    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

    REVIEW OF THE FISCAL YEAR 2019 BUDGET REQUEST FOR THE COAST GUARD AND
                        MARITIME TRANSPORTATION PROGRAMS

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

                                    (115-40)

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                    COAST GUARD AND MARITIME TRANSPORTATION

                                     OF THE

                                  COMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 MARCH 14, 2018

                                   __________

                           Printed for the use of the
                 Committee on Transportation and Infrastructure

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         Available online at: https://www.govinfo.gov/committee/house-
         transportation?path=/browsecommittee/chamber/house/committee/
                                 transportation
                                       ______

                         U.S. GOVERNMENT PUBLISHING OFFICE

    31-307 PDF                WASHINGTON : 2018

                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      BILL SHUSTER, Pennsylvania, Chairman
    DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
    JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of
      Vice Chair                             Columbia
    FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
    SAM GRAVES, Missouri                 ELIJAH E. CUMMINGS, Maryland
    DUNCAN HUNTER, California            RICK LARSEN, Washington
    ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
    LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
    BLAKE FARENTHOLD, Texas              DANIEL LIPINSKI, Illinois
    BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
    DANIEL WEBSTER, Florida              ALBIO SIRES, New Jersey
    JEFF DENHAM, California              JOHN GARAMENDI, California
    THOMAS MASSIE, Kentucky              HENRY C. ``HANK'' JOHNSON, Jr.,
    MARK MEADOWS, North Carolina             Georgia
    SCOTT PERRY, Pennsylvania            ANDRE CARSON, Indiana
    RODNEY DAVIS, Illinois               RICHARD M. NOLAN, Minnesota
    MARK SANFORD, South Carolina         DINA TITUS, Nevada
    ROB WOODALL, Georgia                 SEAN PATRICK MALONEY, New York
    TODD ROKITA, Indiana                 ELIZABETH H. ESTY, Connecticut,
    JOHN KATKO, New York                     Vice Ranking Member
    BRIAN BABIN, Texas                   LOIS FRANKEL, Florida
    GARRET GRAVES, Louisiana             CHERI BUSTOS, Illinois
    BARBARA COMSTOCK, Virginia           JARED HUFFMAN, California
    DAVID ROUZER, North Carolina         JULIA BROWNLEY, California
    MIKE BOST, Illinois                  FREDERICA S. WILSON, Florida
    RANDY K. WEBER, Sr., Texas           DONALD M. PAYNE, Jr., New Jersey
    DOUG LaMALFA, California             ALAN S. LOWENTHAL, California
    BRUCE WESTERMAN, Arkansas            BRENDA L. LAWRENCE, Michigan
    LLOYD SMUCKER, Pennsylvania          MARK DeSAULNIER, California
    PAUL MITCHELL, Michigan              STACEY E. PLASKETT, Virgin Islands
    JOHN J. FASO, New York
    A. DREW FERGUSON IV, Georgia
    BRIAN J. MAST, Florida
    JASON LEWIS, Minnesota
                                    ------                                7

            Subcommittee on Coast Guard and Maritime Transportation

                      DUNCAN HUNTER, California, Chairman
    DON YOUNG, Alaska                    JOHN GARAMENDI, California
    FRANK A. LoBIONDO, New Jersey        ELIJAH E. CUMMINGS, Maryland
    GARRET GRAVES, Louisiana             RICK LARSEN, Washington
    DAVID ROUZER, North Carolina         JARED HUFFMAN, California
    RANDY K. WEBER, Sr., Texas           ALAN S. LOWENTHAL, California
    BRIAN J. MAST, Florida               STACEY E. PLASKETT, Virgin Islands
    JASON LEWIS, Minnesota, Vice Chair   PETER A. DeFAZIO, Oregon (Ex
    BILL SHUSTER, Pennsylvania (Ex           Officio)
        Officio)

                                    CONTENTS

                                                                       Page

    Summary of Subject Matter........................................    iv

                                   TESTIMONY

    Admiral Paul F. Zukunft, Commandant, U.S. Coast Guard............     5
    Master Chief Steven W. Cantrell, Master Chief Petty Officer of
      the Coast Guard, U.S. Coast Guard..............................     5
    Rear Admiral Mark H. Buzby, U.S. Navy (Ret.), Administrator,
      Maritime Administration........................................     5
    Hon. Michael A. Khouri, Acting Chairman, Federal Maritime
      Commission.....................................................     5

                   PREPARED STATEMENTS SUBMITTED BY WITNESSES

    Admiral Paul F. Zukunft..........................................    29
    Master Chief Steven W. Cantrell \1\
    Rear Admiral Mark H. Buzby.......................................    40
    Hon. Michael A. Khouri...........................................    49

                           SUBMISSIONS FOR THE RECORD

    Report, ``Federal Maritime Commission 56th Annual Report for
      Fiscal Year 2017,'' submitted by Hon. Michael A. Khouri, Acting
      Chairman, Federal Maritime Commission \2\
    Admiral Paul F. Zukunft, Commandant, U.S. Coast Guard, responses
      to questions for the record from the following Representatives:

        Hon. Duncan Hunter of California.............................    37
        Hon. Rick Larsen of Washington...............................    38
    Rear Admiral Mark H. Buzby, U.S. Navy (Ret.), Administrator,
      Maritime Administration, responses to questions for the record
      from Hon. Rick Larsen, a Representative in Congress from the
      State of Washington............................................    47

    ----------
    \1\ Master Chief Cantrell did not submit a written statement.
    \2\ The report entitled ``Federal Maritime Commission 56th Annual
    Report for Fiscal Year 2017'' is available online at https://
    www.fmc.gov/assets/1/Page/AnnualReportFY17.pdf.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

     REVIEW OF THE FISCAL YEAR 2019 BUDGET REQUEST FOR THE COAST GUARD AND
                        MARITIME TRANSPORTATION PROGRAMS

                                  ----------

                           WEDNESDAY, MARCH 14, 2018

                      House of Representatives,
              Subcommittee on Coast Guard and Maritime
                                        Transportation,
                Committee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 11:07 a.m., in
    room 2167 Rayburn House Office Building, Hon. Duncan Hunter
    (Chairman of the subcommittee) presiding.
        Mr. Hunter. The subcommittee will come to order.
        Today we convene to review the fiscal year 2019 budget
    request for the Coast Guard and maritime transportation
    programs.
        The United States Coast Guard is a multimission service and
    the only armed service with law enforcement authorities. I have
    ongoing concerns with the Coast Guard being an armed service
    within the Department of Homeland Security.
        On its face, the Coast Guard should fit comfortably within
    the Department due to its role in defense and homeland
    security; however, under the Department, the Coast Guard
    doesn't fare well.
        The Service is hampered by lackluster funding requests that
    don't meet the needs of the Service, and as we heard at last
    week's hearing, the Department restricts what performance
    measures the Coast Guard publicly reports.
        Admiral Zukunft, during your 4 years as Commandant of the
    Coast Guard, we have seen the Service make progress reforming
    its acquisition process, acquisition programs for the National
    Security Cutter and the Fast Response Cutter. While they have
    had their issues in the past, they have been producing much-
    needed assets for the Coast Guard. The Offshore Patrol Cutter
    is coming online this year, and hopefully soon we will see the
    start of construction for a polar icebreaker.
        Last year, the Service was instrumental in the Federal
    Government's response to Hurricanes Harvey, Irma, and Maria.
    The Coast Guard's hurricane response efforts were in addition
    to all of the everyday actions the Coast Guard does to protect
    our Nation.
        One of which is drug interdiction. Last year, the Service
    had a record-breaking year for cocaine seizures, having stopped
    over 450,000 pounds of cocaine worth over $6 billion wholesale.
        These efforts often go unsung, and we do not want that. We
    want the Coast Guard to be known for the valor of their
    servicemembers, because we know they take risks every day in
    defense of this Nation.
        We need to understand the needs of the Service. Congress
    needs information to conduct proper oversight and to support
    programs with adequate funding. The lack of information on how
    the Service is meeting its statutory missions and how its
    assets are meeting or not meeting performance goals leaves
    Congress without much-needed information and could lead to
    inadequate budget requests, and more importantly, inadequate
    funding levels. We would like you to help us help you.
        The Coast Guard already falls behind the other services. It
    is the only armed service subjected to nondefense discretionary
    budget requirements. So unlike the other services, this is not
    considered defense spending. This places the Coast Guard in
    competition with all nonmilitary discretionary spending despite
    the Coast Guard being a military service.
        The lack of budget clarity that the nondefense
    discretionary budget has imposed on the Coast Guard has
    definitely impacted the Service in its ability to adequately
    and consistently fund its programs. As I have said before,
    without question, this is a risk to national security and
    should compel a more serious budget approach.
        When the Service is active in time of war, it works as part
    of the Navy. But its everyday missions are critical to our
    national defense. I repeat, every day the Coast Guard's
    missions are critical to our Nation's defense, and the Coast
    Guard needs sufficient funding to acquire its assets and
    effectively do its job.
        Admiral, this is your last hearing in front of this
    subcommittee. And on behalf of the ranking member, I am sure he
    will have something to say, too, but I just want to say thank
    you for your loyalty, steadfast service to this Nation. And we
    just enjoy being with you.
        It is great to see the Coast Guard turn more in a Marine
    Corps direction. So as a marine to coastie, we just want to say
    thank you, and keep on weaponizing your boats.
        MARAD is also with us today. The subcommittee shares
    jurisdiction over the Maritime Administration with the Armed
    Services Committee, having jurisdiction over the nonnational
    security aspects of the merchant marine. The subcommittee
    understands the critical role U.S. mariners have in supporting
    domestic shipping operations, as well as defense operations,
    including the Maritime Security Program and sealift.
        MARAD has been an integral part of the subcommittee's
    Military to Mariner roundtables and discussions to assist
    active and retired military mariners to move into civilian
    mariner positions.
        The subcommittee looks forward to working with MARAD on
    these important issues. I thank our witnesses for being here
    today, and I look forward to hearing your testimony.
        I will now yield to Ranking Member Garamendi.
        Mr. Garamendi. Mr. Chairman, thank you. Thank you for
    calling the hearing.
        Once again, it is a welcome change to be able to talk about
    a funding increase rather than to try to figure out what to do
    with less money.
        First off, Admiral Zukunft, thank you so very much for your
    service. You have been a pleasure to work with over this period
    of time. And the Coast Guard in the recent hurricanes performed
    admirably, way beyond the expectations--well, not beyond our
    expectations, but in a very, very difficult environment. And we
    know that has to do a lot with the command structure, and I
    know that you are at the top of that. So thank you so very
    much.
        I also see that, Mr. Cantrell, you are also going to
    retire. I want to thank you for your service. And I am sure
    that all of the men and women in the Coast Guard appreciate
    what you have been able to accomplish representing them so well
    in your position as well as before this committee.
        I guess we will look forward to Admiral Schultz and see how
    he bears up under our severe questioning. I am sure he will do
    very, very well with it, and I know that he has a significant
    person to follow.
        Now, back to the budgets. It is not just about the numbers,
    but it is really how they all fit together. We have much better
    numbers to work with. That is not my concern.
        Moreover, the real problem with this budget is, does it
    represent a change in which we can look forward to the future
    with wholesome, full budgets, or is it just an anomaly and we
    will go back to where we have been over the last several years,
    and that is trying to figure out how to do more with less.
        Last year's budget, by example, requested the Coast Guard
    be cut by 14 percent. This year we are looking at an 11-percent
    increase. Well, we think that is a significant improvement. But
    what about the years in the future?
        It is my hope that among the options, we are going to see
    increased budgets for the Coast Guard.
        I note that the President is talking about his wonderful,
    beautiful border wall. I think he said $18 billion. Probably
    closer to twice that. But nonetheless, if you want to stop the
    drugs, as he apparently wants to do, better to spend that money
    on the Coast Guard where you have an extraordinary record.
        Tariffs. Interestingly, the President unilaterally imposed
    tariffs last week on steel and aluminum, but in his budget he
    proposes not to use that newfound opportunity for the American
    steel industry to build ships, but rather for MARAD to go out
    and purchase a couple of used hulls and to somehow repurpose
    those for the academies. But what happened to the multiservice
    vessels that were authorized in the budget?
        I am going to ask you, Admiral Buzby, about that. We think
    that we had a pretty good plan, and we are not interested in
    buying a bunch of foreign ships for the maritime academies, but
    rather to make them in America.
        So what are we going to do? Well, we are going to find out
    where you are coming from today.
        Additionally, the Title XI Maritime Loan Guarantee Program
    seems to have been zeroed out. So what does that mean for our
    ships that we need to build for the recycling program and for
    the Marine Highway Program?
        All of this makes very little sense. We need to put
    together a budget that actually meets all of the needs and not
    cuts inappropriately.
        So while the top line looks good, you get into the details
    and we have problems. We are going to get into that in detail.
        I yield back.
        Mr. Hunter. I thank the ranking member.
        And I just ask that we put on timers, too, because we never
    have anybody here at our hearings very often, and now we have
    quite a few people. We will stay on track.
        Mr. DeFazio. Mr. Chairman, may I?
        Mr. Hunter. Absolutely.
        The ranking member of the full committee is recognized.
        Mr. DeFazio. Thanks, Mr. Chairman.
        I would like to congratulate and thank Admiral Zukunft on
    his pending retirement. There was something about severe
    questions, and there don't need to be any today. I think we
    have come a long way in the last 4 years in terms of the Coast
    Guard's future looks better.
        We are finally getting some of the recognition that all of
    us have been arguing for in terms of adequate funding for the
    resources you need. Instead of starting with a proposed cut, we
    have a proposed increase. Inadequate, but a start.
        We are finally moving ahead with the first new icebreaker,
    but we have other things that are still underfunded. Although
    there is $135 million for constructing and renovating shoreside
    infrastructure, there is still a $1.6 billion backlog. We still
    have to look at a whole new fleet of helicopters, buoy tenders,
    heavy lifeboats. There is an incredible list of things that we
    still need for the Coast Guard.
        And when I think about this idiotic wall, I just think,
    boy, if we had the money that is being proposed for the wall
    that anybody can go over, under, or around, particularly on the
    oceans, wouldn't it be better to spend those billions of
    dollars on fully recapitalizing and meeting the needs of the
    Coast Guard and other real defenses to the integrity of the
    United States and to interdict smuggling.
        Chief Cantrell, I also want to congratulate you. Thanks for
    your many, many years of service. And I don't know where you
    are going, I know he is going someplace warm, but I wish you
    well.
        This was a new issue to me about OMB and the replacement
    ships with MARAD, and that causes me tremendous concern. And
    like the ranking member, I can't believe that we can't find
    American hulls. And even for that much money, I think we can
    build a couple of ships. I am not quite sure what the
    specifications are. But that seems like a fair amount of money.
    And if we are going to repurpose foreign hulls, I am going to
    be really not very happy about that. I think three, hopefully,
    at least, and maybe we can enlist the full committee chairman.
        With that, I would yield back the balance of my time. Thank
    you.
        Mr. Hunter. I thank the gentleman.
        Today we will hear testimony from Admiral Paul F. Zukunft,
    Commandant of the United States Coast Guard; Master Chief
    Steven W. Cantrell, Master Chief Petty Officer of the United
    States Coast Guard; Rear Admiral Mark H. Buzby, United States
    Navy, retired, Administrator, Maritime Administration; and the
    Honorable Michael A. Khouri, Acting Chairman, Federal Maritime
    Commission.
        Admirable Zukunft, you are now recognized to give your
    statement.

     TESTIMONY OF ADMIRAL PAUL F. ZUKUNFT, COMMANDANT, U.S. COAST
      GUARD; MASTER CHIEF STEVEN W. CANTRELL, MASTER CHIEF PETTY
    OFFICER OF THE COAST GUARD, U.S. COAST GUARD; REAR ADMIRAL MARK
          H. BUZBY, U.S. NAVY (RET.), ADMINISTRATOR, MARITIME
     ADMINISTRATION; AND HON. MICHAEL A. KHOURI, ACTING CHAIRMAN,
                      FEDERAL MARITIME COMMISSION

        Admiral Zukunft. Good morning, Chairman Hunter, Ranking
    Member Garamendi, and ranking member of the full committee, Mr.
    DeFazio, distinguished members of this committee. I appreciate
    the opportunity to testify today and ask that my written
    statement be entered into the record.
        Mr. Hunter. Without objection.
        Admiral Zukunft. The Congress, and especially this
    subcommittee, has gone to great lengths to challenge the status
    quo, demand transparency regarding our needs, and serve as a
    strong voice for the men and women of your United States Coast
    Guard.
        Examples, such as helping us establish the polar icebreaker
    integrated program office, your support in products like the
    unfunded priorities lists, typify what this committee has done
    for the United States Coast Guard. Your leadership and vision
    have helped us offset uncertainty in the budget cycle and have
    positioned us to receive the first meaningful funding increase
    since the Budget Control Act was passed in 2011.
        And, yes, we are working with the administration to
    finalize our long-term major acquisition project and the latest
    Capital Investment Plan and unfunded priorities list. Many of
    these were submitted months ago. We continue to work with our
    Department and with the administration. We know you need those
    so you can help us in your endeavors to support the United
    States Coast Guard. You have my commitment that we will get
    these to you just as soon as possible, Chairman.
        Following a series of devastating hurricanes, the Coast
    Guard launched one of the largest responses ever, culminating
    in the rescue of nearly 12,000 people. This was an all-hands-
    on-deck campaign, but it came at a cost. And I thank you and
    this Congress for the $835 million to address Coast Guard
    response costs and rebuild damaged infrastructure to modern
    standards.
        And while so many endured these natural disasters,
    transnational criminal organizations continue to raise havoc in
    the Western Hemisphere. Last year, our campaign to protect the
    U.S. border, thousands of miles from our land border, netted
    over $6 billion worth of cocaine before it could reach our
    shores.
        And equally important, we referred 606 smugglers to the
    Department of Justice for prosecution here in the United States
    where we prosecute 100 percent, less than 5 percent prosecution
    in their countries of origin, effectively advancing security
    and prosperity in our backyard.
        Our cybersecurity program of record safeguards cyberspace
    and we secure our maritime critical infrastructure--ports,
    waterways, and commerce--that translates to $4.6 trillion in
    economic activity on an annual basis.
        And we continue to be a sound investment. We earned our
    fifth consecutive clean financial audit opinion, the only armed
    service to do so, and our major acquisition programs continue
    to deliver assets that meet performance cost and schedule
    milestones.
        Given our important work in the high latitudes, coupled
    with an ever-increasing assertive Russia and China, I am very
    pleased the President's budget includes $750 million for the
    polar icebreaker program as well. Our request for proposals,
    released just 2 weeks ago, has energized the U.S. industrial
    base and keeps us on track. We are as close as we have ever
    been in over 40 years to recapitalizing our Nation's polar
    icebreaking fleet, and we must keep this momentum going.
        The budget also advances the recapitalization of our aged
    fleet of 35 inland construction and river tenders, some over 70
    years old, in all with an average age of 56. Replacing these
    vessels with a modern, modest fleet of Waterway Commerce
    Cutters is a matter of economic and National Security Cutters
    as these ships are necessary to sustain our vital maritime
    transportation system, part of that infrastructure, if you
    will.
        While this progress is meaningful and very encouraging, it
    is simply not enough. We need to continue building tomorrow's
    Coast Guard. Years of fiscal constraint under Budget Control
    Act caps have forced funding offsets and reduced our force
    structure. Going forward, we require 5 percent analyzed growth
    in our operations and maintenance account and a minimum of $2
    billion in our acquisition account, a small ask for a service
    that provides great return on investment.
        I have been honored to work alongside you these past 4
    years. The more predictable the resource allocation process,
    the more ready our Coast Guard becomes. We are on the right
    track.
        Thank you, Mr. Chairman, Ranking Member, and members of
    this committee, and I welcome your questions.
        Mr. Hunter. Thank you, Commandant.
        Master Chief Petty Officer of the Coast Guard Cantrell, you
    are recognized.
        Master Chief Cantrell. Thank you, sir. And good morning,
    Chairman Hunter, Ranking Member Garamendi, and distinguished
    members of this committee. It is a privilege to appear before
    you today to represent the workforce of your United States
    Coast Guard.
        As an Armed Force of the United States of America, as well
    as one of the Nation's lead maritime law enforcement and marine
    safety agencies, our men and women represent the finest coast
    guard in the world. These dedicated individuals are on the
    front lines every day carrying out major operations globally,
    as well as protecting our homeland at our maritime borders and
    inland waterways.
        When disaster strikes, your Coast Guard responds with an
    unmatched humanitarian spirit. And I want to thank committee
    members and staff that have visited various Coast Guard units
    throughout a remarkable 2017.
        While visiting our units, you heard directly from the
    selfless people who wear the uniform of one of our Nation's
    five armed services. I hope those visits provided you with
    ground truth about the effects your decisions have on our
    personnel, their families, and their careers.
        I also want to thank you for your continued support of our
    recapitalization efforts, which, as you know, are making
    tremendous impact on an international level. Our new platforms
    are more capable, allowing our personnel to carry out their
    missions with the latest and most technologically advanced
    systems available.
        We continue to have devoted Americans volunteer to serve
    and reenlist in our multimission service, and not just as
    individuals, but often as a family.
        I, along with our senior leaders, remain deeply committed
    to providing our people with state-of-the-art platforms and
    world-class quality of life for them and their families as they
    serve this great country.
        I would continue to ask that we not lose sight of the fact
    that we still have some work to do as many of our Coast Guard
    men and women continue to serve in cutters and at stations that
    are older and less capable.
        But besides the challenges an aging fleet presents to our
    military workforce, in many places members and their families
    continue to face quality-of-life challenges. With many of our
    workforce serving at remote units far from bases or military
    installations, and in many cases high-cost coastal areas,
    access to affordable housing, adequate medical services, and
    suitable childcare will always be a challenge.
        The sacrifices our members and their families make
    throughout a typical career are virtually impossible to
    quantify, and we simply cannot afford not to invest in them and
    their future.
        I would like to take a moment to thank you for the language
    in the 2018 National Defense Authorization Act, which amended
    title 37, United States Code, section 476, allowing
    reimbursement of relicensing costs for our military spouses who
    are forced to move due to military relocation.
        I also thank you for the support received in other
    important focus areas, such as professional credentialing and
    VOW [Veterans Opportunity to Work] to Hire Heroes Act
    requirements for our Coast Guard personnel.
        We look at our new ships and aircraft that are the result
    of this committee's commitment to our Service. However, the
    efforts that we invest in our people are what breathes life
    into these awesome assets and allows our families to continue
    to support us.
        These investments should be nonnegotiable in budget
    discussions. Investment and modernizing our aging accession
    points, along with our other shore infrastructure, should be a
    priority as it is just as crucial to Coast Guard mission
    success as new modern ships and aircraft. I ask that you ensure
    our fiscal year 2019 appropriation reflects your commitment to
    them.
        I know you are keenly aware of these challenges, and I am
    grateful for the support from this committee as we continue to
    address each of them. While our recruiting efforts continue to
    be stronger than any time in the last decade, and we are
    meeting our goals, I reiterate that we must continue to invest
    smartly if we want to retain the talent that is lining up at
    our recruiting offices.
        Mr. Chairman, members of the committee, on behalf of the
    servicemembers of your United States Coast Guard and their
    families, I thank you for your continued and very public
    support and for the opportunity to highlight some of our
    successes and challenges.
        And as this will be my last opportunity to testify before
    you before I retire, let me personally say thank you. It has
    been a true honor to wear this uniform for nearly 35 years in
    service to our great country and such a remarkable opportunity
    to appear before you over the last 4 years to tell you about
    the needs of some pretty amazing Americans, United States
    coastguardsmen. Thank you.
        Mr. Hunter. Thank you, Master Chief.
        Admiral Buzby, you are recognized.
        Admiral Buzby. Good morning, Chairman Hunter, Ranking
    Member Garamendi, distinguished members of the subcommittee. I
    appreciate the opportunity to discuss the President's fiscal
    year 2019 budget priorities for the Maritime Administration.
        The President's $696.4 million budget request for MARAD is
    focused on strengthening the U.S.-flag fleet, investing in the
    education and training of the next generation of merchant
    mariners, and supporting our Nation's commercial and national
    security objectives.
        In 2014, U.S. maritime freight activity supported $4.6
    trillion of economic activity, providing access to the world's
    markets and generating revenues equivalent to 26 percent of our
    GDP.
        The U.S.-flag fleet in international trade, however,
    currently carries less than 2 percent of our annual foreign
    trade, and the U.S.-flag presence in international commercial
    trade is at a historic low of 81 ships. We must grow our share
    of overseas maritime commerce to remain economically viable
    globally.
        As the U.S.-flagged deep-sea fleet dwindles and the U.S.
    becomes increasingly reliant on foreign-flagged shipping, we
    also negatively impact national security. The pool of U.S.
    merchant mariners who crew our ships in peacetime commerce are
    the same dedicated Americans we depend upon to answer the call
    to man our surge sealift fleet in times of national emergency.
        The refusal of some foreign-flagged ships to deliver DoD
    cargo during Operation Desert Shield and Storm illustrates the
    danger of relying on another nation's shipping to move our
    military cargo in a crisis.
        The Maritime Security Program, or MSP, provides direct
    annual stipends for 60 active, militarily useful, privately
    owned U.S.-flagged vessels and crews in international trade.
    This program ensures access to U.S.-flagged ships in
    international trade and, critically, the intermodal networks
    needed to move military equipment and supplies in national
    emergencies.
        The President's budget requests $214 million, or $3.6
    million for each ship enrolled in the MSP. This request is
    recognized as less than the fully authorized level for MSP. It
    reflects hard choices that had to be made as the administration
    pursues rebuilding DoD capabilities. The Department and MARAD
    strongly support MSP and recognize the critical contribution it
    plays in the Nation's security.
        Funding from the Department of Defense in fiscal year 2019
    will allow MARAD to maintain 46 surge sealift support and
    special mission vessels from the Ready Reserve Force in a 5-day
    readiness status and begin service life extensions for several
    ships as part of a comprehensive recapitalization program for
    this fleet, which has an average age of 43 years.
        Survival of the U.S.-flag fleet and our ability to crew the
    surge sealift force, depend, deploy and sustain our military,
    requires an adequate pool of U.S. merchant mariners. Most U.S.
    Coast Guard credentialed officers who crew these ships graduate
    from the United States Merchant Marine Academy and the six
    State maritime academies.
        The President's budget request includes $74.6 million for
    Kings Point, $70.6 million of it to support academy operations,
    and $4 million to fund capital building and infrastructure
    improvements for this 75-year-old institution.
        Budget requests also includes $24.4 million to support
    State maritime academies, $2.4 million of which is to provide
    financial assistance to 75 cadets who agree to incur a
    Government service obligation and $22 million for the
    maintenance and repair of our aging fleet of federally owned
    training ships.
        The administration is amending the President's budget
    request to include $300 million to replace two of the oldest
    training vessels to ensure the availability of safe and
    efficient vessels to meet critical mariner training needs now
    and in the future.
        Finally, the budget requests $30 million for the MARAD ship
    disposal program, the majority of which will be used to
    continue the required decommissioning of Nuclear Ship Savannah
    while in protective storage.
        These programs, supported by the President's fiscal year
    2019 budget request, represent MARAD's top priorities. We will
    keep this subcommittee apprised of the progress of our program
    activities and initiatives throughout the coming year.
        I appreciate the subcommittee's continuing support for
    maritime programs, and I look forward to working with you on
    strengthening our Nation's maritime transportation system and
    bolstering our fundamental, foundational Jones Act.
        I request that my written statement be entered into the
    written record of this hearing. I am standing by for your
    questions, sir.
        Mr. Hunter. Thank you, Admiral.
        I would like to recognize Mr. Khouri, but before I do, I
    want to recognize Rebecca Dye, sitting behind you, and Dan
    Maffei. Rebecca was also a committee staffer and a coastie. You
    have got the trifecta.
        So welcome.
        Mr. Khouri, you are recognized.
        Mr. Khouri. Thank you. Chairman Hunter, Ranking Member
    Garamendi, and members of the subcommittee, thank you for the
    invitation to appear today. With permission, I will summarize
    my written remarks and request that the written testimony and a
    copy of our fiscal year 2017 annual report be included in the
    record.

            [The fiscal year 2017 annual report of the Federal Maritime
            Commission is available online at https://www.fmc.gov/assets/1/
            Page/AnnualReport
            FY17.pdf.]

        Mr. Khouri [continuing]. I also recognize and thank
    Commissioner Dye and Commissioner Maffei for joining me today.
        The FMC's mission is to ensure a competitive and reliable
    international ocean transportation supply system that supports
    the U.S. economy and protects the public from unfair and
    deceptive practices.
        As the Commission monitors and regulates key sectors of the
    container shipping industry to assure competition and integrity
    for America's ocean supply chain, the Commission is meeting its
    mission, and our U.S. exporters, importers, and consumers are
    the ultimate beneficiaries.
        We have seen significant change in the ocean transportation
    system over the last few years. The number of major global
    shipping companies decreased from 21 to 12. With new
    construction, global fleet capacity has increased to 5,200
    containerships and 21 million TEUs [20-foot equivalent units]
    of capacity. This capacity increase outran global cargo demand,
    resulting in overcapacity in nearly all trade lanes.
        Nine of the twelve major ocean carriers are members of
    three global vessel operation alliances. A reassuring data
    trend, however, shows us that even with the mergers and new
    carrier alliances, the individual ocean carriers continue to
    independently and vigorously compete on pricing and overall
    capacity decisions, providing evidence that healthy competition
    continues.
        Industry analysts and shipper interests recognize that the
    alternative to well-regulated vessel alliances would be further
    consolidation in the industry with fewer ocean carriers and
    less service options.
        Another positive development, carrier agreements that
    contain authority to discuss rates, have experienced a steady
    decline. Five such agreements terminated in the past few
    months.
        The Commission has responded to these structural
    developments with new agreement negotiation practice and
    enhanced monitoring programs. We have insisted on narrower
    agreement authority and more clear, definite language.
        For all agreements, our staff maintains a careful watch on
    industry trends, being vigilant for indications of
    anticompetitive behavior.
        Marine terminals and port authorities have shown new
    interest in using cooperative agreements in their operations.
    Terminals are cooperating in new ways as they address the
    challenges of larger vessels unloading more containers at each
    port call and the related port infrastructure requirements and
    developing collective solutions to mitigate cargo bottlenecks.
        On the regulatory front, the Commission continues to look
    for ways to aid compliance with statute and regulatory
    requirements for our stakeholders. Global supply chain
    operations benefit from less regulation through lower cost that
    pass through to our U.S. exporters, importers, and consumers.
        Commissioner Dye recently presented the final report of the
    Supply Chain Innovation Team Initiative that highlighted the
    need for greater information visibility across the ocean
    freight delivery system.
        In December 2016, the Coalition for Fair Port Practices
    filed a petition asking the FMC to begin a new rulemaking
    proceeding to address practices by marine terminals and ocean
    carriers related to demurrage, detention, and related fees. We
    received numerous comments and then held 2 days of public
    hearings in January. The Commission recently voted to institute
    a formal investigation to develop a full factual record.
        Following her experience with the Supply Chain Innovation
    Team Initiative, Commissioner Dye agreed to serve as the fact-
    finding officer. The investigation report is scheduled for
    December of this year.
        Regarding our budget, our requested level of funding for
    fiscal year 2019 is $27,490,000. The FMC is a small agency
    charged with a focused competition and commercial mission and a
    need for specialized staff, including a high percentage of
    economists and attorneys, career fields that tend to fall in
    the upper GS pay scales. The bulk of the Commission's budget,
    approximately 86 percent, is dedicated to these salaries and
    rents.
        Thank you for your attention, and I will be pleased to
    answer any questions.
        Mr. Hunter. Thank you, Mr. Khouri.
        I am going to now recognize Members for questions, starting
    with myself.
        Commandant, as you look back over the last 4 years, just,
    if you would, highlight some things, lessons learned, saved
    rounds, and the biggest challenges that your successor is going
    to have to face, from your point of view.
        Admiral Zukunft. Thank you, Chairman.
        So as I look back 4 years ago, we were very focused on two
    major acquisitions, and that is security cutter, but more
    importantly, the Offshore Patrol Cutter. But we didn't really
    look outside the scope of those major acquisition programs.
        We started applying a strategy driving a budget approach to
    the United States Coast Guard, rather than coming to you asking
    you what we need, but explain why we need it, but how that fits
    within the national security framework.
        As we look at where the Department of Defense is going
    within the national military strategy, but where are they not
    going? You don't see a national military strategy that
    addresses the Western Hemisphere, nor do you see one that
    addresses the Arctic. As an armed service, we can close those
    gaps, and then with the unique authorities that we have, we can
    play in all of those areas.
        So with the support of this committee, we are now
    modernizing our entire fleet of Coast Guard cutters: the
    National Security Cutters, Offshore Patrol Cutters, the Fast
    Response Cutters, polar icebreakers, and now our Waterway
    Commerce Cutters.
        We have created a cyber program of record. We have a Cyber
    Protection Team up and running. Next year, we will have a cyber
    curriculum at our United States Coast Guard Academy.
        Daily we sail into harm's way. For the last 2 years, we
    have had record removals of cocaine. I have been able to meet
    with the Presidents of every country, except Nicaragua, in
    Central America, multiple times with President Santos, to put
    pressure on them to stop the movement of drugs coming through
    their country destined for the United States.
        In 3 weeks, the United States Coast Guard, Mexican Navy,
    Colombian Navy, we will be patrolling together for the first
    time ever in the eastern Pacific.
        But as we sail into harm's way, and as we saw during last
    year's hurricane season, in the last 4 years we have not lost
    one Coast Guard life in the conduct of conducting our hazardous
    operations. And to that, I owe great credit to our officers in
    charge, our commanding officers, to balance risk and at the
    same time carry out some of these, quite honestly, very heroic
    missions.
        And as we are modernizing, we have not been doing it at the
    expense of force structure. We are growing the force and we are
    growing the fleet.
        There is no better time to join the Coast Guard than right
    now, and we are seeing that at our recruiting stations, the
    people that not only want to join the Coast Guard, they want to
    stay in the Coast Guard.
        So what concerns me as I look out beyond 2019? Uncertainty.
    We have got two tremendous at-bats, as I like to call it, in
    2018 and 2019. But there are many more at-bats. And was
    mentioned, is this an anomaly? And so what we need is going to
    be predictable funding as we look in the out-years going
    forward.
        That will be the most critical aspect, is to convey the
    value proposition of the United States Coast Guard, demonstrate
    that we can be accountable for these dollars, as we have had
    the last 5 years with clean financial audit opinions, with
    responsible acquisition programs that deliver on-time, on-
    budget programs that easily meet and many times these new
    assets exceed our operational requirements, as we have seen
    with the National Security Cutter.
        So challenges ahead, but, again, with the tremendous
    support, and taking away some of those huge uncertainties,
    including what could have been a 14-percent reduction to our
    funding base. We would not have prevailed last year during
    Hurricanes Harvey, Irma, and Maria if we did not have that
    fiscal support.
        So support here, challenges ahead, but we are clearly on
    the right trajectory. And really, since 2011, we are finally
    seeing an upward turn in our appropriation.
        Thank you.
        Mr. Hunter. Thank you, Commandant.
        Master Chief, same question, what do you see as the
    challenges for your successor? And I thought you guys did left-
    seat, right-seat carryover to the next Commandant, but you
    don't. The next Commandant brings in his own senior enlisted
    person, right?
        Master Chief Cantrell. That is right.
        Mr. Hunter. So what do you think, Master Chief?
        Master Chief Cantrell. Well, and I would like to talk about
    a couple of successes and accomplishments. First, we got--well,
    he has left--we got Congressman DeFazio out in a motor lifeboat
    out in the middle of a Columbia River bar last year and got him
    wet. So that was an opportunity for him to see the real good
    work that our folks did.
        But over the last couple years, we have had a couple of
    housing areas that have opened up. We have made some modest
    investments in some of our older housing. We have been able to
    get our childcare reimbursement program enhanced so that our
    folks are getting their reimbursements a lot quicker. And with
    the help of this committee, particularly over the last 3 years,
    of being able to protect our Basic Allowance for Housing,
    particularly for dual military couples, and I appreciate that.
        And we have really put our focus on leadership development
    from the time that they leave boot camp all the way through to
    where they are master chiefs, so that we are really training
    our reliefs and our reliefs' reliefs in the best possible way.
        And one that we are really proud of is, as an armed
    service, 4 years ago, our recruits were not firing live
    ammunition at boot camp. They were using a simulator. And we
    were able to turn that around and get our folks and find
    resources to get them to where they are actually going to a
    range and shooting live ammunition and getting qualified before
    they go out. And as a leading maritime law enforcement agency,
    that was just really, really important, and we have been
    successful there.
        For my relief, still got work to do. I think we still need
    some more childcare centers. And while we do have money for
    this year and next year to get a new child development center,
    we need to continue to work that, particularly in some of our
    remote areas that don't have access to DoD facilities.
        A continued investment in our accession point. Our basic
    training facility in Cape May is old, it is in need of repair.
    There are some plans over the next 10 years to rehab that, and
    we just need to keep the pressure there.
        And professional credentialing and licensing, which was
    required by the NDAA in 2015. We need to get after that and
    give that to our folks as they transition out of our Service
    and give them the things that they need.
        And those are the things that I will pass along to my
    relief later this month, hopefully.
        Mr. Hunter. Thank you, Master Chief.
        And, Commandant, again, the last 4 years, I realize this is
    my sixth budget hearing on this, the last 4 years I think was a
    sea change for the Coast Guard in the direction that you are
    going, and it has been an honor to be a part of it.
        Mr. Garamendi.
        Mr. Garamendi. Thank you, Mr. Chairman.
        We have spent the last 4 years trying to figure out how we
    are going to get a heavy icebreaker. We are well on track to do
    that.
        Admiral, could you bring us up to date on where we are with
    the heavy icebreaker and, specifically, the funding issues for
    the first, second, third?
        Admiral Zukunft. Thank you, Ranking Member. And as you
    know, as we look, it is not finalized yet, but certainly the
    2019 budget, very optimistic, with an appropriation that gets
    us an icebreaker with DHS funding.
        As we all know, there is language in the NDAA, the National
    Defense Authorization Act, that puts the onus on the Department
    of Defense to provide one icebreaker.
        So there is still more work to be done in terms of how that
    funding is sequenced. We need more than one icebreaker. The
    program of record, it is six. And then going forward, we need
    to look at block buying these.
        And there is language in the request for proposals for the
    five potential contractors to submit that as well so we can
    make an informed decision, because this is the highest risk
    mission that we have right now. I have nothing else I can send
    down to Antarctica in my inventory right now if our only heavy
    icebreaker should become beset in ice.
        So that is the additional work that needs to happen going
    forward with our polar icebreaker program.
        Mr. Garamendi. The budget augmentation has some $700
    million. My personal opinion of that, that is for the second
    and third icebreakers and we ought not relieve the Department
    of Defense from funding the first icebreaker.
        That is where I am coming from on it. We will see how all
    that works out into the future as we put together the new NDAA
    and the appropriation, the omnibus now underway, then the 2019
    appropriations.
        I toss that out and say that is the bottom line, and
    hopefully that will be the way it is, so that that $750 million
    doesn't relieve the Department of Defense from its current
    obligation to fund the first icebreaker.
        Going forward, we have questions, really I want to get to
    MARAD and Admiral Buzby. And this has to do with the National
    Security Multimission Vessel. Once again, the addendum to the
    budget indicates that there is $300 million to buy some laid-
    up, used, rusty foreign-built hulls, rather than the new
    National Security Multimission Vessel.
        Let's get into it, Admiral Buzby. Where are we with this?
    And are you really serious as a representative of the
    administration to toss out all the work that has been done and
    the design? And by the way, where is the design of this new
    multimission vessel?
        Admiral Buzby. Thank you for the question, sir.
        First, the design is alive and well. It is fairly mature
    and could be built.
        Mr. Garamendi. Fairly mature is what I would call squishy
    words. Exactly where is the design? Is it completed?
        Admiral Buzby. It is not ready to build from. It would need
    to go one further step into detail design and advanced
    procurement. That would be the next step, which would----
        Mr. Garamendi. So it is good to go to the next step.
    However, the administration is taking us to a bunch of rusty
    buckets.
        Admiral Buzby. Well, sir, the reason, I think, that the
    request was made the way it was, was due to the timeframe.
    Given the funds that are potentially in the fiscal year 2018
    budget, which we don't know for sure yet, given the fact that
    we are bumping up against the stops with the Empire State,
    having to get something in place for her in 2019, the nearest
    path, now that we are kind of getting in against the stops, was
    to go on the open market to find, not necessarily a laid-up
    ship, a ship that is available.
        And it could still be a U.S.-built ship. We are going to
    cast a very wide net to see what is available to then upgrade.
        Mr. Garamendi. So if we follow that, what happens to the
    whole concept of a multimission vessel?
        Admiral Buzby. I think it is still alive.
        Mr. Garamendi. I think it just sunk.
        Admiral Buzby. The business case is still there that a new
    ship should be procured. That still exists.
        If money were to materialize and we could get started on a
    ship sooner, a new ship, we could build a new ship. We have the
    capability to do that. But the time is what is working against
    us right now.
        Mr. Garamendi. Let me just be very clear: No way, no how
    are we going to allow you to go out and buy a bunch of rusty
    old hulks rather than continue with what we have been working
    on for the last several years, and that is the concept of a
    multimission vessel. So keep that in mind.
        Admiral Buzby. Yes, sir.
        Mr. Garamendi. There is $300 million that is somewhere out
    there. And I will do everything I can, and I think the
    committee may very well be supporting it, at least the ranking
    member indicated he did.
        Admiral Buzby. I look forward to working with you on that,
    sir.
        Mr. Garamendi. My time has expired, and we are going to do
    the best we can to stay to our 5 minutes.
        Thank you, Mr. Chairman. I yield back.
        Mr. Hunter. I thank the gentleman.
        Mr. Mast is recognized.
        Mr. Mast. Thank you, Chairman.
        I will just start by saying, Master Chief, I think you are
    at about 2 months and a wakeup from what we talked about.
    Congratulations. Thank you for your service to this country. It
    is incredible. It has been an honor to be able to question you
    numerous times out here. And I am just very proud to have you
    join us numerous times on these panels here. So thank you for
    your service to this country.
        Commandant, I have just got a couple of quick questions for
    you, one local, one more broad about airframes. But locally, at
    my level, you guys have been doing a great job doing a
    navigation feasibility study in my area on our big waterways.
    If you could just have your folks get me a completion date on
    that, it doesn't have to be in this hearing, but get me a
    completion date on that, I would appreciate that greatly. I
    just thought I would take the opportunity to ask for that.
        Looking more at the airframes, what I wanted to ask was
    about this. And I understand that the Coast Guard is looking at
    a lot of different courses of action to keep the fleet of MH-
    60Ts up, operational, your workhorse for search and rescue.
    Love having them in the area. You know, I am a boater that gets
    out in Fort Pierce and Fort Lauderdale and Miami, so I like
    having you guys out there.
        But if you are going to keep those flying until the 2030s,
    I am also told that those average flight hours on those
    airframe are about 15,000 hours, so it is a pretty good amount
    of time. And, of course, we all realize on this committee how
    the Coast Guard is really constrained in terms of resources.
        And so in that, I was wondering if you could answer, have
    you guys been looking at the purchasing of new cabins or
    airframes that would basically zero-time those aircraft? Is
    that something that you all look at?
        Admiral Zukunft. Thank you, Congressman, and we will get
    those waterway studies to you as well.
        So with our two helicopters, the H-60 Sikorsky, which is
    our long-range helicopter, we are actually taking what we call
    sunset airframes from the other armed services, and we
    completely renew these, re-engine them. And what we end up with
    is a like-new H-60 airframe. We reset the hours on it. And we
    are acquiring these at half the cost of a new airframe.
        Our H-65 Dolphin model is now in its fifth spiral
    development, if you will. They have been re-engined. It is a
    composite airframe. And when I first deployed with these
    helicopters on my ships back in the late 1980s, when they first
    hit the fleet, they actually have a much greater reliability
    today than they did when the first generation of this airframe
    came out. And much of this is being done through self-help.
        As we look at our 20-year investment plan, starting in
    about the year 2033 is when we start recapitalizing our short-
    range airframes. And then overlaid with that is going to be our
    long-range H-60 airframes.
        And the key decision point at that point will be, what do
    we have in our unmanned aerial inventory? We are also working
    on manned aerial systems to include land-based. And then, do we
    look at a one-airframe model or do we look at a two-airframe
    model, recognizing there are great economies of scale,
    training, and the like, inventory, parts management, if you
    have one airframe?
        And then looking across the Department of Homeland
    Security, especially within Customs and Border Protection, to
    look at commonality across the Service, but we are also part of
    a joint service, to make sure that we have interoperability
    there as well.
        I feel quite comfortable with the timeline that we have set
    right now, just given the reliability and the work that we are
    doing organically within the Coast Guard to maintain these
    airframes.
        Mr. Mast. So this helps you stretch the dollar, and you
    could easily say this is much more than a Band-Aid, this is
    good long term.
        Admiral Zukunft. Near term and long term. And these are
    more than Band-Aids. We are flying these 800 hours a year. The
    reliability rate, we had over 90 airframes down in Harvey,
    Irma, and Maria, not one of those airframes missed a mission. I
    think it is a testimony to the wrench turners that often don't
    get the due credit, the maintainers, if you will, of this
    squadron of aircraft.
        Mr. Mast. Thank you. Thank you, Commandant.
        And, Chairman, I yield back.
        Mr. Hunter. I thank the gentleman.
        Ms. Plaskett.
        Ms. Plaskett. Thank you, Mr. Chairman.
        And thank you, gentlemen, for being here.
        Admiral, thank you so much for the work that you all have
    been doing in the Virgin Islands and the Caribbean. And you and
    I have had several encounters in both good and bad times, and I
    am grateful for the support that you have given to the people
    of the Virgin Islands and Puerto Rico as well.
        Following the passage of the Bipartisan Budget Act, for the
    fiscal year 2018, the administration delivered a wish list of
    how it would want to have that funding spending.
        I guess my question to you would be, is that reflective of
    where the Coast Guard most needs additional funds for the rest
    of fiscal year 2018?
        Admiral Zukunft. Yes, ma'am. And what I am most encouraged
    by is the supplemental relief that we are seeing, especially
    from Hurricanes Irma and Maria.
        As you well know, the U.S. Virgin Islands and Puerto Rico,
    these are Coast Guard communities as well. And so when you see
    the Coast Guard is still there, as these communities are still
    trying to get back on their feet, these are Coast Guard
    families in that very same predicament as well.
        So what this supplemental relief does is, rather than build
    a house out of straw, let's build one out of brick and mortar.
    In other words, let's harden these facilities so they could
    withstand at least a category 3 hurricane.
        We made a similar investment out of Great Inagua with our
    hurricane hangar out there. It experienced 155-knot winds
    during Hurricane Irma. It sustained no damage whatsoever.
        So we need to use these dollars and invest smartly because
    we are in the U.S. Virgin Islands and Puerto Rico for the long
    haul. These are Coast Guard communities as well, and we are
    proud to be part of those communities.
        Ms. Plaskett. OK. I also wanted to ask you, the majority of
    the illegal contraband is being interdicted in the eastern
    Pacific, but you know there is a significant drug smuggling
    threat that reaches the U.S. Virgin Islands and Puerto Rico
    from South America.
        How will the additional National Security Cutters and the
    future Offshore Patrol Cutters defend against this threat? And
    do you believe that it is the sufficient amount and the
    appropriate number? Would you want more vessels to be able to
    take on this threat in that area?
        Admiral Zukunft. So numbers do matter. And the National
    Security Cutter has clearly been a game-changer. We are seizing
    nearly a ton of cocaine a day, and that is between the
    Caribbean, the eastern Caribbean, and in the eastern Pacific
    today.
        What has changed in the last year is we have seen a
    significant decrease in the number of Cuban migrants attempting
    to cross the Florida Straits. We have a fleet of Fast Response
    Cutters home-ported in San Juan, and we have been able to
    repurpose those ships and apply a lot more pressure on the
    approaches to Puerto Rico, to the Dominican Republic, and to
    the U.S. Virgin Islands for shipments that are leaving the
    Guajira Peninsula on a direct run, because the flow rate coming
    into Puerto Rico right now has gone up over 30 percent.
        Ms. Plaskett. It has grown over 30 percent?
        Admiral Zukunft. It has grown over 30 percent over the last
    2 years. It is not staying in Puerto Rico. It is being
    transshipped elsewhere, to include the U.S. Virgin Islands and
    to include the continental United States as well.
        So we are repurposing resources. All this based on
    intelligence.
        Ms. Plaskett. And is it the sufficient amount that you need
    to be able to address this increasing threat in the area?
        Admiral Zukunft. The U.S. will never get in front of this
    problem by itself, which is why we need allies. The interagency
    is contributing as much. And as many ships as we have put out
    there, what we have soon run out of is surveillance aircraft,
    which is why we are looking and experimenting with land-based
    UAS. We have done a couple of prototypes out of Puerto Rico as
    well.
        We need to look at state-of-the-art sensors to put into
    these unmanned aerial systems. But the intelligence is good. We
    do not have enough ships or aircraft to be fully effective in
    this mission.
        Ms. Plaskett. Thank you.
        Administrator Buzby, thank you so much, sir, for your
    service. And I wanted to ask you, with regard to the Maritime
    Administration, can you tell us what, if any, activities or
    support that your agency and your group, particularly your
    Ready Reserve Forces and your own fleet, were able to provide
    during the hurricane season in the Caribbean?
        Admiral Buzby. Yes. Thank you, ma'am.
        We were very proud to play a significant role, clearly not
    as significant as the Coast Guard who were heavily involved. We
    had three of our school ships and one of our Ready Reserve
    Force ships active, participating in hurricane relief for all
    three hurricanes. We were active in Texas, we were active in
    the gulf coast, in Florida, and most heavily in Puerto Rico and
    the Virgin Islands.
        Ms. Plaskett. Because I know that one of the issues that we
    had on the islands was that the inability to have cargo,
    particularly food relief and others, come in. I know that most
    of your support is not related to those things, but related to
    military equipment. But could your fleet also be used to
    support the additional food and other supplies and equipment
    that were needed in places like Puerto Rico and elsewhere?
        Admiral Buzby. Actually our Jones Act fleet of commercial
    ships, we had 24 ships that were providing support to Puerto
    Rico throughout the thing. So there was plenty of capacity.
        But to directly answer your question, yes, there is
    additional capacity that could be brought into play with our
    Reserve ships to augment that should it be necessary.
        Ms. Plaskett. OK. Thank you.
        Thank you very much. I yield back.
        Mr. Mast [presiding]. The Chair is going to recognize the
    gentleman from Louisiana, Mr. Graves.
        Mr. Graves of Louisiana. Thank you, Mr. Chairman.
        First of all, Admiral, I want to thank you very much for
    your service to the Coast Guard and to the Nation. I think we
    first started working together about 8 years ago when we were
    both in different capacities. And I remember one of us getting
    fairly excited and maybe yelling a good bit and things like
    that across the table at one another. And thankfully, your
    temper has subsided since then.
        I am kidding. I might have been the one doing that.
        No, but, again, I just want to thank you very much for your
    service to our Nation. I also know that your wife and family
    have sacrificed much for your service in the time away, and I
    do want to thank you.
        I know that Chairman Hunter talked to you a little bit
    about some of your lessons learned and advice on the way out,
    and we are going to keep your cell phone number and keep
    bothering you as things progress to continue to get your advice
    on how we best handle maritime policy, maritime security, and
    many other challenges that our Nation is facing.
        But your service to the Coast Guard was one, as we have
    discussed at the last few hearings, one of where the Coast
    Guard has evolved into sort of this Swiss army knife in this
    post-9/11 and evolving-threat era that we are in now, where the
    Coast Guard's presence on the water has just continued to
    evolve as the threats have. And you all are an extremely agile,
    multimission agency. And, again, your leadership during those
    challenging times has very much been appreciated. So thank you
    very much.
        Admiral Zukunft. Thank you.
        Mr. Graves of Louisiana. Chief, same to you. I always
    appreciate your absolute, unconditional support for the
    coasties out there and advocating on their behalf. You have
    been a great voice, a very passionate voice for the men and
    women of the Coast Guard. And have appreciated very much your
    fighting for the people that are on the ground, that are the
    people that are literally protecting our Nation on a daily
    basis. And I want to thank you for your service as well.
        Admiral Buzby, before I jump back to Coast Guard, I want to
    jump over to you just for a minute. You have some pretty strong
    words for the importance of a domestic fleet in your testimony.
    You talked a little bit about the important role that Jones Act
    vessels play, U.S.-flagged vessels play in terms of ensuring
    that we have the capability to deliver our military men and
    women, our equipment around the globe.
        And you also talked about some of the challenges associated
    with our increasing reliance upon foreign-flagged vessels. I
    believe you noted in your testimony that there were 177--give
    me a little leeway there--foreign vessels that were used. And I
    believe you noted that in at least 13 cases that those foreign
    vessels had apprehension, hesitation, or refused to go into
    some of these areas where there was tension or conflict. And
    that, obviously, is exactly where we need our military men and
    women and exactly where we need our equipment.
        Do you care to expand or comment on that and just sort of
    your vision on how we ensure those types of situations don't
    happen in the future?
        Admiral Buzby. Thank you for that question, sir.
        It really is critical to my way of thinking, and I think to
    most of the military, and certainly to General McDew of
    USTRANSCOM [U.S. Transportation Command], that we have reliable
    sealift for this country. And that has to come from a
    combination of Government-owned ships that we hold in reserve
    in our sealift fleet, but more importantly, from the U.S.-flag
    fleet. Those are the ships that we can rely upon.
        And some of the cargo that we have to move is critical to
    whatever mission we have to do. And to entrust that to a
    foreign-flag ship with an unknown crew, and as we have seen
    historically, some of those declined to do that. They declined
    to carry that to where we needed to go. And that is simply
    unacceptable. We depend on our sealift forces to move our
    military overseas, period.
        Mr. Graves of Louisiana. Thank you. And I do appreciate you
    providing us that feedback or guidance. And I just want to ask
    if we can continue to work perhaps offline a bit on steps we
    need to take here to ensure that we don't run into those
    reliability problems in the future. But I think it does, just
    to reinforce as this committee has on numerous occasions, the
    importance of having a robust U.S.-flag fleet that can deliver
    for us.
        Admiral, coming back to you, Admiral Z, the icebreaker is
    something we have talked about a good bit over the last few
    years. We have had a number of meetings discussing that. I
    always get this mixed up--the Polar Star is the one that is
    still floating, right? All right.
        So the Polar Star, we are in a situation now where the
    service life of the Polar Star is already, while you all did a
    phenomenal job with duct tape and bubble gum keeping that thing
    floating, the service life on it is somewhat tenuous, I think
    it is safe to say.
        Yet, as I recall, the Coast Guard has indicated that a $2
    billion annual investment in a heavy is really what we need to
    get us to the place we need to be, to have the capabilities we
    need, and also to have a seamless transition from the Polar
    Star into a new heavy. I think it is fantastic that the budget
    request does have, was it $725 million in there, for a heavy
    for fiscal year 2019.
        Can you just comment on sort of how those things
    transition? Because if the $2 billion figure was our target, if
    the service life is, what is it, 2023, I think, on the Polar
    Star, it seems like we are going to have a problem, if we are
    not fully investing in the program annually.
        Admiral Zukunft. Yeah, I am concerned, as I look at the 5-
    year budget bill, when I am asking for a $2 billion floor, and
    we are seeing our acquisition budget continuing to be funded
    below that floor.
        And icebreaking is clearly the biggest risk. There is a $15
    million annualized appropriation to keep the Polar Star in
    service, so there is a smooth hand-off between the Polar Star
    and the next heavy icebreaker.
        That gets us right back to the status quo, though, and we
    are still only a Nation of one heavy icebreaker, which means we
    need to continue to build out that program of record. We need
    to provide predictability for our shipbuilders as well. Our
    shipyards have not built a ship of those scantlings, of that
    design, laying up that much steel since these ships were built
    over 40 years ago.
        It is an investment in our industrial base at the same
    time. And this will be built in the United States and with
    United States steel as well.
        So of all our appropriations, this is the one at greatest
    risk, and it does concern me. And there is going to be tension
    as we look at, how do we fund other priorities within the
    Department of Homeland Security?
        And a concern that I will pass on to my relief is you may
    enter another cycle of flatline budgets at a point in time
    where our needs are continuing to grow, particularly in this
    domain.
        Mr. Graves of Louisiana. OK. Bottom line is, Mr. Chairman,
    I just want to highlight, I think we do have some problems with
    this current schedule in that the service life on the Polar
    Star, we are looking at 2023. Am I remembering that correctly?
        Admiral Zukunft. 2023 is when we anticipate taking delivery
    of the first heavy icebreaker. We want to sustain the Polar
    Star for 2 years beyond that to make sure as we go through sea
    trials we are fully mission ready.
        Mr. Graves of Louisiana. OK. So we have got major concerns
    with the Polar Star still floating by, I think, 2025 then.
        Admiral Zukunft. That is right.
        Mr. Graves of Louisiana. And actually having the ability to
    replace it with a new heavy. And then, of course, we have you,
    in discussions in another formal setting, the administration
    has indicated the need also to have medium capacity. And so
    that is going to need to come on. And if all we are doing is
    $700 million, then we are not able to even deliver the heavy,
    much less coming behind on the medium, which is really
    important.
        If I can change gears real quick. Patrol Forces Southwest
    Asia has six 110s right now. We certainly want to make sure
    that the men and women that are out there helping to support
    our military in that region, that they have the equipment they
    need, have the resources they need.
        I am a little partial to the FRC [Fast Response Cutter], as
    you know, and I just am curious if you could talk at all about,
    perhaps, the need or timelines on replacing the 110s with FRC
    out there.
        Admiral Zukunft. Yes, Congressman. I have had a number of
    high-level engagements. I have written when we want to restore
    readiness, a letter that went through the Secretary of Homeland
    Security that I addressed to the Secretary of Defense, to the
    Chairman of the Joint Chiefs.
        I have met with General Votel, CENTCOM [U.S. Central
    Command], I have met with Vice Admiral Aquilino, he was
    commander of the 5th Fleet in Bahrain, with the Secretary of
    the Navy, and with the CNO, and that we have a hot product line
    that are building these ships on time, on schedule, because the
    110s that are there will time-out in 2022.
        The PCs that the Navy operates, they will start timing out
    a year later. So there is an opportunity, using DoD funding, to
    keep this product line going, to reconstitute the fleet that is
    over there right now. And we need a decision by 2022 so we can
    make those informed decisions to keep that product line going,
    to roll out that next fleet of ships.
        So, Congressman, that is where it stands right now. And it
    does have the highest level of attention from the Secretary of
    the Navy on down, to include the combatant commander in charge
    of that theater. The return on investment is huge. The mission
    is not going away. The demand signal remains high. And so that
    is where we stand right now.
        But 2020 is where the shipbuilder needs to be informed that
    this order is coming in so they can keep that product line
    going.
        Mr. Graves of Louisiana. Great. Thank you.
        Mr. Chairman, there is this weird clock thing in front of
    me, I am not sure what that is, but I want to yield back.
        Mr. Hunter [presiding]. The ranking member and I stayed
    under our time so that we could give everybody else a chance.
    We are just happy you are here.
        Mr. Graves of Louisiana. Well, thank you very much.
        Mr. Hunter. Mr. Lowenthal is recognized.
        Dr. Lowenthal. It is a pleasure to join the Garret Graves
    show.
        Admiral Buzby, I want to ask what to me has become kind of
    a conundrum, and let me lay it out. It has to do with the
    President's budget request for MARAD's Title XI, the loan
    guarantee program. You know, the program has been in operation
    for over 80 years. It guarantees financing for the construction
    of American-made U.S.-flagged vessels. It is a longstanding
    public-private partnership. It has helped to build the U.S.-
    flagged Ready Reserve Fleet, supported American shipyards.
        These loans were crucial to help finance the construction
    of the world's first LNG-powered containership, which was built
    here in America.
        President Trump talks about reviving American manufacturing
    and just last week announced tariffs under a rationale that
    certain industries are vital for our national security. I
    thought for years we have considered shipbuilding one of those
    vital industries.
        My first question is, and let me ask the whole thing, is
    that still the case? And help me to understand the logic that
    if this program has an important role, which you say, and the
    President talks about American manufacturing, but the budget
    calls for no new authority to guarantee loans. That seems to me
    to be a contradiction. Can you respond to that, please?
        Admiral Buzby. Yes, sir, happy to.
        We believe that it is an important program also. This
    really comes down to a funding issue in a very difficult budget
    year. It is a good program. It has built over 1,900 vessels for
    this country. It has done some good things. It has had some
    defaults in the recent past, which have been difficult to get
    through, but it has been a general benefit to the Nation.
        Dr. Lowenthal. So you are very supportive of the program
    and the importance of the program?
        Admiral Buzby. I think it has made great benefit to our
    country.
        Dr. Lowenthal. Thank you.
        Acting Chairman Khouri, I have a question. Last year the
    subcommittee passed legislation to amend the Shipping Act to
    increase FMC's authority to oversee and enforce antitrust
    requirements that would prevent the ongoing consolidation among
    American--among foreign-flagged containers, not American,
    foreign-flagged containers, container carriers, from
    disadvantaging the U.S. maritime and port service industries.
        And I have been told we expect Congress to clear this
    legislation later this year. So my question, when final
    agreement is reached, I think, on the Coast Guard Authorization
    Act--there are two questions.
        One, what is the status of consolidation in the container
    trades? Are there now fewer carriers than there were in 2017?
        And is there sufficient funding in the administration's
    request for the FMC to ensure that the Commission has the
    personnel and resources necessary to conduct very effective
    oversight during this very kind of dynamic period of
    consolidation that is taking place?
        If you can tell, do you have the resources? And what is the
    latest status on consolidation of the U.S. container trades?
        Mr. Khouri. Thank you for the question. Let me answer the
    second one first, if I may.
        We do have the resources to continue our monitoring of the
    ocean industry, ocean container industry. We do have in our
    budget money for additional people, especially in our economist
    group. We just received notice that we are going to lose two
    economists via retirement. That area is sort of the heart and
    soul of everything that we do.
        So we are actively getting ready. I think tomorrow we will
    have new notices for recruiting economists. These are somewhat
    specialized transportation economists. But I do feel confident
    that we can continue that mission and do it effectively.
        On the status, as I said in my testimony, the number of
    major carriers has gone from 21 down to 12. There are a total
    of 36 different carriers that currently serve U.S. trades. Now,
    obviously, the smaller carriers are not up to a scale as a
    Maersk or Mediterranean Shipping. However, bear in mind to some
    extent, when you have a commoditized marketplace, that the
    smaller carriers do effectively, from a pricing standpoint, set
    a lid on how all of the other carriers react.
        We watch like hawks, I can promise you, the pricing
    activities and all of this pricing and decision--excuse me,
    capacity decisions are regularly filed with the Commission. We
    follow that closely. We see where different carriers are making
    pricing decisions this way and that. They are making their
    short-term decisions on putting ships in or out of a trade
    lane.
        And then there are long-term decisions, similar to the
    Coast Guard, when you build a ship you have got it for 30
    years, that the long-term decisions that various carriers are
    making in terms of new-builds continues to show diversity.
        So this is all evidence to us that you still have a very
    competitive marketplace.
        Dr. Lowenthal. OK.
        Mr. Khouri. So I think, as we speak today, the Herfindahl-
    Hirschman Index, not to get technical, but this is the same
    type of analysis the Department of Justice uses to look at
    industries, et cetera, that our main East-West trades, Asia to
    U.S., and the Atlantic trades are still in a very comfortable,
    what is called safe harbor area, under HHI.
        So we feel confident that it still has a very competitive
    marketplace overall to protect our exporters, our importers,
    our consumers, and the various service providers that you
    mentioned in terms of the tug companies. So we do feel
    confident. We would like to have full funding so that we can go
    ahead and hire some of these extra folks into the 2018 and 2019
    budget periods.
        So that is where we are at this point. Thank you, sir, for
    the question.
        Dr. Lowenthal. Thank you. And I yield back.
        Mr. Hunter. I thank the gentleman.
        We are going to start another round of the hearing by
    recognizing myself. This is more what it looks like usually
    here.
        FMC questions really quick. We all raised concerns last
    year. And, by the way, we have a bipartisan FMC bill, that is a
    Senate bill as well, so it is bicameral, bipartisan, to help do
    the things that we talked about last year. I think you got
    yelled at by just about everybody up here.
        So in regards to that, we talked last year about you
    agreeing to allow a group of international car carriers to
    collectively negotiate with U.S. tugboat service providers. In
    light of the concerns that we have raised, is the Commission
    now more closely overseeing negotiations between ocean common
    carriers and the U.S. domestic providers?
        Mr. Khouri. Thank you for the question. The very short
    answer is yes. And just perhaps another sentence or two.
        It has been interesting that some of the alliances have
    visibly backed away from even pursuing some of that activity.
    So I think it was heard by everyone in the industry where the
    Congress stands on the issue, and I feel comfortable that it is
    in good shape.
        And I think the other thing that is in the, if I may, in
    the pending bill, I mentioned in my testimony that five
    different price discussion--what we call price discussion
    agreements, agreements that allow for discussion of pricing, I
    just note, I am not going to say because of, but I note that
    they have filed agreement terminations at the Commission. So
    that is a very positive trend of eliminating price discussion
    through the trades.
        Mr. Hunter. Mr. Khouri, then, you have seen the legislation
    that we have put forward, right?
        Mr. Khouri. Oh, yes.
        Mr. Hunter. Do you think that gives you more tools in your
    toolbox?
        Mr. Khouri. Yes, I do. Yes.
        Mr. Hunter. OK.
        Admiral Buzby, I would ask you more questions, but in the
    NDAA and our other committee, we are both on the Subcommittee
    on Seapower and Projection Forces, we are both, John and I, we
    are both on the Armed Services Committee. You get authorized by
    the NDAA for MSP, it gets paid out of DOT, and the difference,
    the delta between what we authorized, the $300 million and your
    $216 million that you are putting towards MSP with the old $3.5
    million number, instead of the $5 million per ship, we are
    going to work that.
        I am sure we are going to find the money in the Armed
    Services Committee, because even though DOT pays for that, the
    difference needs to be made up in the NDAA, from what I
    understand. So we will work that going forward.
        I guess the one question I have is, do you expect if the
    number stays at $3.5 million, you have 59 MSP ships now, right?
        Admiral Buzby. Sixty.
        Mr. Hunter. You have 60 now?
        Admiral Buzby. We are up to 60.
        Mr. Hunter. What do you expect that to go to? Because when
    we made this change it was for a reason. It was because ships
    were dropping out, right?
        Admiral Buzby. Right. We work very closely with our
    operators. They are very supportive of our program. I do not
    anticipate anybody that will drop immediately. We will be
    working very closely with them, however, if it has to stay at
    that lower number. It is a concern, no doubt. They have voiced
    their concerns. We are concerned about it. We would have liked
    to have absolutely funded it to the $300 million level, but
    just budget-wise we were restrained.
        Mr. Hunter. But also it looks like you have got money in to
    build two merchant mariner training ships--not to build, to
    buy.
        Admiral Buzby. Right.
        Mr. Hunter. Right? And those would not be U.S. built?
        Admiral Buzby. They could be.
        Mr. Hunter. They could be U.S. built, but the numbers you
    have I don't think are.
        Admiral Buzby. Well, if we have to go out and get used
    ships, the estimate is that to purchase a used ship and then
    convert it, it would be about $200 million or so to do that for
    a used ship to then modify it.
        Mr. Hunter. And right now you have two in there, right, you
    have the money for two?
        Admiral Buzby. Right now the language calls for two for
    $300 million.
        Mr. Hunter. OK. But you could theoretically build one.
        Admiral Buzby. We could build--that same number, that 300
    number----
        Mr. Hunter. And put the money back to MSP.
        Admiral Buzby. It is theoretical, but, yes, sir.
        Mr. Hunter. Those are all possibilities.
        Admiral Buzby. It is a possibility. And we look forward to
    working with Congress on this.
        Mr. Hunter. Thank you.
        Mr. Garamendi.
        Mr. Garamendi. Just to follow up on some questions the
    chairman raised.
        How many ships would be in the MSP fleet if the 29-percent
    cut were to take place?
        Admiral Buzby. In other words, if we were to fund it to the
    $3.5 million, we believe that all 60 ships would remain, sir,
    at this point at least.
        Mr. Garamendi. So you intend to negotiate down the subsidy
    per ship?
        Admiral Buzby. That is something we would have to kind of
    look at. You know, that is a policy thing we would have to talk
    to the Secretary about for sure.
        Mr. Garamendi. Well, you also talk to us about these
    things.
        Admiral Buzby. Certainly.
        Mr. Garamendi. I think the chairman and I have made it
    clear where we are coming from on this. We think the MSP
    program is exceedingly important and that the subsidy level at
    $5.2 million was necessary.
        Also, I note that the administration proposes to end the
    Public Law 480 program, which I think directly affects the MSP
    issue. I don't see the logic of that. I think that I don't see
    the logic of most of that budget, to be quite frank about it,
    except we are happy to have the additional money for the Coast
    Guard, as long as they spend that money appropriately on the
    things that we are talking about.
        We talked earlier about the multimission training vessel
    and the $300 million. I want to be very, very clear where I am
    coming from. I think this committee is supporting that position
    that we are not going to buy a foreign-built ship, we are not
    going to abandon the multimission.
        So what does it cost to build those multimission ships?
        Admiral Buzby. A single vessel we estimate about $302
    million. If we were to build two or three, it drops down to
    about $280 million to $290 million.
        Mr. Garamendi. So we would need somewhere around another
    $300 million over the course of the next couple of years to
    build two of those multimission ships.
        What is the purpose of a multimission ship? What is the
    multimissions?
        Admiral Buzby. The reason that we are building the ship and
    calling it a National Security Multimission Vessel is its
    primary mission will be as a training vessel for the State
    maritime academy that it would be assigned to.
        Its secondary mission would be, as we have seen this past
    summer, it would be used in a natural disaster relief sort of
    role, and as designed would have good capability to perform
    that role even better than our ships that were not purpose-
    built.
        Mr. Garamendi. And these rusty hulks that are being
    discussed to be purchased, would they be able to do the
    multimission?
        Admiral Buzby. They would have some capabilities, clearly
    not as much as a ship that was purpose-built for that mission,
    no, sir.
        Mr. Garamendi. So we have got to find a couple hundred
    million dollars to build the two ships and do it right the
    first time, right? Correct?
        Admiral Buzby. That would be the best way to go forward,
    yes, sir.
        Mr. Garamendi. I am sorry, that would be the----
        Admiral Buzby. The very best way to go forward.
        Mr. Garamendi. The very best, most wonderful, beautiful
    way.
        Admiral Buzby. If we can all afford it, yes, sir.
        Mr. Garamendi. I am learning the language of the
    administration.
        We talked earlier about a big, beautiful, wonderful, border
    wall with steel that now has a 25-percent tariff on top of it,
    so the cost probably will end up some--but, in any case, that
    $18 billion. Admiral Zukunft, you said there were how many
    metric tons of cocaine did you seize on the low seas, the high
    seas?
        Admiral Zukunft. 233 this past year.
        Mr. Garamendi. My information that I have received recently
    is that on the entire land border about 20 metric tons were
    seized. That is about one-tenth of what you seized on the high
    seas.
        Admiral Zukunft. What is most vulnerable is where it moves
    in bulk, and that moves predominantly in the maritime domain
    way beyond our border.
        Mr. Garamendi. So my message to the President is, from
    yesterday, he seemed to be really interested in stopping the
    importation of drugs, the illicit drugs coming into the Nation.
    And if he really wanted to get the best for the money, he would
    fund the Coast Guard. It is 10 to 1. You don't need to comment,
    but I put that out there.
        Mr. President, we want to stop illegal drugs entering the
    United States. You want to spend your money in the very best,
    most efficient way possible. Take the $18 billion, spend some
    portion of it to rebuild the fences that we presently have.
    They can be big, beautiful fences or walls. But don't spend $18
    billion that way. Spend it where it has the most effect, which
    is the U.S. Coast Guard.
        And you need autonomous vehicles, drones and the like. You
    need better capability. You continue to work with the Latin
    American countries. All of this takes money.
        And so if we want to get the very best, most efficient way
    to stop drugs coming into the country, it is the U.S. Coast
    Guard, not a beautiful wall paid for by the American taxpayers.
        Enough of that. I think I am out of time once again, Mr.
    Chairman. Excuse me for being so blatant.
        Mr. Hunter. We actually did great compared to the other
    Members today.
        Admiral Zukunft, I have one last question. The fiscal year
    2017 approps, you had about $1.3 billion. This year, even
    though you are under a CR [continuing resolution] still, it
    will be $1.8 billion minus the months we have been in the CR,
    but it will be at $1.8 billion level, if everything goes the
    way it is supposed to go; 2019, you are almost at $1.9 billion.
    So you have 2 years at about $1.8 billion, $1.9 billion.
        But 2020 it drops down to $1.4 billion. It doesn't go above
    $1.7 billion. It never reaches $2 billion at all going forward.
    Is that because we are just looking out basically 2 years at a
    time, or is that because of some other reason?
        That is a precipitous dropoff. That is a $400 million drop.
        Admiral Zukunft. Right. Where you see the dropoff is in the
    polar icebreaker program. And this is at a point in time where
    we will have awarded final design, and we will be in a position
    to make an informed decision to do a block buy.
        And so that is a concern when I see that precipitous of a
    drop, because that drop is mostly in the polar icebreaker
    building program. So that is a significant add-on that we are
    going to need going forward in order to look at----
        Mr. Hunter. So you are saying from 2020 forward, that does
    not include icebreaker funding?
        Admiral Zukunft. Well, where we see that significant drop,
    it really comes within the icebreaking account. That accounts
    for almost all of that reduction of nearly $500 million.
        Mr. Hunter. Gotcha.
        OK. That is all I have.
        Mr. Garamendi.
        Mr. Garamendi. Two more very quick questions.
        This is kind of like your mantra, Mr. Chairman, and you
    have gone through all of the reports that we have not received
    in the timeliness of those, and I appreciate you continuing to
    stay on that issue.
        However, Admiral Buzby, there is one other report that we
    authorized or asked for in 2014. The previous administration
    didn't get it done, although I understand there was a draft
    that was held up in OMB. So where is the National Maritime
    Strategy?
        Admiral Buzby. Thank you for that question.
        I am pleased to report that the National Maritime Strategy,
    in its revised state, has left my desk. It is now routing
    through my staff, prior to going up to the Secretary. And I
    believe it will be going very quickly.
        It was a good piece of work. It needed just some touching
    up. I participated in its construction as a contributor
    earlier, prior to this current position.
        So it is moving along. My goal is to deliver it to you,
    sir.
        Mr. Garamendi. I think I have heard this before, with no
    offense to your good efforts. But please understand that we
    await that. And your good efforts were repeated--actually you
    repeating the good efforts of your predecessor--and it got held
    up somewhere above your level.
        Admiral Buzby. Yes, sir.
        Mr. Garamendi. We look forward to that.
        Second question. It looks to me like the FMC isn't going to
    be able to have a quorum. This seems to be a problem that
    plagues the administration on appointments. I think Mr.
    Maffei's appointment ends in June and then you will be down to
    two people.
        Mr. Khouri. It is my understanding that even with two we
    still have a quorum. It is also my understanding that the
    Surface Transportation Board has operated with one and they
    continue to do business. I am not suggesting that that is
    recommended, optimal, or anything else, but our charter does
    not prevent us from continuing to operate.
        I think each independent agency, you have to look at their
    individual charter to see what is required for a forum. But it
    is something we have thought about and looked into,
    Congressman.
        Mr. Garamendi. I think by raising the question, I make my
    point. If one were to look at the White House, it appears as
    though there will be one person there also.
        Thank you so very much. I yield back my time.
        Mr. Khouri. Thank you.
        Mr. Hunter. I thank the gentleman.
        I thank all of you for being here and sharing with us and
    your testimony.
        Admiral, again, Master Chief, whatever you guys say in the
    Coast Guard, fair wind, safe travels, good seas, all those
    things. Thank you very much for your service to this Nation. It
    will be remembered. Thank you.
        We are now adjourned.
        [Whereupon, at 12:35 p.m., the subcommittee was adjourned.]

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