[Congressional Record Volume 142, Number 130 (Thursday, September 19, 1996)]
[Senate]
[Pages S10972-S10978]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         MARITIME SECURITY ACT

  The Senate continued with the consideration of the bill.
  Mr. LOTT. Mr. President, we have been working very hard to get a 
unanimous consent agreement on a major piece of legislation, maritime 
security. It, I think, is urgent we get this legislation passed. It has 
bipartisan support. It is a major move in making sure that we have an 
American merchant marine. It also actually would save money. We have 
worked very hard to accommodate all of the interests and clear up some 
concerns about this major legislation.
  I had hoped we could get an agreement tonight that would allow us to 
complete action with a series of votes tomorrow morning at 10 o'clock. 
It appears now that that may not be possible. I would like to announce 
now that there will be no further votes tonight. We will continue to 
work to see if we can get an agreement. We will have debate. Hopefully, 
we will get an agreement still tonight to have these stacked votes in 
the morning at 10 o'clock. We have not been able to reach that 
agreement.
  Senator Grassley has been here. He has made his statements. He has 
identified seven amendments that he is very interested in. We had an 
agreement that would have said that all debate on all amendments--we 
were trying to get an agreement that said seven amendments would be 
offered by Senator Grassley, and if votes were necessary, they would 
all occur starting at 10 o'clock in the morning.
  I think Senator Grassley has had the opportunity to make his points 
on the bill in general. I know he would like to be heard on these 
amendments. I think that he has been reasonable in working out the 
framework of an agreement here, but we do not yet have it clear. But I 
think it is important we go ahead and notify Members there will not be 
additional votes tonight.
  I will not make this unanimous consent request at this time. The 
distinguished manager of the bill on the Democratic side of the aisle, 
the great Senator from Hawaii, will be talking to Senators that are 
concerned.
  I just want to emphasize, we are on the verge of passing major 
legislation. We have an agreement in hand that would limit the 
amendments, get it done, and get it to final passage. If we do not get 
this agreement tonight, I fear this bill will never get passed this 
year, because Senators will be leaving tomorrow around noon. If we 
cannot get the votes done tomorrow, if we are going to have seven 
votes--and we have no guarantee that we could even get those on Tuesday 
morning--plus on Tuesday of next week we are going to be very much into 
the continuing resolution debate. We need to get that done. That is the 
overall final agreement that will allow the Senate to leave for the 
year.
  So I urge my colleagues, let us see if we can come to final closure 
on the amendments and a series of votes at 10 o'clock in the morning. 
But I want to emphasize, no further votes tonight. We do not have an 
agreement at this point that we will definitely have votes at 10 
o'clock in the morning but we will keep working on that. We will notify 
all Members through the rotary announcement and in every other way we 
can, but you should expect the possibility of votes in the morning at 
10 o'clock.
  Mr. President, I now turn to a statement so that Senators can be 
checking with their colleagues and see if we can get an agreement on 
the unanimous consent request.
  The Senate has been considering this afternoon the Maritime Security 
Act, H.R. 1350. I urge my colleagues, when we do get an agreement, if 
we get an agreement, to support this critically important national 
security legislation.
  H.R. 1350 will ensure that our Nation and our Armed Forces will have 
available a modern fleet of vessels, and reliable, loyal American crews 
to provide a readily available sealift.
  It also puts at the disposal of the Department of Defense vast 
intermodal and management transportation assets that are essential to 
modern military logistics.
  For the Department of Defense to duplicate the capabilities this 
legislation will provide would cost $800 million a year--eight times 
the yearly cost of the entire maritime security program.
  So this legislation is quite simply a cost-effective bargain for our 
Nation's security. It is also essential.
  If any of my colleagues were undecided on this legislation before the 
recent crisis in the Persian Gulf, they should not be now. What has 
happened in the last 2 weeks has demonstrated that we must be prepared 
and able to act on our own when our national interest so requires.
  During the Persian Gulf war in 1990 and 1991, we had the support of a 
worldwide coalition with almost unlimited access to staging areas, to 
modern ports and infrastructure, and to vessels and crews of many 
nations. Even then, however, some foreign-flag vessels and crews 
refused to enter the Gulf, or it took weeks to decide whether they 
would sail or not--delays that could have been catastrophic in certain 
circumstances or in future conflicts. Still, with U.S.-flag ships and 
crews carrying nearly 80 percent of all the seaborne cargo, the job did 
get done and, frankly, done quite well.

  During this recent crisis, however, we are seeing that our relatively 
good fortune in that war was probably the exception rather than what 
might be the rule in the future.
  For example, according to press reports, every Arab State, even those 
on our side in 1990 and 1991, condemned the strikes on Saddam Hussein.
  Our B-52 bombers had to fly the long way around--all the way from 
Louisiana to Guam to the Middle East--in

[[Page S10973]]

order to avoid overflying countries that disagreed with the U.S. 
actions.
  Our cruise missiles came from U.S. Navy ships in the Persian Gulf and 
could not be supplemented by aircraft based in Jordan, Turkey, and even 
Saudi Arabia because these nations could not permit their strikes to 
originate from their soil.
  A proposed western-Iraqi no-fly zone was rejected because of our 
ability to use Jordanian, Turkish, and Saudi bases.
  And France--France--refused to participate in the new expanded air 
patrol zone over Iraq.
  I ask my colleagues tonight, what will happen in some future conflict 
if the issue is not just overflight rights but access to ports, 
transportation infrastructure, and vessels?
  What will happen if the crews of foreign-flag vessels refuse to carry 
our supplies for political or even religious reasons?
  What will happen if foreign vessels and foreign companies are 
pressured to take a walk?
  During the Yom Kippur War in 1973, Arab nations pressured flag-of-
convenience vessels not to sail to Israel--and they did not sail. It 
has happened before--and it will happen again.
  In the future, we may have allies and vessels--and we may not. H.R. 
1350, the Maritime Security Act, is an insurance policy that we will 
always have at least the essential minimum of vessels and crews ready 
and able to serve our Nation whenever they are called to do so.
  We are, after all, the world's only remaining superpower--with global 
interests and responsibilities.
  No nation in history has survived very long without a strong 
maritime, without a strong merchants fleet. The Navy cannot do the job 
unless there are ships to carry the cargo and to carry the men and 
women that need to get to a troubled site. I think that is a very 
strong reason to vote for this bill.
  This bill is also clearly beneficial in many other respects. First of 
all, it is identical to the one that passed the House, so we can 
complete action and send this bill straight to the President for his 
signature.
  By authorizing investment in the operation of U.S.-flag vessels, the 
bill would strengthen and improve our economy, also. It achieves the 
dual goals of improving defense and our economy because it is highly 
effective in the way it is set up. The private sealift capability that 
this program helps make available to DOD would come at a small fraction 
of the cost it would take to the Department of Defense to acquire the 
ships and the crews that would be needed.
  By helping ensure that there is a U.S.-flag merchant fleet, the bill 
also would help ensure that there is a pool of U.S. citizen mariners to 
man DOD's own Reserve ships in times of emergency. We found out during 
the Persian Gulf War that if we had not had a lot of old merchant 
mariners to come out of retirement, we could not have had the ships 
manned. They did come out of retirement, and a lot of them worked long 
hours. Obviously, they did the job.
  It would help ensure that we will not have to depend on foreign 
vessels or crews to supply these ships overseas.
  Economically, the bill would help ensure that our Nation's commerce 
is not entirely under the control of foreign-flag vessels. It would 
also help level the playing field for U.S.-based carriers whose 
foreign-based competitors usually operate under more generous tax codes 
and have other advantages.
  In my own hometown, when I come over the bridge entering my hometown, 
I look down at the river and I see ships with flags from Panama, 
Liberia, Greece, Russia--no U.S. flags, no U.S. flags. That worries me. 
They are lined up along the docks, the grain elevators, and the other 
cargo-loading areas, right next to one of the world's most 
sophisticated shipyards where we build cruisers, destroyers, and LHD's, 
and there, right next to those various sophisticated ships and the 
construction that goes on, there lies a Russian ship or a Greek ship. 
There is something that is bent out of sorts in my mind to see that 
sight. I would like there to be a guarantee that we would have at least 
a minimum of U.S.-flag ships. This bill would do that.
  On a program basis, this bill is a major improvement compared to the 
present support program for U.S.-flag vessels. This bill would reduce--
I want to emphasize that, reduce--the annual payments per ship by 
perhaps as much as 50 percent and achieve similar reductions in annual 
program levels.
  I worked on this bill for 2 years and I went into it saying we have 
to put the merchant marine fleet on a basis where we can call on them 
if we need them, and also where we will not waste money, and to save 
money in the way it is set up. That is what we have done. This will be 
a highly efficient program.
  Let me also say that to the extent anyone has heard loose talk about 
this bill establishing a new program, that is not the case. A Maritime 
Support Program exists now. It is not as efficient as it should be, and 
it is not structured the way it should be, but we are changing that 
with this bill and continuing an existing program. It retains the 
benefits of the maritime program, but by far more efficiency. This is, 
in terms of real impact, a program streamlining, not creating a new 
program.
  I am also pleased to tell my colleagues this bill would greatly 
reduce regulation accompanying the program. Our American carriers need 
to be able to respond quickly to meet foreign competition. If they have 
to wait for Government rulings before taking steps needed to meet 
foreign competition, it costs them money, it costs them business. So I 
need hardly say what the commercial consequences would be for these 
carriers.
  The Nation, in turn, could lose the benefits of having privately 
owned U.S.-flag merchant ships. This has already happened to a large 
degree under the outdated present program. The ships are going down to 
nothing, and that is where we are headed.
  If we do not pass this bill, we will not have a merchant marine in a 
very few years. If we do not have this program improved and in place 
when we go into the next century, there will not be a U.S. merchant 
fleet.

  This bill would promptly end regulation concerning where vessels can 
go in foreign commerce or how frequently. Some of the regulations that 
have been on the books do not make any sense at all. Why should we have 
this kind of regulatory control of where they go in foreign commerce or 
how frequently?
  It also would newly ensure the U.S.-flag carriers, like their 
foreign-based competitors, will have the flexibility to respond to 
commercial needs by time chartering or using space on the vessels of 
others--without having to ask our Government for approval. Why should 
they? If space is available and you can save money by using it, why 
should you have to go through the process of asking the Government's 
approval, and maybe even having it denied?
  Other provisions eliminate reporting, recordkeeping and other 
requirements. When you are involved with the Federal program, there is 
plenty of that to be done if you get rid of some of the paperwork. With 
such changes, we can expect the executive branch to be able to 
implement the bill effectively and promptly.
  The application process, for example, should not be burdensome and 
should require carriers to provide data only to the extent that it is 
necessary for decisions which the statute requires the agency to make.
  The bill will allow our Nation to have the defense and economic 
benefits of a merchant marine but overhauls the past program so that we 
can achieve those benefits in a way that is far more cost efficient and 
reduces the regulatory burdens on the carriers.
  Let me also make clear that, in taking up H.R. 1350, we are taking up 
a bill which is virtually identical to S. 1139 as reported by the 
Commerce Committee.
  Very few provisions differ at all.
  As a result, the Senate Committee report will be completely 
applicable as to the meaning of provisions of the House bill which are 
comparable to those in the Senate reported bill.
  There are only a handful of aspects of the House bill that differ 
from the Senate bill. Let me note some of them.
  Under the bill, carriers participating in the program are to be 
available to provide assistance to the Nation under certain emergency 
circumstances.
  Compensation for providing resources which includes, for the purposes 
of this provision, services is required and is in addition to basic 
program payments

[[Page S10974]]

made by the Transportation Department.
  The House bill differs from the Senate committee bill on a few 
aspects of this Emergency Preparedness Program [EPP].
  One provision added on the House floor would make clear that a 
carrier's obligations under the emergency preparedness program do not 
continue when an operating agreement under the basic program is no 
longer in effect.
  Another change made on the House floor would make clear that the 
range of circumstances in which the Defense Department can activate an 
emergency preparedness agreement is not limited to times of declared 
war, but also makes clear that the authority to activate an emergency 
preparedness agreement requires a significant event, and a considered 
and carefully coordinated decision.
  These are both clarifying changes, consistent with the intent set 
forth in the Commerce Committee report.
  The House bill would also specify, in proposed section 653(c)(3), 
that the amount of compensation paid under an Emergency Preparedness 
Agreement must be approved by the Secretary of Defense.
  We support this clarification because it is DOD, not DOT, that is 
expected to provide this EPP compensation, which is in addition to 
basic program payments made by DOT. Section 653(c)(3), however, does 
not authorize the Defense Department to fail to meet the compensation 
requirements set forth in section 653.
  Let me note here, in conjunction with the EPP, that we have seen some 
erroneous statements that this bill would eliminate the requirement in 
law today that U.S.-flag vessels be made available in times of 
emergency.
  What the bill does is say that certain of today's statutory 
provisions would not be in effect for a vessel during such time as that 
vessel is covered by an Emergency Preparedness Agreement.
  We have developed the EPP because it will provide more flexible, 
better sealift service to the Government than is available now.
  This concept, which focuses on the whole transportation system and 
process, not individual vessels, has been worked on by DOD, and the 
industry for years.
  That program allows for calling up U.S.-flag vessels to meet true 
emergencies, but it allows other options not expressly available under 
current statute.
  The creation of this alternative is a plus for the Government. And, 
as I said, at such time as a U.S.-flag vessel is not covered by an 
Emergency Preparedness Agreement, the present statutes continue.
  So, any statements that this bill removes obligations for vessel 
operators to help the Government in emergency is simply wrong. To the 
contrary, we have improved the program for the Government.
  The House bill does not include the Senate bill's provision which 
would ensure that companies which choose to enroll their modern, 
foreign-flag vessels in this program do not have to incur additional 
costs to comply with Coast Guard vessel regulations.
  I intend to continue to pursue legislative reform in this area, but 
the specific changes may not be enacted before implementation of this 
bill. In that regard, I want to make clear that the Secretary of 
Transportation has the authority, to swiftly take clear and conclusive 
administrative action in this area.
  The Secretary can and should ensure that operators of modern vessels, 
vessels which the Coast Guard accepts as safe under international 
standards, will not incur additional vessel costs if they do what we 
want them to do--which is to put those vessels under U.S.-flag and 
enter into contracts under this program.
  I will be looking to the Secretary to ensure that before a carrier 
changes the registry of a foreign-flag ship meeting international 
standards to United States to participate in this program, it will not 
be required to incur additional costs due to U.S.-flag vessel 
standards.
  The House bill includes a provision, section 651(b)(4), not in the 
Senate bill. This provision specifies that, to be eligible for the 
program, a vessel ``will be'' eligible for U.S. documentation at the 
time an operating agreement is entered into for the vessel.
  As a technical matter, this does not mean that the vessel must be 
eligible at the time the operating agreement is entered into, but means 
that it must be determined at the time the operating agreement is 
signed that the vessel will be eligible at the appropriate later 
point--as it cannot receive payments under the program until it is 
actually documented as a U.S.-flag vessel.
  Also, under the Senate bill, a provision for certain vessel operators 
to notify certain U.S. shipyards with respect to certain possible 
construction opportunities was to be effectuated by having the vessel 
operator notify the Secretary of Transportation, who would, in turn, 
notify shipyards. It is our view that, under the bill, DOT has the 
authority to make an administrative determination to utilize such an 
approach, so that vessel operators would be able to meet the 
requirement without having to separately notify various shipyards.
  While there are a handful of other differences between the House 
passed and Senate reported bill, these technical explanations indicate 
how small those differences are. Their relatively minor scope 
underscores that it is appropriate for us to proceed to pass the House 
bill and enact this long overdue legislation--so that the American 
people can receive the defense and economic benefits it provides at 
such a low cost.
  Mr. President, I hope that our colleagues and those that are outside 
following this debate will review all of the remarks I have put in the 
Record, because I did go into some additional specific changes that we 
have made. That has been my intent all along, to improve the system and 
to save money while we are doing it. I think we have accomplished that 
in this bill.
  I have worked with parties on all sides. Obviously, Senator Stevens 
has been very involved in this, as has Senator Inouye, Senator Breaux, 
and Senator Hutchison has a lot of interest in it. We are this close to 
getting it done. And yet, because of the objection that we have heard 
so far tonight, we could lose this whole bill. I think it would be a 
great mistake. But I am going to yield the floor in a moment. I 
understand that Senator Grassley will be back in just a few moments and 
he will then, hopefully, begin offering amendments. In the meantime, we 
will continue to work for a unanimous-consent agreement as to how it 
will be considered.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAMS. Mr. President, I rise to discuss some of the concerns I 
have about the Maritime Security Act, H.R. 1350, pending before the 
Senate today.
  On March 6, 1996, I joined several of my colleagues in a letter to 
Commerce Committee Chairman Pressler requesting that additional 
hearings be held on this bill. While there had been one hearing, groups 
opposing this legislation did not testify. Since many groups vigorously 
oppose H.R. 1350, such as Citizens Against Government Waste, National 
Taxpayers Union, Citizens for a Sound Economy, Heritage Foundation, 
Competitive Enterprise Institute, CATO, and National Grain and Feed 
Association, we believe a hearing should be held to fully air these 
concerns.
  That hearing did not occur. Nor did a markup of the Senate companion 
bill occur. We are today taking a controversial House bill from the 
desk that has not gone through the Senate process. The bill was rushed 
through the House in a similar manner and passed by a voice vote. I 
understand, however, that there are now many House Members who believe 
they did not have a good understanding of the bill at the time of the 
vote and would now have preferred a more thorough consideration.
  Mr. President, maritime subsidies have long been on priority lists 
for termination by many deficit hawks. They were heralded by 
Republicans early in the 104th Congress as a prime example of corporate 
welfare that must be terminated. Correspondingly, it has been

[[Page S10975]]

known for some time that operating differential subsidies would be 
terminated. Now that we are closer to termination, the subsidies were 
dusted off and repacked in new authorization legislation called the 
``Maritime Security Bill.'' Now, subsidizing U.S.-flag ships, and their 
noncompetitive labor rates, is an important U.S. security interest.
  National security is vitally important to me. But I am not convinced 
that this bill has raised national security concerns that justify the 
authorization of $100 million to subsidize 50 U.S. ships to the tune of 
$2 million a piece.
  During the gulf war, the Government has the authority to call up 
commercial vessels receiving maritime subsidies. However, three-
quarters of the ships chartered during the crisis were foreign-
flagged--and only 20 percent of the cargo rode on these ships. Most of 
the cargo was carried on Government ships. There is also a ready 
charter market for commercial cargo vessels when more ships are needed. 
Further, the few U.S.-flagged ships that were called up didn't even 
deliver their 8 percent of the total cargo to the war zone. They 
transferred their cargo to foreign-flagged ships at foreign ports. And 
they charged the Government far more than the cost incurred by either 
military or foreign-flagged crews--on top of the subsidies.
  There is no evidence that this continuation of the ODI subsidies 
would work any differently. Also, there is plenty of room for shipping 
companies to continue to substitute foreign flag ships if they are too 
busy, as they can now. Why subsidize ships that are not even available 
in crisis times? Doesn't that gut the intent of the national security 
argument?
  Even the Clinton administration has admitted that this program is 
just one which is necessary to preserve union jobs by subsidizing 
higher U.S. maritime wages. Why not subsidize all union jobs, not just 
those of the maritime unions?
  Mr. President, in my judgment, there are many reasons why we should 
terminate maritime subsidies, including cargo preference and Jones Act 
preferences. Since my colleague, Senator Grassley, had done such a good 
job of presenting them, I will not repeat them other than to say that 
it is my preference that all of the maritime subsidies be terminated--
for the industry to become competitive on its own without the 
Government crutch--and the burdensome Government regulations that come 
with the subsidies.
  There is no reason to believe that the Government, during times of 
crisis, cannot call into service its own vessels, foreign-flagged ships 
owned by American companies, charter vessels or obtain this kind of 
assistance from our allies. These subsidies are not needed and should 
be terminated, as determined earlier.
  Vice President Gore's National Performance Review recommended that 
maritime subsidies be ended. In 1995, the DOT Inspector General 
recommended termination. A MIT study opposes them. Many deficit hawks 
decry the waste of taxpayers money.
  Senator Grassley has also determined that nine retired Navy admirals 
who originally supported the American Security Council's effort to 
promote this legislation now have questions about it and support 
additional hearings before further consideration. They were as snowed 
as our colleagues on the House side.
  The extension of the shipbuilding loan guarantee program has also 
been criticized by many and deserves a closer examination as well.
  The one positive aspect of this bill is the relief it gives the Great 
Lakes Ports, including the Port of Duluth, to cargo preference 
restrictions. While I would prefer to terminate this subsidy as well, 
the bill does give the ports the ability to compete based on price 
rather than whether the ship is U.S. or foreign flagged. While cargo 
preference laws act to subsidize U.S.-flagged crews, they can actually 
jeopardize jobs of dockworkers in ports, such as the Port of Duluth, 
where U.S.-flag ships are scarce.
  Mr. President, I realize that this bill may pass. The proponents 
carry a lot of weight in this body, and the national security argument, 
flawed as it is, is one that many choose not to challenge. Again, I 
have great admiration for the good work of my colleague, Senator 
Grassley, who is willing to call a spade a spade.

  For that reason, and because of the great respect Senator Grassley 
holds in this body, I would urge my colleagues to listen carefully as 
he offers his amendments to this bill. Each one of them attempts to 
ameliorate a serious concern in this legislation. They should not be 
dismissed for procedural or substantive reasons. They are not offerred 
to filibuster the bill. They are offerred to improve it. Each one 
should have been considered in a committee markup, which, again, was 
never held.
  In my judgment, the Grassley amendments are no-brainers that should 
not be controversial. One would ensure that the ships receiving the 
subsidies are available for service, not foreign-flagged subsitutes. 
Why would we subsidize ships that don't even have to be available in 
emergencies?
  Another amendment would force U.S. seafarers to serve in these 
crises. If the Government is subsidizing sizable seafarer wages, 
shouldn't they be required to serve if called? Right now that is not a 
requirement. Senator Grassley would include exceptions similar to those 
granted to military reservists. Again, what is controversial about this 
amendment?
  The next Grassley amendment would equalize seafarer war bonuses to 
the same rate as military reservists. Right now they receive far more. 
Why?
  An amendment would prohibit use of the subsidies for pro-maritime 
lobbying efforts. Last year we voted to restrict use of public funds 
from lobbying use. These funds should be restricted as well.
  Another amendment would prohibit subsidies being used for campaign 
contributions. Subsidized wages of seafarers have enabled these workers 
to contribute 500 times more than other union workers to campaigns.
  One amendment will require U.S.-flag ships and crews to deliver their 
cargoes directly to the war zone. Incredibly, now they can, and have, 
shifted their cargo to a foreign-flagged and foreign-crewed vessel at a 
port far from the war zone. They then can charge the Government U.S.-
flag premium rates while providing lower foreign-flag rates. Or they 
can use a foreign-flag ship the entire route, receiving the same 
premium rates. Why is this acceptable if all of the proponents of this 
bill claim that we need a U.S.-flag capability.
  The bill provides for fair and reasonable reimbursement during use by 
the Government. The Pentagon paid $70,000 to the U.S. cargo ship 
operators to send war materiels to the gulf. The foreign bid was 
$6,000. This is wrong--a betrayal of the taxpayers. The last Grassley 
amendment would give the government the right to hire foreign-flag 
vessels if U.S.-flag costs are greater than 6 percent over the foreign 
cost. U.S. flags would also have to charge the government the same rate 
provided to volume customers.
  If the amendments offered by Senator Grassley are adopted, it would 
be easier for me to consider supporting this legislation. However, the 
entire premise for this bill is flawed. There simply is not a good case 
for this expenditure of taxpayers' dollars.
  Mr. GRASSLEY. Mr. President, before I send an amendment to the desk, 
I am going to talk about the amendment. This is one of those seven 
amendments that I had suggested, and it deals with our seafarers being 
paid bonuses during time of war and to equalize the bonuses between 
people who are seafarers and the bonuses that people in our Navy would 
receive in the very same part of the world under the very same 
conditions.
  If seafarers do decide to serve, I think I pointed out in my original 
remarks on the bill, they have many more options than people who are 
military. When the people in Texas were told by the President of the 
United States, ``Pack up, you're going to go to Kuwait,'' the families 
had tears in their eyes, and we saw on television the men and women of 
America who are committed to the defense of our country respond to the 
Commander in Chief.
  Seafarers have options: to go or not. And if seafarers do decide to 
serve and sail into the designated war zone, they are paid 100-percent 
base pay as a war-zone bonus. The military sealift command reported to 
me that one seafarer was paid $15,700 for a 2-month Persian

[[Page S10976]]

Gulf war bonus. That is on top of the regular pay that they would get.
  The most that our men and women in the regular military or Reserve 
could get for that 2-month period is $300, or $150 a month. So compare 
this $15,700 for a 2-month war bonus for a seafarer with the $300 that 
one of our men or women would have received during that same period of 
time.
  But that isn't the end of it. Our seafarers are eligible for much 
more--much, much more. If their vessel is in a harbor that is attacked, 
a seafarer can get an extra $400 per day. If their vessel is actually 
attacked, not just in the harbor that is attacked, they get an extra 
$600 per day.
  So the amendment that I am offering puts an end to this nonsensical 
approach and inequitable approach between our men and women in the 
regular military or Reserve compared with what the seafarers get. 
Taxpayers' support for seafarers' war bonuses will be limited to the 
level provided for the men and women in our Reserves and regular 
military.
  This amendment makes very certain taxpayers don't pay seafarers 
higher war bonuses than the active military.
  Seafarers get this extra 100-percent base pay. I think everybody 
would agree that this is clearly nonsense and unfair. It ought to be 
demoralizing to our troops to look at the paycheck of one person and 
have $300 compared to the paycheck of a person in the same environment 
with $15,700 and some. We ought to realize that this is inequitable. It 
might even be considered a huge waste of taxpayers' money, or it could 
be equitable to pay our men and women in uniform more.

  The seafarers get incredibly large salary and benefits year in and 
year out from taxpayers supposedly so they will serve Uncle Sam when 
needed. It seems to me it is not right to gouge the taxpayers a second 
time when they are actually called into a war zone.
  It is fair for them to get a bonus, but it is not fair for them to 
get a bonus well beyond what regular military people get who, by the 
way, get paid a lot less than the seafarers get anyway. I want to talk 
about the biggest war bonus paid to a civilian mariner assigned to an 
MSC ship during Operation Desert Shield/Desert Storm. On March 27, 
1991, the Department of Defense approved the payment of war zone 
bonuses to those mariners operating in the Persian Gulf area west of 53 
degrees east longitude. Civilian mariners were eligible for war zone 
bonuses equal to 100 percent of pay for each day their ships were 
within the designated war zone. Payments were effective retroactive to 
January 17, 1991, and ceased on April 11, 1991, the day of the final 
cease-fire.
  The largest war bonus payment made to a civilian mariner aboard an 
MSC controlled ship was approximately $15,700 for that 2-month period. 
The ship was anchored within the designated war zone area approximately 
56 consecutive days. Consequently, the crew members earned larger 
payments than those assigned to other MSC controlled ships.
  The vast majority of the MSC's vessels transported military equipment 
and other supplies from the continental United States and European 
ports to the Middle East. These ships were only in the war zone area 
for approximately 2 to 5 days per voyage. As a result, war bonus 
payments for these civilian mariners averaged approximately $69.50 to 
$1,467 per voyage.
  The war zone areas for military personnel included the Persian Gulf, 
the Gulf of Oman, that portion of the Arabian Sea which lies north of 
the 10 degrees north latitude and west of the 68th degrees east 
longitude or the Gulf Aden and all of the Red Sea. This made it more 
likely that active-duty sailors would qualify for hazardous pay.
  This is the guidance that clarified which bonuses are paid and when 
under Desert Shield/Desert Storm. The imminent danger pay on applicable 
contracts, the actual direct costs of a reasonable crew imminent danger 
pay mandated by compulsory regulations or collective bargaining 
agreements, not to exceed $130 per month, are payable to each crew 
member under the following circumstances: Vessels in the Persian Gulf, 
the Red Sea, the Gulf of Oman, the portion of the Arabian Sea that lies 
north of the 10 degrees north latitude, west of the 68th degrees east 
longitude, or the Gulf of Aden, and vessels in this zone for a minimum 
of 6 days within one calendar month or 6 consecutive days beginning in 
one month and ending in the next, and vessels in this zone between 
August 2, 1990, and until the time in which the Secretary of Defense 
determines that an imminent danger no longer exists in the region. And 
the $130 is not prorated. The full amount is paid to anyone satisfying 
the above criteria.
  Time spent in the war bonus zone described below does not count 
toward the 6 days criteria.
  Let me point out that my war bonus amendment is supported by the 
retired admirals. These were the admirals that I had named earlier. I 
think it is fair to say that retired admirals know that it is not fair 
to pay $15,700 to a seafarer for 2 months, but only $300 to our men and 
women in the reserve or the regular military and Navy.
  In regard to the war bonus--because I just told you about the 
imminent danger pay--in regard to the war bonus, on applicable 
contracts, actual direct costs of the reasonable crew war bonuses, 
mandated by compulsory regulation or collective bargaining agreement 
not in excess of an extra 100 percent of the crew's base pay, exclusive 
of supply penalties, are payable to each crew member under these 
circumstances: The vessel is in the Persian Gulf west of the 53 degrees 
east longitude, a bonus is payable for any day or portion of a day in 
this zone continuing until one day after the vessel passes east of the 
zone, and the vessel then is zoned between January 17, 1991 and the 
time when the final cease-fire marks an end to the hostilities, as 
referred to in the U.N. Security Resolution 686 of April 11, 1991.

  Then we have next the war bonus for harbor attack. I gave a slight 
definition of this earlier. But this would apply in circumstances where 
war bonuses are applicable. It would then be $400, payable to each crew 
member aboard a ship in a harbor which is attacked. This is MARAD's 
determination. Only one harbor attack bonus is payable per day. A 
harbor attack bonus is not payable to a crew member earning a vessel 
attack bonus for the same day.
  Then we have the war bonus that applies, not to the harbor attack, 
but to the actual attack on the vessel. In circumstances where war 
bonuses are applicable, $600 is payable to each crew member aboard a 
ship which is attacked. And that also is MARAD's determination.
  There are certain document requirements. There is a requirement to 
submit imminent danger pay and war bonus invoices to appropriate MARAD 
paying offices in accordance with billing instructions clearly 
identifying which imminent danger war zone is being built, the 
corresponding dates and times in the zone. Note that the base wages 
must be identified for each rating, and MARAD then will request vessel 
deck logs and payroll sheets and individual pay vouchers containing 
crew's signatures for reconciliation of crew wages.
  We have had some instances where seafaring unions sued the U.S. 
Government to obtain bonuses for gulf war trips. Seafaring labor unions 
sued the Government. According to this article, they sued the 
Government in an effort to win war bonus payments for their members who 
worked on Government cargo ships during the war against Iraq.
  The Sailors Union of the Pacific, the Marine Firemen's Union, and the 
Seafarers International Union filed suit in Federal District Court 
claiming the U.S. Maritime Administration unfairly cheated their 
members out of hazardous duty pay. War bonus payments, of course, as I 
said are extra compensation for ship crews that go into risky shipping 
zones. Generally, crews get twice their regular pay, plus extra lump 
sum payments, should their vessels or harboring areas come under direct 
attack.
  The shipping areas where war bonus payments apply are usually the 
traffic lanes within war zone areas designated by the White House. When 
the Persian gulf conflict began in 1991, the unions and the American 
President Line, a primary carrier for U.S. forces agreed to use a war 
zone designated by President Bush as the area where the war bonus 
payments would apply. However, the Maritime Administration later 
established a war zone area that was

[[Page S10977]]

smaller than the original White House designation.
  The American President Line which operated 23 of its own ships, 11 
Ready Reserve force ships for MARAD, argued that it had to use a 
smaller war zone area because it was relying on reimbursement from the 
Government for the Ready Reserve force operations.
  The unions brought the case to an arbitrator from the Federal 
Mediation and Conciliation Service. Arbitrator William Eaton ruled that 
because of its earlier agreement, APL should pay seafarers on its own 
ships at war bonus rates for the entire zone established by the White 
House, but seafarers on the RRF ships could not be included, he 
decided. The union failed in an earlier attempt to get the Federal 
district court here to overturn the arbitration denial of war bonus 
payments to the RRF workers.
  Another newspaper report on these bonuses says:

       The Defense Department officials have agreed to reimburse 
     civilian ship operators for war bonuses up to 100 percent of 
     normal wages paid to seafarers who crewed scores of military 
     cargo ships supplying the Persian Gulf. Although strict 
     conditions will apply, the Navy notified ship owners this 
     week that it will pay for war bonuses given to men and women 
     who entered the war zone after August 2, 1990, the day that 
     Iraq invaded Kuwait. The higher levels of benefit will be 
     paid for voyages after January 17, 1991, when the United 
     States launched its air war against Iraq. The bonuses will 
     continue to be reimbursed until the formal cease-fire is 
     declared by the United Nations according to a notice from the 
     Military Sealift Command, the Navy agency in charge of the 
     ocean transportation.

  Marge Holtz, director of public affairs for the Sealift Command, said 
she did not know how many ship crews would be affected or what the 
total costs would be. She added that certain military censorship 
policies are still in effect and will not be relaxed until the cease-
fire is declared.
  Sealift commander Admiral Francis Donavan said in early March that 
446 voyages had been made into the gulf during the first 7 months of 
the operation. Some individual ships, especially those under the U.S. 
flag, have made multiple voyages.
  At its peek operation, Desert Storm-Desert Shield employed 128 U.S.-
flag ships, 111 foreign-flag ships; crew sizes of the ship ranged from 
about 20 to more than 70 on some specialized vessels. According to the 
Sealift Command notice, crew members on the ships sailing through much 
of the Persian Gulf, the Red Sea, the Gulf of Oman, and portions of the 
Arabian Sea will have their war bonuses paid by the U.S. Government. 
The maximum of $135 a month will be paid for voyages in the period 
leading up to January 17. After that and into the future, until the 
U.N. cease-fire, the war bonuses will be 100 percent of base daily wage 
of each crew member. The notice, however, will not ease one festering 
controversy with the U.S. merchant marine. It stems from the fact that 
reimbursement is not yet being made for ships that are part of the 
Government's Ready Reserve Fleet, a fleet of aging cargo ships kept for 
use in military enterprises. Seventy-eight ships for the Ready Reserve 
were activated to participate in the Persian Gulf buildup, and a fight 
is already on for war bonuses for those crews, said one West Coast 
maritime labor leader.
  Whitey Disley, president of the Marine Firemen, Oilers, Watertenders 
and Wipers Association, said that shipping companies that operate Ready 
Reserve ships under contract to the Government are not paying war 
bonuses. Companies are refusing to pay, even though some of them have 
labor contracts that specifically call for war bonuses.
  One such company is American President Line, Ltd., of Oakland, but 
representatives of the company indicated they will pay if the 
Government offers reimbursement.
  ``It looks like we will have to go to arbitration, a grievance 
procedure on this,'' the union leader said.
  The issue is under ``active review'' by the Maritime Administration, 
the Transportation Department agency responsible for the Ready Reserve 
force. MARAD officials contacted this newspaper and had not responded 
with any comment at press time.

  It is pretty complicated, Mr. President, but one thing that stands 
out here is that we do not have an equitable situation between people 
who are in the full-time military in a war zone with their life just as 
endangered as seafarers who get 100 percent base pay war bonuses. And 
remember, seafarer pay is already higher than what our military people 
get in the first place. It seems to me that we have a responsibility to 
our military personnel that they be treated fairly with the seafarers.
  I want to alert my colleagues to actual amounts of money that are 
paid for these war bonuses to specific shipping companies. We paid 
$29,197.56 to Gulf Trader of the All Marine Service; to the American 
Foreign Shipping Company, war bonuses we paid, $40,512.48; to the 
American Overseas Marine, we paid a total of $599,747.98. That is 
broken down into separate figures for eight different ships, ranging in 
payment from a small amount of $5,937.58, all the way up to figures 
like $253,334.18 and $239,430.80 for a couple of other ships.
  The International Marine Carriers received for two ships $259,642 
total; for the Interocean Management Corporation, war bonuses totaled 
$369,279.27, ranging from a low of $14,276 for one ship to $105,884 for 
another ship; to the Marine Carriers, we paid $55,299.47, ranging from 
a low of $7,553 up to a high of $30,000 for another ship, spread out 
over four ships. Marine Transport Lines received $193,170. OMI Ship 
Management received a total of $439,646. That is a grand total of 
$1,987,496 war bonuses for these shipping lines.
  As I stated previously, these are not the only bonuses that are 
available.


                           Amendment No. 5391

(Purpose: To provide for a uniform system of incentive pay for certain 
             hazardous duties performed by merchant seamen)

  Mr. GRASSLEY. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Iowa [Mr. Grassley] proposes an amendment 
     numbered 5391.

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place, insert the following new section:

     SEC.  . UNIFORM PAYMENT FOR HAZARDOUS DUTY.

       Title III of the Merchant Marine Act, 1936 (46 App. U.S.C. 
     1131), as amended by section 10 of this Act, is further 
     amended by adding at the end the following new section:

     ``SEC. 303. PAYMENT OF MERCHANT SEAMEN FOR HAZARDOUS DUTY.

       ``(a) In General.--The Secretary of Transportation, in 
     cooperation with the Secretary of Defense, shall establish a 
     wage scale for hazardous duty applicable to an individual who 
     is employed on a vessel that is used by the United States for 
     a war, armed conflict, national emergency, or maritime 
     mobilization need (including training purposes or testing for 
     readiness and suitability for mission performance).
       ``(b) Content of Wage Scale.--The wage scale established 
     under this section shall be commensurate with the incentive 
     pay for hazardous duty provided to members of the uniformed 
     services under section 301 of title 37, United States 
     Code.''.

  Mr. GRASSLEY. Mr. President, this is the language, this is the 
amendment that is going to bring war bonus parity between our 
seafarers--and added war bonus pay in some instances, 100 percent 
increases in pay--and regular military. Seafarers ought to get 
additional pay, because their life is endangered, but it must be 
equalized with that our full-time military personnel, who get a lot 
less for war bonuses for the endangerment that comes from being in a 
war zone situation.
  We do this by giving the Secretary of Transportation, in cooperation 
with the Secretary of Defense, the right and power to establish a wage 
scale for hazardous duty applicable to an individual who is employed on 
a vessel that is used by the United States for a war, armed conflict, 
national emergency, or maritime mobilization need, including training 
purposes for testing for readiness and suitability for mission 
performance. And the content of the wage scale, then, as established, 
shall be commensurate with incentive pay for hazardous duty provided to 
members of the uniformed service under sections 301, title 37 U.S. 
Code.
  I yield the floor.
  Mr. INOUYE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Hawaii is recognized.
  Mr. INOUYE. Mr. President, most respectfully, I wish to suggest that 
this

[[Page S10978]]

amendment is demeaning, unfair, and I say insulting to the civilian 
merchant mariner of the United States of America.
  In World War II, I had the great honor and privilege of serving my 
country, and it is true that my pay, even as that of a captain, was 
less than that of most of the merchant mariners. But as a result of my 
injury, for the rest of my life, I will receive a pension. The merchant 
mariner who was injured in World War II is not receiving that pension. 
As a result of my service in the military, I received the bountiful 
gift of this Nation, the GI Bill of Rights. I received my law degree 
and my baccalaureate through the GI Bill of Rights. The merchant 
mariner who served during World War II did not receive the GI Bill of 
Rights. And because of my injury, Mr. President--and this sounds rather 
facetious--in order to assist me in my mobility throughout the 
neighborhood, my country gave me a car, an automobile. The disabled 
merchant mariner did not receive a car. Today, as a result of my injury 
in World War II, my wife and I receive full medical benefits for the 
rest of our lives. The merchant mariner doesn't receive that.

  As a result of that, understandably, the merchant mariner said this 
will never happen again. So, since then, they have organized and they 
have said, ``Though we cannot get the GI Bill, nor can we get lifetime 
pensions and hospitalization and dependents' benefits, we are going to 
insist that if we are going to stand in harm's way and risk our lives, 
we should be covered.''
  Mr. President, we are, by this amendment, comparing apples to 
coconuts--apples and oranges look alike in some cases, but this is 
apples and coconuts. I hope that at the appropriate time tomorrow 
morning--whatever my leader wishes to do--we will dispose of this with 
an overwhelming vote, because this is not fair. It is insulting to our 
merchant mariners.
  Mr. STEVENS. Mr. President, unfortunately, the amendment that the 
Senator from Iowa has offered deals with another situation. Under this 
bill before the Senate, the U.S. Government will pay a flat fee for the 
use of the vessel fully crewed. What the shipowners pay the crew is a 
private matter. It will not affect the payment at all.
  As I said in my opening statement, the problem with the Persian Gulf, 
Desert Shield and Desert Storm, was we had to go to get foreign 
shipping. And in most instances, the premiums extracted were 50 percent 
of the total cost, not just the crew cost. In some instances, it was 
double the charter price. In spite of that, crews refused to enter the 
war zone.
  Now, the Senator's amendment deals with something that happened in 
the past, which would not be the situation in the future with regard to 
this bill. But even with regard to what happened under Desert Shield/
Desert Storm, I think the Senator forgets that we recovered the cost of 
our participation in that crisis, that war, from Kuwait and Saudi 
Arabia. This wasn't taxpayer cost that the Senator was talking about at 
all.
  So, as I indicated, if we had had an agreement, I would not make a 
motion to table.
  I now move to table the amendment.
  Under the leader's direction, there will be no vote on that tonight. 
The vote will occur tomorrow morning at 10 o'clock.

                          ____________________