[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.




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 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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