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






   COAST GUARD MODERNIZATION AND RECAPITALIZATION: STATUS AND FUTURE

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

                                (115-56)

                                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

                               __________

                           SEPTEMBER 26, 2018

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure






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34-009 PDF                WASHINGTON : 2019                 
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
                             transportation
             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
ERIC A. ``RICK'' CRAWFORD, Arkansas  RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
BOB GIBBS, Ohio                      GRACE F. NAPOLITANO, California
DANIEL WEBSTER, Florida              DANIEL LIPINSKI, Illinois
JEFF DENHAM, California              STEVE COHEN, Tennessee
THOMAS MASSIE, Kentucky              ALBIO SIRES, New Jersey
MARK MEADOWS, North Carolina         JOHN GARAMENDI, California
SCOTT PERRY, Pennsylvania            HENRY C. ``HANK'' JOHNSON, Jr., 
RODNEY DAVIS, Illinois                   Georgia
MARK SANFORD, South Carolina         ANDRE CARSON, Indiana
ROB WOODALL, Georgia                 RICHARD M. NOLAN, Minnesota
TODD ROKITA, Indiana                 DINA TITUS, Nevada
JOHN KATKO, New York                 SEAN PATRICK MALONEY, New York
BRIAN BABIN, Texas                   ELIZABETH H. ESTY, Connecticut, 
GARRET GRAVES, Louisiana                 Vice Ranking Member
BARBARA COMSTOCK, Virginia           LOIS FRANKEL, Florida
DAVID ROUZER, North Carolina         CHERI BUSTOS, Illinois
MIKE BOST, Illinois                  JARED HUFFMAN, California
RANDY K. WEBER, Sr., Texas           JULIA BROWNLEY, California
DOUG LaMALFA, California             FREDERICA S. WILSON, Florida
BRUCE WESTERMAN, Arkansas            DONALD M. PAYNE, Jr., New Jersey
LLOYD SMUCKER, Pennsylvania          ALAN S. LOWENTHAL, California
PAUL MITCHELL, Michigan              BRENDA L. LAWRENCE, Michigan
JOHN J. FASO, New York               MARK DeSAULNIER, California
A. DREW FERGUSON IV, Georgia         STACEY E. PLASKETT, Virgin Islands
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
MIKE GALLAGHER, Wisconsin
VACANCY
                                ------                                7

        Subcommittee on Coast Guard and Maritime Transportation

                    BRIAN J. MAST, Florida, 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
JASON LEWIS, Minnesota, Vice Chair   STACEY E. PLASKETT, Virgin Islands
VACANCY                              PETER A. DeFAZIO, Oregon (Ex 
BILL SHUSTER, Pennsylvania (Ex           Officio)
    Officio)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                                CONTENTS

                                                                   Page

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

                               WITNESSES

Admiral Karl L. Schultz, Commandant, U.S. Coast Guard:

    Oral statement...............................................     4
    Prepared statement...........................................     6

                       SUBMISSIONS FOR THE RECORD

Admiral Karl L. Schultz, Commandant, U.S. Coast Guard, responses 
  to requests for information 

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   COAST GUARD MODERNIZATION AND RECAPITALIZATION: STATUS AND FUTURE

                              ----------                              


                     WEDNESDAY, SEPTEMBER 26, 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 10:02 a.m., in 
room 2167, Rayburn House Office Building, Hon. Brian J. Mast 
(Chairman of the subcommittee) presiding.
    Mr. Mast. The subcommittee will come to order.
    Without objection, the Chair is authorized to declare a 
recess at any time.
    Today we hold a hearing on the Coast Guard modernization 
program, which started over 10 years ago and has persisted 
through the tenure of three Commandants. Today we will hear 
from the 26th Coast Guard Commandant on the status of a decade-
old modernization program and his vision for the future of this 
program and the Service.
    Modernization is especially important as the Coast Guard 
faces some unique challenges, increasing cyber threats, growing 
maritime transportation in the Arctic with limited 
infrastructure, while also working to complement its assets 
with emerging technologies to conduct its 11 statutory 
missions.
    In tandem with the modernization program, the Service is 
undertaking a multidecade recapitalization of aging assets, the 
replacement of vessels, aircraft, and shore infrastructure. The 
Coast Guard is nearing completion of production on the National 
Security Cutters and Fast Response Cutters while ramping up 
efforts on the Offshore Patrol Cutters and starting 
construction on the first vessel, a new polar icebreaking 
fleet.
    Successfully acquiring new and relevant assets is essential 
to a modern and responsive Coast Guard. As it modernizes its 
fleets of assets, the Coast Guard needs to determine its 
manpower needs. New assets may not have the personnel needs of 
old assets, while emerging technologies might also allow for 
more efficient placement and usage of Coast Guard personnel.
    How the Coast Guard brings all of these parts together is 
important to the success of the Service efficiently and 
effectively conducting its missions and supporting its 
servicemembers.
    As we near the end of another active hurricane season, we 
see the Coast Guard at the front lines of the response efforts 
to our Nation's emergencies. We are grateful for the Coast 
Guard servicemen and servicewomen who have contributed to the 
response and the recovery efforts. I just got to witness those 
efforts personally down in North Carolina.
    These events remind us that the continued success of the 
Coast Guard is reliant on an effective and an efficient 
modernization plan that is implemented by trained personnel 
using capable assets and technology. In Florida, we are 
familiar with the significant role of the Coast Guard in 
responding to national emergencies and disasters.
    I would like to recognize Admiral Schultz, many Active Duty 
service tours in Florida, his service down there, including 
most recently as the Director of Operations for U.S. Southern 
Command and the Commander of Coast Guard Sector Miami. Very 
close to home for me. I thank Admiral Schultz for being here 
today, and I look forward to hearing his thoughts on these 
issues.
    I will now yield to Ranking Member Garamendi for 5 minutes 
to make an opening statement that he may have.
    Mr. Garamendi. Mr. Chairman, delighted to sit next to you. 
Congratulations on assuming this task and the importance of the 
Coast Guard, as you well know. So I look forward to working 
with you. And we have had a good session with our previous 
chair, and I am sure it will be repeated in your tenure as 
chair of this committee. So welcome, and congratulations.
    I also want to take a moment to acknowledge and welcome 
Admiral Schultz to the committee for his first opportunity to 
testify as the 26th Commandant of the Coast Guard.
    Good morning, and welcome. You have sat in that chair 
before but in a different role.
    The Coast Guard has now endured some tumultuous times, 
especially having to respond and cope with the aftermath of 
three consecutive devastating hurricanes last year and, most 
recently, Hurricane Florence in the Carolinas. So the Coast 
Guard has been busy in your command. Here you go.
    I commend the men and women of the Coast Guard for their 
stellar response to these disasters and for the unfailing 
ability to remain semper paratus--always ready. Whenever, 
wherever, you are always good to go.
    The Coast Guard also has to contend with other serious 
challenges, those of human-induced variety, that either 
diminish or erode the Coast Guard's capabilities and mission 
readiness. And I would like to explore some of those this 
morning.
    For example, I have advocated for years that, to sustain 
the Coast Guard at a level to meet the demands that we have 
placed on it, we have insufficient investments to ensure that 
the Coast Guard servicemembers have the assets, the training, 
and the support they need to get the job done and done quickly 
and correctly.
    Consequently, I commended the administration earlier this 
year when it requested for the Coast Guard in its fiscal 2018 
budget $1.1 billion or 11-percent increase over the fiscal 2017 
enacted level. Considering the administration's abysmal fiscal 
2017 budget request, which was a cut of $1.3 billion or 14 
percent, which fortunately didn't happen, I thought that we had 
turned a corner. I am not so sure that my optimism was 
justified and may very well have been premature.
    Earlier this summer, word leaked out that the 
administration was looking to transfer funds from agencies 
within the Homeland Security Department, including the Coast 
Guard, to U.S. Immigration and Customs Enforcement, or ICE, in 
order to fund the administration's highly controversial, if not 
inhumane, family separation and deportation activities on the 
southern border.
    Transportation and Infrastructure Committee Ranking Member 
Peter DeFazio and I wrote to OMB Director Mick Mulvaney urging 
him in the strongest possible terms to not transfer funds from 
the Coast Guard and certainly not shortchange the Coast Guard 
further as the hurricane season was approaching.
    Well, it appears as though our pleas fell on deaf ears. 
With no notice to the members of this committee, OMB cut 
roughly $32.1 million from the Coast Guard's budget, an amount 
roughly equivalent to the entire Coast Guard budgets for both 
research and development and environmental compliance and 
restoration.
    Admiral Schultz, I want to hear it from you where that $32 
million came from and what it means to the Coast Guard. 
Moreover, I want to learn the impact on your programs.
    Aside from trying to provide a stable budget for the Coast 
Guard, this Service also must confront new maritime challenges 
facing our Nation. As the Arctic warms more quickly, then we 
will have as little as 5 to 10 years to get this job done. We 
are talking icebreakers, we are talking the High North and what 
the strategy is for the Arctic as well as the Antarctic.
    Fortunately, we have made some progress on the 
recapitalization of the Coast Guard's fleet of heavy 
icebreakers. That is good news. The bad news, however, 
delivered recently by the Government Accountability Office, 
indicates that perhaps the Coast Guard's business case for the 
acquisition of the lead ships, Coast Guard icebreakers, has 
serious risks, especially with certain design assumptions and 
an overoptimistic schedule.
    I am not sure I agree with the GAO. I would love to hear 
your view on this, Admiral Schultz. We need to find out if the 
Coast Guard agrees with those recommendations.
    These are just two issues that immediately spring to mind. 
There are others, and we will get to those in the Q&A.
    In closing, Admiral Schultz, you have assumed command at a 
critical juncture in the Coast Guard's history, a time when the 
Service is midstream in the most expensive and far-reaching 
recapitalization in its history, while simultaneously being 
forced to stay ahead of the many turbulent, shifting, economic 
and security challenges as well as the environmental challenges 
that confront not only the Coast Guard but the world.
    Admiral Schultz, your call to build a Coast Guard that is 
ready, relevant, and responsive--the three R's--is both 
admirable and aspirational. Moreover, such principles are 
completely on target with the demands that you have acquired 
and inherited as the 26th Commandant. It is my expectation that 
you will infuse those principles into the Coast Guard during 
your watch, and to that end, we will help you.
    Thank you. I yield back.
    Mr. Mast. Our witness today is Admiral Karl L. Schultz, who 
assumed duties as the 26th Commandant of the Coast Guard in 
June 2018.
    I ask unanimous consent that our witness's full statement 
be included in the record.
    Without objection, so ordered.
    Since your written testimony has been made a part of the 
record, the subcommittee would request that you limit your oral 
testimony to no longer than 5 minutes.
    Admiral Schultz, you are recognized to give your statement.

 TESTIMONY OF ADMIRAL KARL L. SCHULTZ, COMMANDANT, U.S. COAST 
                             GUARD

    Admiral Schultz. Good morning, Chairman Mast, Ranking 
Member Garamendi, distinguished members of the subcommittee. 
Thank you for the opportunity to address you as the 26th 
Commandant for my first time.
    Our United States Coast Guard safeguards the American 
people and promotes economic prosperity. Our leadership and 
presence spans from the Arctic to the Persian Gulf to our 
inland waterway system. As challenges to our national security 
and global influence grow more complex, the need for a ready, 
relevant, and responsive Coast Guard has never been greater.
    Looking back at the transformative changes that have taken 
place within the Coast Guard over the last 15 to 20 years, it 
is clear that our efforts to modernize the Service have been 
effective. Today, we employ a unified command structure; we 
speak with one voice on mission strategy; utilize progressive 
business practices; and have made tremendous strides in our 
financial management, acquisitions, and human capital 
processes.
    Moving forward, our soon-to-be-released strategic plan 
captures my vision for the Service over the next 4 years, 
supports Department of Homeland Security objectives and the 
National Security Strategy. Our lines of effort will emphasize 
our investment in Service readiness while fine-tuning mission 
execution and operational support to meet the needs and demands 
of the Nation.
    Maximizing readiness today and into the future is my top 
priority, and our people are the cornerstone of Service 
readiness. We must recruit, support, and retain what I term a 
mission-ready total workforce that not only positions the 
Service to excel across our full spectrum of missions but also 
represents the diverse Nation we serve.
    While readiness starts with our servicemembers, we must 
also modernize key capabilities and assets. With the support of 
the administration and the Congress, we continue to build 
momentum on our recapitalization efforts, including our highest 
priorities: the Offshore Patrol Cutter and the Polar Security 
Cutter.
    Beyond surface recapitalization, we must also invest in 
reliable C5I enterprise systems and buy down a shore 
infrastructure backlog that currently exceeds $1.6 billion, 
both of which are critical to our frontline operations and the 
operators.
    While improving the readiness of our Armed Forces has been 
the focus of recent budgetary increases, our Coast Guard, one 
of the five armed services, has not received a comparable 
increase in our operations and support funding, which is 
crucial to keeping our modern assets on the water and operating 
at full capacity.
    A mission-ready total workforce, coupled with sufficiently 
resourced assets, modern systems, and resilient infrastructure, 
will enable our Coast Guard to address the Nation's complex 
maritime challenges.
    Our maritime border to the south is being exploited by 
violent transnational criminal organizations, and the Coast 
Guard is a key component of a comprehensive approach to border 
security. We tackle threats before they reach our shores.
    In fiscal year 2017, the Coast Guard interdicted 223 metric 
tons--that is 490,000 pounds--of illegal narcotics and 
transferred 606 smugglers to the Department of Justice for 
prosecution here in the United States. These efforts promote 
regional stability in the Central American corridor and deter 
illegal immigration at our southern land border.
    Our Coast Guard bridges the gap where homeland security and 
homeland defense intersect. We seamlessly integrate into 
today's joint force, supporting the Department of Defense 
across the globe, typically at five of the six geographic 
combatant commander regions on a near daily basis. For example, 
since 2003, a fleet of six Coast Guard Island-class patrol 
boats have provided vital support to the Central Command 
commander in Southeast Asia conducting maritime security 
operations on the Arabian Gulf.
    The Coast Guard also leverages partnerships with maritime 
stakeholders to facilitate the safe and efficient transit of 
commerce, contributing $4.6 trillion annually to our Nation's 
economy.
    The Marine Transportation System, a vital latticework of 
waterways and seaports, is highly dependent on a complex, 
globally networked system of automated technologies, one always 
vulnerable to today's cyber disruptions. As the Nation's 
maritime first responder, Americans trust their Coast Guard to 
thrive in crisis and recovery, and we will continue to deliver 
excellence anytime, anywhere.
    Less than 2 weeks ago, the Nation once again witnessed the 
Coast Guard's bias for action and operational agility. After 
Hurricane Florence made landfall, almost 3,000 Coast Guard 
responders engaged in search-and-rescue efforts, saving almost 
1,000 lives.
    As technology advances, global competition surges, our 
adversaries become more sophisticated, and the maritime 
environment more complex, our Coast Guard provides solutions 
from cooperation to armed conflict. As noted in my 
introduction, the demand for Coast Guard services has never 
been greater.
    I look forward to working with this committee to ensure our 
Coast Guard remains always ready to meet the maritime 
challenges of our great Nation. Thank you for the opportunity 
to testify, and I look forward to your questions.
    [Admiral Schultz's prepared statement follows:]
                                 
 Prepared Statement of Admiral Karl L. Schultz, Commandant, U.S. Coast 
                                 Guard
                              introduction
    Good afternoon, distinguished members of the subcommittee. It is an 
honor and a privilege to appear before you today. Thank you for the 
opportunity to address this subcommittee for my first time as the 26th 
Commandant of the United States Coast Guard. I look forward to working 
with you over the next 4 years to ensure that the Coast Guard remains 
Always Ready to meet the maritime needs of our great nation.
    Our country is facing an increasingly complex global maritime 
environment, driving a demand for Coast Guard services that I feel has 
never been greater. As Commandant, I intend to leverage the Coast 
Guard's broad authorities, capabilities, and partnerships to safeguard 
the American people, promote economic prosperity, and advance our 
national interests. Our unique position within the Department of 
Homeland Security (DHS), and our enduring operations with the 
Department of Defense (DoD), enables us to leverage our specialized 
capabilities and drive domestic and international maritime cooperation, 
build stakeholder capacity, and exert influence at home and abroad. To 
that end, I am steadfastly committed to delivering a mission ready 
total workforce that can identify complicated risks, quickly adapt to 
change, and thrive in both steady state operations and crisis response. 
At the core of this effort are the women and men of the Coast Guard. 
Our Active Duty, Reserve, Civilian, and Auxiliary members are the key 
to our Service's success and their readiness is my top priority.
    In the coming months, I will finalize my vision to move the Service 
forward over the next 4 years--The U.S. Coast Guard Strategic Plan 
2018-2022--and I look forward to sharing that with you once it is 
complete. However, as we map out our future, it is important to assess 
where we have been. To borrow a nautical metaphor, only after we ``take 
a fix'' to establish our current position can we chart a proper course 
to reach our intended destination. In that spirit, over the past 
several months my leadership team and I examined the transformative 
changes that have taken place within the Coast Guard--known as 
``Modernization''--in the recent past.
                       coast guard modernization
    Coast Guard Modernization involved more than simply retooling the 
Service's organizational structure or upgrading its assets or 
equipment. Modernization fundamentally altered the Coast Guard's way of 
doing business across the Service, for every mission, at every level.
    Prior to Modernization, geographically separate Coast Guard units 
operated largely independent of each other and did not have cohesive, 
uniform business processes. Even Areas and Districts tended to 
establish region-specific policies, systems, and standards, and relied 
on nonstandard equipment. As the Coast Guard's portfolio of 
responsibilities steadily increased, a patchwork of region-specific and 
program-specific responsibilities made it difficult to manage the 
Service's business processes--policy, logistics, acquisitions, finance, 
human capital--in a standardized way.
    Recognizing the critical need for change, Coast Guard leaders 
developed plans to modernize the Service. Those plans were grounded in 
a number of principles and priorities, including: centralization of 
operational policy at the strategic level; unity of effort across 
mission programs and with stakeholders; an emphasis on standardization 
of systems, equipment, and processes in mission support; robust 
business practices linking strategy to resource allocation; systems 
thinking to include improved financial management and acquisition 
processes; all of which enabled transparency with internal and external 
stakeholders; and smarter use of--and better support for--our Coast 
Guard people.
    Modernization involved multiple initiatives over a number of years. 
It included field-level reorganizations, including the stand-up of 
unified Sector commands, as well as consolidation of operational 
strategy and mission support in enterprises led by Deputy Commandants. 
It also created new functionally based support systems and retooled the 
Service's financial management and acquisition processes. The 
transformative efforts of Modernization have come to fruition in the 
Coast Guard you see today--a military Service that is more efficient, 
more nimble, and more effective in carrying out its missions.
    dco: speaking with one voice on operational strategy and policy
    Prior to Modernization, individual Coast Guard program offices 
would develop operational plans and policies largely independent of 
each other--without a robust mechanism to ensure alignment with 
national and enterprise-wide priorities. The establishment of the 
Deputy Commandant for Operations (DCO) injected the necessary oversight 
and alignment. DCO now manages and oversees operational planning, 
policy, and external engagements for all mission programs at the 
strategic level. It also coordinates with external stakeholders to 
advance national, homeland security, and Coast Guard strategic goals, 
working through key external forums such as the National Security 
Council, the Homeland Security Council, the DHS, and the DoD. Further, 
through its Assistant Commandant for Intelligence (CG-2), DCO acts as a 
member of our nation's Intelligence Community (IC), coordinating with 
other IC members to design reliable, all-source products that benefit 
both the Coast Guard and other intelligence customers--creating 
strategic advantages for U.S. forces worldwide.
    The Coast Guard is a strategy-driven organization, and DCO uses an 
enterprise-wide perspective to balance and calibrate strategy, plans, 
and policy across all Coast Guard mission programs. When released, the 
Coast Guard Strategic Plan 2018-2022 will function as the Service's 
overarching strategic document that establishes our priorities and 
details the supporting objectives. It will be informed by and directly 
support the National Security Strategy and the DHS goals and 
priorities. The long-term Coast Guard strategies and strategic 
outlooks, such as the Western Hemisphere, Cyber, Arctic, Maritime 
Commerce and Human Capital, are enduring and will remain essential in 
addressing the challenges for which they were generated. Each of these 
strategies, along with other functional and geographic strategic plans, 
will be framed and implemented through the lens of the Coast Guard 
Strategic Plan 2018-2022.
               dcms: mission support for the 21st century
    Mission support also underwent a significant overhaul through 
Modernization. For 200 years, Coast Guard mission support functions 
were distributed across separate commands and program offices, relying 
on different information systems and business processes to perform the 
same functions--acquisition, logistics, maintenance, and supply 
management--for different asset types. Today, the Deputy Commandant for 
Mission Support (DCMS) is the single source that delivers support to 
enable the Coast Guard to effectively carry out its missions.
    Using a business model drawn from best practices in the maintenance 
and overhaul industry and combined with support concepts from the Coast 
Guard aviation community, DCMS manages the entire life cycle of Coast 
Guard assets from acquisition and accession through decommissioning and 
retirement.
    Prior to Modernization, the Coast Guard's acquisition process faced 
significant challenges including out of date policies, inconsistent 
standards, and confusing governance. Under the DCMS umbrella, we 
modernized our acquisition program to better manage the multi-billion 
dollar investments that are reshaping our operational capabilities. As 
the Lead Systems Integrator for major acquisitions, the Coast Guard now 
collaborates with technical authorities and partner agencies to manage 
the risks associated with the engineering, technical, and business 
challenges that confront all complex acquisition projects. This 
streamlined organization has also enabled tighter alignment with the 
DHS Security Acquisition Management and Review Process--facilitating 
unity of effort through transparency and regular communication with the 
Department.
    DCMS also brought improvements in human capital processes. The 
Human Resources (HR) community recruits, hires, trains, and retains a 
diverse workforce to meet the human capital needs of the Coast Guard. 
It also provides a host of products and services, including training 
and education, compensation, health care, work-life programs, housing, 
safe working conditions, morale and recreation programs, and leadership 
opportunities. By adopting a functionally based approach consistent 
with Modernization, the H.R. community can now better meet the 
personnel needs of the Coast Guard--and the needs of the Coast Guard's 
workforce.
                investing in a 21st century coast guard
    At the same time, the Coast Guard was undergoing the transformative 
changes of Modernization, the Service was simultaneously recapitalizing 
its aging fleet of vessels, aircraft, systems, and shore 
infrastructure. Today those efforts continue and recapitalization 
remains a top Service priority. The support of this subcommittee has 
helped us make tremendous progress, and it is critical we buildupon our 
successes to continue to field assets that meet cost, performance, and 
schedule milestones.
    With the support of the Administration and Congress, we are making 
significant progress toward building new icebreaking Polar Security 
Cutters (PSCs). This past March, we released a request for proposal 
(RFP), setting the stage for award of a Detail Design and Construction 
(DD&C) contract in fiscal year 2019 for the construction of up to three 
heavy Polar icebreakers. We are as close as we have ever been to 
recapitalizing our Polar icebreaking fleet; continued investment now is 
vital to solidify our standing as an Arctic nation and affirms the 
Coast Guard's role in providing assured, year-round access to the Polar 
regions for decades to come.
    Later this year, we plan to cut steel on the first Offshore Patrol 
Cutter (OPC). The OPC will provide the tools to effectively enforce 
Federal laws, secure our maritime borders, disrupt Transnational 
Criminal Organizations (TCOs), and respond to 21st century threats. 
Continued progress on this acquisition is absolutely vital to 
recapitalizing our aging fleet of Medium Endurance Cutters (MECs), some 
of which have already been in service for over a half century. We are 
in advanced planning to extend the service life of a portion of our MEC 
fleet as a bridge until OPCs are delivered, beginning in 2021. In 
concert with the extended range and capability of the National Security 
Cutter (NSC) and the enhanced coastal patrol capability of the Fast 
Response Cutter (FRC), OPCs will be the backbone of the Coast Guard's 
strategy to project and maintain offshore presence.
    Production of the fleet of new FRCs is on budget and on schedule. 
Earlier this summer, we exercised the second option under the Phase II 
contract to begin production of six more FRCs. The fiscal year 2018 
appropriation also included funding for two additional FRCs, beyond our 
domestic program of record of 58 hulls, to initiate the vital 
replacement of our six patrol boats supporting long-term U.S. Central 
Command missions in southwest Asia.
    The Service continues efforts to accelerate recapitalization of our 
long-overlooked fleet of 35 river, construction, and inland buoy 
tenders, with an average age of over 52 years. Replacing this aging 
fleet with Waterways Commerce Cutters (WCC), for a modest cost, is 
critical to sustaining the overall safety of our nation's marine 
transportation system, which contributes $4.6 trillion annually to our 
Gross Domestic Product.
    We are also making progress with fielding unmanned aircraft 
systems, and are working toward awarding a service contract to operate 
small Unmanned Aircraft Systems (sUAS) on our NSC fleet. Further, we 
are continuing our partnership with Customs and Border Protection (CBP) 
and exploring options to expand the joint land-based UAS program to 
enhance intelligence, surveillance, and reconnaissance (ISR) and 
support end-game prosecution in the maritime transit zone.
    In concert with efforts to acquire new assets, we are focused on 
sustaining our existing fleet of cutters and aircraft. The current work 
being conducted at the Coast Guard Yard in Curtis Bay, Maryland, 
includes a Service Life Extension Project (SLEP) on our icebreaking 
tugs and a Midlife Maintenance Availability (MMA) on sea-going buoy 
tenders to address obsolescence of critical ship components and 
engineering systems. In addition to vessel sustainment projects, work 
continues at the Aviation Logistics Center in Elizabeth City, North 
Carolina, where centralized, world-class depot maintenance has been 
crucial to sustaining our rotary and fixed-wing aviation assets. The 
Coast Guard has initiated efforts to extend the service life of our 
aging helicopter fleet until the mid-2030's, when we plan to 
recapitalize these assets in conjunction with DoD's Future Vertical 
Lift program.
    We are also mindful of the condition of our aging shore 
infrastructure and the adverse effects it has on readiness across all 
mission areas. The Coast Guard currently has a $1.7 billion shore 
infrastructure construction backlog that includes piers, sectors, 
stations, aviation facilities, base facilities, training centers, and 
military housing units. We appreciate the tremendous support of 
Congress for supplemental funding appropriated in fiscal year 2018 to 
rebuild our damaged shore infrastructure to resilient, modern-day 
standards after the devastating series of hurricanes. Continued 
investment in shore infrastructure is vital to modernizing the Coast 
Guard and equipping our workforce with the facilities they require to 
meet mission.
  looking ahead: ready, relevant, and responsive in the twenty-first 
                                century
    Through my Guiding Principles--Ready, Relevant, and Responsive--the 
Coast Guard will continue to invest in the future of our Service and 
apply Modernization principles and lessons learned to best position the 
Service to meet the ever increasing demand for Coast Guard services.
    Ready: My top priority for the Coast Guard is readiness; we must 
build a mission ready total workforce of Active Duty, Reserve, 
Civilian, and Auxiliary members by rethinking how we deliver personnel 
services, and how we recruit and retain an inclusive team. While our 
people are the cornerstone of Coast Guard readiness, we must also 
continue to field modernized, capable assets and provide sufficient 
resources to operate and maintain them. This means continuing to 
recapitalize our surface fleet, including the important acquisitions of 
the OPC and PSC, ensuring dependable information technology systems, 
and identifying emerging technologies to meet future readiness needs.
    Relevant: The Coast Guard possesses unique authorities, broad 
jurisdiction, flexible operational capabilities, and an expansive 
network of domestic and international partnerships. These are all 
fundamental to addressing the nation's increasingly complex maritime 
challenges. As a key component in the DHS, we secure the nation's 
maritime borders, protect our maritime infrastructure from potential 
attacks, and enable the efficient movement of legitimate maritime trade 
and travel. As a military Service, we advance American influence by 
cooperating globally in ways that other military services cannot. 
However, we are keenly aware of the increasingly competitive security 
environment and are diligently preparing to respond to evolving 
national security threats.
    Responsive: As the nation's premier maritime first responder, the 
Coast Guard thrives in crisis response and recovery. Consistent with 
focus areas of Modernization, we must improve risk management, 
integrate planning efforts across the government, and incentivize 
information sharing to ensure we are ready to answer the call. Our bias 
for action and propensity to exercise on-scene initiative are ingrained 
in our Service's character and allows us to meet the dynamic needs of 
the nation--in response to crisis or in a complex steady-state 
operating environment.
                               conclusion
    Twenty years ago, the Coast Guard's field units covered overlapping 
areas; its strategy was stove-piped within independent program offices; 
and its business models were inefficient. Today, the Coast Guard 
employs a unified command structure at each Coast Guard Sector; speaks 
with one voice on mission strategy; employs modernized business 
practices; and has made tremendous strides in its financial management, 
acquisition processes, and the use of human capital. Modernization and 
its underlying principles set the Coast Guard on a proper course, 
leading from its industrial age roots to the information age in which 
the Service now finds itself. Our heading will remain steady, and we 
will continue to apply Modernization principles and lessons learned as 
we build on our successes and close the policy and performance gaps we 
uncover along the way. By doing so, we will keep the Coast Guard 
operating in a manner that the country expects and deserves--Ready, 
Relevant, and Responsive to meet its maritime service needs. Thank you 
for the opportunity to testify today. I look forward to your questions.

    Mr. Mast. Thank you, Admiral Schultz.
    I will now recognize Members for 5 minutes of questioning, 
beginning with myself.
    And, again, I do thank you for your service. It was an 
honor to see your men and women out there on the ground in 
North Carolina doing their work. It was incredible to see. And 
they were making a difference in the lives of the people that I 
got to speak to in and around the communities.
    I would like to touch off a little bit on what is going on 
with property and significant real property portfolio that 
requires constant maintenance and management that the Coast 
Guard has.
    Through modernization, you have established the Shore 
Infrastructure Logistics Center in order to enhance the 
acquisition, maintenance, alteration, refurbishment, and 
disposal of shore facilities in order to enable the Coast 
Guard's mission execution.
    However, much of the legacy shore infrastructure management 
structure, including civil engineering units which operate 
outside of the standard district and area of geographical 
constraints, those remain in place. We understand that your 
civil engineers remain responsible for not only construction 
and maintenance but also overall management of the real 
property portfolio.
    So this is where I wanted to ask, how do you plan to 
continue to modernize and enhance the Coast Guard's shore 
infrastructure management in order to maximize the usage of 
existing space more efficiently and more effectively spend that 
limited funding that is available?
    Admiral Schultz. Well, thank you, Chairman, for the 
question.
    We do work our real property, our facilities, through our 
Shore Infrastructure Logistics Center. That is part of our 
modernized efforts where, essentially, we have a holistic, 
across-the-service look.
    In past years, in the premodernized Coast Guard, we would 
look through regional commanders--the Atlantic Command, the 
Pacific Command, down through the nine districts. Now we have a 
holistic look. I think we make decisions that are enterprise 
decisions, that take account of risk, that allow us to put 
finite dollars against the most pressing capital projects.
    We do have, as I mentioned, a shoreside backlog that 
exceeds $1.6 billion. The supplemental dollars that the 
Congress awarded us in the 2018 timeframe to make right after 
Hurricane Matthew and deal with it in 2016 and deal with the 
2017 hurricane season injected, you know, a good chunk of 
moneys on top of the work that was ongoing for actual repairs, 
some resiliency money. That has been very helpful. That bought 
down about $100 million of that backlog.
    And the backlog has grown. It remains about $1.6 billion, 
but it was really on a trajectory to $1.7 billion.
    I will tell you today, Chairman, I believe our modernized 
enterprise is in a better situation. We are looking to bring on 
a senior individual to help manage that infusion of moneys. Our 
shore infrastructure, we have had some reductions in bodies in 
that space. So we are bringing someone in to make sure we 
execute the funds that Congress allocated to us in terms of 
supplements for the hurricanes and get after our ongoing 
challenges in what has been--I hate to use the term--a bit of a 
neglected space, but organizations make choices, and we have 
been funded at a Budget Control Act level here the last 7 or 8 
years, and we haven't got the shore infrastructure dollars we 
need.
    But we have seen an uptick there. I will continue to talk 
about that in my appearances before you and on the Senate side 
in the months ahead.
    Mr. Mast. And, Admiral, speaking of those constraints that 
you mentioned, you know, how do you actually foresee 
rationalizing the Service's existing holdings into a more 
coherent, more easily managed portfolio based on the Coast 
Guard's mission needs rather than what you might be able to 
call a mishmash of legacy properties currently owned by the 
Coast Guard?
    I have seen it worked on a number of different fronts, to 
include in my area, you know, properties that just haven't been 
used for very long periods of time, maybe don't even have any 
infrastructure on them whatsoever. How do you foresee 
rationalizing them?
    Admiral Schultz. Mr. Chairman, I would like to actually get 
back to you and maybe give your team a brief on this.
    We constantly are looking at those, and it is the puts and 
takes. There are those legacy properties that, arguably, may 
have not been addressed sufficiently or in a timely fashion, as 
you see as you sit in your Florida congressional district, 
versus the incoming work. And there is a finite amount of human 
capacity to get after those challenges.
    We are aware of those. We are tracking those. Probably best 
if I could defer that to maybe come in and brief your staff and 
give you some of the specifics. I am not well-positioned today 
to tell you, you know, across the country where those are.
    But we constantly look at that inventory. And I think we do 
that more effectively today. Arguably, do we do it as 
effectively as this committee would like from an oversight 
perspective? There is probability some room for improvement 
there.
    Mr. Mast. Thank you, Admiral.
    I did also want to ask, you know, when recapitalization is 
actually complete, the Coast Guard will have over 15,000 less 
major cutter operational hours than it did just 15 years ago. 
And we are looking at the increasing mission sets. So, while 
modern cutters, that may be more capable, less operational 
hours will mean less coverage. So, in order to bridge that 
projected capability gap, the Coast Guard would need four 
additional National Security Cutters, more than four Offshore 
Patrol Cutters.
    So how do you see the Coast Guard continuing to respond to 
increasing demands despite that capability gap?
    Admiral Schultz. Well, Mr. Chairman, as I think you know, 
the program of record for the National Security Cutter was 
eight vessels. The 2018 omnibus actually funds a 10th and 11th 
National Security Cutter. One version of the appropriations 
bill for 2019 that is under deliberation by the Congress right 
now includes long lead time, potentially, for a 12th National 
Security Cutter.
    So we did get more National Security Cutters in the program 
of record, which will bite into a little bit of that shortfall 
you speak to. We are very encouraged. I think we will be 
announcing this week a production award for the first OPC and 
long-lead materials for number 2. That is a program of record 
of 25 ships. Obviously, the Congress will have an opportunity 
to weigh in if they think 25 ships is the appropriate number.
    We are well into the build-out of 58 Fast Response Cutters. 
The Fast Response Cutters are proving significantly more 
capable than the 110-foot Island-class cutters they replaced. 
The Fast Response Cutters, 154 feet over waterline versus 110 
feet. It has a stern-launch boat. It has highly sophisticated 
C5ISR capability. So that vessel, we just pushed one out of 
Hawaii past Guam 2,000 miles away. We couldn't do that with an 
Island-class patrol boat yesteryear.
    So I think what we are seeing and we are just starting to 
get our arms and brains around is just how much more capable 
these assets are. That National Security Cutter is able to 
contribute and process national-level security. And on the 
water, we are just amazed almost daily about what that ship is 
capable to do in the fight on drugs. We rolled the National 
Security Cutter into San Juan Harbor during the response to 
Hurricane Irma. We moved our command-and-control node from 
shore that was damaged onto that National Security Cutter and 
didn't miss a beat.
    So I think there is a conversation there about just how 
much more capable the new assets are versus just solely 
focusing on the number of hours.
    Mr. Mast. Very good, Admiral. I appreciate your response to 
my questions.
    I will now recognize Mr. Garamendi for 5 minutes of 
questions.
    Mr. Garamendi. Thank you, Mr. Chairman.
    Well, let's start with the $34 million or so that was 
transferred. Where did it come from? What does it mean to the 
operations of the Coast Guard that you have $34 million less, 
or maybe even more than $34 million? Bring us up to date. Where 
did the money--where was it taken from your budget to transfer 
to ICE? What does that mean to your operations?
    Admiral Schultz. Well, Ranking Member Garamendi, yes, in 
fact, it was about a $32 million-plus transfer. What I would 
say, sir, is, is that without consequence? Absolutely not. You 
know, an organization that takes every dollar supported by the 
taxpayer towards I think what I would say is goodness for the 
Nation, obviously every nickel matters.
    But, in this case, I would say we have the maneuver space. 
Reprogrammings are a typical part of budgets. We are 1 of 22 
agencies that sit within the Department of Homeland Security. 
As I have been in and out of Washington the last 15, 20 years 
of my life, I am not sure I have seen a budget cycle where 
there hasn't been a reprogramming in the department the Coast 
Guard has sat in, whether that was Department of Transportation 
of yesteryear or DHS today.
    That said, sir, I think to answer in response to your 
question, I think we take some shortages on spare parts. Some 
of it goes towards, you know, efforts to support shore 
infrastructure recapitalization, in terms of the execution of 
that. There is consequence, but it is manageable. I will assure 
you it has not diminished our ability to respond to frontline 
operations, such as recent Hurricane Florence response 
operations and recovery operations.
    Mr. Garamendi. So you are saying it wasn't terribly 
important and therefore we can take $34 million out of next 
year's budget?
    Admiral Schultz. Sir, I am not saying that taking a dollar 
from the Coast Guard budget isn't important. I will say, you 
know, as an operating organization, as a component under a 
larger department with broad-ranging duties spread across 22 
components, it is a part of, I guess----
    Mr. Garamendi. You have been involved in Hurricane Florence 
recovery?
    Admiral Schultz. Sir, I will tell you with great certainty 
it did not diminish our ability to respond to Hurricane 
Florence in any capacity.
    Mr. Garamendi. What was the daily cost of the search and 
rescue in Florence?
    Admiral Schultz. Sir, I don't have a number. I would say 
our search and rescue costs are rolled into our ops and 
support. Our budget model, as you know, is very complicated 
because of our multimission nature.
    But we surged 27 aircraft essentially operating out of the 
Carolinas. We had 11 fixed-wing aircraft. We surged, you know, 
upwards of 3,000 Coast Guard men and women. We had the maneuver 
space in our budget, sir, to do that without any diminishment 
of capability or capacity.
    Mr. Garamendi. And Florence is the last hurricane this 
year?
    Admiral Schultz. Sir, as the chairman talked about, as the 
season, you know, drove towards an end here, it is pretty early 
in the year, and typically we are on high alert until the end 
of the hurricane season on 30 November, sir. So we are paying a 
lot of the attention to the Atlantic Basin activity.
    Mr. Garamendi. So you will be able to develop and deliver 
to this committee the average daily cost of those 27 aircraft 
and 3,000 personnel that were involved in Florence?
    Admiral Schultz. Yes, sir, 3,000, but we will deliver that 
back to you, Mr. Ranking Member.
    Mr. Garamendi. The average daily cost?
    Admiral Schultz. Yes, sir.
    [The information from the U.S. Coast Guard follows:]

        With the exception of activated reservists, costs for Coast 
        Guard personnel responding to Hurricane Florence would have 
        also occurred in the performance of normal Coast Guard 
        missions. These are not included in the estimated cost of the 
        response. However, the travel costs for those responders not 
        permanently stationed in the response area are included in the 
        estimated cost of the response.

        Similarly, Coast Guard assets supporting the Hurricane Florence 
        response would have otherwise been utilized to support normal 
        Coast Guard missions. Only costs associated with use beyond 
        what would have occurred in the course of normal operations are 
        included in the estimated cost of the response.

        The costs for responding to Hurricane Florence are based on the 
        11-day period during which the National Response Coordination 
        Center activated before standing down (September 9-20, 2018).

        The estimated total cost of the Coast Guard's response to 
        Hurricane Florence was $7,115,924. The estimated daily cost was 
        $646,902.

        In addition to these estimated costs for the Hurricane Florence 
        response, there is an opportunity cost for the Coast Guard that 
        is more difficult to quantify. As the Service surged assets and 
        personnel from around the country to support the response, 
        normal Coast Guard operations were delayed or suspended at 
        multiple shore units; Coast Guard cutters interrupted or 
        deferred maintenance and diverted from patrols to support 
        response operations; aircraft scheduled for maritime patrols 
        were reassigned to provide transportation and overflight 
        capability for the response; training for Deployable 
        Specialized Forces was canceled to allow teams to deploy for 
        shallow water rescue support. While this opportunity cost is 
        difficult to estimate, it further erodes the future readiness 
        of the Coast Guard.

    Mr. Garamendi. I would appreciate that. I suspect there 
will be another hurricane. And that $34 million is coming out 
of something.
    Admiral Schultz. Aye, Mr. Garamendi. Got it.
    Mr. Garamendi. OK.
    Potomac River security closings, big hullabaloo about that. 
In 2017, Admiral Zukunft said that the eastern side of the 
Potomac would not be closed whenever the President arrived on 
the western side. Those closings, I am told, are now--that the 
east is closed and the west is closed whenever the President is 
at his golf course.
    Could you bring us up to date on the current policy?
    Admiral Schultz. Yes, sir. Ranking Member Garamendi, 
regarding the river closure, there is a river closure when the 
President is at the Trump National Golf Club there, but there 
is what I would say is a reasonable accommodation. We provide 
security at the behest of the U.S. Secret Service for 
Presidential security. They have asked us to mitigate the risks 
on that waterway.
    I understand there is an ongoing lawsuit filed here 
recently earlier this month. There is a mechanism by which 
kayakers, canoers, other waterway users can contact Sector 
Maryland-National Capital Region. They can request a 
passthrough. I believe that area is served by a cellular phone 
where there should be a means to reach the sector.
    We are aware there is some frustration that, you know, the 
final rule went into effect and there has been comments after 
that. We are sensitive to those comments. We will reach back to 
waterway users, understand suggested alternatives and look at 
that.
    But I will say, first and foremost, as an operating agency 
of the Government, we respond to the U.S. Secret Service 
request to support the President from a security standpoint.
    Mr. Garamendi. Thirty-six times you have closed the river?
    Admiral Schultz. Sir, I am not sure the exact number. There 
is a significant number of times. But there is a means--what I 
would say I think is a reasonable accommodation for folks to 
transit through that section of the river. It is about a 2-mile 
stretch of the river that is impacted.
    Mr. Garamendi. Apparently that is not the case now that 
the--your current policy is to close the river completely.
    I am out of time.
    Admiral Schultz. Mr. Garamendi, I will get back to you. The 
closure with no passthrough is not my understanding of the 
circumstances. But I will circle back, sir, with you or your 
staff and clarify that if I am mistaken on that.
    Mr. Garamendi. If you would, please.
    Admiral Schultz. Yes, sir.
    [The information from the U.S. Coast Guard follows:]

        Upon U.S. Secret Service notification that POTUS will be 
        present at Trump National, U.S. Coast Guard Sector Maryland-NCR 
        releases a Broadcast Notice to Mariners (BNM) via VHF radio 
        providing public notification of Security Zone enforcement. The 
        BNM is then broadcast throughout the enforcement of the 
        Security Zone. In addition to BNMs, members of the public may 
        check for notice of enforcement at www.news.uscg.mil/Baltimore/ 
        or call (410) 576-7200 (pre-recorded message when Security Zone 
        is in effect).

        In order to enforce the Security Zone, U.S. Coast Guard Sector 
        Maryland-NCR partners with the Maryland Department of Natural 
        Resources who provides a vessel with embarked U.S. Coast Guard 
        law enforcement and U.S. Secret Service security personnel.

        During enforcement, the Maryland side of the Security Zone is a 
        transit lane. This lane is the designated portion of the river 
        that vessels may pass through. Prior to entering the transit 
        lane, vessels should request verbal authorization to pass 
        through the transit lane from the on-scene law enforcement 
        vessel, the U.S. Coast Guard Captain of the Port (COTP), or the 
        COTP's designated representative (can call 410-576-2693, SEC 
        MNCR Command Center 24x7).

        This process is the same as the accommodation announced by ADM 
        Zukunft in July 2017.

        This zone has been enacted approximately twenty-five times.

    Mr. Garamendi. I yield back.
    Mr. Mast. Thank you, Mr. Garamendi.
    The Chair will now recognize Mr. Weber for 5 minutes.
    Mr. Weber. Thank you, Mr. Chairman.
    And welcome, Admiral. Congratulations, I think. It is 
always good to see you. I really appreciate you all's response 
during Hurricane Harvey back along our district.
    For the members of the committee that may not know, I have 
the first three coastal counties in Texas, starting at 
Louisiana, so we were ground zero for Harvey flooding. And let 
me just tell you, the Coast Guard got in gear, and it was 
amazing what they did.
    And, Admiral, you were there, and I appreciated you all's 
efforts very greatly.
    And so this discussion with Congressman Garamendi about 
moving $34 million out is of interest to me, because I have 
seen you all up close and personal and what you do and how 
important it is.
    And so I appreciate that, John, your questioning there.
    Admiral, what is the total budget of the Coast Guard? Do 
you know offhand?
    Admiral Schultz. Congressman Weber, our total budget, 
discretionary and nondiscretionary, is a little bit north of 
$12 billion here. That was the high-water mark for the Coast 
Guard here coming out of the fiscal year 2018 omnibus budget.
    Mr. Weber. OK. Thank you.
    You mentioned in your comments that modernization has 
fundamentally altered the system. And so I want you to talk 
about that a little bit. Good, bad, indifferent? Can you effect 
that change?
    You mentioned several things in your comments about how it 
has altered the way that you work together, the different 
facets of the Coast Guard. But you are seeing a lot of storms. 
Congressman Garamendi was asking you about it, and I am really 
a little disappointed that you wouldn't guarantee him no more 
hurricanes, you know.
    But when you say fundamentally altered, as a new 
Commandant, good, bad, indifferent? I know modernization has 
helped. Are you able to effect that, be more cohesive? Describe 
that for us.
    Admiral Schultz. Thank you for the question, Congressman 
Weber. And I would say absolutely it has been positive across 
the board. It is fundamentally a different approach in how we 
do business.
    Probably two of the large pieces, if you look at how we 
work here in Washington, our Deputy Commandant for Operations 
looks strategically at operations policy across the entire 
Coast Guard. That is coast to coast; that is our international, 
global operations. Our Deputy Commandant for Mission Support 
has adopted the best of what was originally our aviation model, 
where it had an operations-level and a depot-level maintenance 
model. We have visibility on our assets from acquiring of new 
assets until we retire them typically many, many years, for the 
Coast Guard, usually decades later. We have visibility on 
those.
    I will give you an example on the maintenance side. So the 
270-foot Medium Endurance-class ship, which we have 13 of, we 
built them in the mid-1980s. They are 30-plus years old. In the 
past, we would have an engineering unit in Portsmouth, 
Virginia, where we have five of those ships homeported, that 
would do maintenance there. And then we had three ships in 
Boston and then another naval engineering support unit that 
would do maintenance there. A couple in Key West, a couple in 
Maine. They were different. They didn't have visibility across 
the budget for the entire Service for that type of ship. Today, 
we have a product line that manages all 13 of those 270-foot 
ships.
    We are making enterprise choices, given finite amounts of 
dollars, to say, all right, across that fleet, what has to be 
done today to put as many of those ships in the fight as many 
days as possible across a given calendar year. I would argue we 
are exponentially more strategic. We are allocating taxpayer 
dollars in a much more sophisticated and purposeful fashion.
    Equipment, our acquisition processes, under mission support 
acquisitions resides, human capital resides. All those enabling 
functions that allow us to have a Coast Guard that is ready, 
relevant, and responsive that I talk about through my guiding 
principles, all benefited from this effort to modernize the 
Coast Guard.
    I am very excited about where we are, and we will continue 
to embrace those principles of modernizing to make sure we are 
putting the best Coast Guard forward to support the Nation.
    Mr. Weber. Well, and we appreciate that. And just for my 
lack of really not knowing, percentage-wise--you are going to 
have national security along the waters. You are going to have, 
obviously, storm response, rescue and recovery. How would you 
categorize your three major areas that you guys work in? What 
are your top three areas?
    Admiral Schultz. Congressman, I would say----
    Mr. Weber. And put them in order, if you can.
    Admiral Schultz. Yes, sir. I would say, first and foremost, 
as a component within the Department of Homeland Security, we 
are focused on the security of the Nation, the national 
security, you know, more specifically, the homeland security. 
We are a globally deployed----
    Mr. Weber. Do you include storms in that?
    Admiral Schultz. Sir, I would say, from a national security 
standpoint, storms clearly factor into that.
    I would say, number 2, the economic prosperity of the 
Nation. I had mentioned the Marine Transportation System. About 
$4.6 trillion of activity occurs in our 361 seaports, our 
25,000 miles of coastline, our vast inland river system that 
you are familiar with. We enable that, whether it is 
navigation, it is partnering with the Army Corps, it is 
reopening those waterways.
    What I found after the storms of 2017, 2016, States with 
ports, the Governors are on the phone with me or my field 
commanders in about 24 to 48 hours: When does my port get 
opened?
    Mr. Weber. I remember.
    Admiral Schultz. The product coming into L.A.-L.B., it is 
about 3 to 5 days on the shelves of the Wal-Marts and Targets. 
So I would say we are a critically key role there.
    Support to the Department of Defense, the national security 
roles. I mentioned support to five of the six combatant 
commanders on any given day. We have coastguardsmen on 
Guantanamo Bay supporting the detention camp operations there 
on a persistent, everyday basis; in the Middle East, on the 
Arabian Gulf, dealing with the Iran threats and the maritime 
security operations there. We are in the Arctic. We are 
asserting an influence through presence. We are the only real 
U.S. Government presence other than the Navy on an episodic 
basis up there on any kind of a routine basis.
    So it is about projecting sovereign presence.
    Mr. Weber. Sure. Well, thank you, Admiral. And we 
appreciate what you all do and appreciate you coming in today.
    Admiral Schultz. Thank you, Congressman.
    Mr. Mast. Thank you, Mr. Weber.
    The Chair will now recognize Ms. Plaskett for 5 minutes.
    Ms. Plaskett. Thank you, Mr. Chair.
    And at this time, I will yield to Mr. Cummings.
    Mr. Cummings. Thank you very much. I want to thank the 
gentlelady for yielding.
    First of all, Admiral, it is good to see you again. And as 
you probably are well aware, back in 1961, President John F. 
Kennedy was at an inaugural parade, and the Coast Guard was 
marching, and he looked out and said, there is not one single 
black person. That was 1961. And the Coast Guard seems to have 
struggled with regard to diversity.
    I just want to know--and, recently, there have been a 
number of complaints with regard to discrimination and 
disparate treatment with regard to disciplinary action.
    As you know, a few years ago, I spoke before the Academy 
because we were having problems then, again, maybe 5, 6 years 
ago. And I am sure you are well aware, because you did the 
invitation, that Congressman Bennie Thompson, Congressman 
Courtney, and I are coming up to the Academy, I think it is in 
November to again address the cadets.
    Just two questions. Tell me, how are we doing with regard 
to diversity in the ranks? How are we doing with diversity with 
regard to faculty?
    And how are we doing with regard--it is not just good 
enough to have nice numbers. What are we doing with regard to 
climate? As you know, I sit on the Naval Academy board of 
visitors, and I have been there for now 12 years. And we have 
to work hard at diversity but also at climate.
    And the other question would be, I want to know, how we are 
doing with regard to women? Because that has been a problem in 
the past at the Naval Academy and still is, to some degree.
    Admiral Schultz. Congressman, good to see you this morning, 
and I welcome the questions.
    Sir, I would say, first and foremost, when you talk about 
discrimination in the Service, I would like to narrow that 
conversation----
    Mr. Cummings. Sure.
    Admiral Schultz [continuing]. To the Academy. I think that 
was your intent, sir.
    Mr. Cummings. OK.
    Admiral Schultz. I would say, writ large, my guiding 
principles, that hit the street on 1 June when I became the 
26th Commandant. I spoke very overtly to the Coast Guard's need 
to be more representative of the Nation we serve, from the 
folks that you see in the Coast Guard, leading the Coast Guard. 
We have about 5 percent of our workforce is African American. 
That is insufficient. About 14\1/2\, 15 percent of our 
workforce is female.
    We have pockets where we are doing very well. The United 
States Coast Guard Academy Cadet Corps, which numbers almost 
1,100, is comprised of 40 percent females. At some point, we 
turned the corner, you know, in the last decade-plus where 
women are in sufficient numbers there, where they are equally 
integrated. If that was a 60/40 split, women to men--I mean, I 
am not sure where that goes, but there is a good story there.
    Underrepresented minorities at the Academy, we still have 
room to go. You know you have my personal commitment, as does 
Mr. Thompson and Mr. Courtney, to support the Academy, work 
with the Academy. We have and continue to investigate any 
incidents of discrimination or racial bias up there and get 
after that, take action on that.
    We have created a task force that I get briefed on on a 
routine basis about what we are doing up there to ensure the 
Academy--we talk about diversity, and that is the numbers. And 
you are right. Talking about the numbers, we had 18 African 
Americans that graduated in the class of 2018, the most ever. 
That is a good-news uptick. We had smaller numbers the year 
before, rivaling where we were in 1977. That is inexplicable in 
2017.
    So we are focused on that, but it is really about 
inclusivity. We need the men and women of all walks of life to 
feel included. They need to be part of the fabric of the 
Academy. The numbers need to come up where we get where we were 
with the women, in terms of, you know, you look around and 
there is folks like you and they are succeeding. We need to 
make sure underrepresented minorities are graduating at the 
same percentages of their majority counterparts.
    In terms of writ large in the Service, sir, we are 
underway, intending to wrap up late January or February, with a 
women's retention study. We find retention of women trails--and 
I don't know the percentage, but there is a trail behind their 
male counterparts, to some degree.
    We are not waiting until January-February to get after 
that. We are trying to tease out the findings. I have created 
what I call a Personnel Readiness Task Force and assigned a 
full-time handful of people to start understanding these 
challenges and start actioning these challenges.
    So I think there is a good-news story to say we are focused 
on it. I welcome your, Mr. Thompson's, and Mr. Courtney's, you 
know, interest. I welcome the chance to bring you to the 
Academy to be part of the conversation that says we are serious 
about this, we are getting better at this.
    The Coast Guard does not benefit--my intent, the Coast 
Guard's intent to be more representative of the society we 
serve does not fare well when there are articles that say the 
Academy isn't a welcoming place to people of all backgrounds. 
That just sets us back, sir, and we don't have time for that.
    So I would love to get you up there. And I appreciate your 
commitment to doing that, where we can say, hey--as you say--
this is our watch, and we are going to better things on our 
watch. And I am personally invested in that, Congressman.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Ms. Plaskett. Mr. Chairman, if I may ask this committee's 
indulgence that, giving my time to Mr. Cummings, that on the 
next Democratic person, I may be able to ask questions?
    Mr. Mast. Absolutely. Without objection.
    Ms. Plaskett. Thank you.
    Mr. Mast. The Chair will now recognize another former 
chairman, Mr. Young, for 5 minutes.
    Mr. Young. Thank you, Mr. Chairman.
    Thank you, Admiral. And congratulations, sir. You are my 
10th Commandant. Ten Presidents and ten Speakers. Ten is a good 
number. I am trying for, actually, 11. So serve your full 4 
years, and I will serve 4 more. And those who don't like it, 
they can go do what with it.
    Mr. Weber. Is the gentleman including his wife, Anne, in 
that last?
    Mr. Young. Pardon?
    Mr. Weber. Are you including Anne in that list?
    Mr. Young. Oh, yeah, of course.
    Mr. Weber. I am just checking.
    Mr. Young. She is an officer. I am not. I am a private E-1.
    This is a strange question, Admiral, and you can't answer 
it right now, and then I have two other more serious questions. 
Of your $12 billion in your budget--did you say $12 billion?--I 
want a report back from you on how many lawyers are you 
employing now and the amount of money spent from your budget in 
the legal field defending your agency against other agencies 
and the private sector.
    This is important to me, because a lot of people forget it; 
I know, personally, when I first came into this office, you had 
very few lawyers. You have a potful right now. And I just want 
to know how much money is being spent, because it takes away 
from, I think, the mission which we directed you to do.
    One of the things that I am interested in, of course, is 
the port access route in the Chukchi Sea, the Bering Sea, and 
the effect upon Alaska Natives up there, the sea resources. 
What assets, mobile or fixed, does the Coast Guard have 
available to address the concerns raised by Alaska Natives 
regarding the region's being unprepared for an oil spill 
response?
    Admiral Schultz. Mr. Chairman, thank you for the question.
    On the first question on lawyers, we will take that and get 
back to you. What I will say--I am speaking to the Judge 
Advocate General's Corps today. And what I will say, sir, is 
those lawyers absolutely enable our Coast Guard operations. Our 
missions have gotten increasingly complex. I am not defending 
the numbers, but we will give you the answer on numbers, we 
will give you the cost on that, as soon as we can quickly turn 
on that.
    Regarding----
    Mr. Young. Just stop right there. The reason I am asking, 
it is just not you.
    Admiral Schultz. Yes, sir.
    Mr. Young. You have to defend yourself. It is a lot of 
other people doing this that take away from the mission. And it 
counts against the budget which you are trying to serve. And, 
you know, I would like to put a stop to the whole thing, 
because, very frankly, most of it is misspent money. I am 
prejudiced that way.
    Admiral Schultz. I understand your concern, sir.
    Mr. Young. Go ahead.
    Admiral Schultz. Yes, sir.
    Sir, regarding the Chukchi, the Beaufort areas in Alaska, 
we have been operating through a framework where we have 
brought mobile capabilities up there generally from about 1 
June into October here. We have supported what we call Arctic 
Shield Operations here this past year with four different 
cutters. We have forward-operated two MH-60 Jayhawk helicopters 
to Kotzebue. We have worked, I think, upwards of almost 20 
rescue cases. We have involved, you know, engaged the local 
community on safety on the water, on oil spill response 
capability. We continue to do exercises up there across the 
range of our portfolios.
    You know, there is obviously talk, discussion, I think more 
in the Army Corps lane than the Coast Guard lane, about 
deepwater-port-type facilities and the future of the Arctic. 
And the Coast Guard potentially would derive some benefit from 
that. I don't believe we are the lead agency on those 
conversations.
    But we will continue to press into the Arctic. We are on 
the precipice of, you know, potentially a detailed design and 
contract award for a Polar Security Cutter. The first time we 
are talking about that conversation in more than four decades 
here. We are keeping the Polar Star, you know, alive on life 
support to bridge that gap.
    But, sir, we will probably continue--not ``probably''--we 
will, for the foreseeable future, until we get, you know, that 
new Polar Security Cutter or multiple new Polar Security 
Cutters built, we will operate on this maritime-capable-
platform-type scenario.
    Mr. Young. All right. You have a very good reputation in 
the Arctic; I want you to know that. Which reminds me, in the 
Arctic, I would call it, program, what role are you taking? Is 
it the Navy? Is it the Department of Homeland Security? Is it 
the Coast Guard? Who is the head dog?
    Admiral Schultz. Well, sir, I think you may have seen 
Secretary Mattis recently visited the Arctic and talked about, 
you know, we need to pay more attention----
    Mr. Young. I am aware of that.
    Admiral Schultz. Yes, sir.
    Mr. Young. But what I am worried about is there is a lot of 
talk. If something happens, are you in charge? Is it the 
Defense Department? Or is it NOAA? Or who runs the shop?
    Admiral Schultz. Sir, if we are talking about some type of 
a spill because of increasing activity----
    Mr. Young. An oil spill, but not necessarily that. How 
about a freeze in? How about navigational aids, all that? Is 
that still going to be under your jurisdiction?
    Admiral Schultz. I believe that defaults to your United 
States Coast Guard, sir. We have a leadership role in the 
Arctic.
    The Navy is there from a defense standpoint. The SecNav is 
interested. We are partnered with the Navy. We are partnered 
with the Navy through the integrated program office on this 
icebreaker that is helping us drive down schedule, cost, 
acquisition risk. We are partnered with NOAA and the Navy here 
as we look at, you know, evolving mission requirements.
    But things like oil spills, things like rescues, sir, those 
are missions that are statutorily in our wheelhouse. And I 
believe that, you know, we will be the lead agency on that.
    Mr. Young. Do you have--the Department of Homeland Security 
and yourselves are working together, or are you looked at as 
the lesser of those two agencies?
    Admiral Schultz. Specific to the Arctic, sir?
    Mr. Young. No, no. The Department of Homeland Security. The 
head of the Department of Homeland Security and yourselves, are 
there good communications there? Are you able to establish your 
priorities, or is it the Department of Homeland Security?
    Admiral Schultz. Congressman, I would say we are a very 
good fit in the Department of Homeland Security. I was with the 
Secretary yesterday. I have great accessibility to her. She 
understands our challenges. We are part of the conversation of 
pushing our borders out.
    I believe that it is a good fit. There is no perfect fit in 
the Federal Government for the Coast Guard because of our broad 
missions, but I think the right fit is DHS. We have great 
support from the Department on this Polar Security Cutter, the 
Secretary's personal interest, the staff's interest. I think 
things are very positive with our relationship with our parent 
department.
    Mr. Young. Well, I know, Mr. Chairman, my time is up.
    But, Admiral, keep in mind you have a big supporter here. 
And if you see someone trying to override your decisions 
concerning the seas, let us know. Because sometimes they have a 
tendency to say, we are this and we are that and you are little 
and you don't mean much. And I am saying, huh-uh. You are the 
one that runs the seas. You are the ones that run the 
navigational aid, search and rescue, oil spill responsibility, 
immigration interdiction, the whole gamut--drug interdiction. 
And if you need help, let us know.
    We haven't funded you adequately. And one thing I will 
condemn Congress--we gave you more responsibility, but we 
haven't funded you as we should, and it seems the money goes 
someplace else. So keep that in mind.
    And thank you for your service. Thanks for being the new 
10th Commandant I have served with.
    Admiral Schultz. Thank you, Chairman.
    Mr. Mast. Thank you, Chairman Young.
    It is now my pleasure to recognize Ms. Plaskett again. You 
are now recognized for 5 minutes.
    Ms. Plaskett. Thank you, Mr. Chairman.
    And thank you, Commandant, for being here.
    I wanted to ask if you could provide an update on the 
current status of the Coast Guard's operations in the U.S. 
Caribbean, specifically if you could speak about the level of 
readiness and preparedness during this hurricane season.
    I know that you all did an excellent job in the Virgin 
Islands and Puerto Rico after Hurricanes Irma and Maria and 
again after Florence. But how does the hurricane activities in 
other areas affect your preparedness for hurricane season and 
utilizing the lessons learned that you have now from the 
previous year?
    Admiral Schultz. Well, thank you for the question, Ms. 
Plaskett.
    I would assure you, ma'am, we are prepared for any type of 
a major storm, hurricane in the Commonwealth of Puerto Rico, 
the U.S. Virgin Islands. We have derived lessons learned from 
last year's unprecedented hurricane season.
    We have fielded some new technologies aboard our Coast 
Guard rotary wing, our helicopters. We actually have greater 
visibility on where those helicopters are. Once we dispatch 
them out to a rescue, a recovery mission, we can see that in 
our command centers. We have employed what we call Coast Guard 
OneNet, which is an enabling technology platform that allows us 
to layer in different NOAA flood-type predictions, other 
information. So we pride ourselves on being a learning 
organization, and we have pulled some things forward.
    With the support of the Congress and the administration, it 
is about $300 million going to Puerto Rico to reconstitute our 
facilities in San Juan. That is our key operational node to 
deal with our air station in Borinquen on the northwest side of 
the island. Both of those locations suffered some fairly 
serious damage to the operations, to the support functions, our 
healthcare center in Borinquen, our child care centers. Over in 
St. Thomas, our detachment there, that facility needs a major 
overhaul.
    But we are standing the watch in those facilities. Our men 
and women are there living in less-than-ideal situations. I 
have made a commitment to make sure as--you know, it takes time 
to--I define a project, contract a project. Some of those 
challenges are even exacerbated in more remote locations like 
the Commonwealth of Puerto Rico or the U.S. Virgin Islands.
    So we will make sure our men and women come into an 
adequate level of existence today, with the hope that in the 
coming years we will better those and get those places more 
resilient.
    Ms. Plaskett. So do you have a report that has been 
prepared on the lessons learned and how you are implementing 
what you learned in the past? Is there some sort of document or 
something that you could share?
    Admiral Schultz. Congresswoman, we have internal, you know, 
lessons-learned-type stuff. We could probably roll up something 
to your staff to tell you what are those things we pulled 
forward from the 2017----
    Ms. Plaskett. That would be helpful.
    As you may know, I sit on the Committee on Oversight and 
Government Reform. And we have requested from--I have 
requested, other members have requested, and we had scheduled 
hurricane review with FEMA. But I think there are other 
agencies, like yourself as well as the Army Corps of Engineers, 
that would really be beneficial to be part of a hearing or a 
discussion like that. Because I know how much you all worked in 
tandem with one another during those. And you all have really 
gotten, I think, a good handle on what went well and what 
didn't go well during that discussion.
    Admiral Schultz. Yes, ma'am.
    And on an annual basis, across all those contingency 
operations, be it hurricanes, oil spoils, as Chairman Young 
spoke about, we do about 700 annual exercises, exercising our 
area contingency plans, our security-type plans. I mean, we are 
a learning, practicing organization that takes contingency 
operations very seriously. So I would be happy to get back to 
you on that.
    [The information from the U.S. Coast Guard follows:]

        The lessons learned related to the 2017 Hurricane Season are 
        captured in the Coast Guard's ``2017 Hurricane Season Strategic 
        Lessons Learned'' After Action Report (AAR).\\
---------------------------------------------------------------------------
    \\ This report is categorized as ``For Official Use Only'' 
and its distribution has been limited to the Subcommittee on Coast 
Guard and Maritime Transportation. It is not included in the hearing 
record.

    Ms. Plaskett. Well, moving outside of necessarily hurricane 
preparedness, but I know that in the past we have talked about 
the need for additional support, additional funding that I 
thought would be very beneficial to the Virgin Islands and 
Puerto Rico because of our borders and the high level of drugs 
and other activity that are going on there.
    Do you feel that you are getting the funding? Will you be 
able to ramp that up? Have the cuts taken an effect on that as 
well?
    Admiral Schultz. Congresswoman, I think there is a good-
news story there. My last job as Atlantic area commander, I 
committed to surging, I believe it was somewhere, 12, 13, 14 
additional bodies to support security operations out of the 
Virgin Islands.
    Secondly, one of my early action items was to commit to 
standing up a base in San Juan. We have a sector command there. 
The sector has a logistics department. That is a complex 
operation, from the security threats, the downrange--that area 
spans from the Commonwealth of Puerto Rico to the U.S. Virgin 
Islands, essentially to the north coast of Venezuela. That is a 
large area. Captain King there has a full-time job just meeting 
his operational requirements.
    So we are standing a base up. We will be putting bodies 
into that between now and the upcoming assignment season, 
summer of 2019. That will be a better-supported location for 
Coast Guard frontline operations with more capable mission-
support enablers.
    Ms. Plaskett. Thank you.
    And one last thing is I really wanted to ask you here in 
this hearing and to others that are on the bases, particularly 
in St. Thomas and in St. John, that we have a real issue with 
regard to vessels and individuals who are mooring and living 
near our harbors and are not necessarily permitting. It has 
become an environmental issue, as well, for us.
    And as you are well aware, we have very scarce resources 
with our own local department of natural resources being able 
to enforce that. And I know as a mandate, part of Coast Guard's 
mandate is, in fact, protecting the environment. And there are 
going to be real issues, long term, if we continue to have 
individuals living in the harbor without proper sewage and 
other facilities on those vessels. You know, you are really 
hard-pressed to go swimming in some of those places where once 
individuals like myself, when you were younger, were able to.
    So I would love to have your support in being able to do 
that.
    Admiral Schultz. Congresswoman, we will work with our local 
commander there, Captain King at the sector, and look what we 
can do in our existing authorities, you know, things that fall 
under our OPA 1990, the Oil Pollution Act of 1990, authorities 
in terms of remediation, environmental risk. We have 
authorities there.
    There are other places where we would have to work in 
partnership with probably the Government of the U.S. Virgin 
Islands to figure out what we can do collectively in 
partnership on those type of situations.
    Ms. Plaskett. Thank you.
    I yield back.
    Mr. Mast. Thank you again, Ms. Plaskett.
    Admiral, there is interest in another round of questioning. 
I am going to begin with recognizing myself for another 5 
minutes.
    And I would like to begin with some questions about 
immediate hurricane response in suburban and urban areas, what 
Mr. Weber has seen, of course, in Texas, what I just witnessed 
in North Carolina, and what we have witnessed in other places 
where you are seeing those roads literally completely 
underwater, homes underwater, and the Coast Guard having to go 
out there and undertake lifesaving capabilities.
    In that kind of situation, you are not talking about, you 
know, an extremely large vessel that was christened and sent 
off into the rough seas. We are talking about small, flat-
bottom vessels, teams of individuals that have to go out there 
around downed power lines and downed trees and livestock and so 
many other issues that are not necessarily always thought of 
when you are thinking about the Coast Guard mission.
    And so, as it relates to that, I was wondering if you could 
speak just a little bit to do you have the resources, the 
assets that you need in place for responding to hurricanes in 
situations like that, whether it is these small vessels, 
whether it is advancement in your drone program and being able 
to go out there and look beyond your line of sight to find 
individuals that are in peril.
    Can you speak a little bit to how that is advanced and what 
the benefits are that you have seen just in these last couple 
years with hurricanes as it relates to that and if you see 
anything on the horizon that you think you have further need of 
in order to provide the adequate response. I would appreciate 
that, Admiral.
    Admiral Schultz. Congressman, thank you for the question. 
And there is a lot in that question.
    I would say, at a macro level, in terms of our response, an 
area of concern for me is the size of our Coast Guard Reserves. 
At one point years back, we had authority to go to 10,000 
reservists. We never got above 8,100 reservists. Today, we are 
at about 6,300, plus or minus, reservists.
    For something like Hurricane Florence, even where we were 
in the 2017 hurricane season, we met mission there with that 
size Reserve. But if this was a protracted, multimonth 
Superstorm Sandy and this scenario went on for many months or a 
Deepwater Horizon that went on for many months--in Deepwater 
Horizon, we would have had activated all 6,300 Reserves today 
and then some, because we got almost up to 7,000-plus back 
then.
    So I would say one area of concern for me is our Reserve 
Force.
    In terms of those Flood Punt Teams, the shallow-water 
capabilities you rode with the other day, those are low-cost 
things. We pull those teams in from all over, our strike 
teams--Atlantic Strike Team, Gulf Strike Team, Pacific Strike 
Team--maintaining those capabilities. Our Eighth District, 
which is the heartland States--23 States in the heartland have 
these to deal with high flooding along the Mississippi and the 
other major river arteries there. So we can pull those boats 
together pretty easily. We can go out and contract for those 
boats out of a Bass Pro Shop, I mean, as long as we do that 
legally.
    I can take deployable Specialized Force folks, our high-end 
operators that are assigned to maritime safety security teams, 
and I could pull them from all over the country to operate 
those boats with a very short ramp-up. So I think we have 
bandwidth and capacity and capability there.
    And those folks have shown their ability. You know, 
Hurricane Harvey was 12,000 people rescued--11,000, almost 
12,000 rescued, a lot from the air but equal or more from the 
water on those inland capabilities on those Flood Punt Teams.
    You saw us fly a small drone. Our R&D center is doing some 
innovative things on how do we bring off-the-shelf capabilities 
like small drones out to surveil areas to make us more 
effective, more impactful.
    We are partnered up, and I think what you get with the 
Coast Guard that really is part of our special sauce is the 
ability to work with the locals, with the States, support FEMA, 
support the Governors. And we really speak that jurisdictional, 
multilingual language. We can plug in from a town with one 
sheriff, and we are a named member of the national intelligence 
community, so we work across that.
    In the recent response, we were lashed up with the First 
Air Force. Admiral Buschman's team was talking to them. Had 
this been a different storm, had it been a high-wind, high-
impact, you know, thousands of people in distress from the word 
``go,'' DoD had a large amphib offshore, they had the Arlington 
offshore, they had, you know, the V-22s onboard to fly in MH-60 
helicopters. There was a lot more capability that you didn't 
see that was ready for a different type of response. The Air 
Force had put, you know, search and rescue crews around the 
perimeter area to support the Coast Guard and other agencies.
    So I think we are well-positioned, sir. I don't think there 
are any large needs. But I will tell you, the one thing is the 
Reserve Force. I will come back to this committee and anytime I 
am on the Hill and talk about my concerns about getting our 
Reserve Force up near the authorized, I think it is 7,100 or 
7,000. We need to get closer to that number, sir.
    Mr. Mast. I appreciate your response. I would absolutely 
welcome your return to speak very specifically about that 
Reserve Force. It is vitally important across all branches of 
our military. I began my career in the Reserve Force, and so I 
am familiar with it on the Army side of the House.
    But it is in that that I will now recognize my friend Mr. 
Garamendi for another 5 minutes.
    Mr. Garamendi. Thank you, Mr. Chairman.
    I would love to get into the GAO report on what we now call 
the Polar Security Cutters. I think I am going to like that 
name. But I think I am going to let it go. The report came out 
very recently. I understand there was discussion about doing a 
specific hearing on that, and so I will wait on that.
    Just generally, your view of their report? Are we still on 
track, taking into account their positions or those 
recommendations? Just quickly, are we OK?
    Admiral Schultz. Ranking Member Garamendi, I would say I 
believe we are OK. We welcome GAO's interests. We welcome GAO's 
recommendations.
    We have not built a large icebreaker, what we are now 
terming a Polar Security Cutter. Before, it was a heavy 
icebreaker. Polar Security Cutter, I think, is a little bit 
adaptive to the nature of the work. It is a competitive space. 
I mentioned SecDef before talking about, you know, cooperating 
where we can, compete where we must. I think the Arctic is a 
competitive space, sir.
    I believe we are in a good place. The technical inputs have 
come in here in August. We are looking at those. Cost inputs 
will come in November. This is an ongoing dialogue. Because it 
is a void there for decades and we haven't built this type of 
ship, we need to continually enhance our knowledge.
    I mentioned earlier in my comments in one of the questions 
about working through this integrated project office with the 
Navy. You know, the Navy builds more big ships. This is going 
to be a large ship. This is going to be a big acquisition. So 
we are deriving benefit from the Navy's interest, from the 
SecNav's interest. I think that does drive down cost, schedule, 
performance risk.
    2023 is aggressive. My predecessor said, you know, we are 
behind. I have coined the phrase ``6-3-1,'' a minimum of six 
icebreakers, a minimum of three being heavy Polar Security 
Cutters, and the ``1'' is one now. We are chasing this space--
--
    Mr. Garamendi. Yeah. Just answer my question. You are on 
it?
    Admiral Schultz. We are on it, sir.
    Mr. Garamendi. We will have a hearing in due course here, 
and we will get into it in significant detail.
    There is another set of ships that we have not built for a 
long time, a program currently called inland waterways/Western 
Rivers tenders, which we are now going to call Waterway 
Commerce Cutters, which is a much better name. We have 
appropriated $1.1 million to get started on this program. There 
is $5 million in the upcoming fiscal 2019 budget.
    Where are we with this? I understand the captain that was 
responsible for the program has moved on to other tasks or 
retired. It is a priority. It is a priority in that this is the 
commerce of the United States in the inland waterways and 
beyond. So bring us up to date.
    Admiral Schultz. Ranking Member Garamendi, thanks for that 
question.
    The Waterways Commerce Cutter is going to get after 
replacing a fleet of 35, kind of a hodgepodge: small river 
tenders, 75-foot pushing barges, 160-foot construction tenders, 
a wide range of vessels. We are excited about that.
    And one piece you left out was actually the 2018 omnibus 
injected an additional $25 million on top of the $1.1 million. 
So we got $26.1 million last year. That signals loud and clear 
to me that the Congress is interested in this vessel. It ties 
to that $4.6 trillion economic engine annually on our 
waterways.
    So we are on this, sir. We are in the acquire phase of the 
acquisition. We are looking and talking to the Army Corps, 
other users, about what technologies we can pull forward.
    We recognize the desire to do this expediently. I have 
ships in that class, or those classes, that are 72 years old. 
The Smilax is the queen of the fleet--72 years old. The average 
age of that fleet is five-decades-plus, 50-plus years. I 
traveled on the Sangamon outside St. Louis in my previous 
capacity, and the cook was wearing double hearing protection 
and a helmet because there was so much vibration as he made the 
crew their meal. So we owe it to our sailors to recapitalize 
those vessels as soon as possible.
    There is a great-news story here. We are building National 
Security Cutters; we are getting ready to award on the OPC here 
imminently; Fast Response Cutters; Polar Security Cutters; 
Waterways Commerce Cutters.
    We have not been in this position before, sir, but your 
signal, your interest in this is absolutely clear on me. Our 
acquisitions workforce is stretched, but they understand my 
expectation is we are going to deliver this ship to the 
waterfront as soon as possible.
    Mr. Garamendi. Very briefly, I am concerned about the 
teamwork that is going to be necessary, the integration of your 
best people into the design and then ultimately the 
construction of these ships, as well as the advice and counsel 
of the folks that are on the river already, not only from the 
Coast Guard, but you mentioned the Army Corps of Engineers. 
Good.
    I would be interested in hearing from you, your design 
team, what kind of a group you are going to put together to 
manage this as well as to bring into the process the best 
thinking of folks that are intimately familiar with the tasks 
beyond just the Coast Guard.
    Admiral Schultz. Yes, sir, Congressman. I think we have 
issued two requests for information, RFIs--I believe one was 
back in the early part of this calendar year and one was closer 
to the summer--to draw at exactly that, those expertise, those 
lessons learned.
    This is not a--I am loathe to put a number out, but I think 
you are talking a $25 million, plus or minus, ship. This is 
not--as we are talking about OPCs and NSCs, I think we have to 
be reasonable in our requirements. You know, we have to build a 
ship that is purposeful to operate on the inland waterways and 
do the type of work it does.
    And there is a lot of--the Army Corps has a prototype they 
are sailing, I believe out of St. Louis. We are going to derive 
the learning from that. And there are other waterway users, 
sir, that we absolutely, through our mature acquisitions 
process, want to draw the best knowledge out there, and we want 
to get after this. And to do that quickly, that is by looking 
and drawing from others, from others that are experts in this 
field.
    Mr. Garamendi. If you could report back on the status.
    I yield back my time.
    Admiral Schultz. Yes, sir, we will.
    Mr. Mast. Thank you, Mr. Garamendi.
    I am now going to recognize Mr. Weber for another 5 
minutes.
    Mr. Weber. Thank you, Mr. Chairman.
    Thank you, Admiral.
    I want you to talk about, if you have the numbers--and if 
you don't, that is fine. It looks like we are going to get a 
Department of Defense bill across the line, we are hoping, 
today and a lot of our--some of our appropriation bills, at 
least. But when we don't, when we are--what is the word--
hampered by a CR, a continuing resolution, what does that do to 
the Coast Guard?
    Admiral Schultz. Congressman, thanks for the question.
    I guess I would say, and maybe it is a bit cynical, but we 
have been hampered by CRs here almost 40 percent of the time 
here in the last eight or nine budget cycles. So we have gotten 
adept at that.
    What does it do to an agency, an operating agency like the 
Coast Guard? It strains that. We have the ability to put our 
uniform members, those civilians that conduct frontline 
operations, like a search and rescue control or in a rescue 
coordination center like Houston that you visited, or a watch 
standard, a vessel traffic service, a civilian there that is 
supporting frontline operations, we can bring them to work 
under a CR or, you know, under a Government shutdown in extreme 
cases.
    But what we do lose is, you know, if it is a shutdown, we 
lose those supporting folks that enable frontline operations. 
So we can do the operations, but things like scheduled 
maintenance, training, those things fall by the wayside.
    CRs preclude us from starting new projects at the beginning 
of the year. So, a year ago when we had a CR, we were getting 
ready to do a Service Life Extension Program on our MH-60 
Jayhawk helicopters. And you saw just how critical those 
helicopters were to the Harvey response in Houston, over in 
your Beaumont-Port Arthur area. We had a lot of helicopters 
doing a lot of important things for Texans there. And, you 
know, deferring those projects like that SLEP any amount of 
time, that just sets us back a little bit, sir.
    So there is a consequence, and we work around it. But, 
ideally, having a budget at the start of a fiscal year makes us 
the most capable organization we can be.
    Mr. Weber. Do you have a dollar amount in difference for 
your funding? Or are those numbers you didn't bring with you?
    Admiral Schultz. Congressman, I would have to get back to 
you in terms of, you know, there is probably some loss, 
inefficiencies that come from operating under a CR that I would 
probably want to bring back to you here in a follow-on, if I 
could.
    [The information from the U.S. Coast Guard follows:]

        The impacts to frontline operations and acquisition programs 
        under the current CR through 7 December are considered 
        manageable. However, if the CR extends further into the fiscal 
        year, the Coast Guard would likely incur impacts to readiness 
        and operations. Pay accounts become significantly stressed 
        during extended CR periods and paying our military workforce 
        becomes challenging. Pay shortfalls force untenable trade-offs 
        between paying our workforce and sustaining frontline 
        operations that keep our Nation safe.

        In addition, the CR prevents the Coast Guard from moving out on 
        new programs due to start in a fiscal year. This often 
        postpones the start of critical acquisition projects or delays 
        on-going projects due to limited funding. If a CR continues 
        into later in the fiscal year, several programs will likely be 
        impacted, including: POLAR STAR sustainment and the MH-60T 
        Service Life Extension Project.

        With the current FY 2019 CR in place through 7 December, the 
        Coast Guard has operated under 34 CRs from FY 2010 through FY 
        2019 and over 40 percent of the time since the start of FY 
        2010. Just like the other Armed Services, CRs impact the 
        readiness of forces and assets at a time when security threats 
        are extraordinarily high. As CRs extend further into the fiscal 
        year, the more damage they do. CRs have administrative costs 
        that are wasteful, as well as readiness and operational costs 
        that are unrecoverable. Over time they erode the foundation of 
        a strong military and sound financial management practices.

    Mr. Weber. OK. Well, I appreciate that. We do appreciate 
what you all do with what you have, and appreciate your 
service. Thank you, Admiral.
    I yield back.
    Mr. Mast. Thank you, Mr. Weber.
    If there are no further questions, I would thank Admiral 
Schultz for his testimony, thank all the Members for their 
participation.
    Before we close, I would take this opportunity to thank 
Captain Noland for his detailed work in writing this review. We 
appreciate that, and it is absolutely recognized here.
    I would now ask unanimous consent that the record of 
today's hearing remain open until such time as our witnesses 
have provided answers in writing to any questions that may be 
submitted to the Coast Guard and unanimous consent that the 
record remain open for 15 days for any additional comments and 
information submitted by Members or witnesses to be included in 
the record of today's hearing.
    Without objection, so ordered.
    The subcommittee stands adjourned.
    [Whereupon, at 11:09 a.m., the subcommittee was adjourned.]

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