[Congressional Record Volume 141, Number 1 (Wednesday, January 4, 1995)]
[Senate]
[Pages S420-S421]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SENATE RESOLUTION 22--RELATING TO CARGO PREFERENCE POLICY
Mr. INOUYE submitted the following resolution, which was referred to
the Committee on Commerce, Science, and Transportation:
S. Res. 22
Whereas the maritime policy of the United States expressly
provides that the United States have a Merchant Marine
sufficient to carry a substantial portion of the
international waterborne commerce of the United States;
Whereas the maritime policy of the United States expressly
provides that the United States have a Merchant Marine
sufficient to serve as a fourth arm of defense in time of war
and national emergency;
Whereas the Federal Government has expressly recognized the
vital role of the United States Merchant Marine during
Operation Desert Shield and Operation Desert Storm;
Whereas cargo reservation programs of Federal agencies are
intended to support the privately owned and operated United
States-flag Merchant Marine by requiring a certain percentage
of government-impelled cargo to be carried on United States-
flag vessels;
Whereas when Congress enacted Federal cargo reservation
laws Congress contemplated that Federal agencies would incur
higher program costs to use the United States-flag vessels
required under such laws;
Whereas section 2631 of title 10, United States Code,
requires that all United States military cargo be carried on
United States-flag vessels;
Whereas Federal law requires that cargo purchased with loan
funds and guarantees from the Export-Import Bank of the
United States established under section 635 of title 12,
United States Code, be carried on United States-flag vessels;
Whereas section 901b of the Merchant Marine Act, 1936 (46
U.S.C. App. 1241f) requires that 75 percent of the gross
tonnage of certain agricultural exports that are the subject
of an export activity of the Commodity Credit Corporation or
the Secretary of Agriculture be carried on United States-flag
vessels;
[[Page S421]] Whereas section 901(b) of such Act (46 U.S.C.
App. 1241(b)) requires that at least 50 percent of the gross
tonnage of other ocean borne cargo generated directly or
indirectly by the Federal Government be carried on United
States-flag vessels;
Whereas cargo reservation programs are very important for
the shipowners of the United States who require compensation
for maintaining a United States-flag fleet;
Whereas the United States-flag vessels that carry reserved
cargo provide quality jobs for seafarers of the United
States;
Whereas, according to the most recent statistics from the
Maritime Administration, in 1990, cargo reservation programs
generated $2,400,000,000 in revenue to the United States
fleet and accounted for one-third of all revenue from United
States-flag foreign trade cargo;
Whereas the Maritime Administration has indicated that the
total volume of cargoes moving under the programs subject to
Federal cargo reservation laws is declining and will continue
to decline;
Whereas, in 1970, Congress found that the degree of
compliance by Federal agencies with the requirements of the
cargo reservation laws was chaotic, uneven, and varied from
agency to agency;
Whereas, to ensure maximum compliance by all agencies with
Federal cargo reservation laws, Congress enacted the Merchant
Marine Act of 1970 (Public Law 91-469) to centralize
monitoring and compliance authority for all cargo reservation
programs in the Maritime Administration;
Whereas, notwithstanding section 901(b) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1241(b)), and the purpose
and policy of the Federal cargo reservation programs,
compliance by Federal agencies with Federal cargo reservation
laws continues to be uneven;
Whereas the Maritime Administrator cited the limited
enforcement powers of the Maritime Administration with
respect to Federal agencies that fail to comply with section
901(b) of the Merchant Marine Act, 1936 (46 U.S.C. App.
1241(b)) and other Federal cargo reservation laws; and
Whereas the Maritime Administrator recommended that
Congress grant the Maritime Administration the authority to
settle any cargo reservation disputes that may arise between
a ship operator and a Federal agency: Now, therefore, be it
Resolved, That it is the sense of the Senate that--
(1) each Federal agency should administer programs of the
Federal agency that are subject to Federal cargo reservation
laws (including regulations of the Maritime Administration)
to ensure that such programs are, to the maximum extent
practicable, in compliance with the intent and purpose of
such cargo reservation laws; and
(2) the Maritime Administration should closely and
strictly monitor any cargo that is subject to such cargo
reservation laws.
Mr. INOUYE. Mr. President, the law of the land, specifically section
1 of the Merchant Marine Act of 1936, declares that the United States
shall have a merchant marine sufficient, among other things, to:
Carry a substantial portion of our international waterborne
Commerce; and to serve as a fourth arm of defense in time of
war and national emergency.
The importance of these requirements has been dramatically
illustrated by the vital role of our merchant marine in World War II,
Korea, Vietnam, during Operations Desert Shield and Desert Storm, and
most recently in Haiti.
While the privately owned and operated U.S. flag merchant marine has
performed so magnificently and effectively in times of crisis, it has
also made extraordinary efforts to ensure that a substantial portion of
commercial cargo bound to and from the United States moves on U.S.
bottoms. Given the chronic overtonnaging in international shipping,
cut-throat competition, and the competitive edge our trading partners
give their national flags, this has not been easy. Nevertheless, if our
commercial fleet is to continue to be an effective auxiliary in times
of war or national emergency, it must first be commercially viable in
times of peace. Otherwise, there will be no merchant fleet when the
need arises.
I think we all would agree that there is a substantial national
interest in promoting our merchant fleet. Indeed, several laws of our
land recognize that national interest and spell out specifically how
the U.S. Government is to go about promoting it. Federal laws require
that all U.S. military cargo, cargo purchased with all loan funds and
guarantees from the Eximbank, 75 percent of concessionary agricultural,
and at least 50 percent of all other international ocean borne cargo
generated directly or indirectly by the Federal Government, be carried
on U.S. flag vessels. According to the latest statistics of the
Maritime Administration [MarAd], in 1993 these cargo reservation
programs generated $1.58 billion in revenue to the U.S. fleet and
accounted for one-third of all revenue from the U.S. flag foreign trade
cargo. The alarming news is that according to MarAd the total volume of
cargo moving under these programs is declining and will continue to do
so.
According to a soon to be published report by Nathan Associates Inc.,
the 1992 economic impacts of cargo preference for the United States
were 40,000 direct, indirect and induced jobs, $2.2 billion in direct,
indirect and induced household earnings, $354 million in direct,
indirect and induced Federal personal and business income tax
revenues--$1.20 for every dollar of government outlay on cargo
preference, and $1.2 billion in foreign exchange.
It is, therefore, imperative that U.S. flag vessels carry every ton
of cargo which these programs and the law intend them to carry. This
brings me to the reason for the resolution I am introducing today.
There are two substantial problems which threaten the viability of
these programs and, therefore, the viability of our merchant fleet.
Several agencies administering cargo reservation programs continue to
do their almighty best to evade the spirit and letter of the
reservation laws, that is, find the law inapplicable to a particular
program, or employ other loopholes.
Because of this problem of evasion and uneven confidence, the
Congress amended the Merchant Marine Act of 1970 to centralize
monitoring and compliance authority for all cargo reservation programs
in MarAd. Nevertheless, the problem remains. Critics of MarAd maintain
the agency is too timid, and does not discharge its obligation
aggressively. MarAd, on the other hand, says it has limited enforcement
powers over those Government agencies which are not in compliance.
As the Secretary of Transportation recently announced the
administration's intent to consolidate the Department of
Transportation's operating divisions, I believe it is more important
than ever for the Congress to reiterate its support for our cargo
reservation laws, so that their administration and enforcement will not
suffer from any Departmental reorganization.
Mr. President, the resolution I am introducing today merely expresses
the sense of the Senate that all of these Federal agencies do what they
are supposed to be doing now, under existing law.
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