absolutely no anxiety level 
that we would not get roughly $24 million on a reimbursable 
basis from them. We are in the process of developing a 
memorandum of agreement between us that will talk about that. 
It prescribes certain amounts of that money that would be 
allocated for homeland security and non-homeland security-type 
activity. So I really have very, very low anxiety that we would 
run into trouble.
    Having said that, we can work this either way that the 
committee feels is appropriate. The one little snag is the 
money that we get from the Oil Spill Liability Trust Fund. 
Right now, under a departmental budget for R&D that gets 
reimbursed to us, that roughly I think it is $3.5 million that 
is sourced from that, cannot be sourced from the department. So 
that is one wrinkle in this new arrangement.
    Mr. Simmons. Which leads me, Admiral, to believe that what 
we should do is have a line item for Coast Guard R&D and put it 
in for Coast Guard R&D and then let the R&D Center compete with 
DHS for those other projects. In other words, we need to look 
at it in that fashion.
    Admiral Collins. Sir, I would not argue with you one bit on 
that.
    Mr. Simmons. Great. In conclusion, and I will let my other 
colleagues speak, I agree completely with Mr. Filner in his 
comments. Pratt & Whitney had an engine available. Pratt & 
Whitney is obviously a U.S. company and not a French company. I 
guess my feeling is that when those Pratt & Whitney workers 
work on an engine for a Coast Guard helicopter, they are 
thinking of the young men and young women that are on that bird 
and they want them to be safe. They want them to be safe in 
their mission. They want them to come home safe because those 
young men and women are Americans. It is their friends' and 
neighbors' children. I am not sure that the folks over in 
France working on that engine have the same feeling about it. 
So I concur with Mr. Filner on that subject and I would be 
happy to join him in looking into that issue further.
    I yield back, Mr. Chairman.
    Mr. LoBiondo. Okay. These votes came up a little bit sooner 
than we thought. We are going to go to Mr. Taylor next, but I 
am going to ask the committee how many members want to come 
back after votes, or can come back, if we should hold the 
panel.
    Mr. Taylor. Mr. Chairman, I will come back. If you do not 
mind, I would prefer to ask my questions when we come back.
    Mr. LoBiondo. For the panel then, I apologize, but we are 
going to ask you to come back. We will break for the votes and 
we will be back as soon as we can. We will stand in recess for 
the votes. Thank you.
    [Recess.]
    Mr. Mack. [Presiding] The committee is now back in session. 
We left off with questions. I believe Mr. Taylor, if you are 
ready?
    Mr. Taylor. Thank you, Mr. Chairman.
    I want to thank you for sticking around. I know it has been 
a long day for you.
    Two things I would like to ask you. One is I know you have 
a very ambitious shipbuilding plan in place, and I am sure from 
past experience know that you need the ships. The recent 
announcement by the Navy of the possibility and quite possibly 
probability of reducing the buy on the DDX program and the 
possibility of going to a single-source program could, if 
enacted, absolutely wreak havoc on the Nation's maritime 
shipbuilding industrial base.
    My question is, given that very real possibility, has the 
Coast Guard given much thought to the possibility of coming 
before this committee or coming before the appropriators and 
saying, we can help preserve that industrial base during this 
lull caused by the delay of the DDX, the reduction of the DDX, 
by expediting the purchase and building of some ships that I 
know I need anyway. Chances are if they are built in more of a 
series, that there will be some economies of scale that you 
might not have had otherwise. A, have you looked at that? I 
know it is a rather recent phenomena coming out of the 
Secretary of the Navy's office, but it does indeed create an 
opportunity for you. That would be question number one.
    The second question is, we have been working with your 
office, unfortunately with varying degrees of lack of success, 
on trying to have a navigation project on the Pearl River in 
Mississippi included in the Truman Hobbs Program. One of the 
hurdles that we are looking at, and it is a fair observation on 
the part of the Coast Guard, as they say, under existing law, 
we do not really need to replace this swing bridge which is the 
shortest path to the sea through an authorized channel. Well, 
there is an alternative that although it is not an authorized 
channel, you do have an alternative, and therefore Truman Hobbs 
really does not apply.
    Two things come to mind. The alternative is through an 
extremely shallow lake that requires periodic dredging by the 
Corps at enormous expense. The alternative I would guess the 
Corps could put a pencil to and would show that over the years 
will cost us a heck of a lot longer to maintain that 
unauthorized channel than to maintain the channel which is the 
quickest and shortest path to the sea.
    So what I am asking for, and would hope that you would 
consider, is a willingness on your part or on the part of the 
Coast Guard to consider some changes to the Truman Hobbs Act 
that would take into account all of the factors, including 
environmental, including long-term dredging at the citizens' 
expense by the Corps of Engineers, environmental impacts, 
quickest and safest route to the sea. I think it has been some 
time since that Act has been amended. I would just ask if you 
would be willing to work with us on that. I see a nod on that 
one. I will take that as a yes.
    On the first one, your thoughts on whether or not we should 
try to alleviate some of the problems that could be caused by 
the small buy on the DDX by expediting the delivery of the 
ships that we know you need.
    Admiral Collins. Of course, we do have an ambitious 
program, as you have stated. We are subject to the same budget 
constraints and downward pressures that the Department of 
Defense is, maybe more so, in our program. I feel very, very 
fortunate to have the Deepwater Program submitted at the level 
it was in the 2006 budget that shows, given on a relative 
basis, what is happening across the national budget, the 
Federal budget, pretty sound support from the Department of 
Homeland Security and the President and OMB on our program.
    What we can do in the out-years is a function of what we 
can fit in, obviously, the Federal budget in terms of capacity. 
A year or so ago that we submitted to Congress, I think it was 
the first report submitted by the new department as a matter of 
fact, several years ago, a report to Congress on the ability of 
Deepwater to be executed in a more rapid way, more compressed 
way, and did the Nation have the shipbuilding capacity to do 
it, and was it a return on investment thing that made sense.
    We submitted that report over and said the answer to the 
first question is yes, the shipbuilding industry in the United 
States was talented and had the capacity to do it. And second, 
that it made sense from getting a capability sooner that this 
Nation needed, you know, the capability that Deepwater builds 
give us, which is a network-centric, much more capable, and 
particularly C4-ISR business.
    So that report is up here on the Hill, and I think kind of 
speaks for itself on what we could do. Right now, how fast and 
aggressive we can be with Deepwater is a function of the over-
arching priorities in the Federal Government. I think for any 
agency in this government over the next couple of years it is 
going to be a challenging budget time.
    So again, to get $966 million in it, I am absolutely 
thrilled that we are at that level. I think, of course a lot of 
the shipbuilding is going to happen down in the beautiful State 
of Mississippi in Pascagoula.
    Mr. Taylor. What a coincidence.
    Admiral Collins. What a coincidence. So we are thrilled 
with that and we have the keel being laid on the national 
security cutter next month, the first one. We have the middle 
cutter being designed and that is robustly funded within the 
2006 budget to get that designed and to get that production 
going, and ultimately build 25 of those, 25 to 28 depending on 
the ultimate plan.
    So I think we are doing pretty good with that. Clearly, 
Deepwater does offer an opportunity to level out the ups and 
downs of the production curve. As you know, when you have more 
downs than ups, you pay more and get less. That is not a 
pejorative statement on any of the shipbuilders, but the 
burdened overhead rate goes up. When you have less production, 
the head-rate goes up. So you pay more and you get less. So it 
is to the advantage of the taxpayers, the advantage of the 
Federal Government, it is the advantage to the people that are 
building ships to try to dampen out those big swings. Deepwater 
does offer an opportunity to do that.
    Mr. Taylor. To what extent, Mr. Chairman, if you do not 
mind, to what extent, I deeply regret that there is going to be 
another round of base closure. Based on what I am seeing with 
the B-22,the F-22, the littoral combat ship, the DDX and the C-
130J, which are all being either reduced or cancelled, I just 
have a gut feeling this is going to be the mother of all BRACs. 
I think it is going to end up being somewhere between one out 
of three and one out of four bases in America.
    To what extent is the Coast Guard involved as some of these 
bases, and there are going to be some nice bases closed, I 
regret to say. To what extent are you allowed to look at that 
and get first pick, should some other government entity no 
longer want that installation? Governors Island comes to mind, 
but by the time the Coast Guard got it, it was pretty worn out. 
There are some new bases that are going to----
    Admiral Collins. We do have an opportunity, as part of the 
process. The problem is that most of the Department of Defense 
facilities, quite frankly, the scale of their services and ours 
is like we are on a different planet. The scale of their bases 
are significant. It is more infrastructure than we can afford 
or manage. It is a mismatch.
    Mr. Taylor. Home port Pascagoula come to mind, which is, 
again, brand new housing. Some of the offices still have 
plastic on the furniture. I mean, it is going to be great for 
someone.
    Admiral Collins. As you know, we have just moved three 
additional ships to Pascagoula. Two of them are already there, 
another one will be there in the next year or so. Those are PC-
179s that transferred to us from the Navy. We have a medium 
endurance cutter there in Pascagoula, and we have a Coast Guard 
station there. It is a great fit. I could not agree with you 
more, Congressman, that the people love being there. It is a 
reasonable cost of living. Mississippians are friendly. They 
like their Coast Guard. It is a great place to be for us.
    We will look at opportunities over the years ahead, if 
there are opportunities there for a larger footprint. But 
again, most of the scale of Navy bases come with a big price 
tag when you own a whole bunch of real estate. It is an 
expensive proposition for us.
    Mr. Taylor. The war in Iraq, what, if any, effect has that 
had on your recruiting and retention?
    Admiral Collins. I just got back from, both the Master 
Chief and I, several weeks ago from visiting our men and women 
in the Arabian Gulf. We got a little sea pay. We were underway. 
We got a little wet. We got off-shore on the patrol boats 
there. Our men and women are doing incredibly. They are highly 
regarded by the other services, very, very professional, and 
regarded as so by the Navy, Army and everybody else. They are 
doing a tremendous, tremendous job. We are very, very proud of 
them. Their spirits are incredibly high. They understand the 
mission they are doing is important. They are there for about 
12 months, then they rotate back. They are very proud of what 
they are doing. By the way, they get their first assignment 
choice coming out of theater, so that makes them a little happy 
at tail's end.
    They are well-supported. We are taking care of them. We are 
taking care of the boats very well. I think the message back to 
the rest of the force is, this is important duty, this is good 
duty, meaningful duty. The Coast Guard has never been more 
relevant to this Nation, whether it is overseas or at home. And 
that is the message. It is influencing our retention rate, 
Congressman.
    Mr. Taylor. I hope positively. That is what I was trying to 
get at. Is it a positive effect or negative effect?
    Admiral Collins. I think it is a positive across the board. 
We did not hear one negative, or at least I did not hear. Maybe 
they were afraid of talking negative to me, but I did not hear 
one negative vibe or see one negative vibe coming from our 
forces there.
    The other very attractive thing, quite frankly, is that we 
are going to have, those junior officers and enlisted folks on 
those boats, when they come back, their resume is much fuller. 
Their experience set is much fuller. They are going to be much 
more valuable Coast Guard folks that have just a broader view 
of the world, and engaging with the rest of the services and 
the coalition folks. I think they are going to be incredibly 
valuable Coasties for a long time.
    Mr. Taylor. Last question, Mr. Chairman.
    Admiral Collins. I did not answer your question on the 
waterway and the Truman Hobbs, but we will be glad to work with 
your staff, sir, to see what is the art of the possible on 
that.
    Mr. Taylor. Okay, two things. The Special Forces have a 
program run mostly through charitable organizations, which is 
called the Special Warrior Fund, where corporations or 
individuals contribute to see to it that if the child of a 
Special Forces person, a Special Forces person dies while on 
active duty. I do not know all the details, but they know that 
their kid is going to go college. That is the purpose of this 
fund. A, does the Coast Guard have something similar? And B, I 
was a bit surprised to find out that in those circumstances, if 
a member of the United States Armed Forces is killed in the 
line of duty, that they cannot transfer the educational 
benefits that they earned, that that cannot be transferred to 
their children. That troubles me. How would you, A, if the 
question was, do you have a similar organization, of course 
then we are counting on charity, which as you know, is a roller 
coaster. How would you feel about amending it so that those 
benefits could be transferred so that that young Coast 
Guardsman knows, God forbid something bad happens, that his 
kids are going to college?
    Admiral Collins. I think it is a reasonable approach, 
Congressman, and it seems very, very attractive and something 
that we should provide our members. Maybe I would defer to the 
Master Chief, because you are familiar with the program in 
question and if it applies to us as well.
    Master Chief Welch. If I may, Mr. Congressman, I, on behalf 
of our work force, think that is a wonderful, wonderful and 
much-needed idea. Our men and women work hard. Our men and 
women sacrifice their lives for the good of this country. It is 
my opinion that we owe them everything that we possibly can pay 
them for their service. In addition, I think we also would be 
well-served to not only offer dependents the Montgomery GI bill 
benefits. I think we would also be well-served to include 
educational benefits for some 65,000 active duty members today 
that do not have educational benefits.
    Mr. Taylor. Why is that, Master Chief?
    Master Chief Welch. Most of the situation, Mr. Congressman, 
results from people entering the Coast Guard on what we call 
the VEAP era, Veterans Educational Assistance Program, who were 
advised or otherwise did not accept the educational benefits 
offered to them, and therefore were left out Montgomery GI bill 
eligibility.
    Mr. Taylor. I am making a request of you. As a former First 
Class Petty Officer, this is kind of fun, but Chief, do you 
think you could get me a recommendation on that, get your 
lawyers to? That needs to be addressed.
    Admiral Collins. We will get our staff looking at that and 
we will do a staff-to-staff thing, sir.
    Mr. Taylor. Okay. Thank you very much. Unfortunately, I 
have to go to Armed Services, but thank you for sticking 
around.
    Admiral Collins. Thank you, sir.
    Master Chief Welch. Thank you.
    Mr. LoBiondo [Presiding]. Thank you.
    Mr. Fortuno, you are recognized for questions.
    Mr. Fortuno. Thank you, Mr. Chairman.
    Admiral, I visited with some of the men and women you have 
in the San Juan operations, and I commend you for the work they 
are doing. Actually, I was accompanying Chairman Young last 
Friday, visiting, and I must tell you that we both were very 
much impressed by what we saw they are doing. They are 
certainly doing more with less, but they are doing it because 
they are definitely committed to their job and to the defense 
of our Nation.
    Among other things, we saw other than ice-breaking. They 
pretty much do everything else down there. We had a special 
interest in the drug and migrant interdiction operations in the 
area. The information they gave us is that 45 percent of the 
migrant interdiction efforts of the Coast Guard nationwide are 
performed out of the San Juan operations. In your presentation, 
you say that there were 11,000 undocumented migrants that you 
intercepted last year. I have numbers for fiscal year 2004 that 
tell me that out of the San Juan operations, about 8,000 were 
intercepted out of San Juan operations, so the numbers do not 
necessarily match. I would like to understand better. It does 
not have to be now, but later on if possible to get some 
information on this.
    Admiral Collins. We would be glad to provide you our best 
records that we have relative to the outcomes out of San Juan 
and others, and give you a full profile of what that 
represents.
    Mr. Fortuno. The other item that we discussed having to do 
with migrant interdiction is that originally we would get 
mostly migrants from the Dominican Republic. Now, we are 
getting a lot of them from Cuba, the People's Republic of 
China, the Middle Eastern countries. We do have a serious 
national security concern that this may be a wide open porch in 
the backyard. Once they get in San Juan, they are in Kansas. 
That is just the way it is.
    I do have a concern, and certainly I am sure that whomever 
prepared the maps, then leave the U.S. VI and Puerto Rico 
purposely, it is just that it is included in one of the 
regions. But I was concerned not to see the U.S. VI and Puerto 
Rico, given the fact that this operation covers from the 
Dominican Republic to Haiti, all the way down to the 
Venezuelan-Colombian coast, with not just a migrant 
interdiction, but a drug interdiction operation that they are 
carrying out. I must tell you, I commend you again for the job 
that they are doing. We went out on a cutter. They do the best 
they can with the equipment they have there, and they are very 
proud of the job they are doing.
    Admiral Collins. Thank you. Clearly, the area in and around 
San Juan, the windward pass, every day I get an operational 
brief and there is a force lay-down of where our ships and 
planes are focused. I can tell you that that area has recurring 
Coast Guard presence. That is where the business is growing, 
the illegal movement of people business is growing. We have a 
very robust presence there. We will continue to have a very 
robust presence there.
    The 110-foot patrol boat, the 123, the extended 110-foot 
boat, our medium-endurance cutters in particular and 
helicopters. We have what is called Op Bah, Operations Bahamas 
and Turks out of Great Inagua. We have a forward operating base 
in Great Inagua and a recurring helicopter presence there that 
gives us that good forward-operating location for our 
helicopters.
    So we are dedicated to a robust presence. We know those are 
where the threat vectors are coming from, whether it is moving 
illegal goods or illegal people or counter-drugs. Those are the 
primary threat vectors. We have, again, a robust presence on a 
recurring basis.
    Our Deepwater, I keep coming back to this because it really 
is our future, the capabilities that Deepwater will give us, we 
will be even more effective than we are now. We will have 
vertical unmanned airborne vehicles, two to each one of our 
ships. They will give us the eyes and ears to have total 
visibility of those kinds of things, those kind of threat 
vectors, along with helicopters and high-speed boats, a 
coordinated package. So we are excited about the future, a 
little impatient about these capabilities, but in the meantime 
we are investing in our Legacy systems, the existing systems, 
to make sure that our men and women have equipment that runs 
and works. I tell you, they are doing great things. I agree 
with you. I continue to be impressed every day with our men and 
women.
    Mr. Fortuno. Thank you.
    Admiral Collins. Thank you for your comments.
    Mr. Fortuno. I would like to switch to another topic. That 
has to do with security, having to do with the cruise ships 
that visit some of our ports. In the case of San Juan, we are 
talking about 1.3 million passengers a year on those cruise 
ships. Ninety-plus percent of those passengers are U.S. 
citizens. This is happening on U.S. soil. I would like to 
understand better what is the Coast Guard doing in terms of 
managing that threat, which is complicated further by what I am 
saying, actually. The numbers for illegal migrants coming from 
countries other than Caribbean countries in the last couple of 
years has skyrocketed, according to the numbers that we were 
given. It is starting to include Middle Eastern countries, as 
well as the People's Republic of China. So that is a concern 
that I have, and I wonder if you have any comments on that.
    Admiral Collins. The large-capacity cruise ship, of course, 
is a popular phenomenon in the United States, a popular 
business line, an important part of the Southeastern United 
States economy. Heck, it is important to the State of Alaska, 
by the way, because the cruise ship industry in Alaska is big.
    There are large numbers of people that move on those cruise 
ships. On a given day in the Port of Miami, on a Friday, and 
you see the five huge cruise ships lined up with up to 3,000 
passengers a pop. You know that they could be vulnerable or 
targets.
    So that security is important. We have been attentive to 
that from day one. One of the interesting comments, of all the 
aspects of the maritime community on 9-10-01, the one that had 
the most advanced security feature to it, a security regime, 
was the cruise industry. That happened from an Act that was 
passed in the late 1980s as a result of the Achille Lauro. That 
spawned legislation and enhanced security requirements for 
cruise ships.
    So when 9/11 happened, we already had a security regime in 
place and a relationship with the large-capacity cruise ships 
to build off of. So it was more advanced than other elements of 
the maritime community. Immediately, we invoked 100 percent 
screening of baggage and passengers. We had three levels of 
security, we called them maritime security condition one, two 
and three that can be invoked at any time. We oversee the 
security operation. We do not do the screening. It is done by 
the private sector, but we oversee it from an oversight 
perspective. The companies, I think, are pretty aggressive and 
responsive to the security requirements.
    We spend a lot of time worried about their waterfront 
security in places like Miami and San Juan and others, to 
ensure that the right waterfront protection is there when they 
are in port, and the necessary patrols and so forth. We do 
inspections of those vessels, not only from a safety 
perspective, but also a security perspective. The crew lists 
are vetted. The passenger lists are vetted.
    So I think they are getting pretty substantial coverage. We 
continue to look at the threat, at the risk, and to put the 
appropriate amount of resources to the threat and the risk as 
it evolves.
    Mr. Fortuno. Thank you, Admiral.
    I yield back my time.
    Mr. Mack. [Presiding]. Thank you.
    Admiral, Master Chief, Chairman and Commissioner, I will 
never forget this day, because I have not been here 60 days 
yet, and look at me.
    [Laughter.]
    Admiral Collins. It is great when you are good, Mr. 
Chairman.
    Mr. Mack. Who knew?
    I just, for a point of reference, I am from Southwest 
Florida. I appreciate everything that the Coast Guard does to 
protect our shores and to protect this country. So thank you 
for the work that you do.
    I do have a question that I would like to ask you, and just 
again for a point of reference. I know this is something that 
is pretty important to the Chairman as well. The Coast Guard 
and Maritime Transportation Act of 2004 authorized the Coast 
Guard to establish a pilot program to develop and test 
procedures to improve the processing and issuance of merchant 
mariners documents. Currently, there are some zones, I guess, 
examination zones that they have to travel to, and there is 
quite a bit of distance in some cases where they have to 
travel.
    There are also, with the advancements of technologies 
recently, not recently, really, but with the advancements of 
technologies and private companies now offering this type of 
solution, has the Coast Guard or the Department of Homeland 
Security budgeted funding to carry out this pilot program? Has 
the Coast Guard taken steps to improve the process by which the 
mariners documents are issued? And has the Coast Guard 
investigated the possibility of allowing merchant mariners to 
submit necessary information and documentation using Internet-
based systems and technologies?
    Admiral Collins. A great set of questions, and a lot of the 
details, I would be glad to brief you and the Chairman on. The 
answer to a lot of those questions is yes, largely for security 
concerns. We had some fraudulent document concerns about 
mariners from a security perspective, and it launched on 
coordination with the FBI and others an extensive review of all 
merchant marine documentation. We did hundreds of thousands of 
reviews and everything else, to sort out the fraudulent part.
    The reason I mention that, it launched us in a whole 
process reexamination of the merchant marine document process. 
A tiger team put together prototypes, ES launched to see how we 
could tweak it. We submitted to the Appropriations Committees 
in both the House and the Senate an unfunded priority list. It 
is a new phenomena, a requirement in last year's bill for me to 
support the high priority things that did not make it into the 
budget, but still remain high priority. Obviously, the 
President's 2006 budget represents our highest priorities. 
These are the next tier.
    On that, you will see merchant marine documentation 
initiative, with significant FTP people and dollars associated 
with it. So at this point, the robust funding of the process 
improvements that we have examined, and we have a list of 
process improvements we would like to launch, are subject to 
that out-year initiative.
    We also have a plan to centralize some of the functionality 
embedded in our regional exam. We have these regional exam 
centers around the country. We have done a study that says some 
of the functionality of that lends itself to centralization, 
where we could rip it out, consolidate it and make it central, 
but leave the personal contact part back at the centers, make 
that more robust, and make the central processing more robust, 
and lean on information technologies to help you out.
    So that consolidation plan is in the works. It is part of 
this out-year thing that we would like to do. I think it is a 
good return on investment. It is the right thing to do. It is 
the subject of a future budget, obviously.
    Mr. Mack. Sorry, real quick. Are you talking about the 
pilot program or what you have learned from the pilot program 
taking forward?
    Admiral Collins. The pilot program, pilot initiatives are 
underway. We owe you a report on that, as I recall, too. But 
this would be the full restructuring of the program that I 
think has safety benefits, security benefits, efficiency 
benefits that will ultimately accrue. We would be more than 
happy to give the Chairman and committee members a brief on 
that plan. In response to direction from Congress, they wanted 
to do a cost-benefit on us, to consolidate and centralize this 
thing, particularly whether we would do it in Washington or we 
would do it Martinsburg, West Virginia at the operations center 
we have out there. We have submitted that already up on the 
Hill that shows you the cost-benefit and what would accrue.
    So the bottom line, we have done a lot of thinking and a 
lot of work on this already. We have done a lot of process 
improvement. We have incorporated the process improvement where 
we can, where it does not involve a lot of money.
    We are also looking at some fundamental changes through 
regulatory effort of the document itself, you know, what the 
document is and what is embedded in it, and how it is used.
    So we would love to give the Chairman and yourself a brief 
on that whole structure, and so you get a good feel with the 
breadth and dimension of the effort. Quite frankly, 
Congressman, the Coast Guard and the Nation is under-invested 
in this particular process and I think let it get into a state 
of disrepair. It is one of these back-office things, a function 
in the back office and maybe did not get the front office 
attention it should. I think what turned the light bulb on for 
us was the security dimensions involved. You want to make sure 
it is not only to document the experience and the training and 
the capabilities of the member, but also is it the member who 
has said he is, and is it a valid seafarer, et cetera.
    So that security dimension has created a greater sense of 
urgency about this issue for us.
    Mr. Mack. Certainly with the advances in technology and 
imaging and everything, and authenticating, the technology is 
there and it is just working it into the system and getting it 
funded is what I am hearing.
    Admiral Collins. Yes, sir.
    Mr. Mack. Okay. Thank you very much.
    If there is no further business, the Chair again thanks the 
members of the Subcommittee and the witnesses. The Subcommittee 
stands adjourned.
    [Whereupon, at 2:58 p.m. the subcommittee was adjourned, to 
reconvene at the call of the Chair.]

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