[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                         
                         [H.A.S.C. No. 114-116]

                                 HEARING

                                   ON

                   NATIONAL DEFENSE AUTHORIZATION ACT

                          FOR FISCAL YEAR 2017

                                  AND

              OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

         SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES HEARING

                                   ON

                LOGISTICS AND SEALIFT FORCE REQUIREMENTS

                               __________

                               HEARING HELD
                              MARCH 22, 2016


                                     
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             SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                  J. RANDY FORBES, Virginia, Chairman

K. MICHAEL CONAWAY, Texas            JOE COURTNEY, Connecticut
BRADLEY BYRNE, Alabama               JAMES R. LANGEVIN, Rhode Island
ROBERT J. WITTMAN, Virginia          RICK LARSEN, Washington
DUNCAN HUNTER, California, Vice      MADELEINE Z. BORDALLO, Guam
    Chair                            HENRY C. ``HANK'' JOHNSON, Jr., 
VICKY HARTZLER, Missouri                 Georgia
PAUL COOK, California                SCOTT H. PETERS, California
JIM BRIDENSTINE, Oklahoma            TULSI GABBARD, Hawaii
JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
RYAN K. ZINKE, Montana               SETH MOULTON, Massachusetts
STEPHEN KNIGHT, California
STEVE RUSSELL,Oklahoma
               David Sienicki, Professional Staff Member
              Phil MacNaughton, Professional Staff Member
                        Katherine Rember, Clerk
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Courtney, Hon. Joe, a Representative from Connecticut, Ranking 
  Member, Subcommittee on Seapower and Projection Forces.........     2
Forbes, Hon. J. Randy, a Representative from Virginia, Chairman, 
  Subcommittee on Seapower and Projection Forces.................     1

                               WITNESSES

Dilisio, F. Scott, Director, Strategic Mobility/Combat Logistics 
  Division (OPNAV N42), Office of the Chief of Naval Operations..     7
Jaenichen, Paul N., Sr., Maritime Administrator, U.S. Maritime 
  Administration.................................................     3
Lyons, LTG Stephen R., USA, Deputy Commander, U.S. Transportation 
  Command........................................................     5

                                APPENDIX

Prepared Statements:

    Courtney, Hon. Joe...........................................    35
    Dilisio, F. Scott............................................    54
    Forbes, Hon. J. Randy........................................    33
    Jaenichen, Paul N., Sr.......................................    37
    Lyons, LTG Stephen R.........................................    44

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    [There were no Questions submitted post hearing.]
 
           LOGISTICS AND SEALIFT FORCE REQUIREMENTS

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
            Subcommittee on Seapower and Projection Forces,
                           Washington, DC, Tuesday, March 22, 2016.
    The subcommittee met, pursuant to call, at 2:04 p.m., in 
room 2212, Rayburn House Office Building, Hon. J. Randy Forbes 
(chairman of the subcommittee) presiding.

  OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE 
     FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON SEAPOWER AND 
                       PROJECTION FORCES

    Mr. Forbes. Before I begin my opening statement, let me 
just say that just last night I was briefed on the Farsi Island 
incident in January involving two U.S. Navy riverine boats and 
was deeply disturbed by what I heard. I was disturbed not just 
by the details of the incident itself, but about what they 
imply about the training and materiel readiness levels of our 
forces on the front lines and about our ability to deter 
Iranian aggression and malicious behavior in the Middle East.
    Unfortunately, I think this administration's policies have 
seriously undermined both with grave implications for our men 
and women in uniform and our national security.
    So I want to take this time to encourage my colleagues on 
this committee and throughout the rest of the House to get the 
briefing on this important topic.
    And today, the subcommittee convenes to receive testimony 
on logistics and sealift fleet requirements.
    I want to welcome our distinguished witnesses and thank 
them for the time and effort they expend on this most important 
issue. Gentlemen, we thank you for being with us today and for 
everything you do to defend our nation.
    Since its earliest days, America has been a seafaring 
maritime nation with a robust merchant marine. Today, merchant 
ships carry around 90 percent of everything with the total 
amount having more than tripled since 1970. This seaborne trade 
fuels our economy and creates critical links with the global 
commons.
    Unfortunately for our national security, however, this 
seaborne trade is being increasingly outsourced to other 
nations and our own merchant fleet is in decline.
    Between the years 2000 and 2014, our U.S. commercial fleet 
has shrunk from 282 vessels to 179, a reduction of almost 40 
percent. This commercial fleet reduction is increasingly 
problematic for the U.S. military and specifically for the U.S. 
Transportation Command [TRANSCOM] because these vessels support 
the military's maritime lift requirements and their crews 
provide the manning for military's mobilization forces 
according to MARAD [U.S. Maritime Administration] and 
TRANSCOM's assessments.
    A reduction in the overall U.S. commercial sector has 
severely jeopardized our ability to sustain any level of 
prolonged military logistics support.
    Furthermore, we are perilously close to not having 
sufficient mariners to support even the initial mobilization of 
our Navy's Ready Reserve Forces.
    Unfortunately, the administration's fiscal year 2017 budget 
request accelerates this decline and weakens our military. The 
administration has proposed reducing funding for the Maritime 
Security Program [MSP] by almost 20 percent. Such a reduction 
will, in my view, undoubtedly reduce the size of our commercial 
fleet below TRANSCOM's military requirements and reduce our 
military surge capacity.
    I look forward to better understanding the administration's 
proposal, but I am determined to change this dangerous 
trajectory.
    Overall, I am concerned that this administration does not 
fully appreciate the connection between the health of our 
merchant fleet and our national security. Proposed changes to 
the Food for Peace program continue to hurt our farmers and our 
mariners.
    While these changes would have economic impacts, this 
subcommittee is focused today upon its harmful impact to 
military readiness and the security of our nation.
    In 1897, the first president of the Naval War College said 
that both from the military and economic view, an extensive 
marine commerce is a primal necessity to a country aspiring to 
be a naval power. In the years since, America has become the 
greatest naval power the world has ever seen.
    But we must not let further decline in either our Navy 
fleet or our maritime commerce undermine our position.
    I now turn to my good friend and colleague, the ranking 
member of the subcommittee, Congressman Courtney of 
Connecticut, for any remarks he may have to make.
    [The prepared statement of Mr. Forbes can be found in the 
Appendix on page 33.]

     STATEMENT OF HON. JOE COURTNEY, A REPRESENTATIVE FROM 
   CONNECTICUT, RANKING MEMBER, SUBCOMMITTEE ON SEAPOWER AND 
                       PROJECTION FORCES

    Mr. Courtney. Thank you, Mr. Chairman.
    And again, as someone who attended that briefing yesterday, 
I would join you in recommending to our colleagues that they 
follow up with the Navy to get that briefing.
    Again, I don't want to just rehash a lot of the comments 
that you made just a moment ago because, particularly in terms 
of the Maritime Security Program, it is going to be, I think, 
an issue that our subcommittee is going to look at with this 
year's defense bill and for all the reasons that you set forth.
    So again, rather than, you know, rehashing that comment, I 
guess the other issue I just would like to highlight in my 
opening remarks, and hopefully we will have a good dialogue 
today with an outstanding panel of witnesses, is the issue of 
maritime training requirements, because obviously we have got a 
workforce issue here in terms of kind of refreshing an aging 
workforce and in terms of, you know, the long view. This is 
really critical in terms of getting that right.
    According to MARAD's own information, the oldest ship in 
the maritime training program that, again, is critical to 
training this next generation, the TS Empire State attached to 
SUNY [State University of New York] Maritime College is 55 
years old and is expected to end its service life in 2019.
    Again, according to MARAD, loss of this ship alone without 
replacement would cause a loss of 36 percent of the existing 
training ship capacity needed for mariner education, portrayed 
``as a major setback to meet the rising national demand for 
mariners by the agency in its 2017 budget request to 
Congress.''
    I want to applaud Administrator Jaenichen for his efforts 
to alert Congress to this issue. And again, we look forward to 
working with him as we put together our Seapower mark in the 
coming weeks to make sure that really we give these critical 
institutions the tools that they need to make sure that 
changing requirements in terms of what is needed out there are 
going to be met, because failure to do that is just going to 
create a cliff that really will ripple through our entire Armed 
Forces if we don't get it right.
    So again, I want to thank the witnesses for being here 
today. I look forward to your testimony.
    Again, I will request that my written remarks, prepared 
remarks be admitted for the record.
    And yield the floor.
    [The prepared statement of Mr. Courtney can be found in the 
Appendix on page 35.]
    Mr. Forbes. Without objection, they will be so entered.
    And now we are pleased to have such a distinguished panel 
with us today. We have the Honorable Paul N. Jaenichen, Sr., 
Maritime Administrator for the U.S. Department of 
Transportation.
    Thank you so much for being with us.
    Also, Lieutenant General Stephen Lyons, U.S. Army, Deputy 
Commander of U.S. Transportation Command.
    General, it is always a pleasure to see you and thank you 
for being here.
    And then Mr. F. Scott DiLisio, Director, Strategic 
Mobility/Combat Logistics, that is a whole mouthful to be able 
to say, Director, but thank you, for the Office of Chief of 
Naval Operations.
    And we, as Mr. Courtney and I told you before, we just 
appreciate so much your service to our country, but we also 
thank you for being with us today.
    And Mr. Jaenichen, I think you are going to start us. And 
we look forward to any remarks that you may have.

 STATEMENT OF PAUL N. JAENICHEN, SR., MARITIME ADMINISTRATOR, 
                  U.S. MARITIME ADMINISTRATION

    Mr. Jaenichen. Good afternoon, Chairman Forbes, Ranking 
Member Courtney, members of the subcommittee. Thank you for the 
opportunity to discuss the U.S. merchant marine and the support 
it provides for our nation to meet the Department of Defense 
logistics and sealift requirements.
    The U.S.-flag fleet of privately owned, commercially 
operated vessels, along with government-owned vessels, provide 
sealift surge and sustainment capacity to move equipment and 
materiel to globally project our Armed Forces and Federal 
agencies when needed, where needed, during times of conflict, 
humanitarian crisis, and natural disasters.
    Supporting these capabilities are the Maritime 
Administration's National Defense Reserve Fleet, Ready Reserve 
Force, and Maritime Security Program.
    The Ready Reserve Force, or RRF, is a fleet of government-
owned merchant-type vessels that ensure our capability to 
rapidly deploy military forces and equipment or emergency 
humanitarian assistance and disaster response supplies to 
events that require intervention by the U.S. Government.
    The RRF currently consists of 46 ships selected on the 
basis of their capabilities, their readiness condition and 
location to meet Department of Defense expected surge sealift 
requirements.
    While the RRF has provided reliable and safe sealift to 
support military and humanitarian missions in the past, the 
fleet is aging. The average age of the fleet is currently 39 
years, well above the normal service life of commercial 
vessels.
    The Maritime Administration is working closely with the 
Department of the Navy [DON] and DOD [Department of Defense] to 
monitor the material condition of the RRF as well as 
determining the future recapitalization requirements of the 
fleet.
    I would note that while we have never fully activated the 
RRF, the 78 ships that were activated in support of operations 
in the first Gulf War exceed the number of vessels that I 
currently have in the RRF fleet.
    The Maritime Security Act of 1996 established the Maritime 
Security Program, or MSP, which provides direct annual stipends 
for up to 60 active, commercially viable, militarily useful, 
privately owned, U.S.-flag vessels and crews operating in 
international trade.
    The MSP fleet ensures DOD access to U.S.-flag ships and 
oceanborne commerce and international trade with the necessary 
intermodal logistics capability to move military equipment and 
supplies in the event of armed conflict or national emergency.
    The fleet also provides critical employment for up to 2,400 
qualified U.S. mariners.
    Of the 78 U.S.-flag vessels that trade internationally 
today 78 currently participate in the MSP program. The number 
of vessels in the international trading U.S.-flag fleet has 
generally stayed above 100 for the past decade, reaching a peak 
of 106 in 2011. And since then, we have seen a decline to the 
78 vessels, or roughly a 26 percent drop in the last 3 years.
    The decline in this segment of the fleet is coincident with 
the decline of government-impelled preference cargoes, and the 
overall volume of preference cargo transported aboard U.S.-flag 
vessels has substantially decreased since 2005 when preference 
cargoes peaked due to military operations in Afghanistan and 
Iraq.
    The Maritime Administration's assessment of the civilian 
U.S. merchant mariner pools shows that the number of civilian 
mariners available to crew government sealift ships, when 
activated, has declined over the past decade. And the number of 
qualified and experienced mariners available will likely not be 
adequate in the very near future unless we take positive action 
to reverse this trend.
    Current estimates show that we only have about 11,280 
mariners that have the necessary U.S. Coast Guard credentials 
to operate large seagoing ships. And we greatly value those 
mariners who have recently sailed and those who have experience 
sailing our government-owned sealift vessels. And that current 
number is sufficient to activate the Federal Government-owned 
sealift-surge sealift fleet of 63 ships, that includes both the 
Maritime Administration's RRF and the military's Sealift 
Command's surge vessels, only for a period of 4 to 6 months, 
but it is not enough for sustained operations.
    Further losses in the number of commercial U.S.-flag ships 
and the corresponding loss of mariner jobs and international 
trade will significantly impact our ability to crew this 
sealift fleet in the future.
    The Maritime Administration is taking action to address the 
issues that challenge the U.S. maritime industry through the 
development of a draft National Maritime Strategy. We expect to 
publish the draft strategy in the coming months, and I look 
forward to providing it to the committee.
    Thank you again for your time and interest in the nation's 
maritime transportation capacity and capability and the 
opportunity to provide a status update for our program and 
discuss what may be a very critical juncture point for the 
long-term health of the international trading U.S. merchant 
marine.
    I look forward to any questions that the subcommittee may 
have.
    [The prepared statement of Mr. Jaenichen can be found in 
the Appendix on page 37.]
    Mr. Forbes. Mr. Jaenichen, thank you so much for your 
testimony.
    General, we would love to hear any comments that you might 
have.

STATEMENT OF LTG STEPHEN R. LYONS, USA, DEPUTY COMMANDER, U.S. 
                     TRANSPORTATION COMMAND

    General Lyons. Thank you, sir. Chairman Forbes, Ranking 
Member Courtney, distinguished members of the Seapower and 
Projection Forces Subcommittee, I want to thank you for 
inviting me and my colleagues, Administrator Jaenichen and Mr. 
DiLisio, here to discuss our military sealift capability that 
is so incredibly essential to our national defense.
    It is my distinct privilege to be with you today 
representing the outstanding men and women of the United States 
Transportation Command. As this committee knows, a major 
strategic advantage of the United States is our ability to 
project and sustain forces anywhere at anytime around the 
globe. And that is dependent on a ready sealift enterprise.
    Our nation has been and will continue to be reliant on 
sealift as the predominant means to move military equipment and 
supplies in support of global operations.
    To accomplish this task, our nation's strategic sealift 
capability comprises two distinct fleets. First, the government 
organic fleet consisting of pre-positioned ships that are at 
strategic locations worldwide, and a CONUS-based [continental 
United States] fleet of reduced operating status vessels 
largely available in 5 days.
    Second is a U.S.-flag commercial merchant fleet managed by 
commercial operators engaged in daily commerce for which MARAD 
provides government advocacy.
    These two fleets, government and commercial, are 
inextricably bound together by the merchant mariners that crew 
both. U.S. merchant mariners crew our pre-positioned ships that 
are currently deployed and commercial commerce fleets day to 
day, and in crisis are called to crew our Navy sealift fleets. 
So without a healthy U.S. merchant mariner fleet, we lack the 
capability to deliver our military forces to war.
    As I sit here today, it is our collective assessment that 
our military sealift capacity, organic, commercial, and the 
mariners that crew them, is sufficient to meet our deployment 
surge requirements in accordance with our national military 
strategy with acceptable risk.
    Over the last 20 years, a series of mobility capability 
assessments have validated an enduring requirement of roughly 
20 million square feet of roll-on/roll-off space, that is about 
91 vessels, the ability to surge 34,000 containers, 86 
petroleum tanker ships and a myriad of specialty ships, such 
ships that enable us to bring joint logistics over the shore to 
create multiple dilemmas for any adversary and multiple options 
for joint force commanders.
    However, despite being in good shape today, we are keenly 
aware of two trends that are cause for concern and action to 
ensure that the strategic logistics remains a competitive 
advantage of the United States.
    We share MARAD's concerns regarding the health of the U.S.-
flag commercial sealift industry. DOD's emergency preparedness 
programs, like the Voluntary Intermodal Sealift Agreement, 
known as VISA, and the Voluntary Tanker Agreement provide 
access to commercial fleets. And DOT's [Department of 
Transportation's] Maritime Security Program provides incentives 
for carriers to retain the U.S. flag.
    These programs not only enable DOD to gain critical access 
to U.S. commercial vessels, but also access to global networks 
and the merchant mariners that I mentioned earlier.
    The MSP program provides ready access for up to 60 
commercial ships and is dependent upon three legs of a stool: 
the first being government-impelled cargo, the second 
commercial workload, and the third a congressionally 
appropriated stipend to offset the costs of operating under a 
U.S. flag.
    We think our reliance on the commercial industry for ships 
and mariners is a cost-effective means of providing military 
sealift when compared to the cost of building an equivalent 
government capability.
    The national security sealift policy underscores our role 
as a maritime nation and clearly articulates the need for DOD 
to retain the ability to respond unilaterally to security 
threats.
    We appreciate MARAD's efforts and congressional interest in 
stemming the decline of our U.S.-flag merchant fleet in order 
to sustain our current capacity that is so necessary to retain 
our DOD readiness.
    The second area I will just touch on briefly of concern is 
the emergency age-out of our government organic sealift fleet. 
The average age of this fleet is approximately 40 years old and 
our first vessels will begin to reach their 50-year life 
service in 2020.
    As a result, the United States Navy is developing a sealift 
recapitalization plan to prevent loss of DOD's capability to 
assure we have sealift requirements. And we appreciate Mr. 
DiLisio's outstanding efforts in this area.
    Finally, I will highlight what many senior DOD leaders and 
the service chiefs have already addressed, and that is how the 
emergence of great-power competition changes the way we need to 
think about maintaining the competitive advantage that 
USTRANSCOM brings.
    The joint operating environment is changing rapidly and not 
necessarily in predictable ways as emerging adversaries will 
attempt to counter U.S. interests and contest our operations in 
the domains of cyber, space, air, and maritime in ways that we 
have not seen before. Given all of this, we are confident that 
our need to project power will not decline.
    In closing, I again want to thank this committee and my 
colleagues from the Navy and MARAD for your continued 
leadership at this critical time in our nation's history. I 
look forward to your questions and ask that my written 
statement be submitted for the record.
    Sir, thank you.
    [The prepared statement of General Lyons can be found in 
the Appendix on page 44.]
    Mr. Forbes. Without objection, all the written statements 
will be submitted for the record.
    And Mr. DiLisio, we are glad to have you and look forward 
to your comments.

  STATEMENT OF F. SCOTT DILISIO, DIRECTOR, STRATEGIC MOBILITY/
 COMBAT LOGISTICS DIVISION (OPNAV N42), OFFICE OF THE CHIEF OF 
                        NAVAL OPERATIONS

    Mr. DiLisio. Thank you, Mr. Chairman. Chairman Forbes, 
Ranking Member Courtney, distinguished members of the 
subcommittee, thanks for the opportunity to speak about the 
state of readiness. I also have not only sealift, but the 
Combat Logistics Force [CLF] and a bunch of special mission 
ships that do all kinds of great things for our nation.
    We continue to meet operational requirements while driving 
innovative and nontraditional solutions to global logistics. I 
am honored to be joined today by Deputy Commander U.S. 
Transportation Command, Lieutenant General Lyons and the 
Maritime Administrator, Mr. Jaenichen. We are true partners. We 
work very hard together, and we have worked very hard on some 
of these issues we are about to talk about.
    I want to take a brief minute and talk about someone other 
than the mariners and recognize the people of the Military 
Sealift Command [MSC] and the Maritime Administration. The 
ships and facilities they operate worldwide would not work 
without the skilled operators and support people. And they 
create our readiness.
    The Combat Logistics Force and strategic sealift missions 
are accomplished by an organic fleet comprised of 122 ships. 
These ships support numerous missions, including at-sea 
resupply of our naval combatants; pre-positioning of critical 
unit equipment; ammunition and sustainment for Marine Corps, 
Army, and the Air Force; humanitarian assistance and disaster 
relief activity; towing; diving and salvage operations 
worldwide; rapid intratheater movement of cargo and personnel; 
and afloat staging capabilities.
    The Navy's Combat Logistics Force ships resupply Navy 
forces at sea, enabling carrier strike groups [CSGs] and 
amphibious ready groups [ARGs] to operate forward and remain on 
station during peacetime and war.
    The Combat Logistics Force ships include replenishment 
oilers, T-AOs; fast combat support ships, T-AOEs; dry cargo and 
ammunition ships, T-AKEs. The T-AOs primarily provide fuel, but 
they are limited in their ability to provide dry cargo. T-AOEs 
and T-AKEs are multi-product ships.
    This year, we will begin recapitalizing our oilers with the 
award of the USNS John Lewis (T-AO 205) would be our newest 
oiler.
    The strategic sealift program provides necessary 
transportation of Marine Corps and Army combat equipment, fuel, 
and sustainment. The capabilities are provided to the combatant 
commanders through three methods: afloat pre-positioning, surge 
sealift, and sustainment shipping. Methods encompass 85 organic 
ships with each providing a crucial set of capabilities when 
called for tasking or activated for service.
    The pre-positioned fleet is strategically located in key 
areas based on anticipated need, ensuring ready access for 
contingencies. Doing so provides flexible, rapid response of 
military equipment, combat gear, supplies essential to 
sustaining initial phases of contingencies, including major 
combat operations.
    The Expeditionary Transfer Dock [ESD]--and Mr. Chairman, I 
promised you I would use both sets of acronyms until we are all 
comfortable with them--formerly the Mobile Landing Platform, 
MLP, joined the large, medium-speed, roll-on/roll-off ships as 
part of the maritime pre-positioning force.
    The combination enables greater sea-basing capability and 
increased flexibility across the operational area. The ESD is a 
tremendously versatile ship and will act as a floating base for 
expeditionary operations.
    Equipped with a deployable vehicle ramp, the ESD is an 
intermediary transfer point for troops, equipment, and 
sustainment moved ashore by landing craft, air cushion, and, 
here is the other one, Expeditionary Fast Transport, EPF, 
formerly Joint High-Speed Vessel [JHSV].
    The EPF is designed for high-speed intratheater transport. 
Experimentation is revealing more potential missions to include 
high-speed logistics shuttle work, humanitarian assistance, 
theater security cooperation, and security force assistance.
    Surge ships are the second subset of sealift, and we will 
talk about that more. And I will cut my comments brief. We have 
talked a bit about the surge.
    Right now, we are working with fleet commanders to 
complement both Combat Logistics Force and strategic sealift 
capabilities by examining innovative ways to improve capability 
and capacity to perform theater security cooperation missions 
that also enhance overall Navy combat force capability. This is 
done through a variety of adaptive force packaging. These can 
create cost-effective opportunities for our fleet to expand 
support missions and sustain global presence.
    We will continue to support forward presence, relieve 
stress on the rest of the force through traditional and 
innovative approaches. We will continue to rely on the CLF 
force to include our new ships that we are introducing and 
strategic sealift as they contribute to the Navy's tenets.
    I also want to thank you for your continued support of our 
force. And thank you again for the opportunity to appear before 
the subcommittee. Thanks.
    [The prepared statement of Mr. DiLisio can be found in the 
Appendix on page 54.]
    Mr. Forbes. Well, thank you so much for being with us, and 
for all of our witnesses.
    I am going to defer my questions until the end. I have a 
number that I just need to get on the record, but I want to 
make sure all of our members can get their questions in first.
    Mr. Courtney, if you don't mind, I have one motion to make 
before I recognize you.
    Mr. Garamendi has joined us and we are glad to have him. 
And I would just like to make sure he can ask his questions. So 
I ask unanimous consent that non-subcommittee members be 
allowed to participate in today's hearing after all 
subcommittee members have had an opportunity to ask questions.
    Is there an objection?
    Without objection, non-subcommittee members will be 
recognized at the appropriate time for 5 minutes.
    Mr. Garamendi, we are glad to have you with us today.
    Mr. Courtney, you are recognized for any questions you 
might have.
    Mr. Courtney. Thank you, Mr. Chairman.
    And thank you to the witnesses.
    Mr. DiLisio, I rode on the USNS Trenton last summer from 
New London to Rhode Island, and I just finally got straight in 
my head what a Joint High-Speed Vessel is, and then you guys 
changed the name on me.
    [Laughter.]
    So it is an EFP?
    Mr. DiLisio. EPF.
    Mr. Courtney. EPF, okay. Anyway, yes, that is right.
    Mr. Jaenichen, I want to again just kind of drill down a 
little bit on the Maritime Security Program because there has 
been obviously Congress has been sort of back and forth on this 
as well as the budget that came over.
    So last year we authorized $5 million per ship in our 
authorizing language for this program. The omnibus then funded 
about, I think, $3.5 million per ship. And the President's 
budget comes over at $3.1.
    Obviously, you all made pretty powerful statements about 
how critical this is, about keeping the fleet together. What is 
the right price point? And is $3.1 really too low? And if it is 
too low, what does that mean in terms of, you know, just trying 
to, again, keep this mission going?
    Mr. Jaenichen. Congressman Courtney, I certainly appreciate 
the question. First of all, I greatly appreciate this 
subcommittee's support for the authorization of the $3.5 which 
was subsequently approved in the consolidated appropriations of 
2016, which also include the authorization for just shy of $5 
million for 2017 in the fiscal year budget.
    At the time that was approved by Congress and signed by the 
President, the fiscal year 2017 budget was already prepared and 
was in preparation to come over to Congress to meet the 
President's budget request drop to Congress on time.
    We had insufficient time to actually analyze that. If you 
take a look at the Maritime Administration's budget, if you 
take a look at my 2016 enacted budget of $399 million, that 
would be an additional $90 million about because we received 
$210 million to support the MSP program at $3.5. That is about 
22 percent of MARAD's budget that was enacted.
    And if I compare that to the $423 in the President's budget 
request, it will be a 27 percent increase because it would 
require an increase of $114 million. That was not something we 
were able to analyze at the time the budget was dropped.
    The budget was prepared based on the program of record 
which authorized $3.1 through fiscal year 2018. But what I will 
tell you is, as General Lyons pointed out in his opening 
statement, there are three things that the Maritime Security 
Program relies on. The first is it requires access to 
government-impelled cargo. Those cargoes have decreased by 75 
percent since 2011, and so that has actually put downward 
pressure on the viability of the fleet.
    Additionally, the overcapacity in the global market. We 
have seen freight rates that are the lowest they have ever been 
in nearly several decades. The result of that is, in order for 
the MSP fleet to be viable, there is really only one place to 
go and that is the stipend amount to ensure that the fleet can 
remain viable.
    We have already pointed out that it is very vital. It is 
the core of our U.S.-flag international fleet. It is 60 out of 
the 78 ships that we have currently. We have 57 that are 
currently sailing in the program, as I pointed out in my 
opening remarks. That fleet is critical for national security 
to be able to globally project and sustain the Armed Forces.
    So hopefully that answers your question.
    Mr. Courtney. It does. So again, just so we are clear, the 
request that came over then was sort of a legacy request from a 
prior policy that----
    Mr. Jaenichen. It was the program of record at the time the 
budget was prepared.
    Mr. Courtney. Okay. I will take that as a green light for 
our subcommittee to revise.
    Another issue which again went sort of back and forth last 
year was the issue of the maritime academy training ships, 
which I mentioned in my opening remarks.
    By our count, this issue has been studied five times going 
back to 2007 and most recently in 2015 where, you know, it is 
pretty clear that, you know, failure to act on this is going to 
create a hole in terms of training those critical positions 
that you talked about.
    So unfortunately, though, the 2017 budget that came over, 
and I realize you have your, you know, limitations about, you 
know, what your testimony can be, but it requests $6 million 
for another study of requirements and alternatives for training 
ship needs.
    And you know, I just, you know, clearly the clock is 
ticking here in terms of the age of these training ships. And 
every study that has been done I think has been a pretty 
powerful endorsement about the fact that we need to move 
forward.
    And again, without having you, you know, sort of get sort 
of juxtaposed to the budget that your Department sent over, if 
we don't start--in terms of the timeframe we are in right now 
with that old ship that is coming off at SUNY Maritime in 2019, 
if we don't start cutting some steel and creating and building 
a ship pretty soon, I mean, is it going to be too late to, you 
know, heel-to-toe to keep at least that fleet sized where it is 
today?
    Mr. Jaenichen. Ranking Member Courtney, I certainly 
appreciate the question. First of all, in your opening remarks 
you highlighted the impact of the Empire State in terms of the 
training capacity for the State maritime academies. It is about 
36 percent.
    As you noted also, the vessel is 55 years old. It has its 
classification from the American Bureau of Shipping through 
2019, as well as a certificate of inspection from the Coast 
Guard.
    There is a potential to be able to conduct a service life 
extension of that vessel. However, I am concerned about the 
cost and whether that is the right approach.
    We have done an estimate based on an ABS [American Bureau 
of Shipping] survey. We take a look at the deferred 
maintenance. We have also taken a look at a crew assessment. 
And I have also had my ship surveyors down onboard the ship. 
And then we had an independent organization actually evaluate 
what it would cost. And the estimated cost is $104 million to 
be able to do a service life extension on that ship.
    Normally if you had a 15-year-old ship, a service life 
extension would be about 10 years. I cannot guarantee that 
spending that amount of money would give us 10 more years on 
that particular vessel. It may give 3, it may not give any 
because there are so many unknowns with regards to when you 
have a vessel that old.
    I am concerned about the capacity. The study that is 
requested in fiscal year 2017 is to do an independent 
validation of several requirements. In addition to the 
requirements, are there other alternatives?
    We have done most recently last year a study that was 
conducted by Volpe [The National Transportation Center], which 
did a business case analysis, which took a look at the options. 
That is available and we can share that with the committee if 
desired.
    We recognize that this is a very costly program to be able 
to exercise and to be able to put a training ship fleet 
together, so that study is an attempt to make sure that we have 
done everything we can to take a look at what alternatives are 
available to do that independent validation.
    If it were left up to me, I would try to move that up as 
quickly as I can to be able to support building a fiscal year 
2018 budget which I have to do this summer. And so I will 
endeavor to do that if at all possible using the appropriated 
funding that we currently have.
    I greatly appreciate the support of Congress to dedicate 
the $5 million to be able to do the construction design. And we 
fully intend to execute that money this year, as intended.
    Mr. Courtney. Well, thank you. And again, I think reading 
between the lines we can sort of get some direction about where 
we may want to head in a couple of weeks on this issue.
    Lastly, you know, again, this perennial question of the 
Jones Act in terms of its justification is being talked about 
by a lot of our colleagues in different committees and possibly 
in different legislation.
    Can you talk about what the impact of repeal of the Jones 
Act would be in terms of, again, the mission that, you know, 
the witnesses have to carry out every day?
    Mr. Jaenichen. Thank you, Ranking Member Courtney. A repeal 
of the Jones Act, I think, would be traumatic for the U.S. 
merchant marine. And I will give you several reasons.
    Currently today, the shipbuilding construction order book 
has 32 vessels on it. Twelve of those are tankers, 20 of them 
are articulated tugs and barges. It also includes six other 
type vessels. Two of those are roll-on/roll-off container 
vessels that are being built at VT Halter [Marine] and also 
some additional container vessels to be able to support both 
the Hawaii trade and the Puerto Rican trade.
    That ship construction that is going on in U.S. shipyards, 
is actually in conjunction with the other Federal shipbuilding 
that we do. If you take away the building requirement by 
repealing the Jones Act, that construction does not occur.
    And as a result, what ends up happening is the Federal 
Government will now incur all of the overhead costs. I very 
much doubt that we would build one of our ships for the Navy or 
one of our other Federal agencies overseas. So that overhead 
now comes to us, which would exponentially increase our costs 
to be able to maintain those shipyards viable and that 
industrial base which is critical.
    Our concern here is, if we ever had to ramp up, for 
whatever reason, that capacity will be lost and it is not 
something that could be recovered easily.
    I am also concerned about the loss of the mariner jobs. As 
we talked about earlier, we are at the very cusp of not being 
able to do. We can do the surge and we are right at the very 
edge of being able to do that. But we cannot sustain longer 
than 3 to 4 months the capability to provide logistics movement 
to support the Department of Defense.
    If the Jones Act goes away, we currently have 92 ships that 
are operating under the Jones Act under the U.S. flag. The 
total fleet of self-propelled vessels greater than 1,000 tons 
is 170; 78 are in the international trade and 92 in the Jones 
Act. That is what is supporting that 11,280 mariners in our 
mariner pool currently today.
    Without the Jones Act, that goes away, I can't support DOD, 
I can't support national security.
    Mr. Courtney. Thank you.
    And thank you to all the witnesses.
    I yield back.
    Mr. Forbes. The distinguished gentleman from Alabama, Mr. 
Byrne, is recognized for 5 minutes.
    Mr. Byrne. Thank you, Mr. Chairman.
    And I might note for the panel that my Uncle Jack graduated 
from the Merchant Marine Academy and unfortunately, like so 
many of the men that served in World War II, he was lost at 
sea. So I know that the people that participate in this 
activity are not doing so risk free. And I appreciate every day 
what you do and the sacrifice that the people that you work 
with make.
    Mr. DiLisio, I want to talk to you, and I get confused by 
the acronyms, too, about the Expeditionary Fast Transport 
Vessel, the EPF. I don't know why it is not the EFT, but it is 
the EPF, so I will get used to that.
    As I understand it, the original plan was to build 18. We 
have delivered six and six are in various phases of 
construction or have been contracted for at the very least.
    In the last 2 years, the administration has not asked for 
any additional of these vessels, but the Congress has gone 
ahead and authorized and appropriated one each year.
    So you just described that the missions that that vessel 
can perform have actually broadened. You have discovered more 
things that it can do.
    Talk a little bit about how important that vessel is and 
what you would be able to do if you had the full complement of 
18.
    Mr. DiLisio. Thank you for the question. Most of what we 
are finding out right now is through experimentation. So there 
is quite a difference between being interested in experimental 
work vice full deployment. And as you might gather, we are into 
our early deployments on these ships.
    So I have really only got two ships that are in full 
deployment status and two coming. The total complement was 10, 
not 18. We had truncated the program at some point in time to 
10.
    And the interesting part is they are good for 270 days a 
year. We couple about 90 days for maintenance for a ship. These 
ships, because they are made out of aluminum and they are fast 
transports, they have to be dry-docked every year.
    So there is a trade-off between me telling you thank you 
very much for the additional ship and then me figuring out how 
to blend in the operational costs of that across the total 
force. And so I pick up a dry dock every year for every ship I 
get. And so it does become a challenge balancing that.
    That said, I do believe over the course of the next year or 
so we are going to find that that ship is very versatile. I am 
sure you have heard some noise--news--you have heard some news 
about----
    Mr. Byrne. Sometimes news up here is noise.
    Mr. DiLisio. It could be.
    [Laughter.]
    That was maybe a Freudian slip.
    But you have heard about some of the things we are learning 
as we operate the ship. We have taken the ship into higher sea 
states in some cases and had some cracking. We have gone and 
fixed those. So we are kind of in the infant stage with the 
EPF.
    I do believe that ship will grow up very fast, but there is 
a trade between every ship we add, and then how wide I can 
space the operational costs as we utilize that force.
    I hope that answers your question.
    Mr. Byrne. It does. But expand upon the various things that 
you are finding out, even though some of it is experimental. 
What are the various new things that you are finding out that 
it can do?
    Mr. DiLisio. Fair enough to say that it is a large, open 
space. If you can envision the mission space of the ship being 
large enough to carry six Abrams tanks, it has got a lot of 
open space. So anything you can do in modular fashion and you 
can drive up the ramp, anything that you can put into a 20 foot 
by 20 foot container or a 20-foot-long container, it could be a 
special missions operation, it could be anything you could put 
in a 7-meter or 11-meter RHIB [rigid-hulled inflatable boat] 
off the side of the vessel, it could be anything you can fly 
off of the flight deck, whether that is manned or unmanned. And 
I am just kind of giving you a wide scope of things that are 
opportunities.
    And they operate all over the world. So also you could get 
into a modular form of logistics supply and delivery for other 
ships, anything that you can bring up that ramp.
    We talked a little bit about the ESD that is also in the 
Pacific. The EPF can mate skin-to-skin with that ship and 
reconfigure loads at sea, up to sea state about two-and-a-half. 
So if you are in fairly calm seas, reconfiguration at sea is 
now a possibility.
    We had always wanted sea-basing capability over time, and 
this gets us closer to it.
    Mr. Byrne. Well, I thank you all for what you do. We need 
to do a better job, I think we all agree on that, in supporting 
what you do. Because your support capability and your support 
activities are so very important to our ability to defend the 
country. So I know our other members of the subcommittee, we 
are all going to try to find some way to help you out. But it 
is a tough budget environment.
    So thank you, and I yield back.
    Mr. Forbes. Thank you, Mr. Byrne.
    The chairman of the Readiness Subcommittee, Mr. Wittman, is 
recognized for 5 minutes.
    Mr. Wittman. Thank you, Mr. Chairman.
    I want to thank our witnesses today, Mr. Jaenichen, 
Lieutenant General Lyons, thanks so much for all of your 
efforts and appreciate what you do and the challenges that you 
meet.
    Mr. Jaenichen, I wanted to ask you--I am sorry, Mr. 
DiLisio, too. I'm not forgetting your presence here. I want to 
thank you, too.
    Mr. Jaenichen, I want to ask you, specifically with the 
Maritime Security Program, as you know, Congress has authorized 
about $5 million per ship stipend to retain those vessels, to 
make sure we have them on standby with the necessary capacity. 
Yet the fiscal year 2017 budget request supports $3.1 million 
per ship.
    If the Congress supports the administration's request, then 
obviously there is going to be a shortfall there in creating 
less capacity than what you all project that is needed to make 
sure we have those ships available.
    So tell me what happens if Congress funds the stipend at 
$3.1 million versus the $5 million per ship.
    Mr. Jaenichen. Congressman, thank you for the question.
    First of all, I need to talk a little bit about, as I 
mentioned earlier, the requirement for the MSP program at its 
inception was really based on the three-legged stool that 
General Lyons referred to. Two legs of the stool have almost 
gone away with regards to the access to government-impelled 
cargo and also commercial cargo, which really leaves the 
stipend as the only place to go.
    In 2011, based on a 2010 baseline, MARAD conducted a study 
and we estimated that the average differential cost to operate 
a U.S.-flag vessel versus a foreign-flag vessel was about $4.6 
million. If you progress that to fiscal year 2016 numbers, it 
is somewhere between $5 and $7 million and our average is based 
on a back-of-the-envelope review of some of the assessments of 
the operators' costs as about $6.1.
    That authorization that was provided just shy of $5 million 
in the consolidated appropriations is about the right number. 
The industry has told us that is the right number.
    At $3.1, I can't guarantee that the fleet will be able to 
stay what it is currently at the ship mix and the operators 
that are currently in the fleet today. They are severely 
challenged. The entire global industry is losing money as are 
the operators that are participating in the MSP program.
    Mr. Wittman. Do you believe--you pointed out capacity and 
only 78 ships available in the domestic fleet, 60 of those 
contracted under MSP.
    A couple of questions. With this shortfall, it seems like, 
to me, we could lose even more of those ships of the 60 that we 
need. So not only are you in a situation with current need, but 
even the surge capacity with us going down to 78 ships is now 
in significant jeopardy.
    So give me your perspective on how do we get to the right 
place in this with requesting fewer dollars per ship, knowing 
what that creates and those ships moving out of MSP, fewer 
ships overall available in MSP and only having 60 ships today. 
It seems like, to me, we have got a train wreck coming.
    Give us your perspective on what we need to do to make sure 
that that doesn't happen.
    Mr. Jaenichen. Thank you, Congressman.
    Just to make sure, there are 57 ships of the 78 today. We 
have approved one additional ship to come in, but it is not 
under U.S. flag yet, to replace one of the RO/ROs [roll-on/
roll-off ships] that caught fire last summer. And we are 
currently reviewing essentially the requests for two additional 
vacancies that currently exist in the program.
    With regard to the program itself, that 60-ship capability 
is extremely important. But our challenge, as I pointed out, as 
I was answering Ranking Member Courtney's question, the budget 
that we submitted in fiscal year 2017 was based on the program 
of record at the time the budget was developed.
    There was insufficient time, as I mentioned before, to be 
able to do an assessment to get increased to the authorization 
that was provided by Congress in the consolidated 
appropriations for 2016.
    Mr. Wittman. Let me ask this, too. This isn't only an issue 
about the number of ships, but it is also an issue of our 
merchant mariners. If there is not a demand there for the 
merchant mariners, then our cadre of folks that we need to take 
these ships to sea, to run them, to make sure we have that 
capability there, not just the capacity, but the capability in 
the merchant mariners goes away, too.
    Give me your perspective on where this leaves us, too, with 
the merchant mariners that we need to make sure MSP is 
successful.
    Mr. Jaenichen. The real critical aspect is I need to have 
an active fleet that actually has the mariners that are sailing 
on a daily basis.
    We have done an estimate. In order to activate the ready 
surge capability that we have in the organic government or the 
government-owned fleet, we currently today have about 627 
mariners that are keeping them in that ready-5 status that 
General Lyons talked about in his opening remarks.
    To be able to activate all of those vessels, and that 
includes the 15 for Military Sealift Command and also the 2 
Missile Defense Agency ships that I also support for special 
mission, requires an additional 1,300 mariners to be able to 
activate them and then push them out to where they need to go 
to be able to support that global projection and sustainment of 
our Armed Forces.
    We can do that with the current number of mariners for 
about 3 to 4 months. It is that first crew rotation that is 
critical and that is what I cannot be able to guarantee at this 
point.
    With the number that I have today, I have a very, very 
small margin to be able to say that I can do that and surge 
that fleet completely.
    After the 4-month period, again, I can't do that. I would 
need at least 40 more ships sailing actively under U.S. flag 
and the mariners there to be able to guarantee you that I can 
provide sustainment.
    We have a perfect storm coming. And the perfect storm is 
the fact that starting on the 1st of January of 2017 the 
International Maritime Organization [IMO] Standards for 
Watchkeeping and Training [STCW--Standards of Training, 
Certification, and Watchkeeping] come into effect. Those 
requirements are different. If you are not actively sailing 
today, which means that you are not actually being paid to get 
that upgraded license to be able to meet the STCW requirements, 
you are likely not going to do it because it is going to come 
out of your pocket.
    So in past situations where we have had to surge the fleet, 
we have actually had mariners that have come out of retirement 
to be able to do that. They will not be available to us after 
January of 2017.
    And the impact is, if I were to use some of those mariners 
without those STCW endorsements, they do not have to allow our 
ships into the ports where we potentially have to debark the 
equipment to be able to support DOD's operations.
    So the impact is, is we are very close to not having enough 
mariners. And I am concerned at what happens in the future.
    It is also a very aging workforce. And I am concerned that 
they could retire on us. And again, I don't know where that 
point is, but we are getting very close to it.
    Mr. Wittman. Thank you, Mr. Chairman. This seems to be a 
strategic catastrophe in the making.
    Mr. Forbes. I agree.
    The gentlelady from Missouri, Mrs. Hartzler, is recognized 
for 5 minutes.
    Mrs. Hartzler. Thank you, Mr. Chairman.
    You know, one of the greatest privileges that we have as 
Members of Congress is to get to appoint or nominate young 
people for the service academies. And I know that there is a 
merchant marine academy. I have had the privilege of sending a 
young lady from our district there. She loves it. And she and 
her family can't say enough great things about it.
    So looking at the shortfall that you are talking about here 
in manpower, can you just give me kind of an update? I haven't 
had the privilege yet of visiting, it is on my to-do list. But 
how many people are going through the academy, and if you think 
this might be a bright spot in helping meet these shortfalls?
    Mr. Jaenichen. Thank you for the question, Congresswoman.
    Currently today there is about 250 in each incoming class. 
We graduate around 200 on an annual basis, 25 percent of them 
go on to active duty into one of the branches of the armed 
services, and then about the rest, 75 percent, will actually 
sail on our commercial fleet.
    That number today, and if I combine that with the six State 
maritime academies, I produce about 900 mariners a year. The 
only ones that are required to sail are the ones that go to 
Kings Point and those that receive what we refer to as a 
student incentive program stipend, which is $8,000, and they 
have about a 3-year service obligation. Those that go to Kings 
Point have a 5-year service obligation.
    I am concerned. There was a study that was completed by the 
Secretaries of Labor, Education and Transportation. That report 
was released in August of 2015. And in that we used a 2012 
baseline in terms of the age demographics for the seafarers.
    We need 70,000 new mariners by 2022. Half of those are 
licensed officers. The programs that you are referring to, both 
Kings Point and the State maritime academies, are producing 
only about 900 of that shortfall. So we are going to be far 
short of being able to meet that requirement that we know is 
coming in 2022.
    There is ample opportunity and there is great opportunity 
for those seafarers. But again, it relies on the U.S.-flag 
fleet.
    As I mentioned earlier, if the Jones Act were to be 
threatened, those jobs would go away. That creates a challenge 
for our seafarer workforce.
    Mrs. Hartzler. Do you see any opportunity or changes being 
made in your training and your recruitment of young people to 
help make up the shortfall? So if I heard you right, you need 
70,000 new people by 2022----
    Mr. Jaenichen. 2022.
    Mrs. Hartzler [continuing]. And you are only graduating 
about 900 a year. So what are some other programs that you have 
out there to try to meet the shortfall?
    Mr. Jaenichen. Thank you. We are currently working with the 
Military Sealift Command. We are also working with the American 
Maritime Partnership. We have recognized that veterans, as they 
are leaving the services, many of them have seafaring 
capabilities, those that are operating Army watercraft, those 
in the Coast Guard, and those in the Navy.
    We are working on a military-to-mariner program because we 
think that is a way that we can potentially get the shortfall 
within the Committee on Marine Transportation System, the CMTS. 
We are working with our 27 agencies on an integrated action 
plan to be able to get to the heart of that.
    The real issue is how they get credit for the courses that 
they take over the course of their military career to be able 
to get a U.S. Coast Guard endorsement and we are currently 
working on that particular issue.
    The challenge right now is a veteran comes out, he 
literally has to start from scratch because he gets no credit 
for any of the experience or any of the training that he has 
had. So we are actually getting to the heart of that.
    Obviously there are other ways to do it, but we do have 
limited capacity. We are pretty much, in terms of what we are 
doing at Kings Point, we are at capacity there with regards to 
what we are able to do and the State maritime academies are at 
capacity as well.
    Obviously, the training ship fleets which supports--in 
order to get an officer's license requires 360 days during the 
period of time that you are actually training for that 
endorsement. That is difficult to obtain. The State maritime 
academies do it through a combination of training ships 
sailing, typically they have 100-day cruises every year, and 
then they also have to have some commercial time. Kings Point 
does it by sailing commercially for 1 year out of the 4 years 
that they are taking their curriculum.
    So that actually is one of the challenges, just capacity. 
Obviously, as the fleet size has decreased, our ability to 
place cadets and midshipmen on those fleets is reduced as well. 
So I am concerned about our capacity to train as well as the 
ability to meet the demand of the future mariner workforce.
    Mrs. Hartzler. Well, I commend you for thinking outside the 
box. I think especially targeting veterans, I think, makes a 
lot of sense. And if there is any help that we can provide to 
helping so that they qualify more easily, it just makes a lot 
of sense and I know we will be here ready to help.
    Mr. Jaenichen. Thank you, Congresswoman.
    Mrs. Hartzler. Thank you. I yield back.
    Mr. Forbes. Gentlemen, as we mentioned to you before we 
started, we now have a series of votes. I think it is five 
votes, if I am not mistaken. And so if it is okay with you we 
are going to recess during those votes and then we will all 
come back after that time.
    So we stand in recess until the completion of these votes.
    [Recess.]
    Mr. Forbes. Gentlemen, we are going to go ahead and get 
started, if it is okay. Mr. Courtney said that was okay with 
him.
    And I have a few questions. As you know, I deferred mine 
until after the other members, and then Mr. Garamendi will have 
his time for questioning.
    But General, if you could, and these are some questions we 
just need to get on the record for our transcript, but how many 
ships are required to support the Maritime Security Program?
    General Lyons. Sir, thanks for the question. TRANSCOM fully 
supports the 60 ships that are in the Maritime Security Program 
and the capability that brings.
    Mr. Forbes. In your best, professional military judgment, 
is there a sufficient analysis to underpin the 60-ship military 
requirement?
    General Lyons. Sir, there is. Really, over the last 20 
years we have done several mobility capability assessment 
studies, all arriving at similar types of conclusions in terms 
of the types of vessels and the capability we need to surge. So 
yes, sir.
    Mr. Forbes. In your best, professional military judgment, 
does the fiscal year 2017 budget request support the 60-ship 
MSP requirement?
    General Lyons. Sir, it does support a 60-ship MSP 
requirement. You know, the big question alluded to earlier is, 
are those incentives inside that program sufficient to retain 
the U.S. flag. And I think Administrator Jaenichen addressed 
those earlier, sir.
    Mr. Forbes. Mr. Jaenichen, TRANSCOM has indicated a 
military requirement of 60 ships. Once again, can you explain 
the impact of the fiscal year 2017 budget proposal to the MSP 
force structure?
    Mr. Jaenichen. Thank you for the question, Chairman. The 60 
ships in the program, obviously when we submitted the 2017 
budget, that was at the program of record at the time, which 
was at $3.1.
    My concern with regard to the fleet today is, as a result 
of the downward pressure that we have seen on their ability to 
get both commercial and the decrease that we have seen in 
government-impelled cargoes has put significant downward 
pressure on the fleet.
    The stipend amount today, I cannot guarantee that that is 
sufficient to keep those vessels in the program. And as we have 
indicated, all the three of witnesses have said, those 60 ships 
are important for our national security.
    And the operators themselves who have those agreements, 
they have to make financial decisions based on what they are 
able to do. And if it is losing money, then they are not going 
to be able to stay in the program. We have seen that before. 
They have told us that the reason for reflagging or to flag out 
of the program is because they can't make it financially 
viable.
    Mr. Forbes. If you had to venture your best estimate based 
on the fiscal year 2017 budget and what it would do to the 
force structure, how many ships do you think it would reduce 
the structure by?
    Mr. Jaenichen. I can't give you a number, Chairman, in 
terms of what it would be. I know that there could be an 
adverse effect; I just can't tell you what that would be.
    Mr. Forbes. That is fair.
    General, what is your assessment of our U.S. mariners' 
ability to sustain a full-scale mobilization of the Ready 
Reserve Force?
    General Lyons. Chairman, I think where we are today, we 
would be able to support a surge of the force. But as 
Administrator Jaenichen indicated, we are in a downward trend 
in the number of mariners. We are very, very concerned. We are 
right on the margin between medium and high risk to be able to 
mobilize that fleet. And of course, the bigger issue is to be 
able to sustain that fleet over a long period of time, 
prolonged period of time.
    So we have some serious concern. Even though today I think 
we are okay, we have some significant concerns about that 
capability in the future.
    Mr. Forbes. Could you help me in terms of surge capability 
and tell me, we could do it initially, could we sustain it over 
any length of time? And if so, what would your approximate 
length of time be that you would tell the committee?
    General Lyons. You know, Chairman, difficult to say. Enemy 
gets a vote how long the duration of that conflict, per se. 
Administrator Jaenichen, I think, has indicated in his mariner 
assessment that we would be able to surge the fleet and sustain 
it for a several months, but not much past that point. And I 
will defer to MARAD on that, sir.
    Mr. Forbes. Okay. If our nation loses another 200 U.S. 
mariners, will we have sufficient forces to even support the 
initial activation of the Ready Reserve fleet?
    General Lyons. Again, you know, MARAD has done a lot of 
work here. The analysis that I have seen, we have got some 
concerns about where we are in the threshold. Again, I think we 
would be able to surge the fleet initially. The ability to 
sustain that really becomes somewhat problematic for us.
    Mr. Forbes. Mr. Jaenichen, could you comment on that, if 
you would?
    Mr. Jaenichen. Thank you, Mr. Chairman. We have estimated 
that we need about 11,019 mariners to be able to have the 
capability to surge. And once we have reached that point, now, 
my concern is not necessarily being able to surge, but also our 
assessment is based on today. I can't tell you what it will be 
2 years from now or 5 years from now. And I am concerned about 
our ability to do that in the future as we take a look at the 
aging demographic of our seafaring workforce.
    So we are very close to the margin between that medium and 
high risk, as I indicated earlier, to an earlier question.
    In order to be comfortable with the number of mariners we 
have, with the STCW requirements that go into effect in January 
of 2017, we need an estimate of approximately 40 more ships to 
have sufficient mariner pool that is sailing actively on a day-
to-day basis to make sure we have the right number.
    Mr. Forbes. If we lost 200 mariners, would we be in high 
risk?
    Mr. Jaenichen. We would, sir.
    Mr. Forbes. General, how important is the Ready Reserve 
Force to our military's ability to support a full-scale 
mobilization?
    General Lyons. Chairman, it is extremely important. In 
fact, without that Ready Reserve Force fleet, we would be 
unable to deliver a significant portion of combat power 
globally. So we are absolutely reliant upon that capability 
from the pre-positioned ships that are forward positioned, to 
the surge fleet, to the Ready Reserve Force fleet. Those are 
critical in our ability to project power.
    Mr. Forbes. Mr. Jaenichen, over the long term would the 
administration's Food for Peace proposal increase or decrease 
the number of U.S. mariners?
    Mr. Jaenichen. Thank you, Chairman, for the question. If we 
go back to the 25 percent reduction that occurred in 2012 when 
we did the ``Moving Ahead for Progress in the 21st Century'' 
that reduced the food aid program from 75 to 50 percent in 
accordance with a 1954 civilian cargo preference, we estimated 
at that time we would lose somewhere between 9 and 12 ships.
    We have subsequently lost 28. Now, we also recognize that 
that is coincident with all of the downward pressure on the DOD 
cargoes, the retrograde from Afghanistan and Iraq. So those all 
occurred at the same time, which is it is that total 
government-impelled cargo which has actually caused that.
    Our estimate for what is proposed in the fiscal year 2017 
budget, we have included in that budget $25 million as a 
mitigating factor to make sure that we don't have an adverse 
effect on the mariner pool, we will be able to maintain some 
ships, principally the ones that are principally carrying food 
aid cargo that are not in the MSP. And so $24 million of that 
would be dedicated to those non-MSP carriers and then a million 
would be dedicated to the retraining of the mariners to make 
sure that we have that capability.
    So we recognize that the proposal from the administration 
does have an impact on the U.S. merchant marine and we are 
trying to mitigate that with the budget request that has been 
submitted.
    Mr. Forbes. Okay. How does the loss of mariners impact the 
military's ability to support the Navy's Ready Reserve Force, 
General?
    General Lyons. Chairman, the merchant mariner is 
inextricably linked to the Department of Defense's ability to 
project force. And so as I indicated earlier, the predominant 
cargo, both equipment and supplies, go by sealift. And so 
without that merchant mariner capability, we don't have a DOD 
surge sealift capability.
    Mr. Forbes. And Mr. Jaenichen, what is the administration's 
plan to provide sufficient mariners to support sustained 
operations, not just the initial activation of the Ready 
Reserve Force?
    Mr. Jaenichen. Thank you, Chairman, for the question. The 
Maritime Administration is currently working on a draft 
National Maritime Strategy which we hope to address. And as I 
indicated to Congresswoman Hartzler's question earlier, we are 
working within the Committee on Marine Transportation System to 
put together a ``Veteran-to-Mariner'' program to try to get at 
the shortfalls that we are currently experiencing.
    Mr. Forbes. Mr. DiLisio, will the proposed inactivation of 
a T-AOE in fiscal year 2017 increase or decrease our military 
readiness?
    Mr. DiLisio. Mr. Chairman, our current requirement for CLF 
ships is 29. The AOE takes us at 30, so that would be losing 
any margin I have, so I will be right at the margin with 29.
    Mr. Forbes. The administration has proposed to eliminate an 
aircraft carrier, euthanize 11 cruisers, eliminate a carrier 
air wing, and now inactivate another T-AOE. Is the inactivation 
of the T-AOE driven by fiscal pressures?
    Mr. DiLisio. Thank you, Mr. Chairman. The USNS Rainier is 
the ship we are talking about right now. And that is a 
financial trade given the 40-plus million dollars of service 
life extension work I would need to do to her to keep her in 
service and the 60-plus million dollars a year it takes to 
operate her. So as it turns, it is a $100 million proposition 
for one ship. The alternative ships are in the $40, $50 million 
a year range.
    Mr. Forbes. Okay. Just a couple more questions and then we 
will move on.
    This is for Mr. Jaenichen and General Lyons. There are some 
in Congress that have indicated that the United States should 
outsource our military maritime lift capacity to other foreign 
nations and that U.S. crews should be replaced by foreign 
crews. Could you both explain the value of an organic maritime 
lift capability and why Congress needs U.S. mariners in the MSP 
program and the Ready Reserve Force?
    Mr. Jaenichen. Chairman, thank you for the question. The 
first thing I would say is the U.S. merchant marine and the 
mariners that are part of that active workforce have always 
responded to the call. They are patriotic. They have done what 
is needed to conduct our sealift requirement. They have never 
failed to carry our requirements, equipment, supply, materials, 
to support the Department of Defense operations.
    I cannot say the same for foreign-flag crews. We have had 
several instances in which they have not gone into the theater 
for their own fear of their own safety.
    We also run the risk if you have foreign seafarers that 
potentially we are at the risk of some political decision by 
another country who those mariners potentially are national 
citizens to. And I don't think that is a position that we want 
to be in going forward.
    Mr. Forbes. General, do you have thoughts on that?
    General Lyons. Chairman, yes, sir. We believe that the case 
for a U.S.-flag fleet is compelling. There is no guarantee 
whatsoever that a foreign-flag fleet will sail into harm's way, 
as the Administrator said, and we have had cases of that in the 
past.
    Mr. Forbes. Mr. Garamendi, if you would be patient with me, 
one more. We have the gentlelady from Hawaii and then we will 
be right to you.
    So the gentlelady from Hawaii is recognized for 5 minutes.
    Ms. Gabbard. Thank you.
    General Lyons, can you speak to your Ready Reserve Force 
requirements and whether or not you have enough of your either 
organic mariners or commercial vessels to meet that 
requirement?
    General Lyons. Yes, ma'am. Today we have a capability that 
I believe is sufficient to meet the national military 
strategy's requirements with acceptable risk.
    The issue we face is where we will be tomorrow. We see some 
downward trends that are significant in nature, one of which is 
the health of the merchant mariner industry that we have been 
discussing and those mariners that not only sail our commercial 
vessels, but also sail our Ready Reserve Force fleet, our surge 
fleet crew, our pre-positioned equipment that is out there 
today.
    So we believe we are in good shape now, but we do have some 
concerns about where we are headed in that as well as the age-
out of the organic fleet.
    Mr. Jaenichen. Congresswoman, if I could add just a few 
comments. First of all, we get great support from our resource 
sponsor in the Navy. They provide us the funding to be able to 
maintain the maintenance and repair as well as the crewing 
dollars to be able to support that Ready Reserve Force in their 
ready status.
    My concern is we are doing that with a fleet that is 39 
years old. So as General Lyons pointed out, we have acceptable 
risk today, but we are doing it with ships, some of the ships 
that I have in my fleet are 50 years old. We are doing the best 
we can. Some of the equipment is obsolete; it is no longer 
made, so we have to take extraordinary measures to be able to 
maintain the readiness of that fleet.
    If that fleet is called, I would like to say that I can 
guarantee every single time we will be able to do it. But as we 
get farther in time, and we have every intent to utilize the 
funding to be able to extend that service life to 60 years, I 
can't guarantee you it will be able to be able to carry the 
equipment that we need.
    Several of the ships in the inventory are steamships. They 
are hard to maintain, hard to operate. And if we are surging to 
be able to support a specific operation and I have a problem on 
one of those ships that's, you know, 40 years old, we may not 
be able to support the fight and there are potential soldiers, 
sailors, or marines that could be at risk as a result of that.
    Ms. Gabbard. Similarly, you have talked about the 
importance of the Maritime Security Program as it relates to 
your ability to respond and move people and logistics, et 
cetera. What is the fleet size requirement of the Maritime 
Security Program?
    Mr. Jaenichen. Thank you for the question, Congresswoman. 
Sixty has been identified as the number. There has been some 
mobility and capability assessment, as General Lyons alluded to 
earlier.
    Typically, that fleet is for sustainment. It is a 
commercial fleet. The surge would actually be done by our 
organic assets, both with the Military Sealift Command with 
their pre-po ships and also the Ready Reserve Force ships that 
we have.
    What has happened over time is those ships in the MSP 
program are typically in commercial service. They will then 
become available once they are able to position themselves to 
be able to carry those sustainment cargoes.
    The 60 that is there based on the operational requirements, 
that would require a classified briefing to be able to 
specifically go through those particular movements that are 
required to be able to support the most comprehensive and most 
challenging scenarios that the Department of Defense has. But 
we need all 60 to be able to do that.
    It also makes the assumption that we will have no losses. 
And we recognize that there are changes in the environment, as 
General Lyons pointed out in his opening comments, from the 
standpoint of cyber, from air and maritime defense that that 
may not be a valid assumption going forward.
    And my understanding is DOD is doing a study on the 
potential risks and what kind of numbers would require to be 
changed or added to be able to ensure we have the correct 
capability going forward.
    Ms. Gabbard. Assuming that you do have losses and being 
able to account for that.
    Mr. Jaenichen. Assuming that we could have losses, that is 
correct, ma'am.
    Ms. Gabbard. Right, right. Okay, thank you.
    Thank you, Mr. Chairman.
    Mr. Forbes. The gentleman from California, Mr. Garamendi, 
is recognized for 5 minutes.
    Mr. Garamendi. Thank you very much, Mr. Forbes. And thank 
you for the courtesy of allowing me to participate.
    This is the fourth hearing that I have been in in the last 
couple of months that deals with this issue.
    And Mr. Chairman, you may want to add to your record the 
hearing record of those other committees. I think it would be 
useful in that all of those committees' hearings have all come 
to the same point, and that is that we have a national security 
issue here, a very, very serious one.
    The House Armed Services Committee usually winds up talking 
about national security and the risks that we run. This is a 
real one and it is happening in real time.
    And I thank you very much for your questions, Mr. Chairman. 
They were right on. And most of the questions I would ask, you 
have already done.
    I just maybe kind of weave this together from this hearing 
and other hearings.
    Mr. Jaenichen, is it about cargo? Is it really about cargo, 
that these ships, if they are going to be able to maintain, 
they have to have cargo? The food aid has been reduced, Ex-Im 
[Export-Import] Bank has been reduced, and the military's been 
reduced. Some of those are policy, some of those are 
fortunately the wars have ground down a bit.
    Is it cargo?
    Mr. Jaenichen. Thank you for the question, Congressman. In 
every situation where we have talked to an operator who has 
reflagged a ship, he has told us that it is the absence of 
cargo which has contributed significantly to their decision to 
reflag or to scrap those vessels.
    Mr. Garamendi. Okay. And we have talked extensively about 
the mariners and the average age of the mariners, licensing 
issues, and the ships that are not available for the mariners 
to be on. And I won't go into that except that that is 
obviously a problem here.
    It seems to me that what we have is a government and 
administration that is not looking at all of the pieces of this 
puzzle and weaving them together in a way that is sensible, 
both for national security, for jobs, for the shipyards, and 
the like.
    We know that there is a threat on the Jones Act, which 
testimony already on the record today about the importance of 
the Jones Act for all the pieces of this puzzle.
    We know that the USAID [U.S. Agency for International 
Development] is determined to cash out the commodity portion of 
the Food for Peace. We have had testimony here today about the 
downward pressure that that puts on the maritime industry.
    We know that at the moment the Ex-Im Bank is not operable 
and that there are problems there. And thankfully, we do not 
have the need at the moment for the military that we have had 
in the past.
    We need to get this together.
    Mr. Forbes, your hearing is extremely important, together 
with the other hearings. And I think as we go through the 
policy questions and the NDAA [National Defense Authorization 
Act] and as we talk to the Foreign Affairs Committee, we need 
to make it very, very clear that this is a national security 
issue.
    Your committee is on this. I know that Mr. Hunter and the 
Coast Guard Maritime Committee are also on it.
    But I think we can weave together here a very compelling 
argument to sustain the MSP, the Ready Reserve Force, and the 
mariners that go with it by pushing the Food for Peace back to 
$75 [million].
    One more question. Where does the $25 million come from, 
Mr. Jaenichen?
    Mr. Jaenichen. Congressman Garamendi, that is actually in 
our budget for the Maritime Security Program for the MARAD 
budget in 2017. It is actually included so that the total is 
actually $211 [million], which is in the MSP request because it 
includes that $25 million to support the administration's 
proposal for additional 25 percent flexibility.
    Mr. Garamendi. Last year that money came from the Food for 
Peace program. Is this different this year?
    Mr. Jaenichen. It is an identical proposal to what was in 
the fiscal year 2016 request, Congressman.
    Mr. Garamendi. Was the Food for Peace program reduced by 
the 25?
    Mr. Jaenichen. It is reduced by the flexibility for an 
intervention that would include a potential local and regional 
purchase, but I would refer you to USAID for how they would 
actually execute that particular authorization.
    Mr. Garamendi. It is just very curious that instead of 
sending food and we are now taking money out of the food 
program and circulating it back to the MSP program. It doesn't 
make much sense to me.
    Mr. Jaenichen. Congressman, we are--I think you have 
confused it. There was a proposal at one time to be able to use 
the food aid reform and have money. This proposal is not that. 
This is just a funding in the MSP line to support the 
mitigation efforts.
    Mr. Garamendi. I think we would be better off shipping food 
and keeping the mariners busy, keeping the ships busy, rather 
than providing what basically is a welfare program that may or 
may not keep the mariners busy. It depends whether those ships 
get laid up or not.
    Mr. Jaenichen. Congressman, that proposal is no longer on 
the table as under consideration.
    Mr. Garamendi. Money is fungible and it moves.
    Mr. Chairman, I thank you for your committee. And you are 
onto something very, very important here.
    Know that the Subcommittee on Transportation is with you to 
try to sort this out.
    Mr. Forbes. We thank the gentleman.
    And Mr. Courtney is now recognized for any questions he may 
have.
    Mr. Courtney. Just one quick follow-up.
    Mr. Jaenichen, you mentioned to Representative Hartzler a 
few minutes ago. Again, MARAD is going to be issuing a 
comprehensive maritime strategic plan shortly. Is that right?
    Mr. Jaenichen. That is correct, Ranking Member Courtney. In 
fact, we have had that, it is in interdepartmental review now. 
It has been in OMB [Office of Management and Budget] for a 
while. I hope to be able to get that out for draft public 
comment, and then we would take those public comments and then 
we would finalize the strategy. And I am hoping to have that 
draft National Maritime Strategy out in the next couple of 
months.
    Mr. Courtney. And how many years has it been since the last 
plan?
    Mr. Jaenichen. The last strategy dates back to 1936 as 
modified in 1970, so it has been a while, sir.
    Mr. Courtney. And how many departments did you have to run 
the traps on this?
    Mr. Jaenichen. During my initial review, we actually 
started this process back in 2014, the first National Maritime 
Strategy symposium was held in January of 2014, we held a 
second in May. Once we got the draft done, we have shared it 
with the 27 agencies and commissions that were in the Committee 
on Marine Transportation System and I also provided it and got 
comments that we included in our draft that we provided to OMB 
that came from the majors, so Coast Guard, Department of 
Energy, DOD, Army Corps of Engineers, to ensure that we had it 
about right.
    And so we are in that process now to go through to get 
final interdepartmental review.
    Mr. Courtney. So about 80 years and 27 agencies. Again, I 
just want to salute you for your persistence in this and just 
tell you we look forward really enthusiastically for the draft.
    And I want to thank you and the witnesses for your 
testimony.
    Mr. Jaenichen. Thank you, Ranking Member.
    Mr. Forbes. Well, thank you, gentlemen.
    As you remember, Mr. Courtney and I had indicated to all 
three of you that at the end we would give you whatever time 
you needed to clarify any of your remarks or to add anything to 
the record that you thought might be pertinent.
    So we will start now, and just thank you again for being 
with us.
    And Mr. Jaenichen, any closing thoughts that you have for 
us?
    Mr. Jaenichen. Chairman, I would just like to talk a little 
about the importance of the MSP just one last time. If you 
recall, we reauthorized the MSP program out to 2025. And all of 
the carriers signed up for that program at that time.
    The world has completely changed from the time that they 
resigned those contracts to get out to 2025. And so that timing 
and the stipend amount that was there, we all recognize that 
they are under downward pressure, as I have already testified 
to. So I would encourage the committee to think about that as 
we go forward in terms of the future viabiity of the MSP.
    The second is the mariners themselves. They are a strategic 
national asset. That is what allows us to provide national 
security. If there were any other workforce sector that 
supported national security, that had experienced a 20 percent 
loss and reduction in the number of people, there would be a 
public outcry.
    This is a crisis in the making and we are not talking about 
it. That is one of the reasons why I greatly appreciate this 
committee for having this hearing today.
    The final one that I have is with regards to the 
recapitalization of the sealift fleet and the training fleets. 
We are operating old ships. And as a result in operating old 
ships, it costs more, it is more expensive to continue the 
operation and repairs. And at some point, we reach a limit and 
we are not going to be able to operate.
    The ships, if they can't operate, if they are in the Ready 
Reserve Force, I can't provide the requirement to provide that 
sealift for DOD. And if it is a training ship, I don't have the 
capacity to train the mariners that we have already identified 
are essential to our future and to be able to support the 
Department of Defense.
    Mr. Forbes. Thank you.
    General, any closing remarks that you would like to offer 
us?
    General Lyons. Chairman, thank you. I think it was said 
today this is clearly a national security issue. This committee 
certainly recognizes that strategic mobility is a competitive 
advantage of the United States.
    And sir, I would just like to thank you, leadership, the 
entire committee for your work to keep our national defense 
strong. Thank you, sir.
    Mr. Forbes. Thank you, General.
    Mr. DiLisio, we are going to let you have the last word.
    Mr. DiLisio. That is unusual.
    [Laughter.]
    What I wanted to do, Mr. Chairman, was we have talked a lot 
about the MSP program and we talked about mariners. And 
certainly with my partners, everything they have told you, I 
agree with.
    What I want to remind everyone is that we have 122 organic 
ships that we did not talk about that use the same mariner 
pool. And these are organic ships like the pre-positioning 
ships that are already in place, ready to go in theater in 
fully operational status with the very same mariners onboard.
    So as what we have described as a catastrophe in the 
making, as the quality of the mariner pool begins to shrink, as 
the numbers shrink, the people that are going to be on the 
pointy end delivering Marine Corps and Army equipment is also 
going to be at risk.
    And I will tell you, we pick the best we can find. But 122 
organic ships, same mariners. That is all, Mr. Chairman. Thank 
you.
    Mr. Forbes. Gentleman, thank you all so much again for your 
service to our country and for being here today.
    And if there are no other questions, we are adjourned.
    [Whereupon, at 4:08 p.m., the subcommittee was adjourned.]



      
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