[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                REVIEW OF FISCAL YEAR 2023 BUDGET REQUEST 
                    FOR THE COAST GUARD AND MARITIME 
                    TRANSPORTATION PROGRAMS

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

                                (117-47)

                             REMOTE HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 27, 2022

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
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     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation
                             
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
48-450 PDF                 WASHINGTON : 2022                     
          
-----------------------------------------------------------------------------------                                

             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

  PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri                 ELEANOR HOLMES NORTON,
ERIC A. ``RICK'' CRAWFORD, Arkansas    District of Columbia
BOB GIBBS, Ohio                      EDDIE BERNICE JOHNSON, Texas
DANIEL WEBSTER, Florida              RICK LARSEN, Washington
THOMAS MASSIE, Kentucky              GRACE F. NAPOLITANO, California
SCOTT PERRY, Pennsylvania            STEVE COHEN, Tennessee
RODNEY DAVIS, Illinois               ALBIO SIRES, New Jersey
JOHN KATKO, New York                 JOHN GARAMENDI, California
BRIAN BABIN, Texas                   HENRY C. ``HANK'' JOHNSON, Jr., 
GARRET GRAVES, Louisiana             Georgia
DAVID ROUZER, North Carolina         ANDRE CARSON, Indiana
MIKE BOST, Illinois                  DINA TITUS, Nevada
RANDY K. WEBER, Sr., Texas           SEAN PATRICK MALONEY, New York
DOUG LaMALFA, California             JARED HUFFMAN, California
BRUCE WESTERMAN, Arkansas            JULIA BROWNLEY, California
BRIAN J. MAST, Florida               FREDERICA S. WILSON, Florida
MIKE GALLAGHER, Wisconsin            DONALD M. PAYNE, Jr., New Jersey
BRIAN K. FITZPATRICK, Pennsylvania   ALAN S. LOWENTHAL, California
JENNIFFER GONZALEZ-COLON,            MARK DeSAULNIER, California
  Puerto Rico                        STEPHEN F. LYNCH, Massachusetts
TROY BALDERSON, Ohio                 SALUD O. CARBAJAL, California
PETE STAUBER, Minnesota              ANTHONY G. BROWN, Maryland
TIM BURCHETT, Tennessee              TOM MALINOWSKI, New Jersey
DUSTY JOHNSON, South Dakota          GREG STANTON, Arizona
JEFFERSON VAN DREW, New Jersey       COLIN Z. ALLRED, Texas
MICHAEL GUEST, Mississippi           SHARICE DAVIDS, Kansas, Vice Chair
TROY E. NEHLS, Texas                 JESUS G. ``CHUY'' GARCIA, Illinois
NANCY MACE, South Carolina           ANTONIO DELGADO, New York
NICOLE MALLIOTAKIS, New York         CHRIS PAPPAS, New Hampshire
BETH VAN DUYNE, Texas                CONOR LAMB, Pennsylvania
CARLOS A. GIMENEZ, Florida           SETH MOULTON, Massachusetts
MICHELLE STEEL, California           JAKE AUCHINCLOSS, Massachusetts
Vacancy                              CAROLYN BOURDEAUX, Georgia
                                     KAIALI`I KAHELE, Hawaii
                                     MARILYN STRICKLAND, Washington
                                     NIKEMA WILLIAMS, Georgia
                                     MARIE NEWMAN, Illinois
                                     TROY A. CARTER, Louisiana
                                ------                                7

        Subcommittee on Coast Guard and Maritime Transportation

                  SALUD O. CARBAJAL, California, Chair
RICK LARSEN, Washington              BOB GIBBS, Ohio
JAKE AUCHINCLOSS, Massachusetts,     RANDY K. WEBER, Sr., Texas
  Vice Chair                         MIKE GALLAGHER, Wisconsin
SEAN PATRICK MALONEY, New York       JEFFERSON VAN DREW, New Jersey
ALAN S. LOWENTHAL, California        NICOLE MALLIOTAKIS, New York
ANTHONY G. BROWN, Maryland           Vacancy
CHRIS PAPPAS, New Hampshire          SAM GRAVES, Missouri (Ex Officio)
PETER A. DeFAZIO, Oregon (Ex 
    Officio)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................     v

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Salud O. Carbajal, a Representative in Congress from the 
  State of California, and Chair, Subcommittee on Coast Guard and 
  Maritime Transportation, opening statement.....................     1
    Prepared statement...........................................     3
Hon. Bob Gibbs, a Representative in Congress from the State of 
  Ohio, and Ranking Member, Subcommittee on Coast Guard and 
  Maritime Transportation, opening statement.....................     4
    Prepared statement...........................................     5
Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chair, Committee on Transportation and 
  Infrastructure, opening statement..............................     6
    Prepared statement...........................................     8
Hon. Sam Graves, a Representative in Congress from the State of 
  Missouri, and Ranking Member, Committee on Transportation and 
  Infrastructure, prepared statement.............................    55

                               WITNESSES

Admiral Karl L. Schultz, Commandant, U.S. Coast Guard, oral 
  statement......................................................    10
    Prepared statement...........................................    11
Master Chief Jason M. Vanderhaden, Master Chief Petty Officer of 
  the Coast Guard, U.S. Coast Guard, oral statement \\...    16
Hon. Daniel B. Maffei, Chairman, Federal Maritime Commission, 
  oral statement.................................................    18
    Prepared statement...........................................    19
Lucinda Lessley, Acting Administrator, Maritime Administration, 
  oral statement.................................................    23
    Prepared statement...........................................    24

                       SUBMISSIONS FOR THE RECORD

Framework Timeline for U.S. Coast Guard Training Center Cape May 
  Barracks Recapitalization, Submitted for the Record by Hon. 
  Jefferson Van Drew.............................................    56

                                APPENDIX

Questions to Admiral Karl L. Schultz, Commandant, U.S. Coast 
  Guard, from:
    Hon. Salud O. Carbajal.......................................    57
    Hon. Alan S. Lowenthal.......................................    58
    Hon. Peter A. DeFazio on behalf of Hon. John Garamendi.......    58
    Hon. Sean Patrick Maloney....................................    59
    Hon. Chris Pappas............................................    59
    Hon. Sam Graves..............................................    59
Questions from Hon. Peter A. DeFazio on behalf of Hon. John 
  Garamendi to Hon. Daniel B. Maffei, Chairman, Federal Maritime 
  Commission.....................................................    65

----------
\\ Master Chief Jason M. Vanderhaden did not submit a prepared 
statement for the record.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                             April 22, 2022

    SUMMARY OF SUBJECT MATTER

    TO:      LMembers, Subcommittee on Coast Guard and Maritime 
Transportation
    FROM:  LStaff, Subcommittee on Coast Guard and Maritime 
Transportation
    RE:      LHearing on ``Review of Fiscal Year 2023 Budget 
Request for the Coast Guard and Maritime Transportation 
Programs''
_______________________________________________________________________


                                PURPOSE

    The Subcommittee on Coast Guard and Maritime Transportation 
will hold a hearing on Wednesday, April 27, 2022, at 10:00 a.m. 
EDT in 2167 Rayburn House Office Building and via Zoom to 
examine the President's fiscal year (FY) 2023 budget requests 
for the Coast Guard and maritime transportation programs. The 
subcommittee will hear testimony from the U.S. Coast Guard 
(Coast Guard or Service), the Federal Maritime Commission 
(Commission or FMC), and the Maritime Administration (MARAD).

                               BACKGROUND

COAST GUARD

    The Coast Guard was established on January 28, 1915, 
through the consolidation of the Revenue Cutter Service 
(established in 1790) and the Lifesaving Service (established 
in 1848). The Coast Guard later assumed the duties of three 
other agencies: the Lighthouse Service (established in 1789), 
the Steamboat Inspection Service (established in 1838), and the 
Bureau of Navigation (established in 1884).
    Under Section 102 of title 14, United States Code, the 
Coast Guard has primary responsibility to enforce or assist in 
the enforcement of all applicable federal laws on, under, and 
over the high seas and waters subject to the jurisdiction of 
the United States; to ensure the safety of life and property at 
sea; to carry out domestic and international icebreaking 
activities; and, as one of the six armed forces of the United 
States, to maintain defense readiness to operate as a 
specialized service in the Navy upon the declaration of war or 
when the President directs.
    The Coast Guard is directed by a Commandant, appointed by 
the President with the advice and consent of the Senate to a 
four-year term. Admiral Karl Schultz was sworn in as the 26th 
Commandant of the Coast Guard in June 2018 and will retire from 
his duty on June 1, 2022.

FISCAL YEAR 2023 COAST GUARD BUDGET REQUEST

    The President's FY 2023 budget request for the Coast Guard 
\1\ compares to the FY 2022 enacted funding level \2\ as shown 
here:
---------------------------------------------------------------------------
    \1\ White House. FY 2023 President's Budget, available at https://
www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf.
    \2\ Consolidated Appropriations Act, 2022 (Public Law 117-103), 
available at https://www.congress.gov/bill/117th-congress/house-bill/
2471.

                  Coast Guard FY 2022 Enacted to FY 2023 President's Budget Request Comparison
                                             (Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------
                                                                   President's FY    FY 2022 to FY   FY 2022 to
                      Program                          FY 2022       2023 Budget      2023 Change      FY 2023
                                                       Enacted         Request            ($)        Change (%)
----------------------------------------------------------------------------------------------------------------
Operations & Support (O&S)........................   $ 9,162,120      $ 9,620,029        $ 457,909          5.0%
Environmental Compliance & Restoration (EC&R) \1\.      $ 27,456         $ 24,386        $ (3,070)        -11.2%
Medicare-Eligible Retiree Health Care Fund             $ 240,577        $ 252,887         $ 12,310          5.1%
 (MERHCF).........................................
Procurement, Construction & Improvements (PC&I)...   $ 2,030,100      $ 1,654,850      $ (375,250)        -18.5%
Research & Development (R&D)......................       $ 7,476          $ 7,476              $ -          0.0%
National Coast Guard Museum Grant \2\.............      $ 50,000              $ -       $ (50,000)       -100.0%
                                                   -------------------------------------------------------------
  Subtotal, Discretionary.........................  $ 11,517,729     $ 11,559,628         $ 91,899          0.8%
                                                   -------------------------------------------------------------
Retired Pay.......................................   $ 1,963,519      $ 2,044,414         $ 80,895          4.1%
State Boating Safety Grants.......................     $ 128,987        $ 132,442          $ 3,455          2.7%
Maritime Oil Spill Program........................     $ 101,000        $ 101,000              $ -          0.0%
General Gift Funds................................       $ 2,864          $ 2,864              $ -          0.0%
Housing Fund \3\..................................       $ 4,000          $ 4,000              $ -          0.0%
                                                   -------------------------------------------------------------
  Subtotal, Mandatory.............................   $ 2,200,370      $ 2,284,720         $ 84,350          3.8%
                                                   -------------------------------------------------------------
    Total.........................................  $ 13,718,099     $ 13,844,348        $ 176,249          1.3%
----------------------------------------------------------------------------------------------------------------
\1\ EC&R funding was incorporated into the Coast Guard's O&S PPA in FY 2019; this row is therefore excluded from
  the Discretionary Subtotal.
\2\ Museum funding was awarded as a one-time grant in FY 2022 and is not expected to continue on an annual
  basis.
\3\ Housing funds appear as a discretionary offsetting fee in the Coast Guard Congressional Justification.
  Housing funds appear as Administrative Provisions in the Joint Explanatory Statement as multiple line items.


    The President requests $13.8 billion in FY 2023 for the activities 
of the Coast Guard, including $11.5 billion in discretionary 
funding.\3\ The discretionary request is an increase of $96 million 
(0.8 percent) from the FY 2022 enacted level.
---------------------------------------------------------------------------
    \3\ United States Coast Guard. U.S. Coast Guard Budget Overview: 
Fiscal Year 2023 Congressional Justification, available at https://
www.uscg.mil/Portals/0/documents/budget/2023/
FY%202023%20Congressional%20Justification.pdf?ver=sNVot6ILB-
bDynTKEVPTBw%3d
%3d&timestamp=1648484167362.
---------------------------------------------------------------------------
Operations and Support
    The President requests $9.620 billion for the Operations and 
Support (O&S) account in FY 2023, a $458 million (5.0 percent) increase 
from the FY 2022 enacted level. The O&S account supports the day-to-day 
activities of the Coast Guard including administrative expenses, 
support costs, travel, lease payments, and the operation and 
maintenance of infrastructure and assets. The O&S account also funds 
personnel compensation and benefits for the Service's approximately 
40,500 active-duty military members, 8,000 reservists, and 9,000 
civilian employees.\4\ Included in this request is $5.1 billion for 
military pay and personnel support; $430 million for mission support, 
including enterprise management and environmental compliance and 
restoration; and $3.9 billion for field operations.\5\
---------------------------------------------------------------------------
    \4\ United States Coast Guard. 2023 Budget Overview: Posture 
Statement, available at https://www.uscg.mil/Portals/0/documents/
budget/2023/FY%202023%20Posture%20Statement.pdf?
ver=nSIvAr6imO5IsOC3m0PMsg%3d%3d.
    \5\ Id.
    The O&S budget request includes increases in funding to cover 
follow-on costs for the operation and maintenance of newly acquired 
assets and technology and increases in other administrative expenses to 
cover the cost of the 2022 military pay raise (4.6 percent), 2022 
civilian pay raise (2.7 percent), 2023 military pay raise (2.7 
percent), and 2023 civilian pay raise (4.6 percent).
    The FY 2023 budget includes an increase of 33 staff positions, 19 
full-time equivalents (FTE), and $6.8 million to fund initiatives in 
the Coast Guard's Technology Revolution Roadmap.\6\ This comprehensive 
framework outlines investments required to ensure mission execution 
supported by reliable, mobile, and integrated technology.\7\ The 
investments in this request are focused on the sustainment of the rapid 
application development platform, newly developed mobile applications 
and telework capabilities, and sustainment of new enterprise 
applications. The base for this program is seven positions, seven FTE, 
and $6.0 million. This funding allows for the rapid development of 
cyber-secure web-based applications for use by marine inspectors, law 
enforcement officers, pollution investigators, recruiters, and other 
field operators across the Coast Guard.\8\ It also provides personnel 
to support the new capabilities offered by acquisitions programs, 
including logistics information management and command and control 
systems. Finally, this request sustains the Coast Guard's increased 
telework capacity with dedicated personnel and contract services 
support.\9\
---------------------------------------------------------------------------
    \6\ United States Coast Guard. U.S. Coast Guard Budget Overview: 
Fiscal Year 2023 Congressional Justification.
    \7\ United States Coast Guard. Tech Revolution: Vision for the 
Future, available at https://www.dcms.uscg.mil/Portals/10/CG-6/roadmap/
C5i-roadmap-FINAL-v6.pdf.
    \8\ United States Coast Guard. U.S. Coast Guard Budget Overview: 
Fiscal Year 2023 Congressional Justification.
    \9\ Id.
---------------------------------------------------------------------------
    In January of 2020, the Coast Guard opened the Blue Technology 
Center of Expertise (BTCOE) at Scripps Institution of Oceanography in 
La Jolla, California.\10\ This new Center of Expertise will further act 
as a unique pipeline to innovation and enable sharing of information 
between the Coast Guard, private sector, other federal agencies, 
academia, and non-profit organizations.\11\ Following the creation of 
this new center, the President's FY 2023 budget request includes an 
increase of one full-time position, one FTE, and $2.5 million to fund 
personnel and operating costs associated with the BTCOE and the Defense 
Innovation Unit detachment. This increase establishes a base for these 
programs.\12\
---------------------------------------------------------------------------
    \10\ United States Coast Guard. Coast Guard opens new Blue 
Technology Center of Expertise, available at https://www.dcms.uscg.mil/
Our-Organization/Assistant-Commandant-for-Acquisitions-CG-9/Newsroom/
Latest-Acquisition-News/Article/2065456/coast-guard-opens-new-blue-
technology-center-of-expertise/. January 24, 2020.
    \11\ Id.
    \12\ United States Coast Guard. U.S. Coast Guard Budget Overview: 
Fiscal Year 2023 Congressional Justification.
---------------------------------------------------------------------------
    The Environmental Compliance and Restoration (EC&R) account was 
moved to the O&S account in FY 2019. The President requests $24.4 
million within O&S for EC&R in FY 2023, a $3.1 million (or 11.2 
percent) decrease from the FY 2022 enacted level. The EC&R funding 
provides for the clean-up and restoration of contaminated Coast Guard 
facilities, and for the remediation of Coast Guard assets to ensure 
they are safe to operate or can be decommissioned in compliance with 
environmental laws.\13\ The $24.4 million requested for EC&R continues 
long-term monitoring at 22 sites, begins or continues investigation and 
remediation site work at 30 sites, and displays a commitment to ongoing 
identification, investigation, cleanup, and long-term management of 
contamination from hazardous substances and pollutants for Coast Guard 
systems, buildings, structures, and assets.\14\
---------------------------------------------------------------------------
    \13\ Id.
    \14\ Id.
---------------------------------------------------------------------------
    The FY 2023 budget request also transfers the coordination of 
Maritime Operational Threat Response (MOTR; coordinated U.S. government 
response to threats against the U.S. and its interests in the maritime 
domain globally) \15\ and Spill of National Significance events (SONS; 
oil spills that are sufficiently large or complex that coordination 
between federal, state, local, and responsible party resources is 
required to clean up the spill) \16\ to the U.S. Coast Guard as part of 
the Department of Homeland Security (DHS) effort to realign certain 
non-statutory functions from the DHS Office of Operations Coordination 
and Planning (OPS).\17\ While such events are rare when they occur, the 
Coast Guard is the primary subject matter expert and DHS OPS does not 
provide dedicated resources in this area. By removing the coordination 
step within DHS OPS, the Coast Guard will be better positioned to 
directly seek input from across DHS. The assumption of MOTR and SONS 
events by the Coast Guard does not include additional resources.\18\
---------------------------------------------------------------------------
    \15\ Department of Homeland Security. Global MOTR Coordination 
Center, available at https://www.dhs.gov/global-motr-coordination-
center-gmcc.
    \16\ SONS Communications Coordination Workgroup. Spill of National 
Significance Executive Reference Guide, available at https://
www.dco.uscg.mil/Portals/9/CG-5R/MER/MER%203/
SERG_04_April_2019_FINAL.pdf?ver=2019-06-08-153911-130.
    \17\ United States Coast Guard. U.S. Coast Guard Budget Overview: 
Fiscal Year 2023 Congressional Justification.
    \18\ Id.
---------------------------------------------------------------------------
    The proposed O&S increases are offset by proposed cuts derived 
through decommissioning certain assets, fee and operational 
adjustments, annualization of prior-year initiative reductions, and the 
termination of one-time costs. Specifically, the proposed reductions 
affecting the O&S account include:
      Asset decommissions and associated personnel reductions: 
The FY 2023 budget request proposes the decommissioning of four HC-130H 
Long Range Surveillance Aircraft ($12.9 million), one 210-foot Reliance 
Class Medium Endurance Cutter (WMEC; $10.0 million), temporary 
disestablishment of one 270-foot Famous Class WMEC crew during an 
extended Service Life Extension Project (SLEP; $22.2 million), five 
110-foot legacy Island Class Patrol Boats (WPBs; $6.8 million), and 
five legacy 87-foot Marine Protector Class Coastal Patrol Boats ($2.2 
million) for a total savings of $41.2 million in FY 2023.\19\
---------------------------------------------------------------------------
    \19\ United States Coast Guard. U.S. Coast Guard Budget Overview: 
Fiscal Year 2023 Congressional Justification.
---------------------------------------------------------------------------
      Operational adjustments: The FY 2023 budget request also 
proposes savings of $1.6 million in Coast Guard detailee reductions, 
$1.1 million in the consolidation of redundant stations, $896 thousand 
in improved boat operations, $182 thousand in improved management 
efficiencies,$775 thousand in improved mission support efficiencies, 
$1.0 million from departmental initiatives, and $488 thousand from 
rebalanced maritime patrol aircraft operations for an additional 
savings of $5.9 million.\20\
---------------------------------------------------------------------------
    \20\ Id.
---------------------------------------------------------------------------
Procurement, Construction, and Improvements
    The President requests $1.655 billion for the Procurement, 
Construction, and Improvements (PC&I) account,\21\ a $375 million (18.5 
percent) decrease from the FY 2022 enacted level.\22\ The PC&I account 
funds the acquisition, procurement, construction, rebuilding, and 
physical improvements of Coast Guard owned and operated vessels, 
aircraft, facilities, aids-to-navigation (AtoN), communications and 
information technology systems, and related equipment. Specifically, 
the budget request includes $1.476 billion for sustainment and 
acquisition of the following assets:
---------------------------------------------------------------------------
    \21\ Id.
    \22\ Consolidated Appropriations Act, 2022 (Public Law 117-103).
---------------------------------------------------------------------------
      In-service vessel sustainment: Major Maintenance 
Availabilities (MMA) ensure in-service vessels continue to meet their 
designed service life through the recapitalization of hull, mechanical, 
electrical and electronic systems that have been identified as the 
highest contributors to maintenance costs and operational availability 
degradation. SLEPs increase in-service vessel service life without 
significantly modifying capabilities.
      +  $36 million for 47-ft Motor Life Boat SLEP;
      +  $22.5 million for 225-ft Buoy Tender MMA;
      +  $23.8 million for 270-ft Medium Endurance Cutter SLEP;
      +  $7 million for 175-ft Coastal Buoy Tender MMA; and
      +  $4 million for CGC HEALY MMA.
      National Security Cutter (NSC): $60.0 million for 
delivery of NSC #10 and continued construction of NSC #11, including 
Post Delivery Activities (PDA) necessary to make these cutters ready 
for operation.
      Offshore Patrol Cutter (OPC): $650 million for the 
construction of OPC #5, and Long Lead Time Materials (LLTMs) for OPC 
#6. The acquisition of 25 OPCs, including PDA necessary to make these 
cutters ready for operations, to replace the Coast Guard's fleet of 
Medium Endurance Cutters (WMECs), and bridge the capabilities of the 
NSC and FRC. The delivery of OPC #1 is anticipated to occur in FY 2023.
      Fast Response Cutter (FRC): $16.0 million for the 
delivery of FRCs #51-55. Continued construction of FRCs is necessary to 
replace the Coast Guard's fleet of 110-ft Island Class Patrol Boats 
(WPBs).
      Boats: $8.0 million to order/deliver one Long Range 
Interceptor (NSC #10-11), nine Over-The-Horizons (NSC #10-11, OPCs #1-
3, PSC #1), and six Maritime Security Response Team boats.
      Polar Security Cutter (PSC): $167.2 million for the 
continued construction of PSC #1, the start of construction of PSC #2, 
and the continued purchase of LLTM for PSC #3.
      $125 million for the purchase of a commercially available 
Polar Icebreaker.
      Waterways Commerce Cutter program: $77.0 million for 
project planning and LLTM/construction of River Buoy Tender and 
Construction Tender first articles, and the continued development of 
government-led design for the Inland Buoy Tender.
      $15.0 million for a multi-year CGC POLAR STAR SLEP.
      $182.0 million for aircraft.
      $82.0 million for other acquisition programs.

    The budget request also includes $180 million for shore facilities 
and AtoN.\23\ This request is a decrease of $183.2 million (50.4 
percent) from the FY 2021 enacted level,\24\ and a decrease of $99.7 
million (35.6 percent) from the President's FY 2022 budget request.\25\ 
The Coast Guard estimates that there is a $1 billion deferred shore 
facility maintenance backlog, while the Government Accountability 
Office (GAO) approximated that number at $2.6 billion in February 2019 
(likely higher today), according to Coast Guard information.\26\ As of 
2018, the deferred maintenance backlog included more than 5,600 
projects, while the recapitalization and new construction backlog 
included 125 projects.\27\ GAO's analysis of Coast Guard data found 
that as of November 2018, there were hundreds of recapitalization 
projects without cost estimates--the majority of recapitalization 
projects.\28\ Coast Guard officials told GAO that these projects were 
in the preliminary stages of development.\29\ From that report, the GAO 
recommended that the Commandant of the Coast Guard employ models for 
its asset lines to predict the outcome of investments, analyze trade-
offs, and optimize decisions among competing investments.\30\ The Coast 
Guard concurred, and in response to Section 5108 of title 14, United 
States Code, the Coast Guard produced their Unfunded Priorities List 
(UPL) in order of priority on June 29, 2021.\31\ This included $992.2 
million for Procurement, Construction, and Improvements; and $121.1 
million for Operations and Support, totaling $1.1 billion across the 
two accounts.\32\
---------------------------------------------------------------------------
    \23\ United States Coast Guard. Fiscal Year 2023 President's 
Budget: Fact Sheet, available at https://www.uscg.mil/Portals/0/
documents/budget/2023/FY%202023%20President's%20
Budget%20Fact%20Sheet.pdf?ver=gcTYiFH9QRw%3d.
    \24\ United States Coast Guard. Budget Overview: Fiscal Year 2022 
Congressional Justification, available at https://www.uscg.mil/Portals/
0/documents/budget/2022/FY2022_Congressional_
Justification.pdf?ver=YXeBcfwpAIAE7RuU94zRJg%3d%3d.
    \25\ Id.
    \26\ Government Accountability Office. COAST GUARD SHORE 
INFRASTRUCTURE: Actions Needed to Better Manage Assets and Reduce Risks 
and Costs. GAO-19-711T, September 25, 2019.
    \27\ Id.
    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ United States Coast Guard. FY 2022 Unfunded Priorities List, 
available at https://www.dhs.gov/sites/default/files/publications/
uscg_-_fy_2022_unfunded_priorities_list.pdf.
    \32\ Id.
---------------------------------------------------------------------------
Research and Development
    The President requests $7.5 million in FY 2023 for the Coast 
Guard's Research and Development (R&D) account, an amount equal the FY 
2022 enacted level. The R&D account supports improved mission 
performance for the Service's 11 statutory missions through applied 
research and development of new technology and methods.\33\
---------------------------------------------------------------------------
    \33\ United States Coast Guard. Budget Overview: Fiscal Year 2023 
Congressional Justification.
---------------------------------------------------------------------------
    The Coast Guard intends to use the requested $7.5 million in FY 
2023 for programs to develop technologies and systems that improve 
operational presence and response, as well as perform technology 
assessments to inform the early stages of the acquisition process.\34\ 
Of the funding, $0.5 million is derived from the Oil Spill Liability 
Trust Fund as authorized by the Oil Pollution Act of 1990 (33 USC 
Sec. Sec.  2701-2761).\35\
---------------------------------------------------------------------------
    \34\ Id.
    \35\ Id.
---------------------------------------------------------------------------
Federal Maritime Commission
    The FMC was established in 1961 as an independent agency that 
regulates ocean-borne transportation in the foreign commerce of the 
United States.\36\ The FMC protects shippers and carriers from 
restrictive or unfair practices of ocean carriers, including foreign-
flagged carrier alliances. The FMC also enforces laws related to cruise 
vessel financial responsibility to ensure cruise vessel operators have 
sufficient resources to pay judgments to passengers for personal injury 
or death or for nonperformance of a voyage.\37\
---------------------------------------------------------------------------
    \36\ Section 46101 of title 46, United States Code, available at 
https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-
section46101#=0&edition=prelim.
    \37\ Federal Maritime Commission. Federal Maritime Commission FY 
2023 Budget Justification, available at https://fmc2.fmc.gov/wp-
content/uploads/2022/03/Federal-Maritime-Commission-CONG23-Budget-
Submission.pdf.
---------------------------------------------------------------------------
    The FMC is composed of five commissioners appointed for five-year 
terms by the President with the advice and consent of the Senate. The 
Honorable Daniel B. Maffei was designated Chairman of the Commission by 
the President in March 2021.
    The President's FY 2023 budget request for the FMC \38\ compares to 
the FY 2022 enacted funding level \39\ as shown here:
---------------------------------------------------------------------------
    \38\ Id.
    \39\ Consolidated Appropriations Act, 2022 (Public Law 117-103).

                      FMC FY 2022 Enacted to FY 2023 President's Budget Request Comparison
                                             (Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------
                                                                 President's FY    FY 2022 to FY   FY 2022 to FY
                     Account                         FY 2022       2023 Budget      2023 Change     2023 Change
                                                     Enacted         Request            ($)             (%)
----------------------------------------------------------------------------------------------------------------
Office of Inspector General (OIG)...............          $485  $544 \\              $70           14.4%
Operations and Administrative Program...........       $32,384          $34,140           $1,756            5.4%
                                                 ---------------------------------------------------------------
  Total.........................................       $32,869          $34,684           $1,815            5.5%
----------------------------------------------------------------------------------------------------------------
\\ FMC, with concurrence from the OIG, will no longer include a distribution of overhead costs in the
  allocation of the budget for OIG expenses.


    The President requests $34.7 million in FY 2023 for the activities 
of the FMC, a $1.8 million (5.5 percent) increase from the FY 2022 
enacted level. This request would permit additional personnel hires 
(increase of 36 FTE compared to FY 2022 staffing level) \40\ in advance 
of anticipated retirements in key high-level or hard-to-fill positions. 
It also includes a projected 4.6 percent pay raise for personnel in FY 
2023, information technology and cybersecurity modernization projects, 
and activities of the Office of Inspector General.\41\
---------------------------------------------------------------------------
    \40\ Federal Maritime Commission. FMC FY 2023 Budget Request, 
briefing delivered to the H.R. Committee on Transportation and 
Infrastructure on April 19, 2022.
    \41\ Office of Inspector General. Office of Inspector General FY 
2023 Justification of Estimates for Congress, available at https://
oig.hhs.gov/documents/root/1026/FY-2023-HHS-OIG-CJ.pdf.
---------------------------------------------------------------------------
Maritime Administration
    MARAD was established in 1950.\42\ It administers financial 
programs to build, promote, and operate the U.S. flag fleet; manages 
the disposal of federal government-owned vessels; regulates the 
transfer of U.S. documented vessels to foreign registries; maintains a 
reserve fleet of federal government-owned vessels essential for 
national defense; operates the U.S. Merchant Marine Academy; and 
administers a grant-in-aid program for state operated maritime 
academies and other financial
---------------------------------------------------------------------------
    \42\ Section 109 of title 49, United States Code, available at 
https://www.law.cornell.edu/uscode/text/49/109.
assistance programs to support the U.S. maritime and shipbuilding 
industries.\43\ Lucinda Lessley has served as the Acting Administrator 
of MARAD since January 2021.
---------------------------------------------------------------------------
    \43\ Department of Transportation. FY 2023 Budget Highlights: 
Maritime Administration, available at https://www.transportation.gov/
sites/dot.gov/files/2022-03/Budget_Highlights_
FY2023.pdf.
---------------------------------------------------------------------------
    The President's FY 2023 budget request for MARAD \44\ compares to 
the FY 2022 enacted funding level \45\ as shown here:
---------------------------------------------------------------------------
    \44\ Id.
    \45\ Consolidated Appropriations Act, 2022 (Public Law 117-103).

                     MARAD FY 2022 Enacted to FY 2023 President's Budget Request Comparison
                                             (Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------
                                                                   President's FY                     FY 2022 to
                      Account                          FY 2022       2023 Budget     FY 2022 to FY     FY 2023
                                                       Enacted         Request      2023 Change ($)   Change (%)
----------------------------------------------------------------------------------------------------------------
Operations and Training............................    $ 172,204        $ 192,000          $ 19,796       11.50%
Assistance to Small Shipyards......................     $ 20,000         $ 20,000               $ -        0.00%
Ship Disposal Program..............................     $ 10,000          $ 6,000         $ (4,000)      -40.00%
Maritime Security Program..........................    $ 318,000        $ 318,000               $ -        0.00%
Title XI--Administrative Expenses..................      $ 3,000          $ 3,000               $ -        0.00%
Title XI--Loan Guarantees..........................          $ -              $ -               $ -        0.00%
State Maritime Academy Operations..................    $ 423,300         $ 77,700       $ (345,600)      -81.64%
Cable Security Fleet Program.......................     $ 10,000              $ -        $ (10,000)     -100.00%
Tanker Security Program............................     $ 60,000         $ 60,000               $ -        0.00%
Maritime Transportation System Emergency Relief              $ -              $ -               $ -        0.00%
 Authority.........................................
Port Infrastructure Development Program............    $ 234,310        $ 230,000         $ (4,310)       -1.84%
                                                    ------------------------------------------------------------
  Total............................................  $ 1,250,814        $ 906,700       $ (344,114)      -27.51%
----------------------------------------------------------------------------------------------------------------


    The President requests $907 million in FY 2023 for the activities 
of MARAD,\46\ a $344 million (27.5 percent) decrease from the FY 2022 
enacted level.\47\
---------------------------------------------------------------------------
    \46\ Department of Transportation. FY 2023 Budget Highlights: 
Maritime Administration.
    \47\ Consolidated Appropriations Act, 2022 (Public Law 117-103).
---------------------------------------------------------------------------
    MARAD's FY 2023 budget request does not include funding for the:
      Maritime Transportation System Emergency Relief 
Authority;
      Cable Security Fleet Program (although this program has 
some funds that carried over from FY 2022); or
      Title XI Loan Guarantees.
Operations and Training
    The President's FY 2023 budget requests $192 million for Operations 
and Training, an increase of $19.8 million (11.5 percent) beyond the FY 
2022 enacted level. Included in this request is $87.8 million for 
academic operating expenses of the U.S. Merchant Marine Academy 
(USMMA), including the continued implementation of measures to help 
prevent sexual assault and sexual harassment; $11.9 million to fund 
routine and unplanned emergency facility maintenance and repairs of the 
USMMA's aging buildings and infrastructure; $10 million for the 
Maritime Environmental and Technical Assistance program, which advances 
low carbon alternative energies and technologies that are safe, 
affordable, and sustainable, while also supporting job growth in clean 
energy and maritime transportation fields; $10.8 million for America's 
Marine Highway grants to support the development, expansion and
modernization of America's navigable waterways and landslide 
infrastructure to enable the movement of freight by water; and $4 
million to support program evaluation assessments aimed at improving 
the efficiency and resiliency of agency core assets and programs.\48\
---------------------------------------------------------------------------
    \48\ Department of Transportation. FY 2023 Budget Highlights: 
Maritime Administration.
---------------------------------------------------------------------------
Assistance to Small Shipyards
    The Assistance to Small Shipyards Grant Program provides capital 
grants to small privately-owned shipyards to expand and modernize 
shipbuilding capacity, efficiency, and competitiveness. Grant requests 
routinely exceed available funds. The program received $20 million in 
FY 2022, and the President also requests $20 million in the FY 2023 
budget.\49\
---------------------------------------------------------------------------
    \49\ Id.
---------------------------------------------------------------------------
Ship Disposal
    The President requests $6 million for the Ship Disposal Program, 
which is a $4 million (40 percent) decrease from the FY 2022 enacted 
level. This program provides for the proper disposal of obsolete 
government-owned merchant ships maintained by MARAD in the National 
Defense Reserve Fleet. This request includes $3 million to maintain the 
Nuclear Ship SAVANNAH in protective storage according to Nuclear 
Regulatory Commission license requirements, while decommissioning of 
the vessel's defueled nuclear reactor, components, and equipment is in 
progress.\50\ This funding also includes $3 million for Ship Disposal 
Program support, including salaries and overhead.\51\ The National 
Defense Reserve Fleet is under the jurisdiction of the House Committee 
on Armed Services.
---------------------------------------------------------------------------
    \50\ Id.
    \51\ Id.
---------------------------------------------------------------------------
Maritime Security Program
    The President requests $318 million for the Maritime Security 
Program (MSP), which is equal to the FY 2022 enacted level, to maintain 
a viable commercial fleet that can support a U.S. presence in foreign 
commerce. Under this program, $318 million in direct payments are 
allocated among up to 60 U.S. flagged vessel operators engaged in 
foreign trade. MSP vessel operators must keep their vessels in active 
commercial service and provide intermodal sealift support to the 
Department of Defense in times of war or national emergency. This 
budget request enables vessel operators to remain active and available 
for service, and results in $5.3 million per stipend payment for each 
of the 60 ships in the program.\52\ Allocating less than $318 million 
annually for the program allows U.S. vessels to exit without penalty, 
and likely would also leave to vessels exiting the U.S. flag registry. 
The MSP is under the jurisdiction of the House Committee on Armed 
Services.
---------------------------------------------------------------------------
    \52\ Id.
---------------------------------------------------------------------------
Title XI Loan Guarantees--Administrative Expenses
    The President requests $3 million for administrative expenses to 
carry out the guaranteed loan program, which is equal to the FY 2022 
enacted level. The Title XI Loan Guarantee Program helps to promote the 
growth and modernization of the U.S. shipyard industry by providing 
additional opportunities for vessel construction and modernization, 
including repowering that may otherwise be unavailable to ship 
owners.\53\ The program is under the jurisdiction of the House 
Committee on Armed Services.
---------------------------------------------------------------------------
    \53\ Id.
---------------------------------------------------------------------------
State Maritime Academies
    The President requests $77.7 million for the six State Maritime 
Academies (SMA), which is a decrease of $345.6 million (81.6 percent) 
compared to the FY 2022 enacted level. This request includes $35 
million for vessel management, logistics, and maintenance oversight to 
support integration of National Security Multi-Mission Vessels (NSMMV) 
into the schoolship fleet of training vessels; $30.5 million to 
maintain the six legacy SMA training ships; $6 million in direct 
payments to the schools; $2.4 million for student tuition assistance; 
and $3.8 million for training ship fuel assistance. The decrease of 
$345.6 million is primarily due to the completion of construction of 
the sixth NSMMV. SMA Operations provides federal assistance to the six 
SMAs, to help educate and train mariners and future leaders to support 
the U.S. marine transportation system. These graduates promote commerce 
in the United States and aid in the national defense by serving in the 
merchant marine. The SMA Operations request funds student financial 
assistance, direct assistance to each of the six SMAs, and support of 
new training vessels under the NSMMV program. SMAs are under the 
jurisdiction of the House Committee on Armed Services.
Tanker Security Program
    The FY 2023 request for the Tanker Security Program (TSP) is $60 
million, an amount equal to the FY 2022 enacted level. TSP provides 
direct payments to U.S. Flagship product tankers capable of supporting 
national economic and Department of Defense contingency requirements. 
The purpose of this program is to provide retainer payments to carriers 
to support a fleet of militarily useful, commercially viable product 
tankers sailing in international trade, as well as assure access to a 
global network of intermodal facilities.\54\ The program will also 
sustain a base of U.S. Merchant Mariners to support national security 
requirements during times of urgent need. The program is under the 
jurisdiction of the House Committee on Armed Services.
---------------------------------------------------------------------------
    \54\ Id.
---------------------------------------------------------------------------
Port Infrastructure Development Program
    The President requests $230 million for the Port Infrastructure 
Development Program (PIDP), a decrease of $4.3 million (1.84 percent) 
from the FY 2022 enacted level. This request is in addition to the $450 
million investment in advance appropriations provided in FY 2023 under 
the bipartisan Infrastructure Investment and Jobs Act (Public Law 117-
58).\55\ The PIDP provides grants for coastal seaports, inland river 
ports, and Great Lakes ports infrastructure to improve the safety, 
efficiency, or reliability of the movement of goods, and to reduce 
environmental impacts in and around ports.\56\
---------------------------------------------------------------------------
    \55\ Id.
    \56\ Id.
---------------------------------------------------------------------------
                              WITNESS LIST
      Admiral Karl L. Schultz, Commandant, United States Coast 
Guard
      Master Chief Jason M. Vanderhaden, Master Chief Petty 
Officer of the Coast Guard, United States Coast Guard
      The Honorable Daniel B. Maffei, Chairman, Federal 
Maritime Commission
      Ms. Lucinda Lessley, Acting Administrator, Maritime 
Administration

 
   REVIEW OF FISCAL YEAR 2023 BUDGET REQUEST FOR THE COAST GUARD AND 
                    MARITIME TRANSPORTATION PROGRAMS

                              ----------                              


                       WEDNESDAY, APRIL 27, 2022

                  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 and via Zoom, Hon. 
Salud O. Carbajal (Chair of the subcommittee) presiding.
    Members present in person: Mr. Carbajal, Mr. DeFazio, Mr. 
Larsen of Washington, Mr. Sean Patrick Maloney of New York, Mr. 
Gibbs, Dr. Van Drew, and Mr. Graves of Louisiana.
    Members present remotely: Mr. Auchincloss, Mr. Lowenthal, 
and Ms. Malliotakis.
    Mr. Carbajal. I ask unanimous consent that the chair be 
authorized to declare a recess at any time during today's 
hearing.
    Without objection, so ordered.
    I also ask unanimous consent that Members not on the 
subcommittee be permitted to sit with the subcommittee at 
today's hearing and ask questions.
    Without objection, so ordered.
    As a reminder, please keep your microphones muted unless 
speaking. Should I hear any inadvertent background noise, I 
will request that the Member please mute their microphone.
    And to insert a document into the record, please have your 
staff email it to [email protected].
    Good morning, and welcome to today's hearing on the review 
of fiscal year 2023 budget requests for the Coast Guard and 
maritime transportation programs. Today, we will hear directly 
from the Commandant and Master Chief Petty Officer of the Coast 
Guard, the Chair of the Federal Maritime Commission, and the 
Acting Administrator of the Maritime Administration on the 
President's budget request and agency priorities.
    We begin with testimony from the Coast Guard, which has 
nearly 40,500 Active Duty military members, 8,000 reservists, 
and 9,000 civilian employees who carry out the Service's 
missions, including port and waterway security, marine 
environmental protection, border safety, and search and rescue, 
among others.
    Despite the agency's importance as one of the six branches 
of our military, the Coast Guard is chronically underfunded and 
overextended, even during its largest recapitalization effort 
since World War II. To ensure our servicemembers have the 
equipment, personnel, and support systems they need to complete 
their missions and return home safe, the Service must be 
supported with every available resource.
    Following the Coast Guard, I look forward to hearing from 
the FMC on how it plans to address supply chain issues and 
ensure fairness in ocean shipping. The agriculture industry, 
which includes many farmers and growers in my home State of 
California, continues to be negatively impacted by these supply 
chain issues. As the Federal agency tasked with enforcing 
international shipping regulations, FMC has key authorities 
which allow it to secure an even playing field for participants 
in maritime commerce and continue to promote American jobs.
    Last, but not least, I look forward to MARAD discussing its 
plans to revitalize the American maritime industry, from ports 
and infrastructure to our shrinking U.S.-flag fleet and the 
availability of merchant mariners. Acting Administrator Lessley 
has done a phenomenal job facilitating efforts to upend the 
toxic culture that has allowed sexual assault and harassment to 
fester within the maritime industry. Her leadership on EMBARC 
and her work to bring industry along is remarkable and does not 
go unnoticed. We have a long way to go, but I believe her 
leadership in the passage of the Safer Seas Act, of which I am 
an original cosponsor, will help protect future mariners and 
bring justice to victims.
    Ms. Lessley: Chair DeFazio and I stand ready to help you.
    MARAD oversees vital grant programs, including the Maritime 
Security Program, the new Tanker Security Program, META, and 
the Port Infrastructure Development Program, which give 
maritime users the opportunity to improve the safety, 
efficiency, and reliability of their operations shoreside and 
at sea. This benefits mariners, the U.S. economy, and our 
irreplaceable natural environment.
    To give one example, META, the Maritime Environmental and 
Technical Assistance Program, supports the research, 
development, installation, and use of new carbon technologies 
that are safe, affordable, and sustainable. Investing in such 
innovations is crucial to positioning the United States as a 
leader in the global marketplace and reducing our carbon 
pollution within the transportation sector.
    For MARAD, I am particularly interested in how the Port 
Infrastructure Development Program will support the Morro Bay 
wind energy project offshore in my district, building out the 
port infrastructure to receive and transmit this energy, as 
well as creating laydown space for shoreside wind turbine 
staging. It is of critical importance and will take a 
significant investment. This project is especially timely for 
areas in my home district, such as San Luis Obispo County, that 
may need Federal assistance to take full advantage of this 
budding energy industry.
    I will end my remarks here by thanking our witnesses and 
attendees for their participation.
    I want to especially thank Commandant Admiral Schultz, as 
he will be retiring from his position in June. Admiral Schultz 
has given his entire career in service to this country and has 
been a knowledgeable and genial leader for the Coast Guard in 
his work with us in Congress for the past 4 years.
    I wish you a fulfilling next chapter of your life.
    I hope today's testimonies and the discussions that follow 
will call Congress' attention to priorities within America's 
vital maritime domain.
    [Mr. Carbajal's prepared statement follows:]

                                 
   Prepared Statement of Hon. Salud O. Carbajal, a Representative in 
Congress from the State of California, and Chair, Subcommittee on Coast 
                   Guard and Maritime Transportation
    Good morning, and welcome to today's hearing on the ``Review of 
Fiscal Year 2023 Budget Request for the Coast Guard and Maritime 
Transportation Programs.''
    Today, we will hear directly from the Commandant and Master Chief 
Petty Officer of the Coast Guard, the Chair of the Federal Maritime 
Commission, and the Acting Administrator of the Maritime Administration 
on the President's budget request and agency priorities.
    We begin with testimony from the Coast Guard, which has nearly 
40,500 Active Duty military members, 8,000 reservists, and 9,000 
civilian employees who carry out the Service's missions, including port 
and waterway security, marine environmental protection, boater safety, 
and Search and Rescue, among others. Despite the agency's importance as 
one of the six branches of our military, the Coast Guard is chronically 
underfunded and overextended even during its largest recapitalization 
effort since World War II.
    To ensure our servicemembers have the equipment, personnel, and 
support systems they need to complete their missions and return home 
safe, the Service must be supported with every available resource.
    Following the Coast Guard, I look forward to hearing from the FMC 
on how it plans to address supply chain issues and ensure fairness in 
ocean shipping. The agriculture industry, which includes many farmers 
and growers in my home state of California, continues to be negatively 
impacted by these supply chain issues. As the federal agency tasked 
with enforcing international shipping regulations, FMC has key 
authorities which allows it to secure an even playing field for 
participants of maritime commerce and continue to promote American 
jobs.
    Last but not least, I look forward to MARAD discussing its plans to 
revitalize the American maritime industry, from ports and 
infrastructure, to our shrinking U.S. flagged fleet, and the 
availability of merchant mariners.
    Acting Administrator Lessley has done a phenomenal job facilitating 
efforts to upend the toxic culture that's allowed sexual assault and 
harassment to fester within the maritime industry. Her leadership on 
EMBARC and her work to bring industry along is remarkable and does not 
go unnoticed.
    We have a long way to go, but I believe her leadership and the 
passage of the Safer Seas Act, of which I am original cosponsor, will 
help protect future mariners and bring justice to victims. Ms. Lessley: 
Chair DeFazio and I stand ready to help you.
    MARAD oversees vital grant programs including the Maritime Security 
Program, the new Tanker Security Program, META, and the Port 
Infrastructure Development Program, which give maritime users the 
opportunity to improve the safety, efficiency, and reliability of their 
operations shoreside and at sea. This benefits mariners, the U.S. 
economy, and our irreplaceable natural environment.
    To give one example: META, the Maritime Environmental and Technical 
Assistance program, supports the research, development, installation, 
and use of new low carbon technologies that are safe, affordable, and 
sustainable. Investing in such innovations is crucial to positioning 
the United States as a leader in the global marketplace and help reduce 
our carbon pollution within the transportation sector.
    From MARAD, I'm particularly interested in how the Port 
Infrastructure Development Program will support the Morro Bay wind 
energy project offshore of my district. Building out the port 
infrastructure to receive and transmit this energy, as well as creating 
laydown space for shoreside wind turbine staging, is of critical 
importance and will take a significant investment. This project is 
especially timely for areas in my home district such as San Luis Obispo 
County, who may need federal assistance to take full advantage of this 
budding energy industry.
    I will end my remarks here by thanking our witnesses and attendees 
for their participation. I want to doubly thank the Commandant, Admiral 
Schultz, as he will be retiring from his position in June. Admiral 
Schultz has given his entire career in service to this country, and has 
been a knowledgeable and genial leader for the Coast Guard in his work 
with us in Congress for four years. I wish you a fulfilling next 
chapter of your life.
    I hope today's testimonies and the discussions that follow will 
call Congress' attention to priorities within America's vital maritime 
domain.

    Mr. Carbajal. Now I would like to call on the subcommittee 
ranking member, Mr. Gibbs.
    Mr. Gibbs. Thank you, Mr. Chairman. And thanks to our 
witnesses for being here today.
    First of all, I congratulate the Commandant, Admiral 
Schultz, as he completes his long service to the Nation this 
next month. He has done much to repair the damage done to the 
Service's budget by the Budget Control Act and has begun what 
will be a long road to upgrading the Coast Guard's digital 
capabilities to those needed by a 21st-century law enforcement, 
marine safety, and environmental stewardship Service.
    I am sure I speak for all my subcommittee colleagues in 
wishing you well as you leave the Coast Guard, which you have 
served for more than 40 years. Congratulations. I wish you all 
the best.
    While we do celebrate your service in the Coast Guard, I 
have to mention the issues the Guard must address in your 
absence. Since you appeared before the subcommittee last July, 
nothing seems to have happened with respect to completing the 
regulations implementing the recommendations of the Atlantic 
Coast Port Route Study. I look forward to hearing whether we 
are in any danger of seeing those regulations made final in the 
near future, or will the Coast Guard continue to defer those to 
the Interior Department. I continue to believe the Coast Guard 
should take its role as the primary Federal agency responsible 
for maritime navigation safety seriously, rather than act as an 
adjunct permit reviewer for the Department of the Interior.
    I was heartened to see the fiscal year 2023 increase in the 
request for the Coast Guard's operating and support account. 
But as always, I am extremely disappointed in the perennial 
reduction in the procurement, construction, and improvement 
account. The account falls from an appropriated level of more 
than $2 billion in fiscal year 2022 and a House-passed 
authorized level of $3.4 billion in fiscal year 2023 to a 
requested appropriations level of $1.6 billion for fiscal year 
2023. That level of funding will not even allow the Coast Guard 
to hold steady on the billions of dollars of shoreside 
construction and maintenance needs, prevent the Service from 
falling further behind in its IT infrastructure, and allow 
progress in the Service's far-behind-schedule cutter 
acquisition program.
    I urge the Commandant to assure his legacy by telling us 
that he supports the acquisition of a 12th National Security 
Cutter before that production line grows cold, and the 
opportunity is lost.
    I will work to see that the Congress steps in yet again to 
reverse the budget request's harmful impact on the Coast 
Guard's acquisition budget, and in turn, protect the Service's 
future mission capabilities. Like last year, I noticed no funds 
are requested for the new Great Lakes icebreaker. I will work 
with my Great Lakes colleagues to correct this oversight. I am 
also interested in whether a common hull design could be used 
for a Great Lakes icebreaker in the notional Arctic Security 
Cutter, if the Coast Guard remains committed to a two-size 
polar icebreaker program. I think that could make sense.
    A provision included in H.R. 6865 sets minimum standards 
for alternative oil spill response planning criteria in western 
Alaska. The section provides new authority that only applies if 
the Coast Guard determines that the national planning criteria 
don't apply in western Alaska. The Coast Guard has refused to 
set such criteria, thus leaving it to Congress to do the job. I 
regret that the Coast Guard has had difficulty understanding 
the plain language of this section, and I look forward to 
continuing to work with the Service on this issue.
    An unprecedented surge of imported cargo is pressure-
testing the U.S. supply chain. Both the House and Senate have 
passed ocean shipping reform measures at the behest of the 
beleaguered importers and exporters who are finding their 
products late in reaching their destinations. Thus far, as I 
understand it, the Federal Maritime Commission has found no 
collusion or illegal anti-competitive manipulation of vessels 
and equipment.
    However, I look forward to hearing from our former 
colleague, and now Federal Maritime Commission Chairman, Dan 
Maffei, to describe what resources the Commission needs to 
assure that a robust, effective, ongoing ocean shipping 
regulatory program is maintained.
    I am pleased again to see a former Coast Guard and Maritime 
Transportation Subcommittee staffer, Lucinda Lessley, back 
today as the Acting Maritime Administrator. I look forward to 
hearing today what actions the Maritime Administration is 
taking to tighten down cargo preference regulations and ensure 
that all Federal agencies abide by these important mandatory 
set-asides of cargo for carriage on U.S.-flagged vessels. I am 
also interested to hear if MARAD has received availability 
determination requests in regard to the increased rate of 
discharge from the Strategic Petroleum Reserve.
    [Mr. Gibbs' prepared statement follows:]

                                 
Prepared Statement of Hon. Bob Gibbs, a Representative in Congress from 
the State of Ohio, and Ranking Member, Subcommittee on Coast Guard and 
                        Maritime Transportation
    Thank you, Mr. Chairman, and thank you to our witnesses for being 
here today.
    First, congratulations to Commandant Admiral Schultz as he 
completes his long service to the Nation in the next month. He has done 
much to repair the damage done to the Service's budget by the Budget 
Control Act and has begun what will be a long road to upgrading the 
Coast Guard's digital capabilities to those needed by a 21st century 
law enforcement, marine safety, and environmental stewardship service. 
I'm sure I speak for all my Subcommittee colleagues in wishing you well 
as you leave the Coast Guard in which you have served for more than 40 
years.
    While we do celebrate your service to the Coast Guard, I have to 
mention the issues the Guard must address in your absence. Since you 
appeared before the Subcommittee last July, nothing seems to have 
happened with respect to completing the regulations implementing the 
recommendations of the Atlantic Coast Port Route Study. I look forward 
to hearing whether we are in any danger of seeing those regulations 
made final in the near future, or will the Coast Guard continue to 
defer to the Interior Department. I continue to believe the Coast Guard 
should take its role as the primary federal agency responsible for 
maritime navigation safety seriously, rather than act as an adjunct 
permit reviewer for DOI.
    I was heartened to see the FY23 increase in the request for the 
Coast Guard's Operating and Support Account, but, as always, I'm 
extremely disappointed in the perennial reduction in the Procurement, 
Construction, and Improvement account. The account falls from an 
appropriated level of more than $2 billion in FY22 and a House-passed 
authorized level of $3.4 billion in FY23 to a requested appropriations 
level of $1.6 billion in FY23.
    That level of funding will not even allow the Coast Guard to hold 
steady on the billions of dollars of shoreside construction and 
maintenance needs, prevent the Service from falling farther behind on 
its IT infrastructure, and allow progress in the Service's far-behind-
schedule cutter acquisition program.
    I urge the Commandant to ensure his legacy by telling us that he 
supports the acquisition of a twelfth National Security Cutter before 
that production line grows cold and that opportunity is lost.
    I will work to see that Congress steps in yet again to reverse the 
budget request's harmful impact on the Coast Guard acquisition budget 
and, in turn, protect the Service's future mission capabilities. Like 
last year, I noticed no funds are requested for a new Great Lakes 
icebreaker. I will work with my Great Lakes colleagues to correct that 
oversight. I am also very interested in whether a common hull design 
could be used for a Great Lakes icebreaker and the notional Arctic 
Security Cutter, if the Coast Guard remains committed to a two-size 
polar icebreaker program.
    A provision included H.R. 6865 sets minimum standards for 
Alternative Oil Spill Response Planning Criteria in Western Alaska. The 
section provides new authority that only applies if the Coast Guard 
determines that National Planning Criteria don't apply in Western 
Alaska. The Coast Guard has refused to set such criteria, thus leaving 
it to Congress to do the job. I regret the Coast Guard has had 
difficulty understanding the plain language of this section, and I look 
forward to continuing to work with the Service on this issue.
    An unprecedented surge of imported cargo is pressure testing the 
U.S. supply chain. Both the House and the Senate have passed ocean 
shipping reform measures at the behest of beleaguered importers and 
exporters who are finding their products delayed in reaching their 
destinations. Thus far, as I understand it, the Federal Maritime 
Commission has found no collusion, or illegal anti-competitive 
manipulation of vessels and equipment. However, I look forward to 
hearing from our former colleague and now Federal Maritime Commission 
Chairman Dan Maffei to describe what resources the Commission needs to 
ensure that a robust, effective, ongoing ocean shipping regulatory 
program is maintained.
    I'm pleased again to see Lucinda Lessley back today as the Acting 
Maritime Administrator. I look forward to hearing today what actions 
the Maritime Administration is taking to tighten down cargo preference 
regulations and ensure that all federal agencies abide by these 
important mandatory set-asides of cargo for carriage on U.S.-flag 
vessels. I am also interested to hear if MARAD has received 
availability determination requests in regard to the increased rate of 
discharge from the Strategic Petroleum Reserve.

    Mr. Gibbs. Thank you, Mr. Chairman. I yield back.
    Mr. Carbajal. Thank you, Mr. Gibbs. I now would like to 
call on the chairman of the Transportation and Infrastructure 
Committee, Mr. DeFazio.
    Mr. DeFazio. Thank you, Chairman Carbajal. Thanks for this 
important hearing today.
    All of the witnesses here before us today play a vital 
role--the Coast Guard, the Federal Maritime Commission, the 
Maritime Administration--in our Marine Transportation System. 
As an oceangoing nation, we have tremendous needs in this area.
    I want to start the same way as the subcommittee chair and 
the ranking member did, by congratulating the admiral and 
thanking him for his strong leadership.
    Chief, thank you. These were pretty tough and turbulent 
times for the Coast Guard, and you have gotten through it in 
good shape. So, for whatever you are going to do next, best 
wishes.
    I would also like to congratulate--although she is not yet 
confirmed, I expect will be confirmed--Admiral Linda Fagan, who 
is not here today, as the next Commandant, and, I think, will 
be a tremendous successor to Admiral Schultz. I look forward to 
working with her during my remaining time in Congress.
    For the fiscal year 2023, Coast Guard has requested $13.82 
billion. This is a 1.3-percent increase over last year. Now, 
that is better than what you proposed last year, which was a 
0.3-percent increase. But given the current rate of inflation, 
which the Coast Guard is going to be subjected to in many ways, 
from shoreside costs to fuel for the ships, I really don't 
think that that is going to be an adequate amount of funding.
    I also have ongoing concerns expressed by others about the 
problems on your shoreside infrastructure, particularly the 
inadequate housing. We have inadequate childcare. Those are 
complaints I hear a lot. And in areas where there is inadequate 
housing, members of the Coast Guard have to go into the private 
market. Rents are skyrocketing. It is very difficult. And if we 
want to do what we need to do to recruit and retain our 
Coasties, we have got to do better for their working 
conditions. That is really a tremendous concern.
    When I was in Coos Bay, when the Commandant was there--I 
think it was a year ago last summer to get the award--we saw 
what they were doing to renovate some housing. It was a start. 
But we need to do a heck of a lot more of that.
    You are proposing to recruit 4,200 people this year. That 
is a pretty high number. I hope you can achieve it. But then, 
once we achieve it, we want to keep them. We want them to do 
full careers.
    So, as you know, during the shutdown I was very upset about 
the lack of pay for the Coast Guard, and I attempted to move 
legislation to prohibit that from happening in the future, but 
was unsuccessful at that point in time.
    The decrease in funding for shore facilities and aids in 
navigation is puzzling to me, with the backlog we have. I want 
to learn more about how you came to $180 million. I assume it 
was the trolls over at OMB putting pressure on you. But anyway, 
I would be interested in plumbing the depths of that.
    I am constantly trying to deal with the Office of 
Management and Budget. We would be much better off without 
them, but that is for another day.
    With regards to the Maritime Administration, MARAD is vital 
for the successful management of our maritime shipbuilding 
industries. I am constantly trying to see that we build more 
U.S. ships, and also that we have a more competitive shipping 
industry.
    I note that the cartel of three major shippers made more 
money last year than they made over the last decade. And yet we 
don't think there is some collusion or price gouging or taking 
advantage of the excuses of the pandemic. It is a real problem.
    And I want to learn more about the decrease in your Port 
Infrastructure Development Program requests, compared to the 
2022 enacted. It all starts with port capacity. In fact, I am 
advocating at this point for a mega-project so that we can have 
a new container port. It would be the first direct ship-to-rail 
container port on the west coast. Obviously, very efficient, 
very environmentally responsible. And that would be in Coos 
Bay, Oregon. And it could add 10 percent to west coast 
capacity. There is not a lot more land area in L.A.-Long Beach, 
and it is a heck of a long steam up the Columbia River to 
Portland. Coos Bay has a lot of advantages, if the 
administration has the vision to move forward with that, and I 
am hopeful they will. The President did mention it when he was 
in Portland last week.
    But I am pleased to see an increase in the operations 
training budget, and some of this goes to the Merchant Marine 
Academy, and again, we need a lot of repairs for aged buildings 
and facilities and dorms and things there.
    And I am also pleased to support the EMBARC measures which 
have been designed to protect cadets against sexual assault and 
sexual harassment. Last year, the Academy faced a lot of 
scrutiny regarding its culture of safety, for good reason. 
Fortunately, I have witnessed steadfast leadership of MARAD's 
Acting Administrator, Ms. Lucinda Lessley, during this time, 
and she has worked diligently to motivate a major cultural 
shift at the Academy, despite resistance. And I have every 
confidence that she will continue to lead capably, with 
competence and integrity, and hold steadfast on the changes we 
need.
    For the Federal Maritime Commission, I am pleased to see a 
5.5-percent increase requested for overall funding. As the 
ranking member mentioned, we haven't found collusion, but we 
know there is collusion, and we are dealing with shipping 
cartels. And you need those resources to enhance your oversight 
enforcement capabilities, and that is critically needed to 
lower the cost of shipping, which is going to help with 
inflation. I look forward to hearing from all of our witnesses 
today.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
      Congress from the State of Oregon, and Chair, Committee on 
                   Transportation and Infrastructure
    Thank you, Chair Carbajal. The Coast Guard, Maritime 
Administration, and Federal Maritime Commission all play vital roles in 
safeguarding the economical movement of $5.4 trillion in our marine 
transportation system, and I have stressed for decades that we need to 
provide robust funding to these three agencies who are critical to our 
national security and economic sustainability.
    I would like to start by commending Admiral Schultz for his strong, 
steadfast leadership of the Coast Guard. For the past four years, you 
have steered the Coast Guard on a steady course through unprecedented, 
turbulent waters. Through your vision, the Coast Guard has emerged more 
ready, relevant, and responsive during these tough times. Your 
retirement is well-earned. Thank you for your service to your country, 
Admiral Schultz.
    I'd also like to congratulate Admiral Linda Fagan on her historic 
nomination as the next Commandant of the Coast Guard. I couldn't be 
more pleased with her nomination to succeed Admiral Schultz and am 
confident she will command the Coast Guard with honor, integrity, and 
great devotion. I look forward to working together.
    For fiscal year 2023 the Coast Guard has requested $13.82 billion, 
just a 1.3 percent increase in its overall budget relative to the 
fiscal year 2022 enacted level, including a 0.8 percent or $95.9 
million increase in discretionary spending. I am encouraged by the 
Coast Guard's request this year versus last when the Coast Guard's 
budget request was a mere 0.3 percent increase from the fiscal year 
2021 enacted level. However, given the Coast Guard's diverse array of 
missions and increasing responsibility, 1.3 percent is simply not 
enough.
    My primary concern is the servicemembers and the deplorable, 
dilapidated buildings they must work and live in on a daily basis. 
Inadequate housing and childcare are a persistent complaint amongst 
servicemembers. If we want to increase retention and diversity, we must 
do more to support our Coast Guard members. I'm also concerned with the 
downward trend in recruiting. The Service has set an ambitious goal to 
recruit 4,200 new servicemembers in 2022. This is a huge undertaking 
for a service that has only 320 recruiters and I look forward to an 
update on progress made to meet this goal.
    I am also deeply concerned with the 35.6 percent decrease in 
funding requested for shore facilities and aids to navigation. This is 
particularly alarming in light of the Coast Guard's estimated $3 
billion shoreside infrastructure maintenance backlog. This deficit has 
grown after many years of underfunding, and I am interested to learn 
more about how the Coast Guard arrived at just $180 million needed to 
address the backlog.
    With regards to the Maritime Administration, MARAD is vital to 
ensuring successful management of U.S. maritime and shipbuilding 
industries. During the unprecedented events of the past couple of 
years, we have seen that maritime commerce provides a direct lifeline 
to the economy. Today, I am curious to learn more about the decrease in 
MARAD's Port Infrastructure Development Program request compared to the 
fiscal year 2022 enacted level. If we are going to provide for a 
resilient supply chain, it all starts and ends with port capacity.
    However, I am pleased to see an increase of $19.8 million or 11.5 
percent over the fiscal year 2022 enacted level for MARAD operations 
and training. This amount includes $99.7 million dedicated to the U.S. 
Merchant Marine Academy, which is expected to fund some much-needed 
maintenance and repairs to the Academy's aging buildings, and most 
importantly, to support new EMBARC measures which have been designed to 
protect cadets against sexual assault and sexual harassment while at 
sea.
    In the last year, the Academy has faced great scrutiny regarding 
its culture and safety, and for good reason. Fortunately, we have been 
witness to the steadfast leadership of MARAD's Acting Administrator, 
Ms. Lucinda Lessley. She has worked diligently to motivate a major 
cultural shift at the Academy despite significant resistance. I have 
every confidence that Ms. Lessley will continue to lead with competence 
and capability to benefit the Academy and MARAD at-large.
    Turning to the Federal Maritime Commission, I am pleased to see a 
5.5 percent increase requested for its overall funding. I believe it's 
clear that the Commission needs additional resources to enhance its 
oversight and enforcement capabilities due to disruptions to the global 
supply chain over the past couple of years.
    The increase is warranted to provide the Commission with the 
resources needed to effectively oversee and ensure all foreign carriers 
abide by fair shipping practices and comply with all U.S. anti-trust 
requirements.
    I look forward to hearing from our witnesses on how the President's 
budget will ensure that the Coast Guard, MARAD, the FMC, and all the 
programs that support and regulate the U.S. maritime industry are 
adequately resourced.

    Mr. DeFazio. Thank you, Mr. Chair.
    Mr. Carbajal. Thank you, Mr. DeFazio. I would now like to 
welcome the witnesses: Admiral Karl Schultz, Commandant of the 
United States Coast Guard; Master Chief Jason Vanderhaden, 
Master Chief Petty Officer of the United States Coast Guard; 
the Honorable Daniel Maffei, Chairman of the Federal Maritime 
Commission; and Ms. Lucinda Lessley, Acting Administrator of 
the Maritime Administration.
    Thank you for being here today, and I look forward to your 
testimony.
    Without objection, our witnesses' full statements will be 
included in the record.
    Since your written testimony has been made part of the 
record, the subcommittee requests that you limit your oral 
testimony to 5 minutes.
    With that, Admiral Schultz, you may proceed.

 TESTIMONY OF ADMIRAL KARL L. SCHULTZ, COMMANDANT, U.S. COAST 
 GUARD; MASTER CHIEF JASON M. VANDERHADEN, MASTER CHIEF PETTY 
 OFFICER OF THE COAST GUARD, U.S. COAST GUARD; HON. DANIEL B. 
  MAFFEI, CHAIRMAN, FEDERAL MARITIME COMMISSION; AND LUCINDA 
     LESSLEY, ACTING ADMINISTRATOR, MARITIME ADMINISTRATION

    Admiral Schultz. Well, good morning, Chairman DeFazio, 
Chairman Carbajal, Ranking Member Gibbs, distinguished members 
of the subcommittee. Thank you for the opportunity to testify 
today. On behalf of the entire Service, I thank you for your 
enduring support of the Coast Guard and our efforts to restore 
Service readiness.
    Our 2022 fiscal year appropriation reflects Congress' 
continued commitment to addressing the Coast Guard's readiness 
challenges and maintaining progress on surface, aviation, and 
infrastructure recapitalization, while also highlighting the 
Service's increasing role in shaping global maritime affairs 
and national security. Because of your support, we are 
acquiring the Nation's first new heavy polar icebreakers in 
almost a half century to enable a U.S. presence in the 
geostrategically important high-latitude regions.
    The operations and support increase of more than 20 percent 
between the 2019 and 2022 budgets and the administration's 2023 
budget request better positions the Coast Guard by investing in 
our mission-ready total workforce, mission-enabling 
technologies, and modern assets and capabilities to meet the 
challenges today and in the future.
    But critically important work remains. To advance our 
national, economic, and environmental security interests in an 
increasingly complex geopolitical and technologically 
sophisticated environment, we must maintain this growth to our 
operational funding and a keen focus on the resilience of our 
capital infrastructure.
    As a multimission Service, we are exceptionally agile and 
adaptive, executing our 11 statutory missions simultaneously, 
and we must apply these same skills to build a stable and 
predictable PC&I funding of $2.0 billion-plus annually to 
optimize our ability to plan the recapitalization of both our 
facilities and our assets. While we have been very successful 
in replacing frontline operational units devastated by recent 
years' hurricanes, my crews on the Great Lakes praying for 
hurricanes to reach their region is a poor way and an 
unacceptable way to do business.
    The administration's 2023 budget request supports continued 
progress on the Offshore Patrol Cutter program, absolutely 
vital to replacing the capability provided by our legacy fleet 
of 210-foot and 270-foot Medium Endurance Cutters, which 
largely operate in the Atlantic. These legacy assets have 
served the Nation with distinction, some for 55 years, but are 
increasingly more difficult and expensive to maintain.
    The budget request also enables us to grow our fleet of MH-
60 Jayhawk helicopters, which operate with national and 
Offshore Patrol Cutters as force multipliers. New Jayhawk hulls 
or converted former Navy airframes per our Sundowner Program 
will enable us to optimize Coast Guard aviation operations both 
in near coast and distant waters.
    Beyond 2023, we must continue to restore the Coast Guard 
the Nation needs to ably conduct domestic operations, 
facilitating the economic engine that is the Marine 
Transportation System, as 95 percent of overseas trade enters 
or leaves the U.S. by ship, as well as resourcing expanded 
operations abroad in support of our national interests, 
including those detailed in the White House's recent Indo-
Pacific strategy.
    The Coast Guard contributes significantly to domestic as 
well as global maritime safety and security by employing our 
Service's unique blend of authorities and capabilities 
collaboratively alongside our interagency and international 
partners to achieve national objectives across a broad spectrum 
of strategic challenges.
    We are currently executing about $1.4 billion dedicated to 
improving shore facilities across our Service, including $350 
million provided in the 2022 appropriation that supports 11 
critical shore facility investments, as well as the 
supplemental inject of $430 million provided by Congress as 
part of the Infrastructure Investment and Jobs Act, which in 
itself funds 18 distinct projects.
    We are grateful for this generous funding which enables us 
to address some of our aging infrastructure, including 
inventory that dates back to the late 18th century, as well as 
provide new infrastructure for new assets we are fielding. But 
our legacy assets remain vital operational contributors, and we 
cannot shortchange their maintenance and sustainment funding.
    Our forces are disaggregated across America's coastal 
communities at roughly 1,000 individual units. Hence, we 
maintain a significant inventory and backlog for both 
recapitalization of infrastructure and asset maintenance. We 
are appreciative in the 2022 funding that supports 26 new 
engineering positions--civil engineering, specifically--to help 
action those funds. This additional support to manage and 
execute this critically important infrastructure work will help 
us tackle projects at the speed of need.
    Like the other DoD Armed Forces and DHS operational 
components, the reality of high inflation, as well as the needs 
of a modern workforce, warrant immediate review and retooling 
of our policies to recruit, train, and retain the finest talent 
in order to sustain Service readiness. While we diligently 
address policies to eliminate barriers to success, we must 
inject additional creativity in our thinking about how we 
organize and employ people to continue to meet operational 
demands.
    The key to our success has always been and will remain our 
people, the backbone of our Service. As previously stated, they 
stand the watch 24 hours a day, 7 days a week, 365 days a year, 
always ready for the call.
    Thank you, 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 morning Chairman Carbajal, Ranking Member Gibbs, and 
distinguished members of the subcommittee, I appreciate the opportunity 
to testify today and thank you for your enduring support of the United 
States Coast Guard. The Fiscal Year (FY) 2022 Consolidated 
Appropriations Act reflects Congress' continued commitment to 
addressing the Coast Guard's readiness challenges and maintaining 
progress on surface, aviation, and infrastructure recapitalization, 
while also highlighting the Service's increasing role in shaping global 
maritime affairs and national security. Today, I look forward to 
discussing how the Administration's FY 2023 Budget request better 
positions the Coast Guard to advance our national, economic, and 
environmental security interests in an increasingly complex 
geopolitical and technologically sophisticated environment.
    The Coast Guard contributes significantly to global maritime safety 
and security by utilizing its unique blend of authorities and 
capabilities collaboratively in a ``whole of government'' approach; a 
skillset increasingly vital to achieving national objectives across a 
broad spectrum of strategic challenges. In 2021, as the Nation's 
maritime first responder, we surged forces in response to domestic 
natural disasters such as the deadly and destructive Category 4 
Hurricane Ida that ravaged the Gulf region, and mobilized rapidly to 
respond to the 14 August 7.2 magnitude earthquake that struck Haiti's 
Southern Claw, saving hundreds of lives and providing other critical 
assistance in the disaster's immediate aftermath. These contingencies 
were additive to ``steady state'' operations in which your Coast Guard 
saved 4,747 lives in Search-and-Rescue cases, interdicted 380,000+ 
pounds of cocaine, responded to 11,000+ pollution incident reports, and 
facilitated the free flow of $5.4 trillion worth of commerce across the 
Marine Transportation System (MTS) while global supply chain issues 
impacted the availability and costs of goods and commodities.
    As near-peer competitors, adversaries, and transnational criminal 
organizations attempt to take advantage of finite resources within 
others' sovereign waters, as well as erode the rules-based 
international order that protects and enables the free flow of goods 
and commerce on the world's oceans, like-minded countries look to the 
U.S. Coast Guard for leadership and partnership. I would contend that 
it is ``coast guard work'' to ensure the safety of life at sea, to 
protect the marine environment, to promote economic prosperity, and to 
generally maintain ``good order'' in waters of coastal state 
jurisdiction.
    This past year the Coast Guard's most modern and capable assets 
operated across the globe with partners and allies in a manner that 
further models maritime governance and ensures safe and free movement 
across sea lines of communication. National Security Cutter (NSC) MUNRO 
participated in cooperative at-sea exercises with the Royal Australian 
Navy in the South China Sea, while NSC BERTHOLF enforced regional 
fisheries management during Operation North Pacific Guard with maritime 
law enforcement entities from Canada, the Republic of Korea, and 
Japan--just one example of Service efforts to counter Illegal, 
Unreported, and Unregulated fishing, a leading global maritime security 
threat. In the South Pacific, the Coast Guard commissioned three new 
154-foot Fast Response Cutters to operate from Coast Guard Forces 
Micronesia/Sector Guam. These new assets are strategically placed to 
support the White House's Indo-Pacific Strategy that details the need 
for an expanding Coast Guard presence in the region to work 
collaboratively with partners and bolster Indo-Pacific security.
    In the Arctic, Coast Guard Cutter HEALY transited the Northwest 
Passage and circumnavigated North America. Scientists routinely refer 
to the Arctic as the world's thermostat, and on this important 
deployment HEALY conducted seafloor mapping and analyzed meltwater from 
Greenland's glaciers. This work proved critical not only to improving 
navigation routes, but to also furthering scientific understanding of 
how the ocean, atmosphere, and ice interact amidst a changing climate. 
In the Antarctic, Coast Guard Cutter POLAR STAR, the Nation's only 
heavy polar icebreaker, created a navigable path through ice as thick 
as 21 feet to enable the annual replenishment of America's McMurdo 
Station.
    In 2021, your Coast Guardsmen worked overtime fulfilling all 11 
``steady state'' statutory missions as well as supporting DoD and our 
sister DHS agencies when needed. They contributed unique and 
complementary Coast Guard capabilities to the Joint Force across both 
geographic and functional Combatant Commands. They supported the 
resettlement of Afghan refugees under the Department of Homeland 
Security's ``Operation Allies Welcome.'' They provided critical 
healthcare and other logistical support to meet surging demands on the 
Southwest Border. Never has the utility of such diverse Coast Guard 
services been so essential to our Department, the Nation, and the rest 
of the world.
    While I remain incredibly proud of the exceptional service the 
Coast Guard provides to the American taxpayer, increasing mission 
demands, inflationary costs, and constrained resource levels continue 
to challenge Service readiness for both steady-state missions and 
contingency operations. The Service requires increased operational 
funding to continue closing the readiness gap while building the Coast 
Guard the Nation needs, as well as funding to support the continued 
recapitalization of operational assets and infrastructure.
    I appreciate the significant investments for surface, aviation, and 
shore maintenance included in the FY 2022 Appropriation; however, the 
desired impacts of these investments are greatly diminished by the 
historic inflation we experience today. In recent years, the Coast 
Guard has been hamstrung by increasing maintenance backlogs resulting 
in hundreds of lost patrol days for cutters and thousands of lost 
flight hours for aircraft. This means that cutters, boats, and aircraft 
are unable to deploy for planned operations, our people are unable to 
complete their mission, and our partners are left without full Coast 
Guard support. Rising inflation and supply chain issues continue to 
increase costs throughout the life cycle for our assets.
    For example, in the past year the price for steel to build our 
ships has increased 48 percent, fuel costs have increased 20 percent 
with an additional adjustment on the horizon, and the price for select 
critical parts to maintain our Medium Endurance Cutters have increased 
37 percent. These increasing costs for operating and sustaining our 
fleet negatively impact our ability to perform our missions and our 
combined efforts to restore service readiness.
                           Restore Readiness
    Service readiness for the Coast Guard has been, and remains, my top 
priority. Increasing global complexity and expanding demand for Coast 
Guard capabilities necessitate modern technology, resilient 
infrastructure, highly-capable assets, and a trained workforce that 
reflects the diversity of our Nation. The FY 2023 budget request best 
positions the Coast Guard by investing in mission-enabling technologies 
and the modernizing of assets and capabilities to meet today's 
challenges and prepare for tomorrow's threats.
    Support the Mission Ready Total Workforce: Building and sustaining 
a ``mission-ready total workforce'' is the cornerstone of our success, 
and I remain committed to providing our dedicated and talented people 
with the tools, resources, and policies that will enable them to 
professionally thrive and personally grow. The world's most capable and 
talented Coast Guard is comprised of over 57,000 Active Duty, Reserve, 
and Civilian personnel, supported by 21,000 Auxiliary volunteers.
    Moving forward, we will continue to pursue policies and practices 
that maximize readiness and enable us to recruit, train, and retain a 
workforce increasingly more representative of the American public we 
serve. We remain committed to creating an environment that not only 
attracts the best of our Nation's diverse talent, but also provides an 
inclusive environment and rich experience that positions the Coast 
Guard to be an employer of choice with unmatched retention in today's 
highly competitive economy. We must adjust our human resource practices 
to fill our ranks and optimize our mission ready total workforce. The 
FY 2023 budget requests $170 million for pay and benefits; as well as 
$53 million to enhance recruiting and retention initiatives, further 
expand diversity and inclusion efforts, modernize training, and better 
support the needs of our workforce.
    Modernize Capability: The Coast Guard is in the midst of its 
largest recapitalization effort since World War II--an effort critical 
to ensuring our Nation has the capable, modern assets it needs to meet 
the unprecedented growth in demand for Coast Guard services. However, 
until fully recapitalized the Coast Guard continues to conduct missions 
with legacy assets, some of which are over 50 years old.
Surface Assets
    With the continued strong support of both the Administration and 
Congress, we're acquiring the Nation's first new heavy polar 
icebreakers in almost half a century. The $80 million provided in the 
FY 2022 Consolidated Appropriations Act partially funded long-lead time 
material for the third Polar Security Cutter (PSC). The FY 2023 request 
of $167 million will sustain the program and procure an additional 
portion of long-lead time materials for the third PSC. When fully 
operational, PSCs will provide the global reach and icebreaking 
capability necessary to ensure United States presence in the Arctic and 
Antarctic regions in support of national interests and in furtherance 
of the National Security Strategy and the National Defense Strategy, as 
appropriate.
    The FY 2023 request also includes the acquisition, modification, 
and operation of a commercially available polar icebreaker in order to 
add near-term national capability in the Arctic, train icebreaker 
sailors, and help inform capability requirements for the future 
acquisition of Arctic Security Cutters (medium icebreakers). As melting 
sea ice creates new routes in the High Latitudes that increasingly 
attract human activity, scientific discovery, and economic prospects, 
the Coast Guard needs year-round surface access to the critically 
important geo-strategic Polar Regions.
    Continued progress on the Offshore Patrol Cutter (OPC) program is 
absolutely vital to recapitalizing the capability provided by our 
legacy fleet of 210-foot and 270-foot Medium Endurance Cutters (MECs). 
The FY 2023 request provides $650 million for construction of the fifth 
OPC and long lead time materials for the sixth as we progress towards 
our program of record of 25 hulls. The legacy assets the OPC's will 
replace have been workhorses for decades and have served the Nation 
with distinction, but the MEC fleet is becoming more difficult and 
expensive to maintain, and we continue to see degradation in its 
operational availability.
    The FY 2023 request also includes $77M to support the Waterways 
Commerce Cutter (WCC) program, specifically, the detailed design and 
construction of the first two articles. Recapitalization of our fleet 
of inland tenders--some of which have been in service since the 1940s--
is essential to maintaining both the fixed and floating aids that 
enable navigation on the U.S. Marine Transportation System (MTS). This 
system includes over 25,000 miles of rivers and navigable channels that 
connect America's consumers, producers, manufactures, and farmers to 
domestic and global markets; these marine highways are the economic 
lifeblood of our economy, and are absolutely critical to American 
prosperity.
Aviation Assets
    The FY 2023 request continues the Coast Guard's transition of our 
rotary wing fleet with $100M included for an additional four MH-60T 
helicopters. Our current fleet includes 98 MH-65 Dolphin and 48 MH-60 
Jayhawk helicopters. Both helicopters are undergoing essential Service 
Life Extension Programs (SLEP) to push current capabilities into the 
late 2030s. Growing the Coast Guard's fleet of MH-60s via the purchase 
of new hulls, or the conversion of low-hour former Navy air frames at 
our Aviation Logistics Center, is crucial to sustaining Coast Guard air 
operations and meeting mission demands.
    Expanding Operations--Arctic, Oceania, and the Atlantic Basin: Our 
mission effectiveness and global impact is multiplied when we pursue 
persistent efforts to address common challenges, share costs, and widen 
the circle of cooperation. As transformational change in the maritime 
domain triggers persistent demand for more ``coast guard work'' 
globally, coastal nations worldwide seek leadership from the U.S. Coast 
Guard to establish or bolster their own coast guards or maritime 
services, and to adapt or expand their existing maritime security 
capabilities. Our collaboration in ``coast guard work'' strengthens 
partnerships and amplifies our collective ability to disrupt threats 
before they reach our shores. The FY 2023 request provides the Coast 
Guard $118 million to expand the Service's operations in regions vital 
to America's national security and prosperity--the Arctic, Oceania, and 
the Atlantic Basin.
    Cybersecurity and C5I Modernization: Evolving cyber threats 
continue to present challenges to ensure the security of the Coast 
Guard's network, but also that of the Marine Transportation System. The 
FY 2023 request promotes continued efforts to modernize and protect the 
Coast Guard's networks pursuant to Executive Order 14028 on Improving 
the Nation's Cybersecurity, while positioning the Service to have the 
robust suite of cyber tools and professionals necessary to keep pace 
with technological advances and increasing cyber threats. Additionally, 
we are leveraging the momentum of recent years' Congressional support 
for our ``Technology Revolution''--a ``Whole of Service'' effort to 
ensure our dedicated workforce has reliable, mobile, and integrated 
information systems to empower operations, attract and retain a skilled 
workforce, and leverage data.
Shore Infrastructure
    Coast Guard facilities must be safe and resilient to meet mission 
demands. Based on the nature of our missions, Coast Guard facilities 
are located in areas prone to hurricanes, flooding, earthquakes, and 
other natural disasters. The Nation's reliance upon the Coast Guard to 
serve as a first responder after such disasters underscores the 
importance of our facilities being resilient and ready for operations. 
We greatly appreciate the $434 million provided by the Congress as part 
of the Infrastructure and Investment and Jobs Act, and the $355 million 
provided in FY 2022 to support critical shore facility investments.
    The Coast Guard has been slowly recapitalizing our shore 
infrastructure, updating and where possible replacing legacy military 
housing and support facilities, and modernizing waterfront facilities 
to accept new assets. Despite these efforts, the Service carries 
substantial backlogs for both the recapitalization of infrastructure 
and asset maintenance. While we are making consistently strong headway 
on recapitalizing our cutters and aircraft, that progress requires 
making tough annual trade-offs that continue to impact our shore 
infrastructure needs. Every Coast Guard mission begins and ends at a 
shore facility, and the FY 2023 request includes targeted investments 
to improve the condition of our aging shore facilities, and to prepare 
for the Coast Guard's future fleet. Given the scope of the challenge, 
both additional investments as well as a modern approach to project 
planning, prioritizing, and execution are necessary to ensure the 
Service has the adequately maintained and resilient infrastructure 
required to meet the operational demands of both today and tomorrow.
                               Conclusion
    As we look to FY 2023 and beyond, we must resource the Coast Guard 
that our Great Nation needs to ably conduct domestic operations, as 
well as leverage the unique authorities and capabilities of the 
``World's Best Coast Guard'' to conduct operations far beyond our 
coasts in support of our national interests. Funding provided in the FY 
2023 President's Budget will enable the Service to protect the 
Homeland, save those in peril, enhance our economic prosperity by 
supporting the maritime industry, protect our national resources, adapt 
to climate change, and strengthen the international rules-based order.
    With the continued support of the Administration and Congress, your 
Coast Guard will live up to our motto--Semper Paratus--Always Ready. 
Thank you for your enduring support of our Coast Guard workforce.
                       FY 2023 Budget Highlights
Budget Priorities:

      Restore Readiness--The Coast Guard must maintain momentum 
restoring Service readiness. More than ever, the Nation needs a ready 
Coast Guard with the personnel, tools, and support systems to operate 
in an increasingly complex, interconnected, and technologically 
advanced maritime domain.
      Build the Coast Guard of the Future--The Coast Guard is 
in the midst of the largest recapitalization effort since World War 
II--an effort critical to ensuring the Service has the capable, modern 
assets it needs to meet the unprecedented growth in demand for Coast 
Guard services.

    The FY 2023 Budget requests $9.62 billion for Operations and 
Support (O&S) and $1.65 billion for Procurement, Construction and 
Improvements (PC&I). Budget highlights include:

Restore Readiness (O&S):
Support the Mission Ready Total Workforce
      $170 million for requisite military pay and allowances 
per National Defense Authorization Act requirements, maintaining parity 
with the military branches within the Department of Defense, and $49 
million for civilian pay and benefits (O&S).
      $53 million for workforce readiness, including 
recruiting, retention, diversity and inclusion, training, and support.
Modernize Operational Capability
      $100 million for new assets including: operations and 
maintenance for OPC #2; crew for OPC #3; operations and maintenance for 
National Security Cutter (NSC) #10 and crew for NSC #11. Additionally, 
the Budget provides funding for operations, maintenance, and crew for 
three C-27J aircraft.
      $11 million for marine safety capacity to modernize and 
oversee the merchant mariner credentialing program, and additional 
personnel to conduct timely and thorough marine inspections and 
investigations to enable commerce and maritime security.
Expanding Operations: Arctic, Oceania, and the Atlantic Basin
      $30 million to crew a commercially available polar 
icebreaker to expand Coast Guard capacity, and near term enhanced 
capability to conduct Arctic operations, grow High Latitude sailors, 
and inform Arctic strategy.
      $48 million to expand operations in the Indo-Pacific in 
order to promote economic prosperity, combat IUUF, promote 
environmental resilience, and ensure unrestricted lawful access to the 
region's maritime environment.
      $40 million to support activities in the Partnership for 
the Atlantic Basin initiative to address maritime security issues.
Cybersecurity and C5I Modernization
      $47 million to operate, maintain, secure, and protect 
Coast Guard IT networks and conduct cyber effects operations to deter 
and respond to cyber-attacks on the Marine Transportation System (MTS).
      $7 million to transition to modern software and provide 
mobile solutions for the workforce.

Recapitalize Legacy Assets and Infrastructure (PC&I)

      $1.2 billion for vessels, including: $650 million for 
construction of OPC #5 and long-lead time materials for OPC #6; $167 
million for the PSC program, including project management and 
construction of PSCs #1-2 and long-lead time materials for PSC #3; $60 
million for post-delivery activities for NSCs #9-11; $77 million for 
the Waterways Commerce Cutter (WCC) program, including project 
management and long-lead time materials; and $125M to acquire a 
commercially available polar icebreaker.
      $182 million to recapitalize and sustain fixed and 
rotary-wing aircraft including: sustainment of the current MH-60T 
helicopter fleet and funding for fleet expansion; modernization and 
sustainment of MH-65 helicopters to extend service lift into the 2030s; 
and continued missionization of HC-27J medium-range fixed wing 
surveillance aircraft.
      $180 million for shore infrastructure improvements to 
support new acquisitions and the execution of Coast Guard operations 
including: PSC homeport in Seattle, Washington; FRC homeport in St. 
Petersburg, Florida; WCC homeports; continued buildout of the 
consolidated operational base in Charleston, South Carolina; and other 
infrastructure repairs and upgrades.

    Mr. Carbajal. Thank you, Admiral Schultz.
    Next, we will go to Master Chief Vanderhaden.
    You may proceed.
    Master Chief Vanderhaden. Thank you, sir.
    Good morning, Chairman DeFazio. Sir, it has been an honor 
to serve with you. Thank you for inviting me and allowing me to 
be your guest at the State of the Union Address. That was one 
of the highlights of my life, and I am grateful for that. Thank 
you. It was a wonderful, wonderful time.
    Chairman Carbajal, Ranking Member Gibbs, and distinguished 
members of the subcommittee, I want to join Admiral Schultz in 
extending my utmost gratitude on behalf of the men and women of 
the Coast Guard for your enduring support of our efforts to 
restore Service readiness. This is likely the final time I will 
appear before the committee as Master Chief Petty Officer of 
the Coast Guard, because I also am retiring later next month.
    As I reflect on the last 34 years, I am proud to observe 
how much the Coast Guard has grown to better serve our American 
people. I want to thank the members of this subcommittee and 
the Congress for helping the Service continually evolve to meet 
the complex challenges facing our Nation. Your advocacy has 
been and continues to be essential to ensure that we provide 
the best mission execution, and that we remain always ready.
    The Coast Guard's relatively small force executes a broad 
array of missions, and we are successful because we foster an 
empowering environment where all our members understand the 
importance of their service to their Nation.
    As with all Services, the Coast Guard faces numerous 
challenges. The current challenge I am most concerned with is 
our ability to recruit and retain the workforce needed to 
operate our cutters, boats, and aircraft. A close second 
concern is the exponential increase in the cost of housing 
facing our Coast Guard families.
    As we replace our aging assets, the new cutters, 
helicopters, and planes being built require us to grow our 
workforce, so that we are prepared to operate these new, 
amazing assets.
    The Coast Guard enjoys the highest retention rate of all 
the military Services. However, like the rest of the country, 
we are challenged to find the next generation of dedicated men 
and women who can and will serve in the military. It is an all-
hands-on-deck effort to attract the best and brightest, and 
that is why we are expanding our Everyone Is A Recruiter 
program. Finding new ways to attract talent to the Coast Guard 
is tricky. If any of you know anybody that wants to serve in 
the Coast Guard, I have got some Coast Guard swag for you, and 
we can hand that out. So, we are really working hard to 
recruit, but it is a tough recruiting environment right now.
    A close second to recruiting is retention. If we want to 
grow, we have to keep the people we have. But housing costs are 
making it almost impossible for our people to find a place to 
live. With the dispersed nature of the fifth largest branch of 
the U.S. military, your Coast Guard, our members are forced to 
live on the economy in most places. Our people are having to 
live very far from their units, giving them untenable commute 
times. It is having a detrimental effect on the servicemembers 
and their families.
    I know you can't bring housing costs down, but we need some 
legislative help in addressing the speed and flexibility to 
assess housing costs. The basic allowance for the housing cost 
assessment system lags far behind the actual cost, especially 
for the Coast Guard. This lag means that the rates never 
reflect the actual costs that our people are paying for 
housing. Policy changes are helpful for retention, but we are 
always looking to do more to retain our best and brightest.
    Having a mentor is proving to be very helpful to improving 
retention. We have seen outstanding participation in our new 
mobile-enabled mentoring program that connects mentors and 
mentees through traditional one-on-one mentoring on a global 
basis. We have thousands of Coast Guard members using this new 
program, and that number is growing every day. Twenty-eight 
percent of those users are women, and we are finding the 
program is very popular with our affinity groups and other 
underrepresented members. In fact, the Air Force, the Army, the 
Navy, DHS, and many of our other Federal Government partners 
are using the Coast Guard as a model for their mentoring 
programs.
    The Coast Guard is diligently developing innovative 
strategies to build the workforce of the future. We recognize 
the imperative to be an employer of choice that reflects the 
public we serve. We are incorporating recommendations and best 
practices from several workforce studies, along with human 
resource management software improvements into a Ready 
Workforce 2030 strategy. We are currently developing an 
implementation plan for that strategy, which will help us 
leverage data and technology to improve the quality of life for 
our people.
    As I depart the Coast Guard, I want to thank you on behalf 
of the entire Coast Guard. You all have demonstrated not just 
by word, but by action, how much you care about the Coast 
Guard. Your staffs have enabled a small force to complete an 
incredible amount of service to our country. You have improved 
our morale by making each Coastie more effective and efficient 
in their duties. And with your continued support, we will be 
able to provide more and better service to our wonderful 
Nation.
    Thank you for inviting me to testify today, and I look 
forward to answering your questions.
    Mr. Carbajal. Thank you, Master Chief Vanderhaden. Let me 
just say that I neglected to also recognize and thank you for 
your service.
    Master Chief Vanderhaden. Thank you, sir.
    Mr. Carbajal. For some reason it just escaped my mind that 
you too were retiring. So, congratulations. Thank you for your 
service and leadership over your career, but as well as these 
past 4 years, working with the Commandant, to make sure that 
you guys provide extraordinary leadership for the Coast Guard 
and our Nation. Thank you so much.
    Master Chief Vanderhaden. Thank you, sir. It is an honor.
    Mr. Carbajal. Next, we will go to Mr. Maffei.
    You may proceed.
    Mr. Maffei. Thank you. Good morning, Chairman Carbajal, 
Ranking Member Gibbs, full committee Chairman DeFazio, and 
members of the subcommittee. I am grateful to have this 
opportunity to testify in support of the Federal Maritime 
Commission fiscal year 2023 budget request, and answer your 
questions.
    The Commission seeks just under $34.7 million to support 
its operations in the coming fiscal year. This would be a 
substantial increase, a bit over 5 percent, from our fiscal 
year 2022 enacted budget. The increase would go mainly to 
enforcement and consumer assistance, since we continue to 
receive large numbers of complaints commensurate with the high 
freight rates, diminished reliability, increased delays, and 
shortages of equipment such as containers and chassis that 
currently plague our ports and ocean transportation.
    We strive our best to review every potential case 
thoroughly for violations of the law, and do all we can to 
assist importers, and especially exporters, managing a system 
where the capacity is simply unable to meet the continuing 
surge of demand that started early in the COVID-19 pandemic. 
That said, we are a small agency of fewer than 120 people 
regulating an estimated $1.3 trillion of commerce.
    As I have indicated to the subcommittee before, there are 
potential enforcement cases that we cannot examine, or at least 
not as thoroughly and expeditiously as they might merit, 
because we simply do not have enough capacity. Your and your 
colleagues' response to this situation is why I am bold enough 
to ask you for this increase, while understanding that you are 
contending with intense pressures on the Federal budget.
    I also want to make it clear that, while I advocate for an 
increase in resources, and I support bipartisan bills to 
enhance our authority, the FMC is not waiting for these things. 
We are already taking action on multiple fronts.
    We have increased monitoring and enforcement activity, 
paying particular attention to ocean cargo carriers and their 
alliances, and I have directed our enforcement bureau to 
prioritize export cases.
    We have initiated a new focus on addressing fees and 
surcharges with the goal of bringing greater transparency to 
what shippers actually have to pay.
    We have provided guidance to shippers on bringing 
complaints to the FMC, and we are seeing a marked increase in 
cases being filed.
    With the support and advice of my Commission colleagues, I 
directed the FMC to audit the major container carrier companies 
to encourage and facilitate compliance on the Commission's 
detention and demurrage rules, and their legal obligation not 
to discriminate against exports.
    The Commission is acting on all of the nonlegislative 
recommendations of the fact-finding investigation on pandemic-
related effects led by Commissioner Rebecca Dye. These include 
launching a new rulemaking to set forth standards governing 
detention and demurrage billing practices, issuing policy 
statements that address barriers to filing action at the FMC, 
and placing an export advocate in our consumer affairs bureau.
    Through multiple initiatives such as Commissioner Dye's 
Supply Chain Innovation Teams and Commissioner Carl Bentzel's 
data initiative, we have started tackling the complex issue of 
shortages of usable equipment, such as export containers and 
chassis, and the difficulties that shippers face in getting 
reliable, useful information such as when ships will actually 
take on export cargoes.
    These efforts are contributing to increased incentives on 
the containership lines and terminal operators to work together 
with America's shippers to solve problems, rather than cause 
them. I am gratified that some long-time critics of ours are 
saying that they have not seen so much positive activity at the 
FMC in years, and perhaps ever.
    All of this said, the supply chain challenges are complex 
and interconnected. Cargo transportation in foreign nations, as 
well as the United States, as we have seen with the Shanghai 
issues in this past week, and at sea, at ports, and inland has 
all come up short when it comes to satisfying the vast demand 
for ocean shipping. No single Government agency is capable of 
addressing all these issues. So, the FMC works across 
Government as well as with industry stakeholders to find 
solutions to improve our Nation's cargo transportation 
networks.
    In ocean shipping, however, the FMC is at the vanguard. And 
if legislation pending before Congress is enacted into law, as 
I hope it will be, our workload will further increase. This is 
the right time to invest in the ability of the Commission to 
hold accountable the industry we regulate, and meet the needs 
of American shippers. Thank you.
    [Mr. Maffei's prepared statement follows:]

                                 
Prepared Statement of Hon. Daniel B. Maffei, Chairman, Federal Maritime 
                               Commission
    Good morning, Chairman Carbajal and Ranking Member Gibbs, I am 
grateful to have this opportunity to testify in support of the Federal 
Maritime Commission Fiscal Year 2023 Budget Request.
    The Commission is seeking $34,683,500 to support its operations in 
the coming Fiscal Year. This is a $1,815,000--or 5.2 percent--increase 
from our Fiscal Year 2022 enacted budget and represents a substantial 
expansion in our enforcement and consumer assistance capabilities.
    This investment is needed. Demand for Commission services is not 
dissipating. Our Office of Consumer Affairs and Dispute Resolution 
Services continues to receive voluminous requests from the public for 
assistance. Aggravated shippers continue to share information with us 
about unsatisfactory service--all of which is reviewed for potential 
violations of the law. There has been a noticeable uptick in litigation 
initiated at the Commission, both in small claims as well as formal 
complaints before our Administrative Law Judge. Our Area 
Representatives and Bureau of Enforcement personnel are pursuing all 
possible leads to identify possible enforcement actions.
    Not only is the demand for Commission services not dissipating, the 
reasons why people contact us do not appear to be going away anytime 
soon.
    The global, ocean-linked, supply chain system continues to suffer 
from conditions that undermine its effectiveness and provide no obvious 
or easy solutions. Congestion, diminished reliability, and shipper 
competition for scarce resources--in this case space aboard vessels--
all work in tandem to force rates up. The longer demand remains at 
historic levels, the longer it will take for the system to return to 
some semblance of its normal operating rhythm.
    Make no mistake, no part of the world escapes the consequences of a 
system operating at the limits of its capabilities and at the maximum 
of its capacity. This is not unique to the United States. No major 
shipping nation in the world has not experienced similar problems. 
However, given the strong demand of U.S. consumers and U.S. 
manufacturers for goods, commodities, and industrial inputs, effects of 
global supply chain problems are particularly pronounced in our Nation.
    Shippers' frustration with ocean carriers and congested ports is 
understandable, but the problem is fundamentally not that simple. Far 
from carrying less cargo, ocean carriers are carrying record setting 
volumes of containers into the United States. Our seaports are being 
much more productive and handling much more cargo volumes. The biggest 
challenge is not to get the ocean carriers and seaports to carry and 
process more cargo, but how to address and resolve issues in the U.S. 
domestic networks and infrastructure that are even more severe 
limitations on the supply chain's capacity. The availability of 
intermodal equipment, warehouse space, intermodal train service, 
trucking, and enough workers in each of those sectors, remain 
challenges to getting more cargo off our ports and to destination with 
more certainty and reliability.
    Foundationally, these are complicated, interconnected, and global 
problems that can only be addressed by many parties and organizations 
demonstrating leadership and taking responsibility for matters where 
they can make a difference. There is no one government agency, nor one 
company capable of unilaterally addressing the myriad causes that have 
so totally disrupted the international ocean freight delivery system.
    As I noted above, many parties have turned to the Federal Maritime 
Commission for help during this disruptive period. We have responded as 
comprehensively, aggressively, and creatively as possible within the 
bounds of our present authorities. Among our initiatives are the 
following:
      We have increased investigative and enforcement activity, 
paying particular attention to ocean carriers.
      We have initiated a new focus on addressing fees and 
surcharges with the goal of bringing greater transparency to rates.
      We have increased the monitoring requirements of ocean 
carrier alliances and continue to assess if further changes are 
necessary.
      We have invested in our Bureau of Trade Analysis and 
their ability to conduct oversight of the markets and alliances by 
adding staff with backgrounds in data science and analysis.
      We have provided guidance to shippers on bringing 
complaints at the Federal Maritime Commission and we are seeing an 
increase in both formal and especially informal docketed proceedings 
being filed.
      We have reviewed hundreds of pieces of correspondence 
sent to the Commission for potential actionable enforcement actions.
      The Bureau of Enforcement has continued to investigate 
for any illegal conduct in the marketplace and stands ready to 
prosecute potential violations by any entity under our jurisdiction.
      We have consulted with counterpart competition 
authorities, the European Union, and the People's Republic of China, 
regarding our respective efforts to ensure a competitive marketplace 
for ocean transportation services, as well as observations and 
conclusions from each regime's monitoring work.
      I directed, following conversations with Commissioner 
Dye, that the FMC created the Vessel-Operating Common Carrier Audit 
Program to help ensure with compliance on the Commission's interpretive 
rule on detention and demurrage and other important regulations.

    Much of the focus on actions the Commission can take to address 
pandemic-related impacts to the supply chain comes under the auspices 
of Fact Finding 29 led by Commissioner Dye. In July of last year, the 
Commission issued a set of eight Interim Recommendations based on what 
she had learned from her work. The Commission unanimously embraced her 
recommendations and has acted on each that did not require legislative 
change to implement. Specifically:
      The Commission issued an Advanced Notice of Proposed 
Rulemaking in February to solicit feedback if a new rule governing 
demurrage and detention billing practices would benefit the trade and 
should apply to marine terminal operators and non-vessel operating 
common carriers in addition to vessel-operating common carriers.
      The Commission issued three policy statements in December 
2021 providing new guidance to shippers and others on bringing private 
party complaints at the Federal Maritime Commission. These policy 
statements address barriers identified by the trade community as 
disincentives to filing actions at the agency.
      +  The Commission reiterated that shippers associations and trade 
associations may file a complaint alleging a prohibited act violation 
under 46 U.S.C. Chapter 411. This allows these organizations to protect 
the interests of their members while also providing shippers with a 
degree of separation and insulation from potential retaliation.
      +  The Commission reiterated that a party who brings an 
unsuccessful complaint is not automatically required to pay the other 
party's attorney fees. The Commission will look favorably upon 
complainants who raise non-frivolous claims in good faith, who litigate 
zealously but within the rules and for proper purposes, and who comply 
with Commission Orders.
      +  The Commission emphasized that it broadly defines both who can 
bring a retaliation complaint, as well as the types of shipper activity 
that is protected under the existing retaliation prohibitions. This 
policy statement also addresses the proof necessary for certain 
retaliation complaints.
      Commissioner Dye issued an advisory in February outlining 
options shippers have for filing demurrage and detention complaints at 
the Federal Maritime Commission. Her statement provides links to 
information on the Commission's website that can be helpful to 
individuals in determining which avenue to address their complaint and 
the information necessary to initiate a proceeding. Finally, she 
outlines the differences between filing a complaint and reporting 
potential violations of the law that might be investigated by the 
Commission's Bureau of Enforcement.
      On a related note, a multimedia presentation explaining 
Commission procedures is in final stages of production and will soon be 
posted to the Commission's website.
      As referenced above, an Export Advocate has been assigned 
to CADRS to work directly with U.S. export shippers in addressing and 
resolving the unique challenges they face.

    The U.S. domestic freight transportation system has been strained 
for years. It has operated sufficiently, but with essentially no excess 
capacity to absorb shocks to the system. Previous significant 
disruptions demonstrated shortcomings in our networks and 
infrastructure and revealed the need to realize more capabilities to 
move cargo. One obvious response is to build more capacity. To that 
end, I applaud the Congress' passing of bipartisan legislation on 
infrastructure that includes funding for ports. That will certainly 
help.
    An additional approach is to find ways to use existing 
infrastructure more efficiently. Improving information sharing among 
all those involved in moving containerized trade is a way to achieve 
that goal. Toward that end, I asked Commissioner Carl Bentzel to take 
on the Maritime Transportation Data Initiative which is identifying 
data constraints that impede the flow of ocean cargo and add to supply 
chain inefficiencies. His work has three key objectives: cataloging the 
status quo in maritime data, storage, and access across the 
transportation chain; identifying key gaps in data definitions/
classification; and developing recommendations for common data 
standards and access policies/protocols. Since its launch in December, 
Commissioner Bentzel has held weekly sessions with representatives from 
all sectors of the maritime freight supply chain to gain their 
expertise on how data can contribute to the long-term reliability of 
the domestic cargo delivery system. Commissioner Bentzel will hold a 
Maritime Data Summit on June 1, 2022, where he will present his 
findings and receive feedback from industry participants.
    In addition to addressing the concerns of cargo shippers, the 
Commission has been active on issues related to the passenger cruise 
industry. The COVID pandemic created a significant disruption to this 
industry that employs hundreds of thousands of Americans and is a vital 
part of the economies of several states. To do everything we could to 
help, the Commission initiated Fact Finding 30 under the direction of 
Commissioner Louis Sola. In March 2022, the Commission adopted a final 
rule recommended by Commissioner Sola that establishes more rights and 
options related to refunds for cruise passengers when a cruise line has 
cancelled or delayed a voyage. These changes not only provide more 
remedies to consumers, they help reestablish the public's confidence in 
being able to book a cruise voyage.
    Our newest Commissioner, Max Vekich, was sworn-in on February 15, 
2022, and he brings to the Commission decades of experience in industry 
working as a longshoreman. Commissioner Vekich is very interested in 
issues related to port competitiveness and the role smaller and 
regional ports can play in creating supply chain resilience and options 
for shippers.
    For my part, I have no higher priority as Chairman than using the 
authority and jurisdiction of the Commission to help U.S.-based 
exporters access shipping services and reach overseas markets.
    I directed our Vessel-Operating Common Carrier Audit Team to expand 
its scope and evaluate how 11 key shipping lines serve U.S. export 
shippers, and in particular agricultural shippers. Responses will 
provide better insight into market trends and performance and identify 
where opportunities exist for individual lines to improve or increase 
access to service offerings. The Audit Team completed their first round 
of discussions last week and the Commission will be briefed on the 
initial findings in the coming weeks.
    As I testified above, we have added an Export Advocate to our 
Office of Consumer Affairs and Dispute Resolution Services (CADRS), and 
I have directed both CADRS and the Bureau of Enforcement (BoE) 
prioritize any case that involves exporters.
    Further, the BoE is examining the business practices of five 
independent ocean carriers drawn to the U.S. markets by high freight 
rates to determine how those companies are serving the export markets 
and if they are meeting their legal obligations.
    This is all in addition to other ongoing efforts such as 
Commissioner Dye's work with Supply Chain Innovation Teams toward 
solutions to some of the most challenging issues exporters face. These 
include insufficient equipment availability, inefficient container 
return procedures, and the lack of reliable information regarding 
vessel calls and deadlines for delivering cargo for loading.
    I honestly believe we are doing everything we can within our 
current authority, however I am very openminded to ideas. I will do the 
most I can to support U.S. exporters and I will note here my support 
for versions of the Ocean Shipping Reform Act going through Congress 
that is detailed in other places.
    A valuable channel for receiving input is the Congressionally 
established Federal Maritime Commission National Shipper Advisory 
Committee, which is off to a very strong start. This group of 24 
individuals representing exporters and importers has approached their 
duties with a seriousness and sense of purpose that is impressive. They 
are holding their fourth meeting in six months today and we are happy 
to have them at the Commission in person for the first time.
    Over the past year, the Commission has worked hard on many fronts 
to make a difference where we can and within the bounds of our 
authorities. I am proud of the work we have done, which is all the more 
significant when one considers the relatively small size of the 
Commission--approximately 115 fulltime equivalent personnel. With more 
resources we can do more and the budget we are seeking provides us with 
that opportunity.
    An increase in our budget will allow me to add personnel to the 
Bureau of Enforcement, the Office of Consumer Affairs and Dispute 
Resolution Services, and the Office of the Administrative Law Judges. 
We are moving forward with hiring actions in each of those functions 
that will permit the Commission to assist more people, investigate more 
allegations of wrongdoing, and provide more rapid consideration of 
litigation. The requested Fiscal Year 2023 budget will allow us to grow 
to approximately 150 fulltime personnel. Almost 80 percent of the 36 
new positions the Commission will create will be in enforcement and 
consumer assistance functions, greatly expanding the abilities to 
assist consumers, investigate complaints, and pursue those who have 
broken the law.
    A significant demand for Commission services already exists and if 
legislation pending before Congress is enacted into law, our workload 
will certainly escalate significantly. This is the right time to invest 
in the ability of the Commission to meet the needs of our regulated 
community and we appreciate the support we are receiving from both the 
Congress and the Administration to grow our capabilities.
    Thank you for your attention. I look forward to your questions.

    Mr. Carbajal. Thank you, Mr. Maffei.
    And next, Ms. Lessley, you may proceed.
    Ms. Lessley. Good morning. Thank you, Chairman Carbajal, 
Ranking Member Gibbs, and, of course, Chairman DeFazio and 
members of the subcommittee. Thank you for the opportunity to 
appear.
    I also want to thank you for your support and leadership as 
we have worked to address the many challenges at the Merchant 
Marine Academy and to support culture change throughout the 
maritime industry. Your leadership support and that of your 
staffs have been absolutely essential to all of our efforts, 
and I just can't thank you enough.
    I am honored to appear with my colleagues, Admiral Karl 
Schultz, Commandant of the Coast Guard; Master Chief Petty 
Officer of the Coast Guard Vanderhaden; and, of course, 
Chairman Maffei, to testify on the President's fiscal year 2023 
budget priorities for the Maritime Administration. I would like 
to begin by providing an update on Sea Year.
    As has been discussed, last year we made the difficult 
decision to briefly pause the Merchant Marine Academy's Sea 
Year training aboard commercial vessels, so that we could 
institute new safety policies to help prevent sexual assault 
and harassment, to support survivors, and to strengthen a 
culture of accountability.
    We developed a program called the Every Mariner Builds a 
Respectful Culture, or EMBARC, which enumerates new safety 
requirements for vessels that carry our cadets. MARAD will not 
place cadets on commercial vessels that have not enrolled in 
EMBARC.
    We have, critically, also instituted new policies at the 
Merchant Marine Academy to improve the support we provide to 
our cadets at sea, and to try to remove barriers to reporting 
when assault or harassment do occur. Cadet embarkations resumed 
in December, initially on training vessels and vessels operated 
by the Navy, the Military Sealift Command, and the U.S. Coast 
Guard. We thank them for their support of our midshipmen, and I 
particularly want to thank Admiral Schultz for his leadership, 
for the unwavering support of the Coast Guard at all stages of 
this effort.
    With their assistance, the members of the class of 2023 are 
accumulating the sea time they need to graduate on time. If, 
however, due to any unforeseen circumstances a midshipman is 
not able to accrue all required sea time, the Coast Guard has 
indicated that midshipmen can still take their license exam at 
the expected time, and then complete all required sea time. No 
one will leave the Academy without all of the sea time they 
need to obtain their licenses.
    As of today, we have, I am pleased to announce, seven 
commercial carriers enrolled in EMBARC. We just enrolled one 
more this morning. Through continuous review, we will work to 
identify areas where our policies fall short and improve them. 
And we will work to support urgently needed culture change 
across the maritime industry.
    We know we did not get everything right. We have put EMBARC 
in the Federal Register, and encourage everyone who has 
comments to submit them.
    Turning to the budget request to address critical 
infrastructure gaps while fostering and sustaining job 
opportunities in the maritime industry, the President's fiscal 
year 2023 budget requests $906 million for MARAD. The 
Bipartisan Infrastructure Law also provides $450 million in 
advance appropriations for our Port Infrastructure Development 
Program, which I know is a priority for this subcommittee. This 
funding, when coupled with the budget request, represents a 
nearly $1.4 billion investment in the merchant marine and the 
maritime industry.
    Looking first at sealift, the budget requests $318 million 
in full funding for the Maritime Security Program, which will 
continue to assure the Department of Defense has access to the 
60 ships enrolled in the program.
    The budget request would continue funding for the Tanker 
Security Program, and we look forward to the enrollment of 10 
U.S.-flagged tankers. MARAD, of course, maintains 41 Ready 
Reserve vessels that provide sealift surge capacity in support 
of our military. Funding from DoD in 2023 would enable MARAD to 
continue to maintain this sealift support and to advance 
essential recapitalization of the fleet.
    MARAD has awarded our vessel acquisition manager contract, 
and two used vessels have been procured. Construction is also 
well underway on the first two of the five National Security 
Multimission Vessels, with the first expected to be delivered 
in early 2023.
    Looking at mariner training programs, the budget requests 
$77 million to provide Federal assistance to the six State 
maritime academies for our grant programs. As I mentioned, the 
budget requests $230 million for the Port Infrastructure 
Development Program to fund grants that improve port 
infrastructure and facilities. This funding, which, when 
combined with the $450 million provided in the Bipartisan 
Infrastructure Law, would create a total proposed investment of 
$680 million.
    The budget requests $20 million for our Small Shipyards 
Grant Program and $10 million for the America's Marine Highway 
Program to support the increased movement of freight by water.
    To advance our essential decarbonization goals, the budget 
requests $10 million for the Maritime Environmental and 
Technical Assistance Program.
    And finally, the budget requests $99 million for the 
Merchant Marine Academy.
    Thank you for the opportunity to discuss the budget 
request. I am happy to answer any questions.
    [Ms. Lessley's prepared statement follows:]

                                 
 Prepared Statement of Lucinda Lessley, Acting Administrator, Maritime 
                             Administration
    Good morning, Chairman Carbajal, Vice Chair Auchincloss, Ranking 
Member Gibbs, and distinguished members of the Subcommittee. Thank you 
for your tremendous support for the Maritime Administration (MARAD), 
the U.S. Merchant Marine Academy (USMMA), and the U.S. maritime 
industry. We greatly appreciate the opportunity to testify today on the 
President's Fiscal Year (FY) 2023 budget, and how this request will 
continue to advance MARAD's key priorities.
                         FY 2023 Budget Request
    MARAD's statutory mission is to foster, promote, and develop a 
strong and resilient United States merchant marine and maritime 
transportation industry to provide essential sealift capacity support 
for our military and to support the competitiveness of the U.S. 
economy.
    The President's FY 2023 Budget request of $906.7 million for MARAD 
will continue to strengthen resiliency in the maritime transportation 
system by advancing recapitalization of our sealift capacity, 
supporting investments in our ports and waterways, and expanding our 
efforts to address climate change. Funding would also continue critical 
investments to address the many urgent and long-standing challenges at 
USMMA.
    The Bipartisan Infrastructure Law (BIL) also provides $450 million 
in advance appropriations which, when coupled with the FY 2023 
President's Budget, would represent nearly a $1.4 billion investment. 
The BIL funding will be invested through our Port Infrastructure 
Development Program (PIDP), which enables us to support the 
construction of new capacity at ports around the United States to 
improve cargo throughput, eliminate bottlenecks, and reduce the time 
and cost of shipping goods.
                           National Security
    Providing the sealift that the Nation needs is a critical part of 
MARAD's mission, and we are proud to be in our 76th year of managing 
the National Defense Reserve Fleet (NDRF). America's strategic sealift 
provides the Nation with the capability to project power globally by 
deploying Department of Defense (DOD) forces and moving cargoes 
worldwide during peacetime, wartime--and through contested environment. 
Our Nation's sealift requires assured access to a combination of 
commercial and Federal resources to succeed.
    Our Government-owned sealift fleet is supported and leveraged by a 
fleet of privately owned, commercially operated U.S.-flag vessels in 
the Maritime Security Program (MSP). The new Cable Ship Security 
Program (CSP) also supports U.S.-flagged ships, and the Tanker Security 
Program (TSP) funded in the Consolidated Appropriations Act, 2022, will 
soon add U.S.-flag capability to transport fuel to enable DOD to meet 
its operational needs.
    Critical to the operation of both Government-owned and commercial 
U.S.-flag vessels is an adequate supply of qualified U.S. mariners to 
crew them. Access to a pool of qualified mariners from a robust, 
commercial maritime fleet is essential to maintaining sufficient 
sealift readiness capacity for contingencies. Due to the declining 
number of ships in the U.S.-flag oceangoing fleet, MARAD is concerned 
about our ability to quickly assemble an adequate number of qualified 
mariners to operate large ships for surge and sustainment sealift 
operations if an extended mobilization were to occur.
    As they always have during times of crisis in our nation's history, 
U.S. merchant mariners and other critical transportation infrastructure 
workers--including longshore workers, truckers, rail workers, and 
warehouse workers--have gone above and beyond during the COVID-19 
pandemic to ensure the effective operation of our maritime 
transportation system and our intermodal supply chains. These essential 
workers have moved record volumes of cargo often at great personal 
risk, and we remember their heroic efforts and sacrifices during the 
COVID-19 pandemic.
    Our nation's strategic sealift is hindered by a number of 
challenges, including: an aging fleet, the threat of operations in 
increasingly contested environments, the shortage of available 
mariners, and unprecedented readiness challenges brought on by the 
COVID-19 pandemic. Funding requested in the FY 2023 Budget will support 
efforts to address these challenges.
    The FY 2023 Budget requests the fully authorized level of $318 
million for the MSP, which is the heart of sustainment sealift. The MSP 
is composed of a fleet of 60 commercially viable, militarily useful 
vessels, active in international trade and available on-call to meet 
the Nation's need for sustained military sealift capacity. In return 
for a stipend, MSP operators provide the DOD with assured access to 
their ships and their global network of critical capabilities, 
including intermodal facilities used to unload and transport military 
cargoes to final destinations.
    The MSP supports and contributes to the sustainment of the merchant 
mariner base, providing employment for approximately 2,400 highly 
trained, skilled U.S. merchant mariners who may also crew the U.S. 
Government-owned surge sealift fleet when activated, as well as support 
for more than 5,000 additional shore-side maritime industry jobs. MSP 
encourages newer vessels to enter the U.S.-Flag fleet. In FY 2021, 
there were six new vessels that flagged into the U.S.-Flag fleet to 
participate in MSP.
    In addition, the newly funded and authorized TSP will begin to 
address the need for more U.S.-flag product tankers capable of loading, 
transporting, and storing on-station bulk petroleum refined products to 
meet both national economic needs and DOD contingency requirements. 
Thank you for your support for the TSP. The FY 2023 Budget for MARAD 
continues funding to maintain this critical program, and we look 
forward to the enrollment of ten U.S.-flag tankers in the TSP, and 
anticipate this would create and sustain more than 500 critical U.S. 
mariner jobs.
    MARAD maintains a fleet of Government-owned vessels in the NDRF, 
including the Ready Reserve Force (RRF) ships and training ships on 
loan to the six state maritime academies (SMAs) and the U.S. Merchant 
Marine Academy (USMMA or Academy). The RRF ships, along with a smaller 
number of Military Sealift Command vessels, provide sealift surge 
capability to deliver DOD equipment and supplies where needed during 
the initial stages of a response to a major contingency. The RRF fleet 
consists of 41 vessels that are maintained and ready for operation 
within five days of activation to transport military cargo to critical 
areas of operation. In addition to providing strategic sealift support 
for DOD, these RRF ships are relied upon to provide support services to 
emergency response personnel at impacted disaster areas during national 
emergencies, including severe weather events such as major hurricanes.
    The President's FY 2023 Budget requests $730 million from DOD 
budgetary authority for MARAD to maintain vessels in the NDRF and RRF. 
Funds will ensure MARAD's ability to maintain the fleet in a ready, 
reliable, and responsive condition to meet strategic sealift for the 
U.S. Armed Forces, and humanitarian support when called upon during 
national emergencies, as well as maintain MARAD's NDRF fleet mooring 
sites.
    Our primary concern for the RRF is the recapitalization of the 
aging current fleet. The budget request includes funding to support the 
acquisition of two used vessels. The RRF fleet has an average age of 
more than 46 years--some well past their expected duration of use--
which makes recapitalization critical. The COVID-19 pandemic has 
exacerbated difficulties in maintaining ship and even mariner 
readiness. The challenges have included widely varied local public 
health control measures, shipyard and local marine repair delays due to 
COVID-19 effects on the workforce, training shortfalls, and delays in 
the receipt of replacement equipment and even raw materials like copper 
windings for motors. While these challenges have contributed to longer 
out-of-readiness periods, our overall readiness actually increased over 
the last year thanks to modest increases in resources.
    MARAD has been actively working on recapitalization. As authorized 
in the FY 2018 National Defense Authorization Act (NDAA) and following 
an acquisition protest upheld by the Government Accountability Office, 
MARAD re-solicited and awarded the Vessel Acquisition Manager (VAM) 
contract to manage our recapitalization efforts. After a global vessel 
search, screening, and onboard inspections, two vessels were selected 
for procurement in 2021. The first vessel was delivered to MARAD in 
March, for rapid enhancement as an RRF sealift vessel and delivery of 
the second vessel is imminent. We continue to work closely with DOD, 
U.S. Transportation Command , and the Navy to support the procurement 
actions necessary for these vessels to meet the Initial Operational 
Capability as RRF ships.
    Wherever possible, the RRF program will advance recapitalization 
and seek opportunities to increase the rate of vessel replacement. As 
vessels are reassigned to MARAD from DOD components for maintenance in 
the RRF program, our recapitalization requirements will increase. The 
rate of recapitalization is limited by the number of ships we are 
currently authorized to purchase.
              U.S. Merchant Marine Education and Training
    MARAD supports mariner training programs to produce highly skilled 
U.S. Coast Guard (USCG) credentialed officers for the U.S. merchant 
marine. MARAD continues to support mariner education and training 
through the USMMA, and facilitates mariner education through the 
support we provide to the six SMAs.
    USMMA is a major recruitment source of U.S. Navy Reserve (USNR) 
Officers and also a principal source of new officers for the U.S. 
Navy's Strategic Sealift Officer Program, which maintains a cadre of 
approximately 2,000 USNR Officers with the necessary training and 
credentials to operate strategic sealift resources at times of national 
need. The skilled maritime leaders and military officers that graduate 
from USMMA help keep the nation's maritime industry competitive in the 
global marketplace and also answer the call to duty when the nation 
needs their service.
    The President's FY 2023 Budget for MARAD requests $99.7 million for 
the USMMA. Funding will support academic operating expenses for an 
estimated 1,010 midshipmen and 296 faculty and support staff, including 
continued support for measures to help prevent sexual assault and 
sexual harassment, and provides for routine and unplanned facility 
maintenance and repair needs of the Academy's aging physical plant.
    The Academy, MARAD, and DOT are committed to ensuring the safety of 
midshipmen both on campus and during their training at sea. As the 
Committee is aware, late last year, we made the difficult decision to 
pause the Merchant Marine Academy's Sea Year training aboard commercial 
vessels that midshipmen undertake to earn sea time. We did this so we 
could strengthen both the measures we require of the commercial 
operators carrying cadets and our own institutional policies, 
procedures, and training instructions to prevent sexual assault and 
sexual harassment (SASH), improve maritime safety, and support a 
culture of respect in the merchant marine.
    In response to a request from Members of Congress--including 
leaders of the Transportation and Infrastructure Committee--for a 
public plan to prevent SASH and improve safety, we implemented a new 
Superintendent's Instruction to govern Sea Year at the Merchant Marine 
Academy. We also revised the Sea Year guide to include new policies and 
procedures to improve the support we provide to midshipmen, including a 
new amnesty policy for SASH survivors, witnesses, and bystanders. We 
also provided cadets with satellite phones they can use at sea to 
contact the Academy as well as their wider support network, including 
family and friends.
    In addition, we developed a program called ``Every Mariner Builds a 
Respectful Culture,'' (EMBARC). This program enumerates policies 
intended to help prevent sexual assault and sexual harassment, to 
support survivors, and to support a culture of accountability. 
Commercial carriers must adopt these policies before cadets can embark.
    Critically, we intend for these policies not only to strengthen 
cadet safety, but to be the first steps in what must be an ongoing 
effort to strengthen safety for every mariner. That is why we have 
required these practices be implemented as part of vessels' Safety 
Management System. Doing so will reinforce a long overdue change in 
shipboard culture that will promote fair and equitable treatment of all 
mariners on board and thereby contribute to a safe working environment 
in which employers do not tolerate sexual assault and sexual 
harassment. We appreciate this Subcommittee's leadership on these 
issues and its support for our ongoing efforts to spur urgently needed 
culture change in the maritime industry.
    As of April 19, 2022, five carriers are enrolled in the EMBARC 
program. We continue to meet with carriers to answer their questions 
about EMBARC standards and have published and updated a compilation of 
``Frequently Asked Questions'' to provide additional clarity.
    We are also committed to complementing these foundational efforts 
with a comprehensive review of sexual harassment and sexual assault 
incidents experienced by cadets, both on campus, and aboard commercial 
vessels during Sea Year.
    Cadet embarkations resumed in December 2021, initially on training 
vessels and vessels operated by Military Sealift Command (MSC), the 
Navy, and the Coast Guard. We greatly appreciate the support provided 
by the MSC, the Navy, and the U.S. Coast Guard to our cadets. Thanks to 
their assistance, we currently expect that the midshipmen in the USMMA 
Class of 2023 will accrue the sea time needed to qualify for their 
licensing exams. We also appreciate the concessions that the Coast 
Guard has provided to support our midshipmen. We note that thanks to 
these concessions, should any midshipman have a sea time deficit, they 
will still be able to take their licensing exams on time and any 
remaining sea time will be provided by USMMA working in coordination 
with our partners. No student will leave USMMA without all of the sea 
time they need to graduate with their licenses.
    As the Committee knows, we have been providing Congressional staff 
with weekly updates on these issues since January 5, 2022. We continue 
to meet with carriers to answer their questions about EMBARC, and have 
published and updated a ``Frequently Asked Questions'' page to address 
issues of concern. We urge every U.S.-flagged carrier to enroll as 
quickly as possible so that we can continue to expand cadets' 
commercial embarkations.
    The FY 2023 Budget for USMMA includes $11.9 million for essential 
and recurring maintenance and repair activities, and unplanned 
emergencies on campus. An increase in funding will support the 
realignment of certain routine maintenance and repair activities and 
expenses of environmental and energy management control systems, and 
safety functions as we transition to a Campus-wide Maintenance Contract 
to more effectively and efficiently manage these annual requirements. 
Additional funding will also facilitate requisite replacement and 
rehabilitation of major operating systems (chillers, boiler plants, 
sewage plants, water mains, etc.) that have been operating beyond their 
useful lives.
    We greatly appreciate the support from Congress to ensure that the 
Academy has the resources necessary to modernize its facilities, and 
most recently approving the reprogramming of certain Academy prior-year 
balances to among other things: will support the hiring of additional 
infrastructure staffing; provides MARAD with additional oversight 
resources for the Academy's capital improvement program; and funding 
for maintenance and repair needs. MARAD and DOT will continue to work 
to identify and evaluate the long-term infrastructure needs of the 
Academy, and ensure that facilities are maintained to provide a safe 
and healthy environment for Midshipmen, faculty and staff while 
enhancing the quality of education at all times. We are also working to 
strengthen USMMA's institutional capacity to manage capital and 
maintenance programs according to professional project management 
principles.
    The FY 2023 Budget request also includes $77.7 million to provide 
support to the six SMAs in educating and training mariners to become 
future leaders in the maritime industry. This request includes funding 
for vessel management, logistics, and maintenance oversight to prepare 
the schools to receive and operate the National Security Multi-Mission 
Vessels (NSMV). The budget request would address unanticipated 
increases in steel costs for the NSMVs, support for pier improvements 
necessary for heavy weather mooring of the NSMVs, maintenance and 
repair costs to maintain the legacy school ships, and continue our 
direct support to the SMAs.
    The new NSMVs will provide a state-of-the-art platform to support 
mariner education, and also provide significant new capabilities to 
engage in national humanitarian and disaster relief missions. The 
training ships are the most important assets provided by the Federal 
Government to enable the SMAs to maintain their mariner education 
programs that prepare cadets to obtain unlimited USCG licenses.
    Congress has recognized the need to replace these training ships, 
and we thank you for supporting and appropriating funds for the 
construction of five NSMVs. MARAD has implemented the Congressional 
acquisition strategy utilizing commercial best practices through a 
contracted Vessel Construction Manager (VCM) to negotiate for, manage, 
build, deliver, and warrant these new ships. Construction is fully 
underway at Philly Shipyard on the first two ships --the EMPIRE STATE 
and the PATRIOT STATE--as designed and at a fixed price. The first NSMV 
is expected to be delivered to MARAD in early 2023, and we will 
continue to keep the Committee informed as the NSMV program progresses.
    Until the final delivery of the fifth NSMV, MARAD anticipates the 
continued need for the SMAs to share vessels in the training fleet to 
mitigate shortfalls in the current availability of berths so cadets can 
gain the requisite number of sea days to meet their licensing 
requirements. Funding requested in FY 2023 will continue to support 
this effort. The challenge of providing sea days to cadets has been 
exacerbated by the COVID-19 pandemic, which caused nearly all SMA 
training cruises to be cancelled. Utilizing funds appropriated by 
Congress to support SMA training vessel sharing, MARAD has sponsored 
training cruises to help make-up opportunities for creditable sea days.
         Other Economic and Climate Sustainability Investments
    The strong rebound in U.S. consumer demand that reached its peak in 
2021 has spurred unprecedented growth in cargo volumes and stressed the 
maritime supply chains on which the U.S. economy relies. Many in the 
industry expect volumes to remain high throughout much of calendar year 
2022.
    The MARAD Port Infrastructure Development Program request of $230 
million for FY 2023 will provide grants to improve port infrastructure 
and facilities, and to stimulate economic growth in and around ports, 
while also improving safety, addressing climate change and equity, and 
strengthening our supply chain. In addition to the FY 2023 Budget, the 
BIL provides $450 million in advance appropriations for this program in 
FY 2023. Together, this funding would provide a $680 million investment 
for port infrastructure projects. Investing in the modernization of 
ports creates well-paying union jobs for American workers, helps 
transform our deteriorating infrastructure, creates more opportunities 
in disadvantaged areas, and accelerates equitable long-term economic 
growth and resilience to strengthen our supply chains.
    The FY 2023 Budget requests $10.8 million for the America's Marine 
Highway Program and will provide grants to support the increased use, 
development, and expansion of America's navigable waterways and 
landside infrastructure to enable the movement of freight by water, 
thereby reducing highway congestion and associated emissions, as well 
as damage to the roadways. There are currently 54 Projects and 29 
Routes. The routes encompass 41 states, the District of Columbia, and 
all five U.S. territories. They serve as extensions of the supply 
chains within the surface transportation system, and enable more cost-
effective transportation options for U.S. shippers and manufacturers. 
Funding for grants will seek to focus on projects that mitigate and 
minimize the environmental impacts of our ports and along the waterways 
to reduce negative impacts on neighboring communities and port workers.
    The FY 2023 Budget requests $20 million for MARAD's Small Shipyards 
grants to support infrastructure improvements at qualified small U.S. 
shipyards to help improve their efficiency and ability to compete for 
domestic and international commercial ship construction and maintenance 
opportunities. Investing in shipbuilding supports job creation in a 
vital domestic industrial base. These grants may also support the 
acquisition of equipment that reduces climate impacts and adapts 
technologies that reduce shipyard power consumption
    Within MARAD's FY 2023 Budget request, $10 million will support the 
Maritime Environmental and Technical Assistance (META) program to 
advance low carbon alternative energies and technologies, while also 
supporting job growth in clean energy and maritime transportation 
fields. This is the only Federal government program that seeks to 
augment and preserve the American maritime industry's competitive edge 
by making maritime transportation more technologically advanced, energy 
efficient, safe, affordable, and sustainable.
    The FY 2023 Budget request for MARAD includes $3 million for the 
Maritime Guaranteed Loan Program to provide the salaries and overhead 
support to manage the loan portfolio, currently at $1.5 billion in 
outstanding loan guarantees. This program is designed to manage loans 
that help to promote economic growth and modernization of the U.S. 
shipyard industry by providing additional opportunities for vessel 
construction and modernization, including repowering, that may 
otherwise be unavailable to ship owners.
    The President's FY 2023 Budget also requests $6 million for MARAD's 
Ship Disposal Program for support staff and overhead costs to continue 
to put primary emphasis on the disposal of the worst conditioned, non-
retention vessels to mitigate environmental risks. Funding will also 
help to sustain the unique infrastructure of the U.S. ship recycling 
industry base, including supporting American jobs in economically 
depressed areas. Since 2007, MARAD has removed a total of 174 non-
retention vessels from the various fleet sites. This funding also 
supports the continued maintenance of the Nuclear Ship SAVANNAH (NSS) 
in protective storage pursuant to Nuclear Regulatory Commission (NRC) 
license requirements while decommissioning of the vessel's defueled 
nuclear reactor, components, and equipment is in progress. NSS 
decommissioning and license termination must be completed by December 
2031. MARAD is currently on track to meet this target date several 
years early.
                               Conclusion
    These programs represent MARAD's priorities supported by the 
President's Budget. We will continue to keep this Subcommittee apprised 
of the progress of our program activities and initiatives in these 
areas in the coming year.
    Thank you for the opportunity to present and discuss the 
President's Budget for MARAD. I appreciate the Subcommittee's 
continuing support for maritime programs, and I look forward to any 
questions you and the members of the Subcommittee may have.

    Mr. Carbajal. Thank you, Ms. Lessley. We will now move on 
to Member questions.
    Each Member will be recognized for 5 minutes, and I will 
start by recognizing Chairman DeFazio.
    Mr. DeFazio. Thank you. Thank you, Chairman Carbajal. And 
this would either be to the Commandant or Master Chief.
    What percent of your budget is fuel costs? Do you have a--
not an anticipated question, it just sort of--I am just sitting 
here thinking about it, and what impact that is going to have 
on your operational capabilities.
    Admiral Schultz. Yes, Chairman, I will be honest with you. 
Unless the Master Chief knows the answer, I don't know the 
percent of our budget.
    Mr. DeFazio. OK.
    Admiral Schultz. I do know under the DLA, Defense Logistics 
Agency, contract we have got about a 20-percent increase, due 
to inflation, that has recently been announced to us. So, that 
is a fairly significant lift inside our budget.
    Mr. DeFazio. OK. All right, that is good. I don't want to 
belabor it, but back to the shoreside infrastructure. Again, I 
am puzzled by the President's budget, and I have, shall we say, 
raised with you and former Commandants your role in terms of 
the Coast Guard is always going to do with what they've got. 
But sometimes it is just not enough, in my opinion. And we hear 
perhaps other Services and other agencies squawk a little bit 
more about the inadequacies of their budget. And I just can't 
reconcile the reduction to $180 million this year, and don't 
see how are you going to begin to catch up with your backlog 
with those numbers.
    Do either of you want to address that, or do you just want 
to let that drop?
    Admiral Schultz. Chairman, I would say this. I think, when 
you look into our Coast Guard budget across the top line, and 
you do a year-by-year comparison, I think there are different 
pieces.
    From the 2011 Budget Control Act, 2013 sequestration, the 
subsequent 8 years, we lost 10 percent of operations and 
support purchasing power. That was very deleterious to the 
readiness of the Coast Guard. In recent budget cycles--2019, 
2020, 2021, 2022--we have actually seen a 20-percent increase 
in O&S, and that has been very helpful, and we are very 
appreciative of that.
    The $1.65 billion, $1.6 billion that Ranking Member Gibbs 
mentioned in the PC&I budget, I overtly stated we would like to 
see $2.0 billion-plus on an annual basis for predictable, 
stable peacetime funding. That would put us on the most healthy 
trajectory course.
    There are large variations. If you have a large lift of a 
capital asset--say a Polar Security Cutter--in 1 year, that can 
move that, a half billion dollars, pretty easily.
    But I would tell you, sir, from a budgetary standpoint, we 
have started to turn a corner. And we are very appreciative of 
the Congress, both chambers, both sides of the aisle embracing 
that the Nation needs a more ready Coast Guard.
    On infrastructure, sir, I would tell you right now we are 
executing about $1.4 billion. We have never done that before. 
Twenty-two--I mentioned twenty-six extra civil engineers to 
help us get after that work. If we can sustain the momentum 
that we are starting to build in recent years, I think it puts 
us on a good trajectory.
    But I am leaving operational cutter days on the table, 
operational aviation days. There is a lot of money in the 
budgets in the last couple of years for spare parts. I think we 
have sort of got the issue on the table.
    When we roll in the IIJA Infrastructure Investment and Jobs 
Act, we roll in the moneys in the 2022 budget, it is almost 
$800 million to get after infrastructure. We are building the 
first childcare centers that we have had in 10 years. The IIJA 
has five new childcare centers plus upgrades to the unit in 
Cape Cod. We also have new MASI--Major Acquisition Systems 
Infrastructure--that is going to build childcare in Seattle and 
Charleston. We have got our first new aviation unit out in 
California, Point Mugu. That is under construction, sir.
    So, I think the story is bettering. There is a long history 
and things we drag with us. But if we can maintain the momentum 
we have started to build, sir, I think we can get after this.
    Mr. DeFazio. OK, thank you.
    Acting Administrator Lessley, I just want to again 
congratulate you on your work on the EMBARC program. Every 
mariner does deserve respect. But I noticed that some shipping 
companies have acted pretty quickly, others haven't. I am 
looking at my Safer Seas Act as a necessary adjunct. What other 
steps would you recommend so we can get more full compliance?
    Ms. Lessley. Thank you for the question, and thank you also 
for your leadership.
    We continue to have dialogue with the carriers. I 
appreciate Chairman Carbajal, also Congressman Suozzi, who have 
helped convene the carriers. I believe that they are making the 
changes they need to make to enroll and appreciate those who 
have enrolled. Obviously, we want every carrier to enroll.
    I appreciate also all of the resources that you are 
bringing to bear, work on the legislation, the Safer Seas.
    This is a long-term process. And I think what is essential 
is that we not only implement the initiatives we have underway, 
but that we look to make sure that everyone is part of this 
process, that everyone understands the expectation that every 
maritime workplace must be a place where every person is safe, 
where they have the opportunity to advance on the basis of 
their competency and skills. That is what we are aiming for.
    Within MARAD we will also be continuing to strengthen our 
work. We have a lot to do at the Merchant Marine Academy in 
terms of continuing to review our policies and procedures to 
make improvements. We are also standing up a new office of 
cadet training and safety that will help us at MARAD strengthen 
our oversight and support of the Academy in line with the 
recommendations of the National Academy of Public 
Administration report.
    Mr. DeFazio. Great. OK, I am pleased to hear that.
    Quickly, Chair Maffei, you have recently released a ruling 
against Hapag-Lloyd, which found them to be acting in violation 
of the Shipping Act. These additional resources that we are 
proposing for this year, will they help you pursue more 
investigations and handle more complaints?
    Mr. Maffei. Absolutely. That is the point of asking for 
them. As I mentioned, we are going to devote most of those to 
investigations and enforcement. I can't speak in particular to 
that ruling, because I might be sitting in a----
    Mr. DeFazio [interrupting]. OK. Now----
    Mr. Maffei [continuing]. But I will say that there are many 
investigations going on. There are a couple of additional cases 
that the FMC has brought against carriers that are still in 
process. There are some in the pipeline. But clearly, we would 
be able to do more.
    I think the ranking member mentioned that I had said at one 
point that we have not yet found collusion among the carriers. 
And while that is technically true, I do want to make it 
absolutely clear that that is not because the industry is 
holier than the pope. That is because freight rates remain 
incredibly high anyway, even with expansions of capacity. And 
also, there are certainly many, many reports of issues with the 
individual carriers that are members of these alliances.
    So, this is not an--this is an industry that, in my view, 
needs more assessment in the enforcement section, and that is 
what these resources will allow us to do. And I appreciate 
again, Mr. Chairman, you allowing me to make that point.
    Mr. DeFazio. I am pleased to hear that, and it is a breath 
of fresh air compared to under the last administration, where 
the problem was substantially ignored. So, thank you for your 
work.
    Thank you, Mr. Chair.
    Mr. Carbajal. Thank you, Mr. DeFazio. And next I will 
recognize Mr. Gibbs.
    Mr. Gibbs. Thank you, Mr. Chair.
    Admiral, I just have a couple of comments here, building on 
what Chairman DeFazio was talking about on the administration's 
budget for procurement, construction, and improvement, $1.654 
billion. We approved--what was it--$2 billion, I guess, for 
fiscal year 2022, and the Don Young Coast Guard bill we just 
authorized, $3.5 billion for fiscal year 2023, which is twice 
the request.
    My concern--I think we share up on the dais here, is how 
much would the shoreside infrastructure construction backlog 
grow from the 2023 to 2025 fiscal years, and the maintenance 
backlog?
    And then I also want to tag on to that about the 12th 
National Security Cutter. I mean, maybe I am missing something 
here, but my understanding is, on the 12th National Security 
Cutter, the construction, that pipeline is hot. And if we don't 
do it, it will go cold. And my understanding is that we can 
probably build that for $700 million. If we let it go cold, it 
is going to be over $1 billion. And then you tack on inflation.
    Do you have any more additional comments you want to make 
about this President's request in the budget? Because it seems 
to me you said $2 billion a year would be enough to sustain 
making progress. But when I look at the maintenance backlog, 
with inflation and all that, I think the Coast Guard needs to 
be more aggressive in trying to get the funds that we are 
trying to authorize and appropriate.
    Admiral Schultz. Thank you, Ranking Member Gibbs. I would 
say, sir, from a predictable stable fund level, $2 billion 
would be a good number for the Coast Guard.
    I would tell you, we obviously, as an operating agency 
inside the Department, have to work within the top line, and 
there is puts and takes. I think, when you look at the unfunded 
priority list, which Congress enabled us to start submitting 
years back, we have lifted quite a bit consistently, 
increasingly so, each of the previous budget years, and are 
picking up a lot of those projects. So, we identified those 
predominantly PC&I infrastructure-type projects, capital 
projects, and the Congress has been putting that on top of the 
President's request. So, I think we are making some progress 
there.
    You asked about the National Security Cutter, 12th National 
Security Cutter, sir. I have, I think, consistently, for 4 
years, said that National Security Cutters are remarkably 
capable global deployers. The program of record was eight 
ships. The Congress has supported the procurement of three 
additional ships. The 10th and 11th ships are under 
construction. We will take acceptance of number 10 in 2023.
    We have got about a $208 million shortfall budgetarily to 
bring 10 and 11 into service. The 2023 budget bites down about 
a little less than one-third of that. So, there is still going 
to be about $150 million outstanding bill. Were the Congress to 
lift a 12th National Security Cutter on top of the President's 
budget, sir, the Coast Guard would not push back on that. There 
are still costs----
    Mr. Gibbs [interrupting]. But I think maybe--I think the 
Coast Guard needs to be a little bit more aggressive in 
requesting it from the appropriators.
    Admiral Schultz. Well, sir, it is hard for me to request 
that when my top priorities, from an acquisition standpoint, 
are the Offshore Patrol Cutter and the Polar Security Cutter. 
So, this gets into the top-line maneuver space, sir.
    But I would tell you, National Security Cutters, as you 
defined them, are incredibly capable. We are three beyond the 
program of record.
    Mr. Gibbs. OK.
    Admiral Schultz. It would displace something within our 
current plan, sir.
    Mr. Gibbs. All right. I've got to move on here.
    Admiral Schultz. Yes, sir.
    Mr. Gibbs. I want to quickly--I've got a text here from the 
Capitol Police on 6:33 p.m. on April 20th about aircraft 
intrusion to evacuate this complex, I guess, as the Army Golden 
Knights were doing a jump for the Nationals baseball game.
    My question is, what happened here? Did we have a 
communications breakdown? Why didn't the Capitol Police know 
about it? Because anything in this zone, in this area, is under 
the Coast Guard, because I have ridden in the Coast Guard 
choppers. Can you just briefly tell me what happened? Because I 
am a little concerned.
    Admiral Schultz. Congressman, what I know of that, it was--
we do have a mission here, the National Capital Region Air 
Defense Mission. We have MH-65 Dolphin helicopters that stand a 
7/24/365 ready watch on very short alert.
    My understanding was the Golden Knights did not notify the 
FAA. The operation occurred. It created some excitement, once 
they figured out what was going on. So, why the notification 
did not occur, sir, I do not know on that. But we do have that 
presence here.
    Mr. Gibbs. Yes, I----
    Admiral Schultz [interrupting]. A little bit different than 
what we generally train for.
    Mr. Gibbs. Yes, I just want--I am just raising it. I just 
raised it, because communications, as you know, are--it is very 
important.
    Admiral Schultz. It is the grease that makes the wheels 
turn, sir.
    Mr. Gibbs. Yes. And obviously, there was a communication 
breakdown there. And fortunately, it wasn't--there wasn't a 
national security issue. But----
    Admiral Schultz [interrupting]. I think the notification, 
if I understand it, should have probably went to FAA, because 
it involved Capital Region airspace, sir.
    Mr. Gibbs. Before time runs out too much----
    Admiral Schultz [interrupting]. But we were not notified--
--
    Mr. Gibbs [continuing]. Here, I want to--help me 
understand. We had the Coast Guard Atlantic Coast Port Access 
Route Study that Congress required in 2016. We have been 
waiting on the Coast Guard to complete the rulemaking process 
for recommended set-asides for navigation in the Atlantic Coast 
Port Access Route Study and on top of that, the Department of 
the Interior intends to begin leasing areas in the Gulf of 
Mexico for a wind energy project in the near future. We also 
have the Arctic and the West Coast Port Route Access Studies.
    Maybe I am wrong, but it doesn't seem to me that this has 
been a top priority for the Coast Guard to develop these lanes, 
shipping lanes, with the wind projects, kind of deferring or--
by talking to the Department of the Interior. Can you explain 
what is going on here?
    Admiral Schultz. Absolutely. I would tell you we take our 
waterway safety management security roles very seriously, sir.
    The ACPARS, Atlantic Coastal Waterways Port Access Route 
Study that you are talking about, we will issue the final rule 
this calendar year.
    Mr. Gibbs. OK.
    Admiral Schultz. We will issue it this calendar year. It 
has been longer than anyone desires. That is fair criticism. I 
own that. But we are working with BOEM, the Bureau of Ocean 
Energy Management. We are working with other Federal 
stakeholders. We have worked on the spacing of wind.
    We currently have, I think, eight towers off of Rhode 
Island. There are two off Virginia Beach. There is permitting 
for up to 1,700. There are multiple Captain of the Port Zones 
and regions here. But the frustration is fair, the criticism. 
But we will have a final rule this calendar----
    Mr. Gibbs [interrupting]. On the Gulf of Mexico, what is 
the status on that?
    Admiral Schultz. The Gulf of Mexico, sir, it is a work in 
progress, again. But we understand the urgency. But I assure 
you that we are not ceding ground on our safety 
responsibilities established by law.
    Mr. Gibbs. I am just encouraging you to make sure the Coast 
Guard isn't ceding ground, because I think that is----
    Admiral Schultz [interrupting]. Yes, we are not--that is 
not our intention----
    Mr. Gibbs [interrupting]. I yield back at this time. Thank 
you.
    Mr. Carbajal. Thank you, Mr. Gibbs. I will now recognize 
myself.
    Ms. Lessley, 2 weeks ago, I was made aware of a report 
conducted by SUNY Maritime, which was completed in January. 
Among other things, the report discussed deficiencies 
associated with diversity, sexual assault, and sexual 
harassment.
    While every institution should be looking inward on this 
issue, the circumstances surrounding this report are troubling. 
In its publicly released versions, SUNY Maritime redacted 
seemingly important portions of the report associated with 
sexual harassment, sexual assault, and racial harassment that 
certainly went beyond shielding names for privacy. The Academy 
even refuses to share the unredacted version with me, as well.
    The report states that the committee has found that, across 
the board, there are issues regarding how racial and sexual 
harassment or claims of sexual assault are handled. I can only 
imagine what is in the redacted portions. The SMAs received 
$1.6 billion from 2018 to 2022, and it is my understanding that 
they are asking for significant help in recapitalizing some of 
their shoreside infrastructure.
    Ms. Lessley, is it appropriate that they operate outside 
the reach of any meaningful Federal Government oversight, while 
still continuing to receive Federal funds?
    Ms. Lessley. Thank you for the question. So, I will give 
you a multipart answer.
    Obviously, there are, for example, Title IX and other 
Federal requirements that apply, and we are also looking at our 
policies and procedures, including opportunities to strengthen 
Title VI oversight.
    That said, I think that there are many novel issues that 
are being raised. Particularly of concern to me is, for 
example, custodial arrangements for the NSMV, which are meant 
to be dual-purposed. There are novel questions that are not 
necessarily anticipated in statute. Our regs are, to the extent 
that we have them, are outdated. And there are also limits to 
our resources. And as I mentioned, as you know, we have a 
tremendous amount of work to do at the Merchant Marine Academy.
    That said, our North Star is safety, creating safety for 
everyone at sea. As we look at our policies and procedures, as 
we look at these opportunities, I would like to continue the 
dialogue with you, with your staff, and obviously with Congress 
to ensure that we are meeting Congress' expectations, and 
certainly, as we discuss these issues that are not necessarily 
anticipated in statute.
    Mr. Carbajal. Thank you. And I would be interested in 
knowing what legislative solutions might exist, as well.
    So, Admiral Schultz, in March's field hearing on small 
passenger vessel safety, we discussed the severe shortage of 
maritime safety inspectors. The Coast Guard itself estimates it 
has only two-thirds of the inspectors it needs to conduct 
timely vessel inspections. Can you please explain what impact 
the President's requested increase of 38 FTEs and $11.2 
million, or 3.8 percent, would have on the current staffing 
shortfall?
    Admiral Schultz. Chairman, thanks for the question, sir. 
So, the proposed budget has $11 million-plus, 73 FTPs is my 
account. Those are marine inspectors, investigators, 
environmental specialists. They build on previous budget 
cycles' numbers. I think that rolls up to be a couple of 
hundred additional marine inspectors.
    We're rolling out and implementing now the Marine Inspector 
Performance Support Architecture and the modernized learning 
environments, so, we are very much focused on the increasing 
technological sophistication of the maritime domain.
    I put out a strategy, the maritime commerce strategy, back 
in the early part of my tenure in 2018, that fall, and we are 
actioning that. We need to build the workforce with the 
expertise to deal with the increasingly complex, 
technologically sophisticated landscape. And so, this is 
another investment towards that end.
    Mr. Carbajal. Thank you.
    Ms. Lessley, in 2021, the United Nations issued a 
declaration on zero-emission shipping by 2050. The 
International Maritime Organization, of which the United States 
is a member, similarly issued an ambitious greenhouse gas 
reduction strategy. What role do you foresee MARAD programs 
such as META playing in making the United States a global 
leader in maritime decarbonization?
    Ms. Lessley. Thank you for the question. Obviously, it is a 
very important program.
    The President's budget for 2023 requests $10 million for 
the program, which would be an increase over the 2022 enacted 
level. And that would be consistent with the administration's 
priorities to support decarbonization, the development of 
alternative fuels, and future energy technologies to improve 
energy efficiency improvements. We think we have a unique 
opportunity with our domestic fleet to pioneer these new 
technologies and emission reduction efforts, which can serve as 
a proof of concept for the oceangoing fleet, so, very excited 
about this program and about the President's support in his 
request.
    Mr. Carbajal. Thank you. Now I will recognize 
Representative Garret Graves.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman. And I 
want to thank both of you for your service. And I hope you all 
get some great fishing in during retirement.
    Commandant, I wanted to ask you. As part of the Don Young 
Coast Guard Authorization Act, Congressman Garamendi and I 
offered an amendment on manning, and we added section 518 to 
the bill that effectively treats foreign vessels operating in 
the offshore working on energy-type projects the same way as 
domestic vessels would be treated. Things like ensuring you are 
proving ownership, things like making sure that your crew 
matches the flag of the vessel, making sure that we actually 
enforce the terms of the work visas that are granted to these 
foreign workers working in our near-shore environments.
    I know that you have been a big advocate of our national 
security, marine security, maritime security. Do you think it 
is fair to require foreign vessels to operate under rules 
similar to those of domestic vessels?
    Admiral Schultz. Congressman, I think there is an ongoing 
dialogue with you in terms of the U.S. crew. There is some 
waiver authority for us on that. I think we look forward to 
continuing to work and have those conversations, sir, on that 
amendment here, in terms of how we implement in terms of 
consistency across other foreign crewing type conversations.
    Mr. Graves of Louisiana. Commandant, this amendment, if I 
remember right, I think it passed 58 or 59 to 2 in this 
committee, strong bipartisan support for the amendment. I would 
urge you to think for just a minute about having a level 
playing field, and not actually prioritizing foreign vessels 
and foreign crews over those of the United States.
    And I don't think I have to remind anybody here what 
happens when we compromise our energy security in the United 
States.
    Admiral Schultz. Yes, sir.
    Mr. Graves of Louisiana. Based on, of course, what is going 
on in the Ukraine----
    Admiral Schultz [interrupting]. Sir, I think I have been a 
pretty consistent voice on Jones Act in support, and support 
for the U.S. merchant fleet and American mariners, sir. I 
think, like I said, I just--I think that conversation is--we 
are working--your point is taken, sir. I am not disagreeing 
with that. I think it is a--just a little bit back and forth 
here, with drafting assistance, those kind of conversations.
    Mr. Graves of Louisiana. And I am happy to get technical 
assistance or drafting assistance from the Coast Guard on this. 
I do want to reiterate that I think, just from a marine domain 
awareness perspective, it is important that we are actually 
enforcing the conditions of these work visas, and that we know 
who is in our waters, making sure that they are playing by fair 
rules, and we are not giving foreign vessels and workers a 
competitive advantage over American vessels----
    Admiral Schultz [interposing]. Yes, sir.
    Mr. Graves of Louisiana [continuing]. And American 
workforce.
    And as you mentioned, Commandant, Admiral, I know that you 
are a big Jones Act supporter, and I think that this is 
consistent with the objectives of the Jones Act.
    Admiral Schultz. Yes, sir.
    Mr. Graves of Louisiana. So, I look forward to working with 
you on that.
    The second thing I wanted to ask you--and I know you have 
covered this in your opening--on an icebreaker. And you and I 
have had numerous discussions over the need for the United 
States to increase its capability to operate in polar 
environments. We have both looked at the chart and the number 
of vessels that other countries operating in the Arctic have in 
terms of heavy capabilities, as compared to the United States. 
I know that you all have been cannibalizing the Polar Sea and 
Polar Star to try to use duct tape and bubble gum to do what 
you can. And I appreciate that the budget request includes, I 
believe, $125 million to give you capabilities in the short 
term for a commercially available vessel.
    I think it requires a purchase to give you operational 
capabilities, but I wanted to ask you if you thought that a 
leasing capability or a leasing option would make sense for the 
Coast Guard in terms of more quickly trying to achieve that 
capability operating in polar environments.
    Admiral Schultz. Yes, Congressman. We have had some 
interesting conversations over the previous administration, the 
current administration. The conversations with my predecessors 
was leasing in lieu of procuring the Polar Security Cutters, 
heavy breakers we need. Once we sort of got the card down on 
the program of record, we had a chance to revisit that.
    I believe, after pretty diligent homework and study on 
this, that a procurement option--because we are going to need--
I have talked about 6-3-1, a minimum of 6 breakers, 3 are 
heavy, 3 beyond that. I think that conversation has really 
evolved with some additional--based on the high latitude study. 
We probably need four to six heavy breakers and three to five 
medium breakers, what we are going to call Arctic Security 
Cutters.
    This commercial available option could feed that for the 
good part of the next 25 years. So, the ability to go out with 
$125 million, another $25 million made available in the 2023 
budget for crewing and operating that, I think we could bring 
that ship--once we work--we need a little help on how we--some 
legislative help on how we actually go execute that. But sir, I 
think that brings in a ship. So, it is a bridging strategy.
    Polar Security Cutter contract date is May 25. Obviously, 
we haven't started cutting steel on that. This allows us to 
build a fleet of icebreaker sailors, allows us to gap between 
that ship, that new polar security, about 27 before it is 
operational. And it helps us to find the requirements for those 
medium breakers down the road, sir.
    Mr. Graves of Louisiana. And Commandant, I am out of time.
    Admiral Schultz. I got you.
    Mr. Graves of Louisiana. But I just want to make sure, 
including a leasing strategy?
    Admiral Schultz. Sir, I think the leasing--just as we did 
the cost analysis, it would cost us more to lease that vessel 
for some specified period of time than to procure that and have 
it in the inventory as one of these Arctic Security Cutters 
henceforth.
    Mr. Graves of Louisiana. I would love to be able to 
continue that conversation with you.
    Thank you, Mr. Chairman.
    Admiral Schultz. Thank you.
    Mr. Carbajal. Thank you, Mr. Graves. Next we will go to 
Representative Larsen.
    Mr. Larsen of Washington. Yes, thank you, Mr. Chair.
    Administrator Lessley, on the Tanker Security Program, that 
is a program that is under the jurisdiction of the House 
Committee on Armed Services. But MARAD implements it, is that 
correct?
    Ms. Lessley. That is correct.
    Mr. Larsen of Washington. Yes. Could you discuss how the 
TSP, Tanker Security Program, how you are thinking about it 
with regards to the announced closure of the Red Hill facility 
in Hawaii, where the Defense Department has said we are going 
to distribute fuel distribution throughout the Indo-Pacific? 
Have you guys thought through that, what that vision looks 
like?
    Ms. Lessley. So, a few weeks ago, I had the opportunity to 
testify in front of the Committee on Armed Services with 
General Van Ovost, the TRANSCOM commander, and would emphasize 
that General Van Ovost made clear that the DoD are looking at 
options and things like long-term charters for tankers. And I 
would not opine on that. It is really a DoD.
    But we are excited about the TSP. And to your point, it 
would obviously provide access to much-needed tankers for our 
DoD. We are in the process, as I testified there, of developing 
a rule, and hope to have that in place as quickly as possible 
so that we could ideally have enrollments begin by the end of 
the calendar year.
    And we recognize the urgency of this program, getting it up 
and getting it going correctly.
    Mr. Larsen of Washington. OK, that is fine. Can I just 
shift to the Small Shipyards Grant? Where are you in the fiscal 
year 2022 process on small shipyards?
    Ms. Lessley. Thank you so much for that question. So, we 
issued our notice of funding opportunity earlier this year. 
Grant applications are due on May 16th, and we have 
approximately $20 million to award. And as we talked last time, 
in the last round for 2021, we issued 31 Small Shipyards Grants 
in 15 States.
    So, the NOFO is out, it is open. We encourage all small 
shipyards to apply.
    Mr. Larsen of Washington. That is great, thanks. Yes, it is 
used a lot and very well in Washington State.
    Mr. Maffei, this morning I met with some folks from ILWU, 
the longshore union on the west coast. And the way they 
described the potential reopening of Shanghai ports because of 
the shutdown is a tsunami of containers and goods coming back 
in the United States. So, a little bit of relief on the west 
coast right now, because of the unfortunate circumstance of 
COVID in China.
    Do you anticipate that same picture, that we are going to 
have backups again and use of anchorages?
    And then what would FMC's response be to that?
    Mr. Maffei. I do anticipate that. I mean, the FMC will 
continue to be vigilant in terms of making sure that nobody is 
violating the Shipping Act. There are not a whole lot of levers 
we have to reduce congestion in itself, other than to make sure 
that we're continuing to do the audits that we are doing to 
make sure that best practices are followed amongst all the 
carriers and certain MTOs.
    We have been meeting with the WCMTOA, the organization of 
the MTOs that manages PierPASS, to help facilitate coming up 
with additional ideas to help with congestion. But congestion 
is the biggest challenge, particularly that exporters face.
    So, the irony is, we are going to get this wave of imports, 
and it is going to end up hurting exports. And that is of 
extreme concern.
    I will only say that the respites that we have had are not 
due to any lessening of the overall problems or situation, but 
simply the market cyclical forces. And the same thing will 
happen with this. We will get, unfortunately, a fair amount of 
a wave from Shanghai, and that will eventually dissipate in the 
same way, but not because any problem has been fundamentally 
solved.
    Mr. Larsen of Washington. Yes, thank you.
    Admiral Schultz, I have a lot of other questions. I had a 
great tour of Coast Guard Seattle last week, and Admiral 
McAllister was up from Pacific Command. So, I will save you the 
questions about Seattle and the Protecting Our Marine Mammals 
Act, and all these--I am getting those answered back home. So, 
I appreciate that.
    But, having said that, the polar security program, as we 
have discussed a little bit, there was $800 million in funds in 
the budget reconciliation package, which hasn't passed. So, how 
is the lack of reconciliation funding forced you all to change 
plans on the Polar Security Cutter program?
    Admiral Schultz. Well, Congressman, the Polar Security 
Cutter program, I think, is on a good trajectory. The 2023 
budget has about $167 million. That gets after program 
management, long lead-time materials, 2022 buys some of the 
long lead-time materials on the Caterpillar key engines. The 
other pieces we were able to roll into 2023.
    We should be maintaining positive momentum on the PSC 
program of record of three ships. I think there is a 
conversation beyond that, as I indicated to Mr. Graves, 
possibly a hot production on more ships. But we are still 
getting ready to cut steel, hopefully before this calendar 
year, on the first Polar Security Cutter.
    Mr. Larsen of Washington. OK, thank you, that is great. 
Thank you.
    And I yield back.
    Mr. Carbajal. Thank you, Mr. Larsen. Next we will go to 
Representative Malliotakis.
    Ms. Malliotakis. Thank you, Mr. Chairman. And thank you to 
the witnesses for being here today.
    My district on Staten Island, we have Coast Guard Sector 
New York, which represents the largest operational field 
command on the east coast. In October of last year I had the 
opportunity to visit with the leadership of our U.S. Coast 
Guard Sector New York, and one of the main issues that we spoke 
about was the need for housing upgrades for the men and women 
stationed there.
    Certainly, housing is a big part of being able to attract 
and retain Coasties. And as you know, adequate housing--and it 
is also important that we give our Coasties and their families 
the quality of life that they deserve, and that the homes they 
come back to at the end of the day are ones that they are proud 
of.
    Housing upgrades at Fort Wadsworth Base have been long 
overdue. As you know, there was a fire a couple of years ago. 
There was $40 million put aside for phase 1 to rehab those 
homes. And I was also pleased to work to push for another $5 
million from the Infrastructure Investment and Jobs Act for 
phase 2 to upgrade 154 legacy housing units.
    I am also encouraged to see that there is $10 million in 
funding for phase 3 that is included in the U.S. Coast Guard 
unfunded priority list for fiscal year 2023.
    Admiral, I know that you also visited our station in 
September, and saw the housing for yourself. I would love a 
comment from you on the status of the upgrades, and what is the 
timeline for the project's overall completion.
    Admiral Schultz. Well, Congresswoman, thank you for your 
advocacy of the Coast Guard writ large, and our men and women 
in New York, and Fort Wadsworth housing.
    As you mentioned, $40 million in the 2021 budget that gets 
after the fire-destroyed units there, additional moneys in 
2022, $5 million to continue efforts. We were able to touch the 
upgrades of the 154 legacy units. We were able to do safety 
assessments of their condition and make upgrades to all those 
units. I think that is critically important.
    The environmental due diligence contract--excuse me on that 
one--the Staten Island units, I think it is the phase 2, just 
gets after the continued body of work there, ma'am.
    So, in terms of the actual timeline, I don't have the dates 
in front of me about when you would see the actual timeline for 
the work there. But the good news is, we have secured the 
funding. It allows us to do the detailed planning. And with the 
multiyear commitment, I think it sends a very strong signal to 
our men and women that live in a very high-cost area, but have 
a high-paced and high demand of Coast Guard services there, 
this is all part of the equation that Master Chief spoke to 
about recruiting and retaining the men and women with the right 
skills to do the work of the Nation.
    Ms. Malliotakis. Well, thank you. And as you said, for all 
those reasons, time is of the essence to make sure that we get 
this construction going. And I look forward--if you can look 
offline and get back to me on some type of a more concrete 
timeline, I very much look forward to being with you at the 
groundbreakings and the ribbon cuttings, because this is, as 
you said, a really important part of retaining Coasties. It is 
something that the commander made very clear, that New York 
City is a very expensive place to live, and so, providing this 
housing at the base is very, very important.
    Is there any other issue that I should be looking at as 
relates to New York Coast Guard Station? Any way that I can 
help advocate to help my Coasties do their job better?
    Admiral Schultz. Congresswoman, we will get back to you on 
more specificity on the timeline. Let me just defer to the 
Master Chief if he has anything on your question about the 
people up in Sector New York.
    Anything on that, Jason?
    Master Chief Vanderhaden. So, the way we--just supporting 
with the cost of living allowances, and paying attention to the 
increased cost of living, basically just doing your job there, 
we need to pay attention to that and be able to assess that, 
and accurately compensate our people on a timely basis so that 
as rents go up, as groceries--as things become more challenging 
and more expensive, that we definitely need to be able to make 
sure that people have the same quality of life year after year 
without--some help with that. And I can get back with you on 
what that would look like.
    Ms. Malliotakis. OK. I look forward to that. Thank you very 
much.
    I yield back.
    Mr. Carbajal. Thank you, Representative Malliotakis. I now 
recognize the distinguished gentleman from California, 
Representative Lowenthal.
    Mr. Lowenthal. Thank you. Thank you, Chairman. I found this 
to be a very interesting hearing, and I have learned a lot. And 
I am going to start with Chairman Maffei.
    Thank you for being here with us today. Thank you for your 
testimony. I especially liked, if I was correct, your 
presenting to us that the improvements that you have kind of 
led on the FMC have been noticed by people who interact with 
the FMC, and that people are getting back to you in a very 
positive way. That is always nice to hear.
    And obviously, when we talked about supply chain issues, 
they are under stress at every level. And no single agency, as 
you pointed out, can end the impact of the pandemic alone. But 
I want to underscore something, and I wanted to ask you if what 
I am going to share with you is what you are hearing also.
    There is a small importer in my district. He imports, 
basically, olives from Europe. And he brings them into the 
Ports of L.A. and Long Beach. And he said that his container 
fees, 40-foot containers, had increased from less than $4,000--
I think it was $3,940--from January of 2020 to over $12,000 in 
March of this year. And in April it had gone up to $14,000. I 
don't need to tell you how that increase can hurt businesses 
and lead to tremendous increases in inflation, and consumers 
all over the country--I am wondering, are those the same 
numbers you are hearing about importing, and how [inaudible]? 
That is one question.
    The second question is, you have provided an important 
update on the FMC's activities to make sure that people are 
playing by the rules. And I appreciate all your work. But I 
want to make sure you have the resources to make sure that 
these companies are playing by the rules, and that they aren't 
profiting from unfair fees. Can you speak to the importance of 
more resources and to the impact of your February MOU with the 
Department of Justice?
    Mr. Maffei. Thank you for the questions, Mr. Lowenthal. I 
will try to answer them as expeditiously as I can.
    There is not one price for ocean transportation. There are 
spot rates, contract rates, tariff rates. That said, though, 
what you are saying does ring true. And the unfortunate thing 
is that the size of a shipper does make a huge difference 
because of their market power. If you are a big box importer, 
one of those big stores or online companies that we all know so 
well, you can guarantee hundreds of thousands of containers 
sometimes to get a much lower rate. So, their rates have gone 
up, those big cargo importers, but nowhere near as much as the 
medium-size and small shipper, because of the differing degrees 
of market power. So, unfortunately, your small importer is 
probably paying that much more. It is not an aberration at all.
    What we have tried to do at the FMC is, even though we are 
not allowed to regulate the rate itself, we are trying to make 
sure that there is no additional fees that are hidden 
someplace, like a congestion surcharge. We are trying to make 
sure that your constituent is not being charged unfair 
detention and demurrage, which they cannot control. And that is 
what we have focused our efforts at under our current 
authority.
    In terms of other things that we are doing, first of all, I 
appreciate that we are getting some compliments. But that 
doesn't mean we are near doing as much as we need to do. We are 
clearly ramping up as quickly as we can, given the situation.
    The memorandum of understanding with the Justice Department 
is helpful. We mostly exchange expertise. We both do 
independent investigations. The Justice Department is currently 
investigating carrier alliances, as well as we do. And we do 
exchange information, but we keep those investigations 
separate. Those sorts of cooperations have been beneficial in 
the past, and we will continue them.
    And in terms of our overall request, I mean, obviously, I 
don't take lightly the fact that, in this current budget 
environment, we are asking for about 5 percent more. But it is 
essential, given the number of cases. With this kind of--this 
demand surge, there have been very high rates affecting all 
sorts of shippers, and then the congestion makes everything 
much worse.
    So, I think I have addressed all of your questions. But if 
I haven't sufficiently, please let me know.
    Mr. Lowenthal. Thank you.
    Mr. Chairman, how much time do I have left?
    Mr. Carbajal. You are out of time, Mr. Lowenthal.
    Mr. Lowenthal. Well, that is too bad. I had great questions 
to ask.
    Mr. Carbajal. We are going to have a second round, so, hold 
your questions. We will come back to you shortly. Thank you, 
Mr. Lowenthal.
    With that we will move on to Representative Van Drew.
    Dr. Van Drew. Thank you, Chairman, and thank you for 
holding today's hearings on the Coast Guard's 2023 budget.
    As we know, we have our great Commandant, Karl Schultz, 
here, and our Master Chief Petty Officer Vanderhaden, who 
equally does a great job.
    Admiral Schultz, thank you for the decades of dedicated 
service to the United States of America. Your extraordinary 
tenure as a Commandant has built a stronger United States Coast 
Guard. The contributions you have made will endure long after 
your retirement. I want to thank you for attending my 
community's Coast Guard ball last week. It was an honor hosting 
you with such a momentous occasion for the Cape May County's 
Coast Guard community. Our friendships will only become 
stronger as the Coast Guard invests in the Training Center Cape 
May.
    In the Don Young Coast Guard Authorization Act of 2022, 
this committee authorized $120 million for phases 1 and 2 of 
the U.S. Coast Guard's Training Center Cape May barracks 
recapitalization. Congress then appropriated $55 million 
towards phase 1 in a bipartisan and in a bicameral manner. 
Yesterday, the Coast Guard provided an unfunded priority list 
to Congress.
    The list includes a request for $60 million to fund phase 2 
of the barracks project. Funding phase 2 in this year's 
appropriations legislation is a national security imperative. 
Global threats, such as Chinese aggression in the South China 
Sea and Russia's expansion into the Arctic have greatly 
increased the importance of the Coast Guard to America's 
national security. Only the Coast Guard has the tools to 
encounter China and Russia's gray zone strategy.
    To address this global challenge, the Coast Guard needs 
more and better prepared personnel. Eighty percent of all Coast 
Guard personnel comes through the training center in my 
district in Cape May. The expansion of the Training Center Cape 
May is the expansion of the Coast Guard itself, and we must 
expand the Coast Guard to meet the national security challenges 
of our 21st century.
    The training center project will also provide more 
opportunities for women to serve. Just as Admiral Linda Fagan 
has been nominated to be the new Commandant, we should provide 
women the opportunity to serve their country in this, our Coast 
Guard. The training center current infrastructure can only 
accommodate 30 percent female recruits. The proposed 
recapitalization will accommodate 50 percent female recruits. 
The barracks recapitalization must move forward to expand 
opportunities for women in the Coast Guard, and I look forward 
to working with Admiral Fagan to fully deliver on the Training 
Center Cape May project and give more women the chance to serve 
their country.
    The Training Center Cape May barracks recapitalization 
project is crucial to the future of the Coast Guard and the 
United States. We have got to get this project done. When the 
training center was last being renovated, a funding lapse 
resulted in an incomplete project. This cannot happen again. We 
must ensure this project is fully funded and fully delivered.
    I have proposed with you a framework to deliver this 
critical project. The first step is for Congress to fund the 
Coast Guard's year 2023 request of $60 million for the already 
authorized phase 2 of the barracks projects. The next phase is 
to authorize phase 3 and 4 in the 2024 Coast Guard 
authorization legislation. Congress should then fund phase 3 
and 4 in fiscal years 2024 and 2025. This framework ensures 
that the barracks project is fully funded by the start of phase 
1 and delivers the full project by 2032.
    This proposed approach was evaluated by the Coast Guard 
engineering and budgetary officials, as you know, as 
operationally, financially, and legally feasible. This plan 
will ensure that this project is fully delivered, and I submit 
to the record a framework timeline for this proposal. My 
framework to implement a prioritized timeline for the U.S. 
Coast Guard Training Center Cape May barracks project is 
feasible, responsible, and imperative to the national security 
of the United States of America in the 21st century.
    Admiral Schultz, thank you again for your leadership and 
your integral role in delivering phase 1 of the training center 
barracks project. Could you please speak on what the training 
center barracks means to the Coast Guard and to the United 
States of America?
    And secondly, I yield the remainder of my time for you to 
speak freely on your time of your great service as Commandant 
of the United States Coast Guard.
    Admiral Schultz. Congressman, let me just start by saying--
--
    Mr. Carbajal [interrupting]. Excuse me.
    Admiral Schultz. I am sorry.
    Mr. Carbajal. Mr. Van Drew, you are out of time. I will let 
the witness answer your question briefly, and then we will move 
on.
    Admiral Schultz. Yes, sir. I would just say thank you for 
the support of the training center. The unfunded priority list 
for 2023 that just reached the Hill here, it includes $60 
million for phase 2.
    As we sequence the conversations earlier about working 
within the top lines of a Federal agency, it maintains my 
commitment. I speak for my successor that we are committed to 
building out all phases of Cape May. There is $10 million that 
came in the IIJA that kind of keep moving the ball forward.
    And to your last question, I will speak for myself and the 
Master Chief. It has been the privilege of our lifetimes to 
serve in these leadership positions. And we appreciate the 
support of this committee as we try to make the Coast Guard a 
little bit better each and every day. Thank you.
    Dr. Van Drew. Thank you for your service.
    Mr. Carbajal. Thank you, Mr. Van Drew. We'll now move on to 
the former chairman of this subcommittee, Representative 
Maloney.
    Mr. Sean Patrick Maloney of New York. The highlight of my 
career, Mr. Chairman, and it is great to see the tradition of 
excellent leadership of this subcommittee maintained and 
expanded upon by your own distinguished leadership.
    I am tempted to yield more time to expand on your great 
leadership, Admiral Schultz, but I actually do have a question 
for you. It is great to see you again, sir.
    It is great to see you, Master Chief. It has been terrific 
working with you all. Thank you for treating me so well and the 
work you do when I chaired the subcommittee.
    But I am curious about a couple of things. And I will just 
note in passing my ongoing belief that, for the 13 billion 
bucks you guys were requesting, we got a hell of a lot for the 
taxpayers' dollars to the 11 statutory missions you perform. It 
doesn't mean we don't have challenges. It doesn't mean we don't 
have things to work on. But bang for the buck, I have always 
been incredibly impressed by all of you and, of course, the 
Coasties who do those missions. So, thank you for that.
    And it is great to see my former colleague, Dan Maffei, 
here. It is nice to know there is life after Congress, sir. You 
give us all hope. Say hi to your beautiful family for me, and 
thank you for your service to New York.
    So, look, I just had a couple of questions. As you know, a 
real priority of mine was the ban on oil barge anchorages in 
the Hudson River between Kingston and Yonkers. Obviously, that 
is Federal law. Now, that is not my question, but there was a 
required assessment that went along with that study about the 
effects of that. And I hope we can look forward to that.
    And in addition to that, I am curious about the progress on 
a second study that was required as well, under the 2021 
authorization, which was a plan to analyze the effectiveness of 
what are called wing-in-ground craft, which I think you are 
familiar with, which are the really remarkable craft that 
attempt to use new technology to sort of operate above the 
surface of the water on dynamic air suspension and can attain 
speeds in excess of 100 miles an hour.
    I know for your missions in the East Pacific, for example, 
getting at those distances would be very helpful, but I am sure 
for other missions, as well.
    Could you comment for me, if you could, on the progress of 
those two studies, the Hudson River anchorages and the wing-in-
ground craft?
    Admiral Schultz. Congressman, to be frank, sir, I need to 
circle back with you on both of those. The wing over water that 
you talked about----
    Mr. Sean Patrick Maloney of New York [interposing]. Yes.
    Admiral Schultz [continuing]. I have not received a recent 
update.
    I will tell you, the increasingly complex nature of the 
waterway, recreational boating up 15 percent. I mentioned 
earlier, before you came in, about 1,700 permitted wind towers 
off the eastern coast. There is a question about the ACPARS 
route study. There are a lot of moving things in the waterway. 
So, we need to--autonomous vessels are right around the corner. 
So, we are defining, sort of, the criteria by which we judge 
the ability for these craft to operate safely.
    But in terms of that type of specific craft, sir, on the 
river, I would take those both for homework to get back to you 
here----
    Mr. Sean Patrick Maloney of New York [interposing]. Right.
    Admiral Schultz [continuing]. This week.
    Mr. Sean Patrick Maloney of New York. Just to be clear, 
separate studies----
    Admiral Schultz [interposing]. Yes, sir.
    Mr. Sean Patrick Maloney of New York [continuing]. 
Reflecting the anchorages on the river, but the craft in 
general.
    So, I am happy to take your commitment to get back to us--
--
    Admiral Schultz [interposing]. Yes, sir.
    Mr. Sean Patrick Maloney of New York [continuing]. On the 
completion of those, I appreciate that.
    Admiral Schultz. And thanks for your committee leadership, 
and your support of the men and women of the Coast Guard, sir.
    Mr. Sean Patrick Maloney of New York. Well, and thank you 
for your forbearance with the current leadership. We are doing 
what we can.
    And I would like to yield my remaining time to Mr. Larsen, 
who I believe had an additional question. But thank you all.
    Admiral Schultz. Thanks, sir. Good to see you.
    Mr. Larsen of Washington. Yes, Admiral Schultz, the other 
question I had was--I have two.
    But quickly, on OPC, the OPC cutters and the timing, is the 
delivery still on schedule for those or not?
    Admiral Schultz. Congressman, yes, sir. We are on schedule. 
Earlier this week we awarded a contract for the construction of 
OPC number 4. This quarter--and I say fiscal year quarter, so 
that is April, May, June--we should award phase 2 for the OPC 
program. That will be hulls 5 through 15, the next 11 hulls. 
And I think we are on track, sir.
    The 2023 budget includes a large chunk of money for OPC 
number 5, and long-lead materials--I think it is $650 million--
long-lead materials for number 6.
    Mr. Larsen of Washington. All right.
    Admiral Schultz. So, that program is progressing as 
planned, sir.
    Mr. Larsen of Washington. All right. And then the second 
question to wrap up for me, the cruise industry is a pretty big 
deal in Washington State and other places around the country. 
We have been through COVID, and I think this year alone Seattle 
is expecting 300 port calls, which is more than, I think, the 
2019 number, the pre-COVID number. So, people are coming back. 
Cruises are up and going. I just want to get a flavor from you 
about your preparation in order to serve safety at sea with the 
increased number of folks who are rushing back into the cruise 
industry.
    Admiral Schultz. Congressman, we are absolutely ready. We 
have seen various levels of return to normal activities, pre-
COVID activities, in different parts of the country. I was in 
south Florida here this past Friday and talked to the different 
lines coming back at different paces, sir.
    But we are ready to work in terms of any inspection-type 
work that needs to go on. And we are ready, should we have some 
other challenges. Each and every one of those almost 250,000 to 
300,000 people that were removed from the cruise lines was 
challenging. But we really worked with local CDC, local 
officials, different safety entities, and I am proud of the 
work of the Coast Guard. But we stand ready, sir, for a full 
resumption of normal operations.
    Mr. Larsen of Washington. I appreciate that.
    Thank you, and I yield back.
    Mr. Carbajal. Thank you, Mr. Larsen. I will now recognize 
each Member for an additional 5 minutes, a second round of 
questions, and I will start by recognizing myself.
    Mr. Maffei, I am aware there are multiple efforts underway 
to increase information transparency in the U.S. supply chain. 
Would you please talk about the importance of information 
transparency in improving the cost and efficiency of 
transporting goods?
    How does the fiscal year 2023 President's budget take into 
account this data initiative?
    Mr. Maffei. I will answer the second part of the question 
first, which is that we are definitely proceeding with a number 
of efforts, not the least of which is my colleague, 
Commissioner Bentzel's, data to start.
    In terms of the specific resources we give to it, some of 
it will come out of recommendations that he makes. This is a 
huge area, as you know, and we want to make sure that we are 
putting the resources in the right places.
    But there is no question that, both in terms of our ability 
to analyze trends in the industry and even potential violations 
of the Shipping Act, information is essential, and in terms of 
serving the shipping public.
    Information transparency is incredibly important for two 
reasons. One is that, given that this is a market-based system, 
and has been since the 1984 Shipping Act, how can consumers--in 
this case, shippers--make the right decisions if they don't 
know?
    So, for instance, if they are comparing rates, but one of 
the rates isn't really the full rate, there is also a 
surcharge. Or even in one case we had a value-added charge, a 
congestion surcharge. Everything is congested, so, putting a 
congestion surcharge, in my view, isn't a legitimate thing. It 
is simply part of the rate.
    You need to be able to compare rate versus rate. So, that 
is one reason.
    The second thing is that, particularly for exporters, the 
logistical challenges involved right now are extreme. A good 
portion of the reason why exports are not getting on ships is 
not so much because the carriers won't take the exports, but 
because it is so unpredictable when that ship will be exactly 
in the right place in the berth accepting exports.
    And so, Commissioner Rebecca Dye, in particular, is 
focusing on working with the industry to try to uncover that. 
There is also a lot of private-sector work here, particularly 
by the Port of Los Angeles and many others. But in any event, 
this kind of information is absolutely crucial to expanding the 
capacity of our ports.
    Keep in mind, our ports have not reduced their overall 
throughput. Quite the opposite, they have all set productivity 
records. But the demand is so intense that, even setting those 
productivity records, we are still jamming up with long lines 
of ships and high containers that are not getting out fast 
enough.
    Mr. Carbajal. [Inaudible] transparency initiative?
    Mr. Maffei. Yes, the transparency--I mean, I was sort of 
answering both because, to me, transparency means being able to 
see the accurate information. So, all of--I think that is--it 
is the same answer.
    Mr. Carbajal. Thank you very much.
    Ms. Lessley, according to the GAO, the size of the U.S.-
flagged commercial fleet decreased by about 60 percent between 
1990 and 2017. This mariner shortage drives up the cost for 
shipping, and poses a serious threat to our national defense 
capabilities.
    What action, if any, has MARAD proposed to remedy this 
persistent challenge?
    Ms. Lessley. Thank you so much for this question, and a 
critical issue. And I will say that, back in 2008, 2009, when 
Congressman Cummings, for whom I worked, was chair, we had a 
series of hearings on that very issue, which was the decline of 
the U.S.-flagged fleet and the fact that we were not carrying a 
substantial portion of our waterborne import-export commerce on 
our U.S.-flagged vessels.
    I think part of the--there are, obviously, significant 
consequences from having a small U.S.-flagged fleet. But I 
think part of the challenge is that at the merchant--here, at 
the Maritime Administration, where our priority is, obviously, 
supporting our U.S.-flagged fleet, we are implementing the 
authorities that we have, which yield the fleet that we have. I 
think it is a policy question of whether there should be 
changes.
    But I do recognize, again, that there are significant 
consequences from having the small fleet. One of them, as you 
mentioned, is having a small mariner pool. And we do believe 
that there would be a shortage if we had to ever activate all 
of our Ready Reserve, and keep our commercial vessels going to 
provide essential sealift.
    I think that there are--the variables here are known, and 
it really comes down to the policy question. Like I said, we 
implement the authorities that we have, fully, and defer in 
terms of whether or not there should be changes to Congress.
    Mr. Carbajal. Thank you, Ms. Lessley. Well, I look forward 
to working with you to identify what incentives, what policy 
suggestions, solutions might exist for us to remedy that 
challenge that I think is so important for us to address in the 
near future. So, thank you very much.
    Ms. Lessley. Thank you. And I know time is out, but I just 
want to say again, recognizing that the maritime industry has 
never been more critical to our Nation, and having U.S.-flagged 
fleet, having mariners who can both meet our economic and 
national security needs, is a critical concern.
    Mr. Carbajal. Thank you. I will move on and recognize Mr. 
Gibbs.
    Mr. Gibbs. Thank you, Mr. Chairman.
    Acting Administrator Lessley, the Maritime Administration 
issues permits for deepwater ports and is the agency's only 
permit-granting program.
    It is my understanding that one such project is now being 
required to do a second Draft Supplemental Environmental Impact 
Statement. Ironically, this statement is due to the proposed 
addition of vapor uptake systems, which will result in 
significant emission reductions. It is unfortunate that this 
project is being slowed down because it is attempting to meet 
more stringent emission standards. This is particularly true 
during a time in which our allies are looking at oil import 
reductions from Russia and threats to reduce their oil 
supplies.
    When do you expect MARAD to issue a Final Environmental 
Impact Statement for the GulfLink project?
    Ms. Lessley. Thank you for that question. So, yes, as you 
indicated, the project sponsors were advised in April that they 
would be required to do a Draft Supplemental Environmental 
Impact Statement, given the addition of a vapor recovery 
system.
    We are working with our Coast Guard partners on the details 
of that, and developing a detailed timeline for the remainder 
of the application review process through the Final 
Environmental Impact Statement and the Record of Decision. We 
are estimating the Record of Decision to be completed in early 
2023 and hope to have the SEIS process well underway in 
midsummer.
    Mr. Gibbs. Well, I hope it gets done as expeditiously as we 
can. I hope you are not slow-walking the process, because it is 
important that, I think, this gets done. And I think the 
additional regulations are causing--are damaging in what we can 
do, especially for helping our allies in this oil situation.
    Mr. Maffei, I've just got a quick question. I am trying 
to--it came up earlier about the increases in container costs. 
And my question is dealing with container costs versus 
contracts. And I guess it is kind of a two-part thing.
    Obviously, when looking at those escalating costs for the 
containers, that is really in the spot market, correct?
    And the contracts, I assume, are less. I don't know how 
long the contracts go for.
    And then also, the second part of that, the small shippers, 
do they have opportunities to contract too, or were they pushed 
out of the marketplace by the big shippers?
    The large retailer--we all know who the large retailers 
are. They have some advantage, I know, anyway, it is economics 
of scale. But is your agency kind of monitoring that, and what 
are your thoughts?
    Is it just pushing out the smaller shippers and making 
bigger retailer shippers at such an advantage that we are just 
seeing more of that going on? Can you comment quickly?
    Mr. Maffei. Yes, that is an excellent question, Ranking 
Member Gibbs, and I think you are really on to something, 
because it is one of those unfortunate things that is going on 
that, yes, prices are going up for everybody, of course, the 
demand is high. But much, much less for the big--the bigger you 
are, kind of the more market power you have. And when there is 
such scarcity, it really flattens out and lengthens, so that a 
small shipper may not be able to get contracts now, even when 
they were before.
    But we at the Commission try to work with them. We have 
made it clear that various shipper alliances can help with 
making contracts, and we have made it clear that shipper 
alliances can also bring cases to the FMC. So, some of these 
small shippers----
    Mr. Gibbs [interrupting]. So, are you seeing a growth in 
the alliances, then?
    Mr. Maffei. In these sort of shipper----
    Mr. Gibbs [interposing]. These shipper alliances, you see 
any growth?
    Mr. Maffei. Anecdotally, yes, but I don't have any data on 
that.
    Mr. Gibbs. OK, because it seems like, to me, that would 
be----
    Mr. Maffei [interposing]. Yes.
    Mr. Gibbs [continuing]. A way to compete.
    Now, my third part, the question comes up, I assume that 
this is not--hopefully, it is not an issue. The shippers that 
have contracts for the containers and stuff with the shipping 
company--the ships like Maersk or whatever, they are not 
getting an advantage to get loaded quicker, move up in front of 
the line to get around the congestion, or not?
    Mr. Maffei. Are you asking if the ships are prioritized, or 
if the cargo is unloaded quicker?
    Mr. Gibbs. Yes. I mean, do they get to move ahead?
    Mr. Maffei. I will look into that.
    Mr. Gibbs. I am just raising the question just to see.
    Mr. Maffei. Yes.
    Mr. Gibbs. You know----
    Mr. Maffei [interrupting]. No, no, no, it is a good 
question. I will look into it. I don't believe that--because of 
the--how complex it is----
    Mr. Gibbs [interposing]. Yes.
    Mr. Maffei [continuing]. To unload these containerships, I 
don't think there is that kind of----
    Mr. Gibbs [interrupting]. Well, I think this is----
    Mr. Maffei [continuing]. But that said, though, you are 
onto something, again, because these contracts, the shippers 
signing these contracts are led to believe, one way or another, 
that they are very binding. Often what we find when we look 
into it is they are actually not binding on the carrier as much 
as the shipper thought. And so, there are a lot of issues with 
these contracts----
    Mr. Gibbs [interposing]. Yes.
    Mr. Maffei [continuing]. Notwithstanding the fact that the 
shipper thinks they got a better--a rate, and particularly a 
guaranteed number of spaces, and then it turns out that they 
don't. And that has been a big problem.
    Mr. Gibbs. And that is probably why we need the Maritime 
Transportation Data Initiative that your agency is working on. 
When do you think we can receive that report?
    Mr. Maffei. I will have to get back to you on that.
    Mr. Gibbs. OK.
    Mr. Maffei. I mean, obviously, as expeditiously as 
possible.
    Mr. Gibbs. Mr. Chairman, just indulge me here. I've got a 
question for the admiral.
    Mr. Carbajal. Yes, yes, by all means.
    Mr. Gibbs. I was going to say nobody else is here.
    Mr. Carbajal. By all means, go ahead.
    Mr. Gibbs. It is just me and you.
    Mr. Carbajal. We do have one more.
    Mr. Gibbs. Oh, do we? OK, OK.
    Anyway, Admiral, I have to bring this up, of course. The 
Great Lakes carriers continue to believe additional Coast Guard 
icebreaking capacity is needed in the Great Lakes. What is the 
percentage increase in the Coast Guard icebreaking effort now 
that the 140-foot icebreaking tug rehabilitation program is 
complete?
    And also, I guess more important to me to understand this 
better, could the Great Lakes icebreakers share a common hull 
and powertrain with what is now being called the Arctic 
Security Cutter? My understanding is the Arctic Security Cutter 
is a smaller vessel compared to the--up in the Arctic, and the 
Coast Guard wants that to do activities in the North. It would 
be the Northwest Atlantic, I guess, up there in the Greenland 
area. Is it possible to--it seems like to me to be a cost 
efficiency thing if they shared the same hull and powertrain 
with the Arctic Security Cutter and a Great Lakes icebreaker. 
Would that make sense?
    Admiral Schultz. Congressman, thanks for the question. I 
will say it this way. I think it is possible.
    I think we had some earlier conversations. I think, as we 
think about what we have, sort of, notionally called an Arctic 
Security Cutter or medium breaker, I think that is probably 
bigger than the capability to the Great Lakes. Let me walk the 
conversation back.
    In the Great Lakes, there are six 140-foot icebreaking 
tugs. It used to be five, we added the sixth. Congress has 
signaled clearly over the last five budget cycles, to the tune 
of almost $20 million, that you are looking for more capacity 
there. We are looking at--we call it the GLIB program. I don't 
think we want to build another Mackinaw off the existing 
designs--that is a 20-year-old design now--but something that 
is Mackinaw-like. Two of the 140s up there operate with a 100-
foot barge. Maybe there is a platform that is Mackinaw-like 
that also would be the replacement for the 140-foot barges, 
sir.
    So, we understand the clear intent that Congress has made a 
business case for more capacity. We are pressing in on that. We 
have a program office based on previous years' budgets with 11 
bodies. There are additional bodies going in. So, we are 
getting after pre-acquisition activities to come forward with a 
clear plan on what we are going to do in the Great Lakes in 
terms of capacity.
    The linkage outside for the Arctic, sir, I think that is 
going to be a vessel with too much draft to be of utility on 
the Great Lakes, having sailed up there for 3 years. So, I 
actually started that conversation, as I have sort of had a 
chance to cogitate on that, looked at this commercially 
available icebreaker. There is one I won't mention by name. We 
have got to go through acquisition processes. But when you look 
at the draft--and that is probably closer to what we need for 
the Arctic work outside the lakes--I am not so sure that would 
get after the mission on the Great Lakes, sir.
    Mr. Gibbs. OK. Well, I appreciate the response, and your 
looking into it, and concern, sir.
    Admiral Schultz. Thank you.
    Mr. Gibbs. And as I just close out here, I wanted to thank 
you again for your service.
    And Master Chief, thank you. I didn't even realize you were 
retiring, too. I have heard great things about you, and I wish 
you all the well.
    [To Admiral Schultz and Master Chief Vanderhaden:] And I 
was thinking about this: You, you, me, and Chairman DeFazio are 
all retiring.
    [To Mr. Carbajal:] So, good luck.
    [Laughter.]
    Mr. Gibbs. Thank you very much, and I yield back.
    Admiral Schultz. And Congressman, congratulations to you. 
Thanks for your support.
    I just want to say both the committee staff has been a 
pleasure to work with over my 39 years. I have got to know the 
CGMT Subcommittee, and I have worked with John Rayfield for 
most of my entire Coast Guard career. So, I want to thank John, 
and Matt has come in and filled big shoes and done a great job. 
So, thank you. And it is a privilege to be here with Lucinda 
Lessley, who is a key partner in working together on some hard 
issues in the maritime today about safety at sea for all 
sailors, and particularly women these days.
    Master Chief Vanderhaden. Thank you.
    Mr. Carbajal. Thank you. There is always the next 
generation, Mr. Gibbs.
    With that we will move on to close out our hearing with 
Representative Lowenthal.
    [Pause.]
    Mr. Carbajal. I think you are muted. I can't hear you.
    [Pause.]
    Mr. Lowenthal. Am I unmuted now?
    Mr. Carbajal. We can hear you.
    Mr. Lowenthal. Thank you, and it is nice to be cleanup. And 
my questions, I want to follow up on questions that I was going 
to ask in the first round, and that is to Ms. Lessley. And my 
first one is more of a statement than a question.
    And I want to thank you for being here, and I want to lend 
my support to the strongest possible funding for programs like 
the Port Infrastructure Development Program. And I think you 
talked about that in your statement, and how the bipartisan 
infrastructure bill greatly--it enhanced the funding for that 
program.
    But I do want to note that, in the fiscal year 2021, there 
were applications for over $1.3 billion in Federal funds, while 
we only gave out a total of $239 million. I know that will go 
up this year.
    The program is--at that point, in 2021--was oversubscribed 
by a factor of 5.4 to 1. And there is a huge demand for these 
resources. They are even more important as the program expands 
to fund the electrification and decarbonization projects. So, I 
just want to kind of reiterate what you have said and say, the 
importance of the Port Infrastructure Development Program.
    But I do want to turn briefly to the importance of funding 
our Merchant Marine Academy, and I thank you for your efforts 
in providing more light on the new standards to ensure that 
students are protected at our Academy.
    And I would just like to know if you can give us a little 
more insight on what it is like bringing the carriers into 
compliance with the EMBARC standards.
    And in protecting students, it was my understanding that 
usually the student had a Sea Year before they graduated. Will 
every student have a Sea Year before they graduate now? Are we 
able to provide that to them?
    Ms. Lessley. Thank you so much for your questions. I want 
to address the Merchant Marine Academy, but also I want to just 
associate myself with your comments on the critical importance 
of the Port Infrastructure Development Program, and the 
historic investments that the President, President Biden's 
Bipartisan Infrastructure Law are providing our Port 
Infrastructure Development Program--will provide $2.25 billion 
in investments over 5 years, all made possible by the 
Bipartisan Infrastructure Law.
    Looking at the Merchant Marine Academy, so, our process for 
bringing carriers into the program, they complete a self 
assessment, and provide policies which are then reviewed by our 
staff, and they are then enrolled.
    And we are also in the process of, as I mentioned, standing 
up our office of cadet training and safety, which will take 
over responsibility for doing the assessment visits to the 
carriers, which is required by statute.
    As I mentioned, we instituted new policies and procedures 
at the Academy, and are in the process of now reviewing EMBARC, 
reviewing the policies and procedures, so that we can continue 
to identify opportunities for improvement, and then we can 
remove barriers to reporting. The essential thing here is 
trust, and we have a lot of work to do to build that.
    In terms of Sea Year, so, yes. Our class of 2022 will 
graduate on time. They had their Sea Year. The class of 2023 is 
the most affected by this. And all of our eligible students are 
gathering their sea days. We are tracking very closely and 
anticipate that everyone will have the time they need to 
graduate. Obviously, Sea Year is a requirement. They need the 
sea days so that they can sit for the licensing exam. We are 
tracking closely.
    We did come into the temporary pause with deficits because 
of COVID. If there are any students who do not--any midshipmen 
who do not gather the time they need by the time of the 
licensing exam, they will be able to take the exam--thank you 
to the Coast Guard--on time, and then accumulate the sea days 
that they still require after the licensing exam. No one, as I 
said in my opening statement, will leave the Academy without 
the sea time that they need.
    I want to again thank Military Sealift Command, the Navy, 
and the Coast Guard for providing billets. In any given year, 
the Military Sealift Command vessels have provided about 25 
percent of our sea days. Without their support, we would not 
have been able to get our students underway, our midshipmen 
underway. But with their support, we are looking good in terms 
of having the class of 2023 gather their--crew their sea time, 
so that they can take their licensing exams and graduate on 
time.
    Mr. Lowenthal. Thank you.
    And with that, I yield back.
    Mr. Carbajal. Thank you, Mr. Lowenthal. It seems that Mr. 
Gibbs, in light of his pending retirement, has a lot more 
questions. So, we are going to let him have another crack at 
it.
    Mr. Gibbs?
    Mr. Gibbs. I just want to make a request to the Admiral, 
because I wanted him to have something to do here in this last 
month.
    But we were talking about the western Alaska national 
planning criteria. I just want the Coast Guard to submit to the 
committee for the record a list of the equipment necessary to 
be located in Alaska in order to meet the time deadlines 
included in the national planning criteria, and the capital 
cost of such equipment. Just send it in to the committee. I 
would appreciate it.
    Admiral Schultz. Congressman, western Alaska is, obviously, 
a unique place with unique challenges in terms of vessels 
complying with national compliance. We have an altered 
compliance program. We are watching what is going on, and 
encouraging private-sector investment and other things. We look 
forward to continuing to work with the Congress on that 
challenge up in that area. So, we understand that, and we have 
to come up with a workable solution because it is not 
reasonable for compliance with other national standards 
elsewhere.
    Mr. Gibbs. I agree with that, and we just want to see your 
plan. Thank you.
    Mr. Carbajal. Thank you. With that, that concludes our 
hearing for today.
    I would like to thank the witnesses for your testimony 
today.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided 
answers to any questions that may be submitted to them in 
writing.
    I also ask 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 11:58 a.m., the subcommittee was adjourned.]

                      Submissions for the Record

                              ----------                              


  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
     from the State of Missouri, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chair Carbajal, and thank you to our witnesses for being 
here today.
    I am concerned that despite an ever-growing mission set and ever-
increasing mission complexity, the Coast Guard's budget request for the 
``Procurement, Construction and Improvement'' Account is yet again 
being slashed in the President's budget request.
    Last year Congress appropriated more than $2 billion to acquire 
needed cutters and other operating assets, put a dent in the 
multibillion-dollar shoreside maintenance and construction backlog, and 
begin the modernization of the Service's quickly degrading IT systems. 
The Administration's request cuts that number to $1.6 billion--well 
below what is needed for the Coast Guard to even tread water with its 
aging infrastructure.
    I am particularly concerned that the Coast Guard is failing to take 
advantage of the one-time opportunities to purchase a 12th and final 
National Security Cutter, and exercise contract options for additional 
Fast Response Cutters before those production lines go cold. These two 
opportunities for increased mission capability won't come again.
    The Coast Guard needs to seize the day, especially while it has the 
Congressional support to do so.
    The Federal Maritime Commission seldom finds itself in the public 
policy spotlight. However, for the last two years it has received much 
attention because of the ongoing cargo surge at U.S. ports. Though the 
Commission has identified no collusion on pricing or artificially 
manipulating vessel availability, the rapid astronomical rise in 
container shipping rates has put significant pressure on the FMC to be 
particularly vigilant.
    I hope our former House colleague, FMC Chairman Dan Maffei, can 
share with us what resources he and the other Commissioners believe the 
FMC needs to right-size its enforcement of ocean shipping regulations.
    Finally, welcome to Acting Maritime Administrator Lucinda Lessley. 
I look forward to hearing how MARAD is working to assure that all 
Federal agencies strictly apply mandatory cargo preference requirements 
to their programs.
    Thank you, Chair Carbajal. I yield back.

                                 
   Framework Timeline for U.S. Coast Guard Training Center Cape May 
 Barracks Recapitalization, Submitted for the Record by Hon. Jefferson 
                                Van Drew
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                Appendix

                              ----------                              


   Questions from Hon. Salud O. Carbajal to Admiral Karl L. Schultz, 
                      Commandant, U.S. Coast Guard

Transition to H-60's I:
    Question 1.a. As the Coast Guard transitions to H-60's, the H-65's 
provide important capacity but are in need of sustainment to continue 
to support the Coast Guard's no-fail mission set. It is my 
understanding that within the Coast Guard's $699.208 million budget 
request for ``Air Operations,'' there is $23 million to purchase main 
gear box parts and $4.6 million to purchase engine cowlings for the MH-
65s.
    Can you confirm that these funds are part of that ``Air 
Operations'' request?
    Answer. Funding to support the aviation maintenance Inventory 
Control Point (ICP) is a single account within the Air Operations 
Programs, Project, or Activities (PPA), which is prioritized throughout 
the year based on immediate and forecasted needs across the Service's 
aviation platforms to ensure adequate sparing for operational units and 
depot repairs conducted at the Aviation Logistics Center (ALC). Funding 
is not appropriated by aviation parts per airframe, and specific 
direction on what parts or airframes to prioritize may limit the 
Service's ability to meet its most exigent needs. With the MH-65 
helicopter and its civilian variant no longer in production, the Coast 
Guard works closely with Airbus and communicates forecasted parts needs 
to ensure adequate sparing is available when needed. These parts, like 
main gearboxes and engine cowlings, are purchased using funds from the 
Air Operations PPA. Any additional funding directed to the ICP will be 
used to procure the most critical parts necessary to ensure 
airworthiness based on the current needs of the Service.

    Question 1.b. During the transition to H-60's, how critical is it 
for the Coast Guard that the MH-65 helicopters are mission ready and 
fully operational?
    Answer. The continued modernization and sustainment of the Coast 
Guard's MH-65 fleet is critical to Coast Guard operations. The 
transition to an all MH-60 helicopter fleet will take up to 15 years. 
As the MH-60 fleet grows and the MH-65 fleet is strategically drawn 
down, sustainment of the remaining MH-65s is critical to maintaining 
vertical lift capability.

    Question 1.c. What would be the consequences of Congress not 
appropriating sustainment funding for the MH-65 helicopters?
    Answer. The continued operational availability of the MH-65 fleet 
is a critical component to maintaining the Service's vertical lift 
capability and is dependent on continued sustainment funding. A lack of 
sustainment funding will result in reduced operational readiness of 
Coast Guard aviation assets, including the MH-65.
Investigating Cases:
    Question 2. There have been many recent allegations of sexual 
assault and sexual harassment from U.S. Merchant Marine cadets while 
fulfilling their Sea Year requirement on board commercial vessels. 
Unfortunately, this pattern is not new. The Coast Guard has 
institutional shortcomings that have contributed to a history of sexual 
assault and sexual harassment in the maritime industry.
    Are there any impediments to the Coast Guard's authority to 
investigate and prosecute sexual assault and sexual harassment cases on 
state maritime academy vessels?
    Answer. Sexual assault is a serious crime that directly undermines 
the safety of life at sea. The Coast Guard remains committed to 
investigating all reports of sexual assault aboard U.S. commercial 
vessels and taking the necessary action to revoke the Coast Guard 
issued credentials of any U.S. mariner who poses a threat to the safety 
or security of a vessel and its crew. The largest impediment to Coast 
Guard investigations is mariners, masters, and companies. All mariners 
should expect to work on vessels characterized by climates of safety, 
inclusion and respect. This includes clearly communicated information 
about resources and reporting options for individual mariners who do 
experience sexual assault, and sexual harassment. For example, victim 
reporting increased after the Coast Guard released Marine Safety 
Information Bulletin 11-21 on Reporting Sexual Assaults on U.S. 
Vessels. While masters are legally required to report alleged sexual 
assault to the Coast Guard, a continued effort to change the culture 
aboard commercial vessels is required to ensure that all mariners and 
companies accept their responsibility to report these crimes to the 
Coast Guard and help eradicate sexual assault in the commercial fleet.
    The Service is actively engaged with Congress regarding the 
proposed language in the Coast Guard Authorization Act of 2022 to 
prevent and respond to sexual assault and sexual harassment. Companies 
play a critical role in fostering a culture of respect among their 
employees and must actively participate in removing predatory and 
harassing behavior from the fleet.

   Question from Hon. Alan S. Lowenthal to Admiral Karl L. Schultz, 
                      Commandant, U.S. Coast Guard

Smart Buoy Technology:
    Question 1. For hundreds of years, maritime pilots have relied on 
buoys as aids to navigation (AToNs) while at sea. The Coast Guard's 
Fiscal Year 2023 budget request identifies ATON maintenance as one of 
the top 3 non-pay cost drivers resulting citing an increased in lost 
ATONs. I understand that the U.S. Coast Guard (USCG) is currently 
piloting ``smart'' buoy technology that includes geolocation, wind, 
current and weather monitoring that will help reduce lost ATONs and 
speed ATON recovery time.
    How does the Coast Guard expect that ``smart'' buoy technology will 
help curb the cost of lost ATONs and when do you expect to receive 
initial data on the success of the current pilot program?
    Answer. The Coast Guard is evaluating the effectiveness and utility 
of smart and monitored aids to navigation (ATON). Specifically, the 
Coast Guard is assessing the ability of integrated satellite 
communication technology to provide increased resiliency to the Marine 
Transportation System. Additionally, the Coast Guard is evaluating 
Global Positioning System monitoring to provide immediate notification 
to waterways managers if an ATON is outside of its assigned positioning 
tolerance. In late 2021, the Coast Guard contracted SailPlan Inc. for 
one year to provide ``Smart Buoy'' technologies to be deployed on two 
buoys located in the Chesapeake Bay. However, the deployment and 
subsequent evaluation have not commenced. Working in cooperation with 
the Maryland Pilots Association, the Coast Guard will evaluate the 
effectiveness of providing real-time environmental data including wind, 
current, and wave height. SailPlan will also perform remote monitoring 
of the ``health'' of the buoy such as monitored power consumption and 
positioning data. The Coast Guard seeks to learn what types of 
environmental sensors may be needed on ``Smart Buoys'' to improve 
safety and efficiency.

Question from Hon. Peter A. DeFazio on behalf of Hon. John Garamendi to 
         Admiral Karl L. Schultz, Commandant, U.S. Coast Guard

Joining Joint Chiefs:
    Question 1. I recently learned that the U.S. Coast Guard, our 
nation's sixth military branch, is only considered a de facto member of 
the Joint Chiefs of Staff. There is legislation that my colleague 
Representative Charlie Crist has proposed (H.R.2136) to promote you, as 
the Commandant of the Coast Guard, to a full voting member of the Joint 
Chiefs.
    What is your position on promoting the U.S. Coast Guard to a full 
voting member of the Joint Chiefs?
    Answer. The current participation of the Coast Guard Commandant on 
the Joint Chiefs of Staff improves synergy and streamlines efforts of 
the U.S. Department of Homeland Security (DHS) with the U.S. Department 
of Defense (DoD) while respecting the unique authorities of each 
department. While not a member by law, the Coast Guard Commandant is 
invited to and attends all meetings of the Joint Chiefs of Staff.

  Question from Hon. Sean Patrick Maloney to Admiral Karl L. Schultz, 
                      Commandant, U.S. Coast Guard

Report Status:
    Question 1. During the hearing I asked for the status of two 
reports: Anchorages and traffic on the Hudson River, and Wing-in-ground 
crafts. These reports were required as part of the Elijah E. Cummings 
Coast Guard Authorization act of 2020 and are overdue. Please provide 
an update on the status of these reports. When should Congress expect 
to receive them?
    Answer:
    Establishing Anchorage Grounds on the Hudson River Report: The 
``Establishing Anchorage Grounds on the Hudson River'' Congressional 
report is drafted and undergoing Coast Guard review. The Coast Guard 
anticipates delivery of this report to Congress by the end of the 
calendar year.
    WIG Report: The Coast Guard, with support from the Federal Aviation 
Administration (FAA), is developing a Request for Information (RFI) to 
seek input from the public, and particularly from offshore facility 
operators, including gas and oil facility operators, wind farm 
operators, persons conducting operations in airspace that may be 
affected by the operation of wing-in-ground (WIG) craft, and WIG craft 
developers on the state and capability of this growing industry. 
Through the RFI, the Coast Guard seeks to better understand the current 
state and potential capability of the WIG industry to support 
transportation in the outer continental shelf and to understand the 
interest and resources necessary for offshore facility operators to 
support a demonstration program.

     Questions from Hon. Chris Pappas to Admiral Karl L. Schultz, 
                      Commandant, U.S. Coast Guard

Replacing Legacy Buoys:
    Question 1. I understand the Coast Guard is currently in the 
process of testing and evaluating modern polyethylene buoys and their 
potential to replace legacy steel buoys currently used by the 
Department. I am very encouraged that the Coast Guard is working on 
this project, which has the potential to significantly reduce both 
procurement and lifecycle sustainment costs for marine aids to 
navigation.
    I would appreciate an update on the status of the program. 
Specifically, can you confirm that effort is funded in the ``Waterways 
Management and Environmental Response'' account in the Coast Guard's 
R&D budget?
    Answer. This project is progressing and is scheduled for completion 
in April 2024. Test buoys have been deployed in the Coast Guard's 1st, 
8th and 13th Districts. The Research and Development Center and 
supporting Coast Guard units are performing ongoing inspections on 
deployed buoys and assessing buoy-hull failures as they occur. 
Additional buoys are scheduled for deployment in the 13th District and 
Western Rivers this summer.
Deploying Polyethylene Buoys:
    Question 2. Lastly, I understand that following the evaluation, the 
Coast Guard aims to produce a report detailing the results in mid-2023.
    What, if any, planning is currently underway in terms of contract 
mechanisms, acquisition strategies, and timeframes to procure and 
deploy polyethylene buoys following the evaluation and report? I 
understand that no formal acquisition decisions can be made prior to 
the report's conclusion, but I am hopeful that, in the event the report 
is positive, the Coast Guard is prepared to rapidly transition to 
procurement and deployment given the potential for significant cost 
savings and operational improvements.
    Answer. The Coast Guard is awaiting the results of the report 
before making acquisitions plans or decisions.

Questions from Hon. Sam Graves to Admiral Karl L. Schultz, Commandant, 
                            U.S. Coast Guard

Navigation as Paramount Use/Navigation Safety:
    Question 1. Is the Coast Guard the lead Federal agency for 
navigation safety?
    Answer. Yes. The Coast Guard is responsible for ensuring the safety 
of navigation and mixed use of all U.S. waterways. Accordingly, the 
Coast Guard is the lead agency for all efforts to balance competing 
interests offshore in order to maintain safe and efficient navigation 
routes to and from U.S. ports.

    Question 2. Does section 70(a) of title 46, United States Code, 
give the Coast Guard the authority to designate fairways and vessel 
traffic separation schemes in U.S. waters in order to recognize the 
``paramount right of navigation over all other uses''?
    Answer. Under section 70003, the Secretary of Homeland Security has 
the duty to perform Port Access Route Studies (PARS) to ensure that 
vessel traffic has safe and open access to U.S. places and ports. The 
law directs the Secretary to consider all other waterway uses, and ``to 
the extent practicable, reconcile the need for safe access routes with 
the needs of all other reasonable uses of the area involved.''

    Question 3. Does section 70003(b) title 46, United States Code, 
limit the authority in subsection (a) in cases where such designations 
would deprive any person the effective exercise of rights granted by a 
lease making navigation a lesser use?
    Answer. The extent to which preexisting lease rights take 
precedence over navigation depends upon the nature of the lease rights 
vested at the time the notice of the PARS is published in the Federal 
Register.
Designate Fairways:
    Question 4. Since as early as 2006 when the Coast Guard became 
aware of efforts to lease areas on the outer Continental Shelf, did the 
Coast Guard proactively designate fairways or establish vessel traffic 
separation schemes under section 70003(a) before the Department of the 
Interior undertook 23 lease actions between October 2010 and February 
2019 thus limiting area in which navigation is the paramount use?
    Answer. The test for priority set forth in 70003(b)(1)(a) and (b) 
requires an analysis of the lease to determine what rights were already 
vested on the date the PARS was announced in the Federal Register. 
Regarding U.S. Department of the Interior (DOI) leases for offshore 
wind energy development, the winning bidder/lessee initially has the 
exclusive right to submit a Site Assessment Plan (SAP). As stated by 
the one Federal court to have analyzed an Offshore Wind Energy lease, 
``on its own, the lease at issue does no more than grant [the lessee] 
the exclusive right to submit a Site Assessment Plan and Construction 
and Operations Plan to DOI's Bureau of Ocean Energy Management (BOEM) 
for approval: See Fisheries Survival Fund v. Jewell, 2018 WL 4705795, 
Sept. 30, 2018. The lease, itself, does not authorize any activity in 
the leased area. Once BOEM evaluates and approves the SAP, the lessee 
has the vested right to undertake the approved data collection 
activities in the area described in the SAP. Following approval of the 
SAP, a lessee has the right to collect data and submit a proposed 
Construction and Operations Plan (COP), which can only be approved once 
all National Environmental Policy Act (NEPA) requirements and 
consultations are completed. In determining priority between navigation 
and all other offshore uses, the Secretary of the Department of 
Homeland Security (DHS) is directed by 46 USC 70003(b) to determine 
which, if any, of a lessee's rights were vested before the Coast Guard 
published a Federal Register notice announcing a Port Access Route 
Study for that same sea area. Two fairways and 14 vessel traffic 
separation schemes were designated by the Coast Guard along the 
Atlantic coast prior to 2010. Any future designation under 46 USC 
70003(a) will be performed in accordance with all requirements in 46 
USC 70003, including the consultation requirement with DOI pursuant to 
46 USC 70003(b)(2) if the designation would deprive the lessee of the 
effective exercise of a right granted by a lease. To date, BOEM has 
approved two COPs (Vineyard Wind--July 2021; and Southfork--January 
2022). The two COPs do not predate studies for those areas announced by 
the Coast Guard in accordance with 70003(c)(1). The Coast Guard 
completed its study of these areas (Massachusetts and Rhode Island 
PARS) and determined that fairways were not necessary to protect 
historic shipping routes.
Atlantic Coast Port Access Route Study:
    Question 5. When the Coast Guard completed the Atlantic Coast Port 
Access Route Study required by Congress in 2016, how long did the Coast 
Guard wait before initiating rulemaking action to implement the Coast 
Guard's own recommendations in the Study?
    Answer. The Coast Guard announced the availability of and requested 
comment on the final Atlantic Coast Port Access Route Study (ACPARS) on 
March 14, 2016, with a 30-day comment period. The Coast Guard published 
an Advanced Notice of Proposed Rulemaking on June 19, 2020.

    Question 6. The Subcommittee understands that since beginning the 
rulemaking the Coast Guard has undertaken four additional supplemental 
port route access studies and that a Notice of Proposed Rulemaking will 
go out when the fourth of those studies is complete. Why was the 2016 
study so deficient that four additional studies were necessary before 
even a Notice of Proposed Rulemaking (NPRM) could go forward? When does 
the Coast Guard intend to publish the NPRM? Complete the rulemaking?
    Answer. The ACPARS evaluated coastwise shipping traffic as a first 
step in the process to identify areas where prospective renewable 
energy installations should not interfere with historic vessel traffic 
lanes. These lanes were not charted, as prior to advancing developments 
in BOEM's offshore wind program, there was not a need for offshore 
fairways. Once the routes were identified, the Coast Guard subsequently 
studied the connecting routes to the individual ports to determine if 
existing Traffic Separation Schemes were adequate or required 
modifications to determine if fairways were necessary to keep 
structures at a safe distance from routes used by vessels transiting to 
and from each port on the Atlantic Coast. The Coast Guard is working 
towards publication of a Notice of Proposed Rulemaking.

    Question 7. How many areas recommended to be set aside for 
navigation in the 2016 Atlantic Coast Port Access Route Study are now 
unavailable for such uses because those areas have subsequently been 
leased?
    Answer. All of the areas recommended to be set aside for navigation 
remain available. The leasing of an offshore area only provides the 
lessee the exclusive right to submit a Site Assessment and Construction 
and Operations Plans. The lease does not guarantee the lessee the right 
to construct or operate any structures or other potential obstructions 
to navigation.
Implement Recommendations:
    Question 8. Why is it necessary for Congress to tell the Service to 
implement recommendations made by the Service in their own study?
    Answer. The Coast Guard intends to implement the recommendations of 
the ACPARS final report in accordance with sections 70003(c)(2) and 
(3), 70004, the Administrative Procedure Act, the NEPA, and several 
other environmental control laws requiring consultations on matters 
including State coastal development, endangered species, and marine 
mammals. Implementing a vessel traffic scheme covering the majority of 
the U.S. East Coast is a significant undertaking with many interested 
stakeholders.
Navigation Rights:
    Question 9. Does the Coast Guard consider navigation to be the 
``paramount right . . . over all other uses'' as stated in Section 
70003 of title 46, United States Code?
    Answer. The Coast Guard recognizes the priority the law provides to 
navigation relative to other potentially competing uses of the 
waterway.
Deference in the Gulf:
    Question 10. The Department of the Interior has announced it 
intends to begin leasing areas in the Gulf of Mexico for wind energy 
project in the near future. Does the Coast Guard intend to show the 
same subservient deference to the Department of the Interior in the 
Gulf with regards to navigation safety that it has shown on the 
Atlantic Coast?
    Answer. Shipping safety fairways are already established in the 
Gulf of Mexico. The Coast Guard is working with BOEM and maritime 
stakeholders to ensure safe access routes that preserve the paramount 
right of navigation throughout the region.
Study Status:
    Question 11. What is the status for the Gulf of Mexico, Arctic and 
West Coast Port Route Access Studies?
    Answer. With the existing fairways in the Gulf of Mexico, the Coast 
Guard has not determined if a Gulf of Mexico Port Access Route Study 
will be necessary. The Coast Guard announced the Alaskan Arctic Port 
Access Route Study on December 21, 2018. The Coast Guard extended the 
comment period twice and reopened the comment period two additional 
times to provide adequate opportunity for public meetings in impacted 
Arctic communities, given the COVID-19 impacts to travel. The period 
officially closed on March 31, 2022, and the Coast Guard is 
adjudicating comments. The recently commenced Pacific Coast Port Access 
Route Study (PACPARS) will likely go through more than one comment 
period with an expected completion by the end of next year. The Coast 
Guard anticipates that implementing recommendations resulting from the 
PACPARS will be challenging due to concerns about the protection of 
marine mammals and other endangered species.
Move to All MH-60 Rotary Wing Aircraft/Transition to H-60's II:
    Question 12.a. The Coast Guard has announced a decision to phase 
out its MH-65 short range helicopters and move to an all MH-60 medium 
range helicopter fleet. There many versions of MH-60, including the 
version which the Coast Guard currently flies.
    Has the Department of Homeland Security signed an Approved Baseline 
for the transition to an all H-60 fleet?
    Answer. The current MH-60 Sustainment Program is in the Obtain 
Phase of the acquisition lifecycle framework and is required to have 
only a preliminary APB (P-APB) at this stage. However, in concert with 
DHS, the Coast Guard is developing an APB that encompasses the MH-60T 
Service Life Extension Program (SLEP) and the transition to an all-MH-
60T fleet (Growth). An Acquisition Decision Memorandum is forthcoming 
from DHS that will allow the Program to execute both MH-60 SLEP and 
Growth efforts while developing the entrance/exit criteria 
documentation for an Acquisition Decision Event to adopt this combined 
APB.

    Question 12.b. Has the Coast Guard selected which version of MH-60 
it will acquire. Will it continue to convert Navy SUNDOWNER hulls and 
newly acquired original equipment manufacturer hulls to the 
configuration currently used by the Service? Select a new Coast Guard 
specific MH-60? A version already being built for other clients?
    Answer. The Coast Guard has selected the MH-60T, which is uniquely 
suited for Coast Guard operations, with the ability to accommodate 
greater fuel loads, land on small flight decks, and operate in all 
weather conditions. The MH-60T airframe with forged spar fittings is 
airworthy to 20,000 flight-hours, a far greater life span than the 
8,000 flight-hour limit of the riveted H-60 airframe currently in use 
by the U.S. Navy, which needs recapitalization every ten to twelve 
years. Furthermore, a single rotary wing fleet composed of all MH-60T 
airframes enables maintenance, logistics, training, operations, and 
overhaul efficiencies.
    The Coast Guard has successfully converted ten U.S. Navy 
``Sundowner'' hulls at the Aviation Logistics Center to the MH-60T 
configuration to replace both MH-60 and MH-65 operational losses and 
transitioned two air stations from the MH-65 to MH-60 to mitigate MH-65 
fleet gaps. The Coast Guard must begin MH-60T fleet growth immediately 
to mitigate the supply chain challenges that will continue to make 
sustaining the current fleet of 98 MH-65s difficult. The Service is 
beginning MH-60T fleet growth using retired U.S. Navy SH-60F and HH-60H 
hulls at ALC using the funding appropriated in Fiscal Year (FY) 2022. 
The Coast Guard intends to continue these efforts with the funding 
requested in FY 2023.
    All new hulls purchased from the original equipment manufacturer 
(OEM) are intended for SLEP. The Coast Guard will continue to convert 
Navy hulls to support MH-60 fleet growth efforts. Given current 
production and delivery schedule of new Sikorsky hulls, the Coast Guard 
will need to convert U.S. Navy hulls until new hulls from the OEM are 
available to meet both MH-60 growth and SLEP needs. The 20,000 flight-
hour limit of a new hull compared to the approximately 12,000 flight-
hour remaining service life of the U.S. Navy hulls makes the transition 
to MH-60 fleet growth with new hulls the best strategy to maintaining 
vertical lift capability.

    Question 12.c. Has the Coast Guard conducted review of 
alternatives? Are there other helicopters more appropriate for cutter-
based operations and the National Capital Air Interdiction Mission, an 
inherently short-range function?
    Answer. Yes, the Coast Guard conducted an Alternative Analysis in 
April 2019 prior to the start of the MH-60 Service Life Extension 
Program.
    The MH-60 is the ideal platform for cutter-based operations and the 
National Capital Air Interdiction Mission. An all MH-60 fleet improves 
mission effectiveness due to the greater range, endurance, and power-
to-weight ratios over the MH-65, streamlines the Service's training and 
logistics systems, and provides for smaller total fleet inventory. For 
this reason, new Coast Guard major cutter acquisitions are being 
specifically designed to land, operate, and hangar Coast Guard MH-60 
aircraft.

    Question 12.d. Do H-60s have to fold their tail rotors in order to 
be stowed on USCG cutters?
    Answer. Yes. In order to hangar MH-60s on the Polar Security, 
National Security, and Offshore Patrol cutters the main rotor and tail 
boom must be folded. Legacy Coast Guard cutters such as the 270-foot 
and 210-foot WMECs cannot hangar the MH-60.
Logistics Information Management System:
    Question 13.a. For many years, the Committee has expressed 
skepticism that the Coast Guard's custom-designed Logistics Information 
Management System would work or was worth the millions so unnecessary 
dollars the Coast Guard spent on it. The Committee was pleased to see 
the Coast Guard finally abandon this custom system in 2021. In FY '23, 
the Coast Guard requests $15 million for a system based on Naval 
Operational Business Logistics Enterprise (NOBLE) Family of Systems 
capability, but still named the Logistics Information Management 
System. The Coast Guard budget shop insists this is the same program. 
The Committee is again highly skeptical that is the case.
    Is the NOBLE-based Logistics Management System now being developed 
the same system as the custom program the Coast Guard spent many years 
and many millions of dollars developing?
    Answer. The NOBLE-based Logistics Management System is not the same 
system as the legacy CG-LIMS system developed by the Coast Guard from 
2011-2018. The Coast Guard chartered its Logistics Information 
Management System (CG-LIMS) Acquisition Program to replace the Coast 
Guard's aging fleet of logistics IT systems in 2008. From 2011-2018, 
the Acquisition Program conducted a pilot project utilizing the Oracle 
eBusiness Suite (EBS) for aviation logistics IT systems, also named CG-
LIMS.

    Question 13.b. Please provide the Committee a year-by-year summary 
of the money the Coast Guard spent on the system named the Logistics 
Information Management System prior to the Coast Guard's 2021 decision 
to abandon that system and use the Navy's NOBLE system.
    Answer. The year-by-year summary of funds expended in support of 
the Oracle EBS solution is provided below:

----------------------------------------------------------------------------------------------------------------
                               FY 2011  FY 2012  FY 2013  FY 2014  FY 2015  FY 2016  FY 2017  FY 2018    Total
----------------------------------------------------------------------------------------------------------------
$Obligated...................   $8.1 M   $7.1 M   $2.6 M   $1.6 M   $4.9 M   $8.5 M   $6.9 M   $6.5 M    $46.2 M
----------------------------------------------------------------------------------------------------------------


    The Coast Guard's acquisition plan has been to leverage a 
commercial-off-the-shelf (COTS) software products, rather than building 
a custom software solution. In 2011, the Coast Guard selected the 
Oracle eBusiness Suite (EBS) as the underlying COTS solution for CG-
LIMS through a competitive solicitation. In 2018, the Coast Guard 
realigned the acquisition with the U.S. Navy (USN). From 2011 to 2018, 
the Service delivered Coast Guard Logistics Information Management 
System Technical Information Management (CG-LIMS TIM), which is a 
technical information management portal for Coast Guard logistics 
assets replacing the legacy systems of Aviation Technical Information 
Management System and Naval Engineering Technical Information 
Management System. Today, this technical information provides logistics 
support artifacts to over 13,000 unique users, supporting Coast Guard 
surface, air, and boat assets, ATON equipment, and numerous Command, 
Control, Communications, Computers, and Information Technology systems/
sub-systems. Also during this timeframe, CG-LIMS successfully 
demonstrated the use of a COTS software solution (Oracle EBS 
Maintenance, Repair, and Overhaul Module) to support aircraft 
sustainment operations at Aviation Training Center, Mobile, AL.

    Question 13.c. Does the Coast Guard really believe that by using 
the same name for the two system Congress will be fooled into thinking 
the Coast Guard did not have to abandon as a failure its effort to 
design a custom logistics management system?
    Answer. The Coast Guard considered rebranding CG-LIMS concurrent 
with the decision to transition from EBS to USN NOBLE as the 
Acquisition Program's IT solution. While the Coast Guard's underlying 
technical solution has changed, its logistics IT modernization 
requirements have not. Therefore, the Service decided that the name CG-
LIMS would be maintained. By retaining CG-LIMS, the Coast Guard could 
utilize the already established lines of accounting/financials, 
acquisition documentation, save time and rebranding costs of the system 
for future users, and preserve the integrity of the existing 
Acquisition Program.
    The partnership with the USN allows the Coast Guard to leverage the 
expertise and resources of the USN to obtain levels of logistics IT 
modernization that would be difficult to attain if it were to proceed 
with a Coast Guard-only solution. It also avoids duplication of effort 
in the planning, resourcing, procurement, and development of redundant 
logistics IT capabilities. Further, this partnership supports Coast 
Guard and USN strategic objectives to improve naval logistics 
interoperability and commonality as detailed in the National Fleet Plan 
and Naval Logistics Integration Strategic Plan.
Physical Access Control System/DoD System:
    Question 14.a. According to a report received last July from the 
Coast Guard pursuant to 2020 Coast Guard Authorization Act, Service 
facilities are not in compliance with the physical access control 
requirements of Homeland Security Presidential Directive (HSPD) 12 or 
Federal Information Processing Standard (FIPS) Publication 201. Before 
Coast Guard facilities can be brought into compliance, the Service must 
have access to one of two potential technological solutions. The first 
solution--the Department of Defense (DOD) Defense Enrollment 
Eligibility System database--uses the DOD Common Access Card (CAC) 
which the Coast Guard uses as their Personal Identity Verification 
credential. However, there is no agreement between that Department of 
Homeland Security and DOD which would allow DHS information to be 
maintained and processed in a DOD system. The lack of such an agreement 
prevents the CAC from also being used for physical access control even 
though it is the Coast Guard's Personal Identity Verification 
credential. The other option is the DOD's Defense Biometric 
Identification System.
    Why has DHS not entered in an agreement with DOD to allow DHS data 
to be maintained and processed in a DOD system thus requiring the Coast 
Guard to use a separate Personal Identity Verification credential, and 
a separate Physical Access Control mechanism?
    Answer. The Coast Guard, as the only Armed Service within DHS, 
continues to work with the Department to seek a solution to enable 
Common Access Card use for personal identity and facilities access 
validation purposes.

    Question 14.b. What is that status of discussions between DOD and 
the Coast Guard regarding the use of the DOD's Defense Biometric 
Identification System? Would use of that system require Coast Guard 
personnel to carry a separate identity credential?
    Answer. The Coast Guard continues to work with DoD to adopt the 
Department of Defense Biometric Identification System (DBIPS) to meet 
physical security and access validation requirements related to 
personal identity credentials. If DPIBS is adopted, Coast Guard 
personnel would continue to utilize current identity credentials.
Increased Threats:
    Question 14.c. While the Service is out of compliance with HSPD 12 
and the FIPS 201 standards and the bureaucrats dither over access over 
one U.S. government department's access to another U.S. government 
department's data, to what additional threats or increased level of 
danger are Coast Guard facilities and personnel being exposed?
    Answer. The Coast Guard is committed to the safety and security of 
its personnel and facilities. The Service employs a comprehensive 
approach to threat identification and mitigation in accordance with 
unit specific requirements based on mission profile, geographic 
location, and recurring threat assessments.
GPS Backup/LORAN Transfer :
    Question 15.a. Since 2008 when the Coast Guard shut down LORAN-C 
and despite ever increasing concerns about GPS jamming, spoofing and 
signal failure, the Department of Transportation has failed to carry 
their mission to provide a GPS timing backup signal--the signal on 
which modern telecommunications rely. Congress has prohibited the Coast 
Guard from removing its LORAN towers pending a request from DOT to 
transfer these towers to that department.
    Has the Coast Guard received any such request from DOT?
    Answer. No. The Coast Guard has not received any LORAN-C related 
requests from the U.S. Department of Transportation.

    Question 15.b. If Congress lifts the prohibition, is the Coast 
Guard prepared to remove the towers?
    Answer. Yes. The Coast Guard is prepared to transfer the towers to 
the U.S. Department of Transportation or divest the towers.
Alternative Planning Criteria for Western Alaska:
    Question 16. The House-passed Don Young Coast Guard Authorization 
Act of 2022 includes a provision that sets minimum standards for any 
Alternative Planning Criteria approved by the Coast Guard for the 
Western Alaska Captain of the Port Zone. This provision was requested 
by our late colleague Don Young who represented Alaska for 49 years. 
The new standards apply ``in any case in which the Secretary has 
determined that the national planning criteria . . . are inappropriate 
for a vessel operating in the area of responsibility of the Western 
Alaska Captain of the Port Zone.''
    The Coast Guard makes the claim that it is working toward a system 
in Western Alaska that will meet national planning criteria. Please 
provide the Committee with:
    Question 16.a. A list of the equipment necessary to be located in 
Alaska in order to meet the time deadlines included in the national 
planning criteria;
    Question 16.b. The capital cost of such equipment;
    Question 16.c. The increase in the cost of compliance for Vessel 
Response Plans to pay for such equipment.
    Answer to 16.a.-16.c. The determination of resources necessary to 
meet time deadlines for the national planning criteria (NPC) are not a 
cumulative summation, but rather a matrix of factors unique to each 
class of vessel and operating area. The required resources to meet NPC 
are determined by an evaluation of the vessel's needs based on vessel 
type, oil type, fuel oil and oil cargo volume, and operating 
environment. The vessel owner and/or operator are required to consider 
all potential response resources (e.g., equipment, personnel, and 
services) that could arrive within the required timelines when 
developing a Vessel Response Plan and coordinate with resource 
providers to determine whether NPC can be met.
    The Coast Guard does not appraise or audit the capital cost of 
resources owned or contracted by vessel owners and/or operators.
    The cost of compliance determination depends on the matrix of 
factors unique to each class of vessel and its operating area. In 
accordance with 33 CFR 155 Subparts D through G and J, vessel owners 
and/or operators are responsible for evaluating and securing the 
requisite resources and services to meet the national planning criteria 
requirements.

 Questions from Hon. Peter A. DeFazio on behalf of Hon. John Garamendi 
    to Hon. Daniel B. Maffei, Chairman, Federal Maritime Commission

    Question 1. Are you seeing the foreign-flagged ocean carriers 
change their business practices as result of recent FMC action and the 
Ocean Shipping Reform Act, on which I am working to negotiate a final 
compromise with the Senators?
    Answer. Based on observations of the staff and reports from 
shippers, ocean carriers are responding to the Federal Maritime 
Commission's initiatives and activities on several key fronts--such as 
increased responsiveness, changes in the fee structures, and higher 
numbers of waivers of per diem fees. Certainly, the FMC action combined 
with Congressional attention to the industry and its practices--
especially the overwhelming bicameral and bipartisan support for the 
Ocean Shipping Reform Act--has motivated the most senior executives of 
shipping companies (in the U.S. and abroad) to address criticisms about 
their service. Several lines have initiated new programs to increase 
their outreach to exporters which I think is a direct result of the 
legislative efforts and the FMC initiatives such as the Vessel-
Operating Common Carrier (VOCC) Audit Program. That said, there remains 
much work to do.
    Commission activities can be characterized by two broad themes: (1) 
enforcement, and (2) engagement/compliance.
    In July 2021 at my direction, following conversations with 
Commissioner Rebecca Dye, the Commission established the VOCC Audit 
Program. Initially, this program was established to analyze the top 
nine ocean carriers by market share for compliance with the Commission 
rule interpreting 46 U.S.C. Sec. 41102(c) as it applies to demurrage 
and detention practices. In March 2022, again at my direction, the VOCC 
Audit Program expanded its scope to evaluate how 11 key ocean carriers 
are serving U.S. export carriers. The Audit Team lead has reported that 
the ocean carriers are approaching this exercise positively and are 
demonstrating constructive and cooperative attitudes. Not surprisingly, 
there are differences from company to company in terms of how 
sophisticated their respective commitments are to demurrage and 
detention compliance, as well as serving the U.S. export market, but 
overall, trends are pointing in the desired direction. We have seen a 
general desire to meet the Commission's expectations for what 
individual lines should do to comply with the rule on demurrage and 
detention, with most lines willingly meeting most, if not all, of the 
``best practices'' identified by the VOCC Audit Team in October 2021. 
Further, we know that many of the 11 lines we are engaging on export 
service have strategies in place, or being developed, to serve this 
market. More work needs to be accomplished on both these fronts and I 
am committed to continuing them until satisfactory progress has been 
achieved.
    The Commission has initiated three Orders of Investigation and 
Hearing. These cases examine the practices of ocean carriers, Hapag-
Lloyd and Wan Hai, as it relates to demurrage and detention, and 
against ocean carrier ONE for its violation of 46 U.S.C. Sec. 41102 
(c). In April 2022, the Commission's Administrative Law Judge issued an 
Initial Decision finding Hapag-Lloyd had violated the Commission's Rule 
on Demurrage and Detention and issued a fine in the amount of $822,200. 
Hapag-Lloyd and the Commission's Bureau of Enforcement subsequently 
entered into a settlement agreement that, if adopted, will result in a 
$2 million fine and changes to that carrier's demurrage and detention 
practices. In May 2022, Wan Hai and the Commission's Bureau of 
Enforcement entered into a settlement agreement for $850,000. All three 
of these matters remain pending before the Commission. In addition to 
the Commission's formal proceedings, its Bureau of Enforcement and Area 
Representatives are investigating the many allegations it receives from 
the public daily.
    We know our efforts have had an effect, and that ocean carriers are 
placing a renewed emphasis on compliance more broadly. Information we 
have gathered indicates the ocean carriers are looking to establish new 
programs ensuring their compliance with relevant regulations and 
statutes. Further, one of the Final Recommendations made by 
Commissioner Dye from her work on Fact Finding 29 is that each ocean 
carrier be required to establish a Chief Compliance Officer who reports 
directly to the Chief Executive Officer. I am supportive of this 
proposal.
    While our work has had a positive effect in many regards, rates to 
ship cargo remain historically high and ocean carrier performance 
continues to be sub-par. Progress on those issues will likely only be 
achieved when supply and demand become more balanced and consistent 
with historic ebbs and flows of international trade patterns. There are 
many issues outside the scope of the legislation or the Commission's 
now or future authorities that must be resolved such as the need for 
more truck drivers, warehouse workers, added intermodal rail capacity, 
and creating additional warehouse capacity. Nevertheless, legislation 
pending before the Congress will help make a difference in the 
Commission being able to address ocean carrier practices that can be 
improved or that need to be investigated.

    Question 2. Do you agree that the FMC must play a more active role 
in the marketplace, so that the foreign-flagged ocean carriers that 
currently dominate global commerce cannot continue to run the table, to 
the detriment of U.S. exporters, and exacerbate our nation's 
longstanding trade imbalance with export-driven countries in the Asia-
Pacific like mainland China?
    Answer. Yes, and provisions in both the House and Senate versions 
of the Ocean Shipping Reform Act (OSRA) will allow us to do so.
    As I stated in both my oral and written statements at the hearing 
held on April 27, 2022, I have no higher priority as the Chairman than 
using the authority and jurisdiction of the Commission to help U.S.-
based exporters access shipping services and reach overseas markets. We 
have acted to do so within the limitations of our current authorities 
and in all candor, our efforts have reached the boundaries of what is 
possible to address. I have identified many of these initiatives in my 
preceding answer.
    Requirements in legislation will be helpful in strengthening 
service contracts, specifying ocean carrier obligations in serving the 
export market, creating more visibility into how the export trade is 
being served, and investigating potential bad conduct by ocean 
carriers. These are welcomed new authorities that will have a 
beneficial effect on how U.S. shippers are served and bring more 
accountability to how ocean cargo services are provided.
    While I do not want in any way to be seen as criticizing the OSRA, 
the answer to the question would be incomplete without mentioning that 
for the FMC, the capacity to be an active regulator is limited by the 
limitations on its authority to oversee the limited antitrust exemption 
that was included in the Shipping Act of 1984. The exemption applies to 
alliances of ocean carrier lines and groups of ocean terminal operators 
which file agreements with the FMC. These alliances and other 
agreements can be beneficial and can have pro-competitive effects. That 
said, the FMC remains vigilant on review of all agreements. I believe 
the FMC should have more robust statutory authority to stop agreements 
(at least temporarily) on its own authority and that agreements should 
be limited in duration so that the parties have to come back to the FMC 
for renewal every five to ten years. These antitrust enhancements are 
not included in OSRA but could be included in subsequent legislation.

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