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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.






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MARCH 4, 1998

Printed for the use of the

Committee on Transportation and Infrastructure





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MARCH 4, 1998

Printed for the use of the
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Committee on Transportation and Infrastructure


BUD SHUSTER, Pennsylvania, Chairman

THOMAS E. PETRI, Wisconsin
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
JOHN L. MICA, Florida
SUE W. KELLY, New York
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RAY LaHOOD, Illinois
FRANK RIGGS, California
CHARLES F. BASS, New Hampshire
JACK METCALF, Washington
ROY BLUNT, Missouri
JOSEPH R. PITTS, Pennsylvania
JOHN R. THUNE, South Dakota
CHARLES W. ''CHIP'' PICKERING, Jr., Mississippi
JON D. FOX, Pennsylvania
J.C. WATTS, Jr., Oklahoma

NICK J. RAHALL II, West Virginia
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ROBERT A. BORSKI, Pennsylvania
ROBERT E. WISE, Jr., West Virginia
BOB CLEMENT, Tennessee
ELEANOR HOLMES NORTON, District of Columbia
PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
BOB FILNER, California
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi
BILL PASCRELL, Jr., New Jersey
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JAY W. JOHNSON, Wisconsin
JAMES P. McGOVERN, Massachusetts
TIM HOLDEN, Pennsylvania

Subcommittee on Coast Guard and Maritime Transportation
WAYNE T. GILCHREST, Maryland, Chairman
FRANK A. LoBIONDO, New Jersey, Vice-Chairman
HOWARD COBLE, North Carolina
BUD SHUSTER, Pennsylvania
(ex officio)

BOB CLEMENT, Tennessee
JAY W. JOHNSON, Wisconsin
ROBERT A. BORSKI, Pennsylvania
(ex officio)


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    Becker, Capt. Fred R., Jr., Director, Naval Affairs, Reserve Officers Association of the United States

    Cox, Joseph J., President, Chamber of Shipping of America, on behalf of the American Waterborne Commerce Coalition

    Kramek, Admiral Robert E., U.S. Coast Guard, accompanied by Master Chief Petty Officer Eric A. Trent, and Commodore Everette L. Tucker, Jr., U.S. Coast Guard Auxiliary
    Nekvasil, Glen G., Communications Director, Lake Carriers' Association


    Becker, Capt. Fred R., Jr

    Cox, Joseph J

    Kramek, Admiral Robert E

    Nekvasil, Glen G

    Trent, Master Chief Petty Officer Eric A

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    Tucker, Commodore Everette L., Jr


Becker, Capt. Fred R., Jr., Director, Naval Affairs, Reserve Officers Association of the United States:

Brochure ''The Coast Guard and Its Reserve: A Good Deal for America

Responses to questions

    Kramek, Admiral Robert E., U.S. Coast Guard, responses to questions


    Barnes, Master Chief Joe, on behalf of the Fleet Reserve Association, statement

    Ouellette, Sergeant Major Michael F., USA (Ret.), Director of Legislative Affairs, Non Commissioned Officers Association of the United States of America, statement

    Woolley, Ted, Boating Law Administrator, Utah, and President, National Association of State Boating Law Administrators, statement

Moseley, James F., President, The Maritime Law Association of the United States:
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Letter to Rep. Gilchrest, dated, April 2, 1998

Executive Summary of the Carriage of Goods by Sea Act 1998 that addresses the most significant modern day changes

Description of the Carriage of Goods by Sea Act 1998

Transcript of the proceedings with enclosures of the Maritime Law Association Meeting of May 1996

Reprint of 18 Houston Journal of International Law, p. 609 (1996) by Professor Michael Sturley of the University of Texas on changes and suggestions for changes regarding the new Carriage of Goods by Sea Act

Letters of support from the Board of the Maritime Law Association

Letters of support from the Carriage of Goods Committee members of the Maritime Law Association throughout the nation



Additional U.S. Coast Guard Questions to the Record for the March 19, 1997, Hearing on the President's Fiscal Year 1998 Budget Request for the U.S. Coast Guard
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U.S. House of Representatives,

Subcommittee on Coast Guard and Maritime Transportation,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to notice, at 10:00 a.m., in Room 2203, Rayburn House Office Building, Hon. Wayne T. Gilchrest (chairman of the subcommittee) presiding.

    Mr. GILCHREST. The Subcommittee on Coast Guard and Maritime Administration hearing will come to order.

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    I want to welcome everybody here this morning. We certainly look forward to the admiral's testimony and to Commodore Tucker, and soon-to-be Mr. Rick Trent, civilian. I guess the admiral's headed in that direction as well. But we look forward to your testimony this morning.

    I'm pleased to welcome everyone here to discuss the President's U.S. Coast Guard budget request for Fiscal Year 1999. The administration's budget request for Fiscal Year 1999 is $4.3 billion, an increase of about $45 million over the amount appropriated for Coast Guard activities during Fiscal Year 1998.

    The President also proposed I would say a rather controversial policy to establish charges for waterways navigation, with estimated proceeds of $35 million next year. I am most concerned with the President's proposal to cut Coast Guard drug interdiction resources.

    The President's Fiscal Year 1999 Coast Guard budget request is $2.77 million for Coast Guard operations, including $372 million for drug interdiction operations. This is only 1.6 percent over the Fiscal Year 1998 level of drug interdiction effort, and a cut of $100 million from the Fiscal Year 1997 level, the most successful year on record.

    Last October, the House passed H.R. 2204, the Coast Guard Authorization Act of 1997. Our bill provided substantial additional amounts of money for drug interdiction operations and equipment. The level of drug interdiction proposed by the President is basically a severe step backward in my opinion, just when we should be mounting an aggressive campaign against rising drug usage in this country.

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    The borders that we are protecting are not infinite. The sources for drug transport are not infinite. We're working with a finite set of circumstances here, and collectively I believe this government has the intelligence to come up with a plan, whatever you want to call it—a war on drugs, for adequate drug interdiction. But I truly believe that we have the intelligence to come up with a plan to virtually eliminate drug transport to the United States if we're serious about it.

    Another troubling aspect of this budget request is the administration's insistence on establishing a waterways user charge. Although we have no details from the administration on this proposal, it's safe to say that there is no legal authority for the executive branch to establish a charge of this type.

    The waterways user charge is a tax intended to raise revenue for the Coast Guard for unrelated programs. Now, there's nothing wrong with raising revenue for the Coast Guard; I guess it's just a matter of how it happens.

    The Coast Guard already charges legitimate user fees for vessel inspection, documentation, as well as issuance of licenses and merchant mariner's documents. I hope the administration will reconsider this particular proposal.

    In closing, I would simply like to say, once again, that the Coast Guard has an enormous responsibility for this country, whether it's in drug interdiction, saving lives, rescuing people on the high seas, interdicting illegal immigrants, or its far-reaching environmental area of responsibility. And so, collectively the Coast Guard has served this Nation extremely well, and as we pursue the budget request and continue the rest of this year in our hearings and markups, we'll make sure that the Coast Guard receives its due respect and receives the funding that is necessary to carry out its responsibilities.
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    I now yield to Mr. Clement.

    Mr. CLEMENT. Well, thank you, Mr. Chairman. It's great having all of you here today, and as the chairman said, I am a former college President. When I first got to Congress people would come up to me and say, ''Man, you're a congressman now. That's really something.'' I said, ''Well, that's right, but you're going to have to understand for 4 1/2 years they called me Mr. President, so I sort of got used to that.'' And as the chairman knows, I'm also a veteran in the military, as well. So there's less and less members of Congress that are veterans. But I'm very proud of that fact.

    But thank you, Mr. Chairman, for scheduling this hearing on the President's proposed budget for Fiscal Year 1999, the Coast Guard. The President has requested that Congress appropriate approximately $4.3 billion for Coast Guard programs for Fiscal Year 1999.

    Over the last two decades, Congress has asked the Coast Guard to expand their missions and responsibility. However, I'm beginning to question how resources are prioritized when deciding which missions are most important to fund.

    I'm particularly concerned about the lack of resources that are being allocated to drug interdiction activity. We should increase, not decrease, the number of aircraft and cutter hours assigned to the Caribbean and southern California coast.

    I believe that the Coast Guard should consider building a few more 87-foot patrol boats, assign these new boats to the Continental United States, and permanently moving some 100-foot patrol boats down to Puerto Rico and the Virgin Islands.
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    In 1997, the Coast Guard interdicted 206,155 pounds of drugs. In Fiscal Year 1999, the Coast Guard believe they will only interdict 167,000 pounds. The rest of the drugs are going to be sold on our streetsand in our schools I believe this is totally unacceptable.

    The Coast Guard is going to be combatting drug smugglers for the next 20 years; therefore, we should permanently assign more vessels to this mission. Meanwhile, we're going to spend 17.6 percent of the operating budget on fisheries law enforcement, while we only spend 13.3 percent on drug interdiction. While fisheries enforcement is important, keeping drugs off our streets is more important.

    Maybe it is time for Congress to set a minimum amount of resources dedicated to the Coast Guard's drug interdiction mission and the Coast Guard Authorization Bill. The Coast Guard's efforts in Operation Frontier Shield was successful in interdicting drugs that would have gone through Puerto Rico. I'm disappointed that we will not be able to continue these efforts this coming year.

    Admiral Kramek, as I said last year, the Coast Guard is doing a commendable job implementing the Government Performance and Results Act. On January 8th, Chairman Shuster and Ranking Member Oberstar, our ranking democratic member, wrote Transportation secretary, Rodney Slater, urging you to consider using the financial management software developed by the Army Corps of Engineers, rather than spending millions to develop your own software. We're hopeful that you can save time and money, even if it only accomplishes 95 percent of what you want in an ideal world.

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    We're disappointed that almost 2 months after the letter was written, the Coast Guard has yet to visit the Corps for an initial presentation. Our staff was able to have a presentation in less than 2 weeks. Using this type of free software will free up otherwise scarce resources for your acquisition and construction budget.

    Lastly, Mr. Chairman, I'm very disappointed about the administration's proposal to charge what they call a user fee for navigational aids operated and maintained by the Coast Guard. These fees are clearly unlawful, since they are really a tax. Buoys, lighthouses, and other navigational aids protect our citizens and the environment from maritime disaster. Every citizen of the United States benefits from this system of 50,000 buoys. Therefore, our navigational aid system has always been funded out of the general treasury. While the navigation tax proposal may not have been initiated by the Coast Guard, they are ultimately going to take most of the heat, since they're the ones that will develop the regulations to charge these fees.

    I urge the legal staff at OMB and the Department of Justice to carefully examine the many court cases involving user fees, and they too will conclude that the administration lacks the legal authority to charge user taxes for aids to navigation.

    Thank you, Chairman Gilchrest, and I look forward to working with you on the authorization of appropriations for the Coast Guard, once the Senate has passed the Authorization Bill this aisle sent them last year.

    Mr. GILCHREST. Thank you, Mr. Clement.

    I'll now introduce Admiral Robert Kramek, Commandant United States Coast Guard; Master Chief Petty Officer Rick Trent, United States Coast Guard; and Everette Tucker, National Commodore of the United States Coast Guard Auxiliary.
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    Gentleman, we look forward to your testimony.

    Admiral Kramek.


    Admiral KRAMEK. Thank you, Mr. Chairman. I'll make a brief oral statement, and submit my written statement for the record. Also joining us in the room today is Vice Admiral Jim Loy, my chief of staff of the Coast Guard, who will relieve me as Commandant at the end of May.

    Mr. GILCHREST. Admiral, we have a lighting system that doesn't seem to be working, so we'll probably just turn it off.

    Admiral KRAMEK. I'll take less than 5 minutes. And then Commodore Everette Tucker and Master Chief Rick Trent have some short opening statements as well.

    We have a good team, and I'm surrounded by part of my team here. Ev has 34,000 auxiliarists and volunteers that work for him, and the Master Chief takes care of over 30,000 of our enlisted personnel. All totaled, our Coast Guard calls itself Team Coast Guard, because that's the way we work together to get our job done.

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    This team had a very productive year as lifesavers and guardians of the sea. With all that we do, we do lifesaving first when people call for help. Over 5,000 lives saved this year, 50,000 calls for rescue and assistance, and over $2.5 billion in property saved.

    We also have kept our oceans safe and clean around the world. You had an opportunity to visit many of our stations this year, Mr. Chairman, and go all the way to Antarctica with the Master Chief to see us break out McMurdo to resupply. You know how environmentally sensitive that area is.

    But we work with the International Maritime Organization, leading the U.S. delegation for safer shipping, for cleaner seas. There's been less oil spills, there's been less accidents. Our passenger vessel industry in this country is the safest in the world, and it's just tremendous achievements made by our marine industry on all fronts.

    We also protect our living marine resources and, Mr. Clement mentioned how much we spend on fisheries. Fisheries are a major source of protein for the developing countries of the world; and major countries of the world, Russia and China, depend on 40 percent of their protein from the sea, and you know how huge those countries are. That's what's put a tremendous stress on our fisheries. And as we've gone through fisheries management plans and enforcement plans—which is not the responsibility of the Coast Guard, rather the responsibility of Department of Commerce—it's given us a huge amount of work to do. The United States has the largest exclusive economic zone of any country in the world; 47,000 miles of shorelines out to 200 miles.

    One only needs to look at Alaskan Aleutian Islands, the richest fisheries in the world, which is our responsibility to patrol the Berring Sea in the north Pacific Ocean to understand the task we have before us.
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    Protecting our maritime borders from drugs, illegal migrants. You've mentioned the statistics this last year. And we're also a distinct instrument of national security, being the only member of the Armed Forces, of the five members of the Armed Forces, that have law enforcement authority, which makes us unique. Therefore, we're utilized in training—40 of the 70 navies of this world are coast guards, and we're used to jointly work with the Department of the Defense to train them in how to protect in their own countries, and we've done that all around the world this year. Those funds are paid for by the Department of Defense. They're paid for by the State Department, either through Partnership For Peace programs or—Nunn Lugar funds. But we are a distinct member of the Armed Forces, in that today we have a Coast Guard cutter on the way to enforce the embargo against Iraq and the Arabian Gulf. It's a mission that we do. There are merchant vessels that need to be boarded and inspected to make sure contraband doesn't go to Iraq. As well as we stood up some forces that are classified—I can't tell you about. But we provided Port Security Units, mostly from our Coast Guard reserve, for this recent call up to prepare for whatever conflict we might have with Iraq.

    This budget before you is a current services' budget. It's based on the Congress and the Administration's balanced budget agreement, which flatlined my agency's budget for the next 4 years. And that's why we're asking for about the same amount within about 2 percent of what we asked for last year, because that's what the balanced budget agreement was all about.

    I ask for your approval of our request. It will allow the Coast Guard to carry out the missions we've been assigned at the same up tempo as last year, or at least almost the same service level. There's some slight reductions we have to make in order to take care of increased costs from inflation, healthcare, and those types of things.
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    We've also come up with almost $60 million in savings in our budget this year, continuing on our streamlining program. We feel we're the model in government for that. We streamlined $400 million in overhead expenses per year from our budget, Mr. Chairman, and will contribute $2.6 billion in savings for the balanced budget agreement by the year 2002, while reducing the Coast Guard's workforce by 4,000 people.

    We are the smallest now since 1965, and our uniform service—to put it perspective—is smaller than the New York City Police Department in spite of all of the missions that we have to do. Our people are working very hard at the small boat stations you visit; 81 hours a week is typical, and at sea it's a lot more than that. My people are the most important to me. All the aspects of this budget support them, for their housing, their pay, their well being, and approval of this budget will continue that.

    Tomorrow's Coast Guard is just as important, however; and the things that we're building—ships, the boats, improving the aircraft, and our Deepwater project—are very important. Trade's going to triple in this country in the next 15 years, and 95 percent of our imports and exports go by sea. Mega ships are being built. We're going to need mega ports to handle them. Passenger vessels are increasing from 2,000 passengers to 5,000. Some on the drawing board carry 8,000 passengers. Container ships are increasing from 2,000 and 3,000 TEU's to 4,000 to 6,000 and some on the drawing boards for 8,000 containers.

    A container ship with 6,000 containers, Mr. Chairman, draws a lot of water, and the containers stretch for 20 miles on the highway, 20 miles on the railroad, all on one ship coming into our waters.
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    This stresses our waterways more. There's more users. There's more people moving to coastal areas. More demand for our services. Continued depletion of the fisheries because of population increases as I've mentioned. And interests that extend beyond the exclusive economic zone, to the deep sea for ocean mining, and things that will eventually develop as a result of the—Sea Treaty. Drugs will continue, migrants will increase, and operations other than war, which will require the Coast Guard to address as a member of the Armed Forces will increase. We work jointly to assist the CINs in that.

    Use of information and knowledge and technology will improve our effectiveness, and we're a leader in that, but we need the best equipment; not 50-year-old Coast Guard cutters, without the capability to serve America as we enter the 21st century; rather approval of our acquisition construction and improvement budget for our ship building and boat building programs that are underway.

    I would point out that the budget provides for the minimum order quantity on all of our contracts, but it does provide for what I feel is our most important acquisition; and that's to continue the Deep Water Systems acquisition. The President is asking for sufficient funds for us to go ahead with this most important procurement to make the Coast Guard ready for the 21st century.

    These are national investments, Mr. Chairman, for all Americans, not just Coast Guard investments. And I want to thank you for your strong support this year. You've traveled and visited almost as much as the Coast Guard as I have. I really applaud your efforts to be our Chairman, and for all that you've made yourself aware of. And I extend that to Congressman Clement as well. The two of you are almost at every function that we have. You're very, very knowledgeable of what we do, and I'm very, very proud to be able to testify before you today.
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    Mr. GILCHREST. Thank you, Admiral. Well, we've also enjoyed traveling with the Coast Guard, and learning from the inside, out, the kind of activities that they're involved in.

    Master Chief.

    Officer TRENT. Good morning, Mr. Chairman. I appreciate this opportunity to discuss the state of Coast Guard enlisted personnel with this distinguished committee today.

    As I begin my remarks, I want to join the Commandant in thanking you for your support of the Coast Guard. The American people rely on services the Coast Guard provides, and your support has ensured they wouldn't be disappointed. I also want to thank each of you for supporting the quality of life improvements that we've asked for over the past few years for Coast Guard members and their families.

    There are approximately 35,000 active duty and reserve component enlisted men and women in the Coast Guard today. Primary responsibility of the master Chief Ptty Oficer of the Coast Guard is to advise the Cmmandant on all matters that affect enlisted people and their families. To ensure that I am knowledgeable about issues pertinent to enlisted members and their families, I have personally talked with thousands of them, while visiting more than 300 Coast Guard units during the past 45 months. I also receive regular input from a network of senior enlisted leaders in the field, and also from my wife, Linda, who regularly meets with ombudsmen and spouses of enlisted members throughout the Coast Guard.
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    As a result, I believe I have a clear understanding of the issues that affect enlisted persons and their families. I am confident in my ability to provide appropriate advice to the Cmmandant, and I believe qualified to get substantive input to this committee.

    When I appeared before this committee a year ago, increased workload was the top issue affecting the morale and quality of life of Coast Guard enlisted members. The downsizing associated with the Coast Guard streamlining plan had cut the enlisted workforce by more than 2,000 members, while there had been no decrease in the demand for Coast Guard services. Unfortunately, this situation has further deteriorated, and workload is still the number one issue impacting Coast Guard enlisted members and their families.

    The Coast Guard is currently more than 900 enlisted members below authorized strength, and the operations tempo remains very high. Most enlisted people still work extraordinary long hours, in many cases averaging 80 hours and more per week. So far, they have done what Coast Guard people always do; they suck it up, and continue to perform beyond all reasonable expectations. Their dedication, loyalty, and sacrifice has ensured the Coast Guard has the ability to respond in any mission areas, providing the services the American people value.

    However, I watch retention of career-enlisted members decline, and recruiting become more difficult. I must tell you, I'm starting to become a little apprehensive and concerned about how much longer this effort can be sustained.

    Today, more than ever before, Coast Guard enlisted members are exposed to consistent negative rhetoric regarding their pay and benefits. The insecurity caused by this constant churning of threats to their pay and benefits creates an environment of stress that takes a real toll on Coast Guard members, often distracting their attention away from their jobs. They are just plain tired of worrying about their well-being and the well-being of their families. Many are affected enough to look for careers outside the Coast Guard.
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    In my statement for the record, I have requested your assistance in halting this continuous assault on military pay and benefits. I have also outlined several issues and needs that would improve the quality of life for Coast Guard enlisted people and their families. I request that you give these important Coast Guard enlisted recruiting and retention issues serious consideration.

    Mr. Chairman, as I conclude my statement, I must ask you to think about the many Coast Guard men and women you have met. They are enthusiastic, well-trained, and ready to give any task their best effort. Some will even make the ultimate sacrifice, just as Lieutenant Jeffrey Crane, Lieutenant Charles Thigpen, Petty Officer Richard Hughes, and Petty Officer James Kanes did on June 8, 1997. As you're aware, they were all members of the crew of Coast Guard Helicopter 6549, which was lost attempting to rescue the crew of a disabled sailing vessel in storm-ravaged seas, 57 miles off the California coast.

    The American people depend on the Coast Guard, knowing it will be semper paratus when needed. However, without her enlisted men and women, the Coast Guard's capability would cease to exist. Attracting and retaining the best workforce America has to offer is more difficult today, but never more important. Therefore, when you consider my statement for the record, I ask that you reflect on a basic premise of leadership. You take care of your people, they'll take care of you.

    Mr. Chairman, I am convinced the action of this committee can have a positive impact on Coast Guard men and women and Coast Guard recruiting and retention. Thank you for inviting me today, and I look forward to your questions.
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    Mr. GILCHREST. Thank you, Master Chief, and we'll look at those very seriously.

    Officer TRENT. Thank you.

    Mr. GILCHREST. Thank you for your testimony.

    Commodore Tucker.

    Commodore TUCKER. Yes, sir. Good morning, Mr. Chairman. I'm pleased to have this opportunity to meet with you and the members of your subcommittee, and to represent the over 34,000 men and women volunteers, the United States Coast Guard Auxiliary.

    As you remember, Sir, back in 1996, your subcommittee supported a change to the legislation regarding the Auxiliary, which was included in the Coast Guard Authorization Act. This Act granted the Commandant broad authority in using the Auxiliary, and provided adequate liability protection to auxiliaries performing these new missions.

    I am very pleased to say to you, Sir, that since then the Auxiliary has moved aggressively to support the Coast Guard's goal of eliminating environmental damage, natural resource degradation, associated with maritime transportation, fishing, and recreational boating.

    You have my written statement for the record. As I did last year, if I may, I would like to put some faces and specific circumstances to the statistics that is in my statement, by covering some examples of the support the Coast Guard Auxiliary is providing the Coast Guard and the citizens of our Nation. I believe these will give you some idea of the diversity in the value of our service and contribution.
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    But first, let me just mention one or two of the statistics. These 34,000 auxiliarists provide the Coast Guard in our states and other federal agencies over 5,900 operational vessels, scattered from the Virgin Islands all the way to Guam. They provide 114 privately-owned aircraft that are ready to support the missions of the Coast Guard. And over 2,300 radio stations, they're ready to stand up and make sure that communications within the Coast Guard are maintained. That's especially important, because many areas of our country have communications dead spots.

    Last year auxiliarists spent over 460,000 hours patrolling our Nation's waterways. They saved 481 lives, assisted over 11,300 people, and saved or assisted almost $.5 billion worth of property out on the water.

    Doing these missions, it's with pride that I'd like to acknowledge the heroic acts of Auxiliarist Frank Monroe. Mr. Monroe, a member of the Coast Guard Safety Patrol from Station Fort Lauderdale Florida, participated in the Coast Guard efforts to render assistancet to 11 people thrown in the water when their boat swamped. In doing so, he rescued a child just seconds before she would have been sucked under a barge. He also, at the risk of his own life, saved three other passengers. Coast Guard personnel were able to save six more.

    For his actions at the risk of his own life, Mr. Monroe was awarded the Gold Lifesaving Medal. And I might again note with pride that two other members of the Coast Guard Auxiliary, on duty now, possess that very coveted award for deeds they did up in the Great Lakes.

    A major mission of the Auxiliary is to serve as a force multiplier of the Coast Guard, in support of rescue or contingency operation. An excellent example of this support occurred when almost 100 auxiliarist from the 8th District, were called out to support the emergency flood relief operation, along the Red River of the north in North Dakota.
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    Auxiliarist provide the Coast Guard with mobile communications and command capability. Auxiliary privately-owned aircraft provided reconnaissance sorties, and moved personnel and supplies into areas not accessible by land vehicles. Additionally, Auxiliary crews maintained a disaster relief unit, and worked side by side with regular and Reserv Coast Guard personnel. This is a good indication of what the Commandant was saying about Team Coast Guard—all of us working together.

    The ''on scene'' Coast Guard commanders stated they could not have maintained efficient and effective command control without the Auxiliary capabilities present. They no communications up north until the Auxiliary provided it with their mobile communications capability. They had no means of getting critical personnel on the scene, until the Auxiliary provided support with Auxiliary aircraft. They of course had the normal support for the Coast Guard, but we backed that up with those aircraft we provided.

    The Auxiliary took over as Coast Guard personnel, followed the flood down river, seamlessly fitting into the Coast Guard team. They continued providing flood support to the victims without any degradation or additional support. Their preparedness and professionalism was critical in allowing me, as well as the Coast Guard on-the-scene commander, to concentrate on other problem areas.

    As a result, sir, the 8th District has formed three Auxiliary disaster response units, which in perhaps this year or in coming years will be ready to immediately deploy to reinforce the Coast Guard along the Mississippi and the other rivers flowing into it.

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    Another way the auxiliary was used; Auxiliarists from the 14th District in Hawaii trained 52 employees for the Hawaii Department of Land and Natural Resources, which included members of that state's marine patrol. Training covered the safe operation of motor vessels and maintenance and use of the vessel safety equipment.

    Continuing out in the Pacific, the Coast Guard Auxiliary unit in Guam used Auxiliary communications to provide a relay between the Coast Guard Marianas section and a Navy helicopter, which provided search and rescue for an overdue vessel. By using the Auxiliary's land mobile facility, the Coast Guard was able to overcome the dead spots in communications around Guam.

    Moving in a little different area up to the Great Lakes, but again another life-saving requirement, Auxiliarists from the 9th District supported the Michigan Department of Natural Resources for providing boating safety instruction to over 2,500 duck hunters. This may seem like a minor case of support, but I'm sure you realize that up in the Great Lakes—with the cold water—this was done to combat the annual occurrence of major tragedies, due to drowning and hypothermia.

    Finally, another area the Auxiliary's moved into involves aids to navigation. The Charleston Light, the last lighthouse built in the United States, recently became the responsibility of the first Auxiliarist trained and qualified as a lighthouse technician. This Auxiliarist is now responsible for performing preventive maintenance and repairs on the lighthouse and ensuring that it's operating properly.

    I believe these brief narratives give some idea of the diversity of the current Auxiliary support. It is proof that your subcommittee really made a great decision by giving the Auxiliary the authority to pursue these new areas in support of our nation.
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    Today we're very proud to be part of Team Coast Guard. As I said, we believe the opportunities provided by the Coast Guard Authorization Act of 1996 positions us to perform invaluable service now and in the future. As you know, for 59 years the Auxiliary has provided the dedicated volunteer service to our country and its Coast Guard. As we move forward into the 21st century, we're really confident that we can maintain, and in fact increase our support to our Nation.

    Sir, I look forward to your questions.

    Mr. GILCHREST. Well done, Commodore.

    And we certainly appreciate not only the time and effort you've put into your testimony, but all the many people that you work with, and do such a fine job.

    Admiral, I'm going to cover a little bit of diverse ground here. The first area of questions is the most, at least for now, the most vexing, and everybody has their own opinion on things, especially the weather and human behavior. The weather is complex and human behavior is complex.

    I have my own opinions, for example, as to why teenage drug use is up; too much television, too many VCR movies, not enough social interaction with people with—moral values is a relative term—with people that want to see young people have a good future, with a sense of love and discipline, and all of those things. Plus, the easy access that drugs might have to young people, and their sense of curiosity about that particular age.
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    But I'm going to ask your opinion on why you think drug use among teenagers is rising, especially increasing, or actually doubled I guess, in the United States since 1992.

    Admiral KRAMEK. Well, I've just gotten the last of my four kids through college, so it's just been a couple of years that they've been teenagers, not long ago. But I can tell you what my impression was. I think we made good strides in the early 1980s and the late 1980s, all the way up to about 1990 and so, on reminding and educating our children that it was bad. And if one were to look back far enough at the statistics from 1975 to 1998, this morning, I'd think that we'd see a dramatic decline in drug use among the citizens of the United States, from over 20 million drug users to far less than half of that today. And I would also point out that we have a good strategy right now that the President just rolled out 3 weeks ago, to decrease the rate we have today by 50 percent by the year 2007.

    Having said all that, there has been an increase, mostly in marijuana use—not amongst cocaine use—amongst teenagers, but amongst marijuana use. We forgot to tell them it was important. The education programs and the public relation programs were terminated or cut back. In this President's budget you'll see money in there to bring those back. You can hardly turn on your TV right now without seeing an advertisement sponsored by the drug czar's office, that it's bad for you and bad for children. $175 million was provided to do that this last year.

    It takes everybody. It takes coalitions, it take schools, it takes parent, it takes churches, it takes the media. Certainly, some of the things you mentioned were detrimental.
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    It takes something else too. From my standpoint, it takes the availability of marijuana. We intradicted over 100,000 pounds of marijuana last year. Besides 100,000 pounds of cocaine, there's still marijuana coming into the country. More perplexing is that in some of our states it's the largest cash crop, grown right here in the United States. My estimates as Interdiction Coordinator is that perhaps 25 percent of all the marijuana in the world is grown in the United States of America, and distributed to our kids and to our population.

    So we have a lot of work to do on all fronts, but I'm convinced if we follow the Strategy outlined in the President's 1998 National Drug Control Strategy, and continue to meet those goals, we'll drive it down. In the next 10 years less than 3 percent of our population will use drugs, and that will be the lowest its every been since we've recorded these things.

    Mr. GILCHREST. Admiral, if we're going to color the white boxes yellow, do we need an increase in funding, and more than what has now been proposed?

    Admiral KRAMEK. Over the 10-year period?

    Mr. GILCHREST. Yes.

    Admiral KRAMEK. Then I think the budget process needs to determine that.

    But I have to point out to you, in the Strategy—the budget in the strategy as proposed you'll notice is flatlined. It's the same amount of money now for the next 10 years. And in fact, when you put inflation and cost of living expenses, all that on it, you have decreased buying power.
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    Mr. GILCHREST. So, I guess what I'm——

    Admiral KRAMEK. But that's because the Congress and the Administration signed a balanced budget agreement, and so we're all living with those caps. And when you're flatlined like that, why you can't get there from here.

    So the Strategy points this out, and it says that each year in order to meet the targets there's going to have to be budget decisions that will allow us to meet the target. Last year I could meet the target. Can I meet it this year? Not quite.

    Mr. GILCHREST. I think we as people, if we're going to take this seriously, have to sit down and set goals for ourselves, and we have to be flexible. We want to balance the budget, and we understand all those ramifications, but out of a 1.7 trillion federal budget annually, I'm sure we can set goals that prioritize the most important things, and we as members can help you achieve what we all collectively want, and that's to reduce drug use by American citizens.

    Admiral KRAMEK. It doesn't take that much more, Mr. Chairman. As I showed you in some of the charts in the classified briefing, we're not far off the mark, and it doesn't take that much more to do a better job.

    Mr. GILCHREST. Then we'll work with you to ensure that small extra amount.

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    You said something, Admiral, about—moving away from drug interdiction, and we take it seriously. We want to work very aggressively to pursue that goal during the rest of this session, and the sessions to come.

    You said something that caught my imagination as far as maritime trade tripling in—how many years?

    Admiral KRAMEK. The next 15 to 20 years.

    Mr. GILCHREST. The next 15 to 20 years. The source of that.

    Admiral KRAMEK. There are various commerce reports put together by the Department of Commerce. The United States is still considered an island nation with respect to trade. Ninety-five percent of our imports and exports, quantity-wise, go by sea. This amount of trade is going to triple in the next 15 or 20 years, and so the Coast Guard has developed a plan for a waterways management system—vessel traffic systems that we do and aids to navigation; they're all part of that.

    In order for the United States to maintain its global competitiveness in this environment, we have to world class waterways management system, such as they do in other nations; Singapore, the Netherlands.

    Mr. GILCHREST. Admiral, based on what you just said——

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    Admiral KRAMEK. Yes?

    Mr. GILCHREST. ——our free capitalistic market economy is based on competition, but that competition extends also from one port to the next, and the ports all have various rules, somewhat different regulations. One port dredges to 40 feet; the next port wants to dredge to 50 feet; somebody else wants to dredge at 60 feet.

    Given the complexity of our port system, and given the fact that trade is going to triple on the high seas in the next 15, 20 years, do you see the federal role creating some national standards for our U.S. ports; and if the trade is going to triple, and the number of ships is going to increase, will there have to be an increase in manpower in the Coast Guard in order to stay up with inspecting each one of those ships? And it's my understanding, in some ports—or maybe it's a Coast Guard policy—that you board every ship that comes into the U.S. ports at least once a year.

    Admiral KRAMEK. And cruise ships, once a quarter.

    Do we need more? Not necessarily. What we need is a coordinated effort. I've put together a waterways management plan. I presented it to the Secretary of Transportation. This is intermodalism in its best sense, because these ports and these cargoes have to be properly linked to railheads, to highway hubs, to airports. This is part of intermodal surface transportation, and when we talk about reauthorization of such things as ISTEA, I'm always struck by how little it says about the water, when 95 percent of our imports and exports are connected to that. It pretty much focuses on our land systems and our aviation systems—but land systems rather.
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    I've made a proposal to the secretary, and he has accepted it; that the Department of Transportation take the lead in coordinating a number of Federal agencies. The Corps of Engineers for example, receives funds through the Harbor Maintenance Trust Fund in order to do the dredging. NOAA does all the charting. The Coast Guard does all the aids to navigation and inspecting. And then we work together with all the municipalities.

    So there's about a dozen different groups involved. The Coast Guard now chairs the Interagency Working Group on Waterways Management. Next month we will provide an implementation plan to the Secretary, where the Secretary of Transportation will take the lead in developing a world class waterways management system to prepare us for the 21st century, Mr. Chairman. That's on track. It's something we need to coordinate and provide leadership for before we throw money at it. In my view, right now we have to manage a little bit differently

    In the case of ship inspection, I asked for more funds to receive more inspectors. I didn't get them, so I've taken a different tact. We've adopted a Port State Control regime here in the United States, which means we've put together a matrix on who the least safe ships, least safe operators, least safe countries are. We target our inspections on those.

    There are 14 foreign flag vessels for every U.S. flag vessel that sails in U.S. ports. I'm only inspecting the foreign flag vessels and only those that have poor safety records or poor ownership records.

    It had been our norm to detain about 50 to 70 vessels a year that were unsafe. This last year, we detained over 550 vessels but the safety in our ports has increased as a result of that.
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    On July 1st the International Maritime Organization and 153 nations decided to adopt an International Safety Management Code. And on July 1st, foreign flag vessels not adhering to the International Safety Management Code or not having adopted that code will not be allowed into U.S. ports. We will enforce this with Port State Control inspections.

    So a great deal has been done. I want to compliment the shipping industry, because we couldn't have done it without them. For U.S. flag vessels, I've delegated responsibility to the American Bureau of Shipping to inspect these ships for us through their Alternate Compliance Program, authorized by legislation that this committee passed a couple of years ago. And last year you gave me authorization to extend that inspection power to other classification societies, and now I have just delegated authority to help us in inspections to Norske Veritas, and we're talking to the Germans as well.

    We're going to international standards. Our goal is that our ports, our waterways, our ships, our safety, all meet international standards. We represent the United States at the International Maritime Organization, and I feel that international standards will be better for our shippers, better for our shipyards, better for our safety, better for our mariners.

    Those international standards are very high indeed. Where we have a difference within international standards now, it is because our standards are higher. We're trying to work internationally through the IMO to convince them it to raise their standards to meet ours.

    Mr. GILCHREST. Thank you, Admiral. I'm going to move along. I had a number of other questions, one of which, since you raised the safety of shipping and international cooperation, was ship scrapping. But we'll hold that for another time.
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    Mr. Clement.

    Mr. CLEMENT. Thank you, Mr. Chairman.

    Admiral Kramek, after the many Supreme Court cases on the differences between a fee and a tax, do your attorneys believe that the Coast Guard has the legal authority to prescribe indirect user fees for aid to navigation services, and if so, then why did the Coast Guard seek legislative authority for these fees during the Reagan Administration?

    Admiral KRAMEK. It's the way one would describe user fees that's controversial. We've been tasked with coming up with a user fee for people that would directly use the services that we provide. If we're successful in describing the service that way, we believe that the existing user fee authority that the Federal government has and that the Coast Guard has, will be sufficient to collect those fees in the same way that we've withstood court cases for user fees for documentation of vessels, inspection of vessels, mariners licenses, and such.

    We have just started this month to study and investigate who would pay the fees. Would it just be for cargo vessels? And I can tell you that, we believe it'll just be for cargo vessels. It exempts fishermen, it exempts recreational boaters. It would probably exempt public vessels, Department of Defense, et cetera, police vessels. We're just in the process of describing this.

    My budget for the construction of the new ships that I referenced in my opening statement said that we needed, to do the job we have to do today and for the 21st century, is dependent on those fees. The way the budget is presented, I need $35 million in this 1999 budget, so I have great incentive to try to describe a user fee system that Congress will find acceptable. It needs to be in my appropriation language and in the record for me to be able to collect those fees, and have them go to my acquisition, construction and improvements account to pay for my shipbuilding costs. Those fees increase to $165 million in collections I'm to make in the year 2000, which includes icebreaking user fees for the Great Lakes.
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    So I'm very carefully looking at how to properly assess those fees within the existing user fees statutes, and present it to Congress so that you'd find it acceptable. If not, I go at great risk of being able to have the ships, and boats, and planes, that I need to do the job for the American public. It's clear that the $440 million that the Administration asks for in this budget for my acquisition program is desperately needed by the Coast Guard.

    My target is $650 to $700 million a year, that I ask for. I've not been able to achieve that, either with the Administration or Congress. This is bare bones. And so if the user fees are found to be illegal or you don't approve them, then I'm at risk for the assets that I need to do my job.

    Mr. CLEMENT. Admiral, based on the Coast Guard's projected workload data in Fiscal Year 1998, you've reduced cutter and aircraft drug interdiction hours about 25 percent. Based on your interdiction projections, you should have seized approximately 72,000 pounds on marijuana and cocaine at this point in the fiscal year.

    Have you interdicted the 72,000 pounds you projected?

    Admiral KRAMEK. Well, we've just started this fiscal year. Just this last week alone we interdicted 15,000 pounds of cocaine. And our projection is that we'll be able to meet our target.

    Part of the reason that there's less operating hours, is that there was some supplemental budget activity the year past that gave more assets. As you recall, there was a supplemental appropriation of $250 million that the Administration asked for to conduct counternarcotics efforts. Rather than task that supplemental, the Congress at the last minute asked their committees to divide up those funds to the agencies they were responsible for. As a result, the Coast Guard received money through ONDCP, that stood up Operation Frontier Shield around Puerto Rico, and made the operation so successful.
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    Those funds haven't been sustained. I mean, they haven't been continued on, because of the Balanced Budget Agreement. So while we had a great impetus—and this was right before the presidential election, as you'll recall, because we had a lot of hearings on this—there's great impetus to plus this up and do something and America was moving together. I think this has settled down a little bit.

    On the other hand, the drug czar's budget this year is more robust than it's ever been before. I'd ask for a billion dollars more distributed over all the things that General McCaffrey has to do. I would just point out that the amount for interdicting is about the same. It's a little bit less than 10 percent.

    So can you reach the targets from there? My answer is no. Not until either the caps are raised or some more oversight is given to this to determine what the distribution should be.

    Mr. CLEMENT. Admiral, the Coast Guard is evidently not getting support from other administration offices in getting the resources necessary for drug interdiction, even though I just heard what you just said. But, should Congress set a minimum number of cutter and aircraft hours dedicated to drug interdiction activity?

    Admiral KRAMEK. No, I don't think they should. This is more of a team effort than Team Coast Guard. I coordinate 32 agencies in interdicting for drugs in the transit zone. They all have part of the budget. If you'll look at Volume II of the 1998 Drug Strategy where all the budgets are presented, you'll see that every agency's budget is presented in there. They're all woven together like a patchwork quilt.
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    As an example, the Defense Department has the mission of detection and monitoring. If AWACs are not available, if P3s are not available—maritime patrol aircraft—and I can tell you they're not because of other national security priorities—then the inceptors to go find the contacts and illegal flight paths that those drug planes are flying, can't be passed on to the interceptors and the helicopters can't be properly used in the Bahamas for the end game.

    So, all these agencies have responsibilities. We need to take a look at the strategies in toto, and decide whether the $17 billion in the 1998 Strategy that the President put forward is sufficient for everybody in a coordinated effort. Just increasing the Coast Guard by itself won't get you much more, except for an operation like around Puerto Rico.

    And I should point out, Congressman McCollum held hearings in Puerto Rico a year ago, and I brought with me a director of the FBI, the Commissioner of Customs, the head of the DEA, and we testified together. Because, while I increased the number of ships and planes down there, Customs increased the number of their boats and agents—put 91 more agents—91 more agents in Puerto Rico. We stood up a High Intensity Drug Trafficking Area, and bought 38 boats for FRA, forces for rapid action—in Puerto Rico.

    Everybody increased their effort in a coordinated way, and that's why everyone was so successful. And we need to do that everywhere. So just taking care of one agency in my opinion is not the right solution.

    Mr. CLEMENT. Master Chief, last year the subcommittee was visiting various Coast Guard facilities in Oregon and Alaska. One rescue swimmer told us that their hazardous duty pay had just increased, so that they were making the same as Coast Guard recruiters.
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    Do you know of other situations in the Coast Guard in which people in very dangerous positions are getting paid less than recruiters, and why does this occur?

    Officer TRENT. That person was slightly uninformed or misinformed, Mr. Clement. The rescue swimmers receive two pays. They get a hazardous duty pay incentive for doing their job, which is authorized. Recruiters do not get that at all. Then in addition to that, recruiters and rescue swimmers get a special duty assignment pay, which is a responsibility pay authorized by Congress for enlisted people with extraordinarily difficult, or jobs requiring extraordinary levels of responsibility. And that pay is to attract them to those jobs and retain those people in those jobs.

    So, the rescue swimmers are getting both of those pays and the recruiters are only getting one of them, the one that's extraordinary, difficult. But I would also point out that recruiters are all authorized a level slightly below rescue swimmers; 10 percent of our recruiters are authorized—the ones that really excel—are authorized a level slightly higher. And Coast Guard recruiters are still authorized this special duty assignment pay for difficult assignment at levels significantly below the DOD recruiters.

    Mr. CLEMENT. And my last question. Commodore Tucker, you state that Coast Guard Auxiliary personnel has examined 1,230 fishing vessels and uninspected passenger vessels.

    What type of safety problems have you typically encountered on these vessels, and what would a member of the Auxiliary do if they found conditions on board one of these vessels which they believe may be vessel unseaworthy, and have you ever found such a vessel?
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    Commodore TUCKER. Well, sir, let me say that our examinations are in fact examinations. We go there to try to educate the skippers and operators of those vessels. In most instances it's just a lack of knowledge. They do not understand what the federal regulations require, and just by sitting down with them and going over and explaining what's needed, most of the skippers respond very swiftly on their own to ensure their vessels in fact meet the Federal requirements. Now, we do not have any regulatory or law enforcement powers. We got there really as a friend of safety.

    We've gotten excellent support from the various associations who have seen our work and the training that we and the Coast Guard have given our people. But generally, we just advise them.

    So I've seen a big change in that, and I've seen a growth of that program. And I think both that and the charter fishing vessel inspection programs are programs that will continue expanding. Those people, most of them, want to be in compliance. They want to be safe.

    Mr. CLEMENT. Thank you.

    Mr. GILCHREST. Thank you, Mr. Clement. Mr. Coble.

    Mr. COBLE. Thank you, Mr. Chairman. I apologize for my belated arrival. I have a markup going on in Judiciary, but I felt obliged to come over here.

    Commodore Tucker, I don't know you as well as I know these two nattily-attired sailors to your left. Well, I shouldn't say that; that implies that you're not nattily-attired. But it's good to have all three of you here.
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    Bob, as you know, for a long time I was the head cheerleader on this Hill for the Coast Guard, but I must say the gentleman from Maryland, the gentleman from Tennessee, the gentleman from Massachusetts, Mr. Delahunt—not with us today, of course; he's in Judiciary—the gentleman from Mississippi, Mr. Taylor, we have created a Coast Guard caucus, Mr. Chairman, as you know. And I hope that that will be beneficiary.

    Mr. GILCHREST. I think to brag on Mr. Johnson over here too, because he—Mr. Coble, he's always here.

    Mr. COBLE. Well, I stand corrected, Mr. Johnson. I didn't mean to omit you. But I think this Coast Guard caucus I think will be beneficial for all involved.

    Bob, you've done a good job. Master Chief, you've done a good job; both of you going to shore; both of you heading for the beach. And you will be missed.

    I wanted to mention—Bob, as you know—pardon my modesty, but as the late Dizzy Dee used to say, ''If you can do it, it ain't bragging.'' For a long time I was the most vocal advocate for the construction of the new Coast Guard icebreaker, as you know. And that's now a fact. And I thank you for the invitation. And after having viewed the launching on TV, I'm glad I wasn't there.


    But for the record, that was not Coast Guard error, that was shipyard error.
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    You'll be missed. I see an aspiring commandant behind us there. I'd be remiss if I didn't say a good word for Commander Gentile, Captain Hathaway; they do tremendous work up here.

    Bob Clement mentioned a question that—and I think I responded to it, Admiral. But I have some misgivings about the administration's ability to levy these user fees without congressional approval. And we can talk about that another day, but from what little I know about it, Mr. Chairman, I'm told that the administration believes that it can collect $35 million, maybe without congressional approval. And that—I have some uneasiness about that.

    Let me ask you this, Bob—Admiral. One of the Coast Guard's Fiscal Year 1999 performance goals is to achieve and sustain complete miliary readiness for the Coast Guard for security program units. Is it possible, in your opinion, for the Coast Guard to meet this goal with only 7,600 reservists? And I think 7,600 is what you've requested.

    What? Is 7,300 on board now?

    Admiral KRAMEK. Yes. And the answer, Mr. Coble, is yes. We are now authorized six Port Security Units to provide to the Commanders-in-Chiefs when they ask for them. One was just asked to be put on 48-hour standby to go to Kuwait for the latest operation that took place over there. And so they've been training, and they're down in the Portsmouth area right now, and they have their anthra shots and they're ready to go.

    I need—if there was total mobilization—two military contingencies to happen almost simultaneously, which is what the annual review assumes, and to take care of what we have to protect our ports—12,300 Reservists. And I've sent a letter to the Administration, requesting that that be authorized. That's authorized through the National Security Committee in the House, not through this committee.
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    However, in today's world with what's going on, I need appropriations of 8,000. That difference of 4,200, we have a year and a half to 2 years to reconstitute if we need, as we go towards something that might be global war, and none of us see that on the horizon.

    So I've only asked for the amount to be appropriated that is reasonable. Secondarily, recruiting has been tough. The Master Chief didn't give you the figures, but one of our recruiters has to meet with almost 110 to 115 qualified high school graduates to get one person to join the Coast Guard. And it's even more difficult for the Coast Guard Reserve. And it's not as hard as what DOD is seeing. I mean, the economy is good, but not as many young people want to join the Armed Forces. So we work very hard on that.

    If I added together all the resources that the Port Security Units needed, it's less than 1,000 people, of the 7,600 that we're asking to be funded in this budget. I told you I needed 8,000, but I'm only asking for money for 7,600, because the reality is, I can only recruit enough to man 7,600 so there's no sense in asking for the funds if I couldn't get there from here.

    I will say that other committees in Congress last year, really saw what we needed, and I want to give some credit to the Defense Appropriations Committee in the House, headed up by C.W. Bill Young, from Florida; and Senator Stevens in the Senate, who appropriated almost $12 million for us in equipment in order to outfit all these Port Security Units.

    So we've got the people identified. They're authorized. They're being stood up. I can meet muster with the 7,600 people we're asking to be funded in the Reserve this year, Mr. Coble.
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    Mr. COBLE. I think you for that.

    Mr. Chairman, I'd like to get with you and Mr. Clement some time, and the others, regarding my initial question concerning the administration's ability to lawfully and properly levy these taxes, user fees—call them what you will—without congressional approval. That makes my coffee taste bad.

    We'll talk about it later. Thank you, gentlemen.

    Mr. GILCHREST. Thank you, Mr. Coble. We'll try to sit down within the next 2 weeks with the committee to do that.

    Mr. Johnson.

    Mr. JOHNSON OF WISCONSIN. Thank you, Mr. Chairman. And I agree with you, Mr. Coble. We oppose—as a representative of the Great Lakes states, we oppose the $35 million navigation user fees for the icebreaking on the Great Lakes. Of course, now you have a sixth Great Lake that you've got to take care of. I imagine you'll be icebreaking on Lake Champlaine, and probably have to ask for additional monies for that. Maybe you can take one of the old Coast Guard cutters there, but we'll find out about whether—since it's now a Great Lake, whether you have to now protect that lake as well.

    But, I appreciate the role that the Coast Guard has taken. I think none so important is the Coast Guard duty of icebreaking. We haven't the problem as much this year because of El Nino; I guess we can all blame on it that.
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    I'm a little disappointed, as I think others are—have expressed the OMB putting on this intolerable $35 million in navigation user fees that we oppose. We don't see a precedent for it. My other concern is, the OMB has sliced the Coast Guard request for $5.3 million to replace the MACKINAW, the heavy icebreaking cutter. It's been there for 53 years, and last year Congress appropriated $2 million for the Coast Guard to study replacement. I wonder when the concept exploration process will be completed, as well as any recommendations on which option should be implemented. Are we're going to replace them?

    Admiral KRAMEK. We've wisely used, I hope, the over $2 million appropriated last year. We're concluding our domestic icebreaker study on what's required for the Great Lakes, and also in the northeast regions of the United States. That will be completed this May, and sent here to Congress showing what the alternatives are.

    Now, you are right, there is no money in the 1999 budget, requesting any program to either renovate the MACKINAW, or to build new ships that would follow on to those alternatives. That was not presented in the President's budget and is not there. But the study will be completed this spring and sent up to the Hill in May.

    Mr. JOHNSON OF WISCONSIN. But you'd like to replace the MACKINAW, and move ahead on that, wouldn't you?

    Admiral KRAMEK. In my opinion, you need—we need as a nation, heavy icebreaker capability in the Great Lakes. Whether it's the MACKINAW, or whether it's other types of vessels that can accomplish it—and some members of your delegations have recently traveled to Europe to look at what they're building in Europe to do this—will come out in the study. It'll be an alternative analysis. And then we'll look at the benefit cost, and we'll make a recommendation on what should be done.
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    In the meantime, however, I'd promise this committee, as well my appropriations committee, that we will keep the MACKINAW 100 percent semper paratus for operations until the year 2006, to allow us to take a look at that study and to see where we should go from there, and then make an informed decision about what we need to do to facilitate domestic icebreaking in the Great Lakes because it needs to be done.

    Mr. JOHNSON OF WISCONSIN. And I know they're looking at some alternatives that some folks in our area also proposed.

    A quick question about the Morro Bay, the icebreaking tug. Would it be feasible at all? Do you have any cost estimates on home-porting that and operating that, the Morro Bay, on the Great Lakes?

    Admiral KRAMEK. It would cost about $2 million a year to do that. It's not required. When we built the icebreaking tugs, the Morro Bay was an additional one added by Congress, specifically to train officer candidates in Yorktown, Virginia, so it was used as training vessel. We're moving the Officer Candidates School, after this last class graduates, to New London, Connecticut, to be part of our Leadership and Development Center. So the Officer Candidates School will be New London with the Coast Guard Academy, along with the Chief Petty Officers Academy. New London will be the Center for Leadership, Excellence, and Management in the Coast Guard. We'll have sufficient training vessels there to train the officer candidates. The Morro Bay becomes excess as a training value. However, we're going to keep it in storage in case we need it for icebreaking somewhere, but right now it would be excess to our needs in the Great Lakes.
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    Mr. JOHNSON OF WISCONSIN. And just a final comment. I'm pleased to see that the $28 million request in there for the Deep Water Project, and that's important to my district, and people who hope to be a part of that. And I understand there's a coalition that's working with aircraft manufacturer and electronics firm, in my district that will look at completing or——

    Admiral KRAMEK. There's at least six coalitions that will be competing. I hope to have our request for proposals out in the middle of this month, and then this summer a contract will be let to three of the successful coalitions to take 18 months to develop the design, the specifications, the concept of what our deep water system, ships, planes, and C4I should be. And I am aware that there's some folks in your area to do that.

    Mr. JOHNSON OF WISCONSIN. And finally, I guess, Mr. Chairman, I'd just agree that we're all in favor of the $35 million. We don't want to cut it from their budget, but we, I don't think, want to impose these icebreaking fees, which would break a long-time precedent.

    Mr. GILCHREST. I agree with you, Mr. Johnson. Thank you very much.

    We do have a vote, and we have a few minutes to make it. I had some other questions to the Master Chief, regarding tuition fees, healthcare, tuition assistance, and some other things. But I think I can call you directly on the phone and get those answers.

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    And Commodore Tucker, I think I'd feel free to do the same with you.

    Commodore TUCKER. Yes, sir.

    Mr. GILCHREST. We're just running out of time. And I don't want to hold this panel here. So we'll recess, and we'll bring the next panel up when we come back.

    Thank you all very much for your testimony.

    Admiral KRAMEK. Thank you.


    Mr. GILCHREST. The subcommittee will come to order. Welcome everybody to the second half of the hearing. I'd like to introduce the second panel, Captain Fred Becker, Reserve Officers Association of the United States. Welcome.

    Mr. Glen Nekvasil.

    Mr. NEKVASIL. Nekvasil.

    Mr. GILCHREST. Nekvasil. Communications Director, Lake Carriers' Association; and Mr. Joseph Cox, President of Chamber of Shipping in America.

    Gentlemen, thank you for coming. We look forward to your testimony.
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    Captain Becker.


    Captain BECKER. Thank you, sir.

    Mr. Chairman, members of the committee, it's again my pleasure to represent the Reserve Officers Association of the United States before your committee. We'd like to first express our profound gratitude to your committee for its strong and vigorous support of the Coast Guard, and most particularly the Coast Guard Reserve, during the Fiscal Year 1998 authorization process.

    We identified a number of significant concerns regarding the Coast Guard Reserve, including funding, recruiting, and the provi-sion of the port security unit equipment. In recognition of a vital support provided to the Nation by today's Coast Guard Reserve, your committee and your staff responded, and we certainly appreciate it.

    Turning to Fiscal Year 1999, we'd summarize our concerns in just two areas. First and foremost, end strength as impacted by recruiting, and second, funding to the reserve account. When I testified before you almost a year ago—it was 19 March last year—the Coast Guard had 7,299 reservists. Today they have 7,287, a decrease of 12. Given the continued reduction in strength, at a level significantly below that authorized and appropriated for the current and last fiscal years, and despite the attention this committee and the Congress as a whole have given to the issue, our concerns have become substantially heightened.
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    We strongly support Fiscal Year 1999 request to maintain the Coast Guard reserve strength at 8,000. We have serious concerns regarding the proposal for an appropriated end-strength of only 7,600, especially in view of the fact, as the commandant just testified, they have now done a study that says they would need in excess of 12,000.

    In this respect, believe it's particularly important that the Congress get to review, and the American public get to review the study, and would ask the committee to make a request for the report, or the study, the commandant's done, as to how many reservists he needs at the earliest possible juncture.

    As to the continued end-strength shortfall, it must be noted that all the other Armed Services, even the United States Army Reserve, are meeting their recruiting goals for reservists. The immediate problem therefore appears to be unique to the United States Coast Guard. While recognizing the Coast Guard is making some effort to recruit reservists, it's evident, the numbers unfortunately speak for themselves, that they're not making progress.

    In this respect, we'd note that the Fiscal Year 1998 DOD Authorization Bill, on the Senate side, required a report on reserve recruiting, to include any needed assistance that the Coast Guard might need from the Congress. Unfortunately, this report has not yet, to my knowledge, been transmitted to the Congress.

    Mr. Chairman, we'd ask that you'd also make inquiries also regarding the status of this report, and that when you get it, ask your staff to review it, and take any action you deem appropriate during the current legislative session.
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    In the absence of that report, we suggest the following actions be taken: the assignment of specific recruiting responsibilities to commanding officers, who in many cases because of geographic constraints would be better able to recruit a reservist than a Coast Guard recruiter; the assignment of additional reservists to assist in recruiting; the assignment of reserve recruiting quotas to active duty recruiters, recruiters have quotas for active duty, but not for the reserves; and mandating relief from the geographic requirement imposed by the Reserve Personnel Allowance List, that significantly constrains the ability to match a recruited reservist to a particular location.

    Turning to funding for the reserve account, the administration's request is $67 million for the reserve training appropriation for Fiscal Year 1999. It's our understanding the Coast Guard intends to use $25 million of the $67 million for reimbursement to operating expenses. Given the present procedures for reimbursement for operating expenses and direct payments by the Coast Guard Reserve, we understand this funding level of $67 million is the minimum needed for 7,600 reservists. Even at this minimal funding level, however, the Coast Guard Reserve would continue to receive only 12 days of annual training. All the other reserves from all the other services receive 14, except for the Navy. In addition, it should be noted that the $67 million funding level is based on a 90 percent funding of on-board strength, as opposed to the previously established way of budgeting for 90 percent of authorized strength.

    Additional funding to support the full 8,000 authorized would appear to be $72 million. It should, however, be noted that the 1998 Appropriations Bill, in appropriating $67 million for the Coast Guard Reserve, limits the amount of reimbursement—or limited the amount of reimbursement to $20 million.
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    The House Appropriations Committee noted the limitation was included to ensure that reserves are not assessed excessive chargebacks to the Coast Guard operating budget. The House report went on to say that the committee believes that the proposedlevel of reimbursement last year, $22.6 million, was too high. If $22.6 million was too high last year, it certainly suggests that $25 million is too high this year.

    Further, we'd ask that the $20 million limitation by the Appropriations Committee—and I realize it's the Appropriations Committee that put it on, not yur committee—must be particularly monitored to ensure the observation of congressional intent. In this regard, maybe with limited additional funding, carefully monitoring of reimbursement and direct funding from the reserve account to the active duty account, from a current as well as historical basis, that the Coast Guard Reserve would have sufficient funds to be at the $8,000 level. This would have a positive morale-building effect on reserves, by not jeopardizing the authorized and appropriated end strength over the long term. And I can tell you, that the House Authorization Committee, which as you know, sets the end-strength authorized for the reserves, has already questioned why the level should remain at 8,000, on more than one occasion, given the fact that they are not recruiting up to their authorized and appropriated level.

    Following, sir, the Chairman of ROA's Coast Guard Committee, Rear Admiral Bob Merillees, United States Coast Guard retired, has at his own expense produced a brochure, entitled ''The Coast Guard and Its Reserve: A Good Deal for America''.

    Admiral Merrilees—who've you met, sir, he called on both you and Mr. Clement last year—asked that I provide copies of this brochure to you, and I will provide it to you, as well as the Full Committee.
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    Again, thank you very much for your and the committee's strong support, and the opportunity to represent Coast Guard Reservists before this distinguished committee. I'm pleased to respond to any questions.

    [The information supplied follows:]
    [Insert here.]

    Mr. GILCHREST. Thank you very much, Captain Becker.

    Mr. Nekvasil.

    Mr. NEKVASIL. Thank you very much for the opportunity to address this subcommittee.

    Lake Carriers' Association represents 11 American corporations, operating 58 U.S. flag vessels exclusively on the Great Lakes. During the recently concluded 1997 navigation season, our members and other Jones Act carriers on the lakes moved more than 125 million tons of dry and liquid bulk cargo, the most in any navigation season since the early 1980s.

    While our members earn their living carrying cargo, the value of the Jones Act trades on the lakes far extends beyond the ships or the 2,500 sailors who man them. The efficient movement of Minnesota and Michigan iron ore supports more than 100,000 steel mill jobs and 8,000 miners in the Great Lakes Basin. The low-cost delivery of low-sulfur coal keeps industrial and residential bills as low as possible.
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    We have many partners in accomplishing this transportation marvel, but none is more important than the United States Coast Guard. At the beginning and the end of the season, it's the Coast Guard that keeps the shipping lanes free of ice. Once the ice clears, it's the Coast Guard that places and maintains the Aids to navigation that keep the ships on a safe course.

    As this subcommittee well knows, the budgetary realities of recent years have forced the Coast Guard to do more with less. I can assure you that 9th District personnel have performed their many duties with the same high level of commitment and expertise, even though their ranks and resources have been reduced.

    Lake Carriers is deeply concerned that the preceding glowing report will be dimmed in the not-too-distant future by the administration's proposal to institute a navigation assistant tax. Although the Office of Management and Budget terms these new taxes user fees, let's not kid ourselves. Our industry, and therefore our customers and their employees will be burdened with additional taxes if this proposal becomes law.

    The Navigation Assistance Tax is like the iceberg that sank the Titanic. At first sighting it seems small and potentially harmless, but it's what lies below the waterline that could damage, or even sink waterborne commerce on the Great Lakes and other waterways.

    In its first full year the Navigation Assistance Tax would raise $176 million, but will the next year or years hold? Look at the tax that funds the Harbor Maintenance Trust Fund; it tripled overnight, and has never come down, even though it is generating a surplus year after year. The Navigation Assistance Tax should be rejected as poor public policy to start with, for it takes too narrow a view of Coast Guard functions.
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    Earlier I stated that Aids to navigation help keep ships on a safe course, but a safe transit protects the marine and surrounding environment. And why must commercial navigation bear all the pain? Aids to navigation are used by fishermen, pleasure boaters, crews and gaming vessels, ferries, as well as by government vessels from the Coast Guard and the Navy. Since not all the users are included, this new tax doesn't even comply with the theoretical model for user fees.

    This tax will be applied to icebreaking in Fiscal Year 2000. Again, while Coast Guard icebreakers do what their name implies, the icebreaking mission is not solely related to commercial navigation. The Coast Guard performs icebreaking to prevent flooding, but where is the bill riparian dwellers?

    What will be the impact of this foot-the-door tax? Higher costs for American industry. Our customers will likely react in one of two ways. They will either switch to Canadian ports to avoid the tax, or they will switch to a land-based mode of transportation. But let's not forget that these options are presently available to them; but they have not chosen them because waterborne commerce through American ports is the most cost-effective means of transportation. No matter what option industry pursues, the result is going to be higher delivery costs for raw materials and goods that's going to benefit no one.

    I want to point out too that our environment will suffer from these modal and source shifts. Vessels are the greenest form of transportation. Their power plants burn significantly less fuel and produce much less emissions than trains or trucks.

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    Just to give you an example from the Great Lakes, where a steel company had switched from vessels to train, it would take six 100-car unit trains to equal cargo in one of our 1,000-foot long ships.

    Waterborne commerce directly or indirectly impacts the economic livelihood of nearly every man, woman, and child in nation. That's why the vast majority of Coast Guard functions have been funded from general revenues.

    This subcommittee and this Congress must retain the policy of funding U.S. Coast Guard missions from general revenues, and amend our laws to state, there will be no taxes on aids to navigation or icebreaking. These are services to the entire nation.

    This subcommittee and this Congress can perform another service to the nation, by including $6 million in the Coast Guard's budget to develop detailed design proposals for a multi-purpose vessel with heavy icebreaking capabilities to replace the MACKINAW. The MACKINAW is the only heavy icebreaker station on the lakes, and for 53 years she's kept commerce moving through treacherous conditions. While her hull is sound, she is technologically doubted, and thus expensive to operate.

    The Coast Guard has concluded, we believe at least, that the cost of modernizing the MACKINAW nearly equals the cost of a new build. Furthermore, a new build will be a multi-mission vessel, something no amount of modernization can achieve with a MACKINAW.

    I cannot stress the importance of maintaining heavy icebreaking on the Great Lakes. During the winters of 1994 to 1996, more than 45 million tons of dry bulk and liquid bulk cargo were moved during the ice season. Although this past December and January were virtually ice free—thanks we gather to El Nino—this was an aberration.
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    Great Lakes steel mills account for more than 70 percent of our Nation's steelmaking capacity, and they cannot be operated efficiently, unless they receive iron ore from early March until late January. The requested $6 million will move forward the process of maintaining heavy icebreaking on the lakes, and in the long term will reduce federal expenditures, as the replacement vessel will require less fuel, and be much more fuel efficient.

    Thank you for the opportunity to appear, and I will try to answer any questions.

    Mr. GILCHREST. Thank you very much.

    Mr. Cox.

    Mr. COX. Thank you, Mr. Chairman. I am Joe Cox, president of the Chamber of Shipping of America. And I would suspect you can tell from my lapel pin, where I stand on Navigation Assistance Tax.

    I'm kind of sorry, Mr. Chairman, that the cadets aren't here, because I had a couple of bits of information which would be necessary for their final exam. Thirty years ago, when I was in a similar situation at the Federal Maritime Academy, I never thought that I would be sitting in front of a subcommittee of Congress testifying nor did I think that I would be able to say that I was a teacher. I teach at Northern Virginia Community College and also Prince George's Community College. And I think a bit of information I'd give them for their test with respect to that, is that while it was difficult being a good student, it's immensely more difficult being a good teacher, until you come to exam time, and then we get to watch the students sweating out there.
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    But, Mr. Chairman, we appreciate this opportunity, and I'm going to alter my written testimony. I have submitted it for the record. Verbally I'm going to focus on a couple of points.

    The first point is that, I represent a broad coalition of the maritime industry. And I think if you look at the people who have signed on to the testimony, you'll see that it's quite an impressive list of various individual companies, maritime labor, other types of labor associations shippers.

    My first sort of surprise in reading the budget, was noting that there was this request for a Navigation Assistance Tax. I went to a coalition meeting, which we had discussed holding, and I was surprised a second time to see the degree of eclectic interest represented among the maritime community. And I think it's one of the first times that I've seen all of us come together on a particular issue.

    I think there are two basic arguments in our submission to your subcommittee. The first one is, if you will, a visceral one, it's one dealing with the issue itself, and the second one is a legal argument and you'll note that the legal part of our argument has been very well-covered in our paper. I think it's been footnoted to a sufficient amount. I must tell you, I had some disagreement with the person who was putting the footnotes in, but they won out since he was an attorney, and I am not.

    However, I note you as Chairman and several Members also noted the fact that they question the legality of this suggestion on the behalf of the Administration. We question that also. I'm glad to see that the questions are coming from the subcommittee in the same way.
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    I would like to stress now the first reason and argument that we would present, which is, we have navigational aids, and they have a broad use within this country. We have a large number of different types of navigational aids, and we also, Mr. Chairman, have a number of different users. Many of them have been mentioned in previous testimony.

    I will only add to that the fact that we have government vessels which are utilizing these services, and I noted this morning someone said maybe we should exclude government vessels from paying for this particular service, the Corps of Engineers, the Navy, the Coast Guard, all operate vessels.

    I think there are also, with respect to certain navigation aids, some non-maritime users, trucking companies and commercial aircraft use our Global Positioning System, the differential corrections which are emitted by the Coast Guard through the VHF system. I will add on to the environmental protection aspects. We don't just have these aids to navigation to make sure that the ship or the recreational boater or the commercial fisherman or the government vessel stays in a safe channel. We want them there because if they don't stay in a safe channel, they're going to come out of it and there could be some problems with respect to spills which then would affect the entire community associated with the waterway.

    And I'll add that Admiral Kramek in his testimony stated that we're going to have more users of the waterways, i.e., increased use of the waterways.

    So to suggest in its basic sense that we should charge a specific group of people, which can be identified because they carry commercial cargo, charge them for the use of aids to navigation which have a plethora of uses, and the difficulties associated with what is the value of that aid to a particular user, we think is improper public policy, and should not be something that is entertained by the Congress, regardless of any discussion that would ensue on the legal side.
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    Mr. Chairman, we have two recommendations attached to our testimony. One deals with the appropriations process this year, and it would clean up the issue with respect to the suggestion by the Administration for this year.

    Our second proposed amendment is one that we would recommend for the consideration by Congress, and it is an amendment to 46 U.S. Code, Section 2110. We suggest adding language that the Secretary could not collect any charges under this subsection for any navigational assistance service, including ice-breaking.

    At the very least, Mr. Chairman, this would bring up any suggestions about user fees, i.e., taxes, with respect to this arena, out into the open where we would start to talk about the legality of it. And before we get to the legality of it, we should talk about, whether we should even do this. Should we be entertaining this type of a system of tax on a portion of our users of the waterway?

    I'm going to conclude, Mr. Chairman, by saying that we understand that the Administration's proposal takes these user fees, which they claim are legitimate and authorized under one section of the budget proposal, and in another section say, these fees should only be accrued to the AC&I account i.e., the Acquisition Construction and Improvement account. We understand the purpose. User fees, when they are generated usually go to the general revenue and so they had to have some language which pushed these back into Acquisition Construction and Improvement.

    Mr. Chairman, in no way should our testimony in opposition to the navigational assistance tax be construed as a negative comment with respect to the Coast Guard's duties and responsibilities.
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    I think we all know the Coast Guard is a multi-functioning organization and the buoy tender that is out there is not only tending buoys, it's performing search and rescue, it's performing drug interdiction, it has spill collection equipment on it by direction of the Congress in order to respond to spills.

    So we recognize the multifaceted nature of the Coast Guard's duties and responsibilities, and I think that we as a nation have a responsibility to fund them to a level where they can carry out the missions assigned to them.

    Thank you, Mr. Chairman. I'll be ready for questioning.

    Mr. GILCHREST. Thank you very much, Mr. Cox. Mr. Cox, I don't think there's any philosophical difference from what I heard this morning either from the witnesses or from the Members on this proposed tax. I think what we need to do, and we'll take your recommendations under advisement, is for us to sit down and figure the strategy that we will want to follow in this session dealing with the Administration's proposal.

    And I basically think, if I can speak for other Members up here, that we're, right now, we're against that proposal for a lot reasons, many of which you also mentioned. Some of which the implementation of that proposal seems very, very complex and difficult, especially if you bring into light everybody that uses GPS. That's a fascinating proposal that I haven't thought of, up until this point.

    So I think we'll move forward and develop a strategy fairly quickly to deal with that issue. A lot of it, quite frankly, is a political issue, where do you get the money from to run the country, and if you do it this way, Congress has to do it another way, so they pass the ball to us now, basically.
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    Mr. Nekvasil, I'm going to ask a sort of a philosophical question again, and it has to do with ice-breaking in the Great Lakes, and you described very adequately the amount of commerce and the benefit to the country as a result of the revenue generated and the Coast Guard's, from your perspective, obligation and responsibility to retaining a modern ice-breaker in the Great Lakes.

    Do you feel that there's no question that the Coast Guard should run the ice-breaking operations to the extent that they do now, and continue to do that in the Great Lakes? Would you consider any other option other than the Coast Guard performing that duty?

    Mr. NEKVASIL. When you consider that you have 100,000 steelworker jobs, and this region represents more than 70 percent of the steel-making capacity, we certainly would not want to consider any untried ideas. The Coast Guard has been performing ice-breaking on the Lakes since the 1936 Presidential Order, the Mackinaw was built in 1944 to meet the needs of World War II. They system as it exists right now works very fine. The only problem that we really have is that we have a 53-year-old ice-breaker that needs to be replaced, and we want to see it replaced as cost-efficiently as possible.

    Mr. GILCHREST. My guess, and I have not talked about this aspect of the Mackinaw with the Coast Guard. My guess is that given the downsizing of all the military services, the reduction of revenue to the Coast Guard to all its various areas of responsibility, I think perhaps they view this issue as one of which would draw a great deal of revenue away from some of their other responsibilities.

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    But I think, at least I feel philosophically the same as you do. There are certain responsibilities that the government has to commerce, especially to water borne commerce, so we'll—the mic?

    Okay. I saw this flag waving off to my right. Is that better? It's funny when you're talking, you don't hear that.

    I think what we'll do—there are certainly a number of Members in Congress, Mr. Oberstar, one, that wants to make sure that water borne commerce is dealt with successfully on the Great Lakes, and that we will either move forward very aggressively in the near-term and decide what to do with the Mackinaw, how to fund a new Mackinaw. We recognize your interest in this issue and we'll deal with it effectively.

    Captain Becker, let me ask you a question about this brochure.

    Captain BECKER. Yes, sir.

    Mr. GILCHREST. This was produced not by the Coast Guard, but by private means?

    Captain BECKER. By Bob Merrilees, United States Coast Guard, Retired, at his own expense.

    Mr. GILCHREST. And he did this to enhance recruitment?

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    Captain BECKER. He did it enhance the viability of the Coast Guard Reserve and the importance of the Coast Guard Reserve to the country. He's the chairman of ROA's Coast Guard Affairs Committee. If you'll recall about a year ago, he made a call on you and Mr. Clement.

    Mr. GILCHREST. Given the fact that the Admiral said this morning that one 1-out-of-every-100 or so people contacted to enlist in the Coast Guard Reserve, there's only one person out of 100 that actually joins up, the difficulty is the expense. Do you have any specific suggestions on to how the Coast Guard can improve the recruitment for reservists?

    Captain BECKER. Yes, sir.

    Mr. GILCHREST. And have these been mentioned to the Coast Guard before?

    Captain BECKER. Yes, sir, they have. In response to our request about almost 9 months ago, they made some relief from what's know as the RPAL, the geographic restrictions requirement. What I had asked that they do is go so far as to say, if you turn down a Coast Guard reservist who wants, or somebody that wants to come into the Coast Guard Reserve, you must report that into headquarters.

    The way it works now is, if you're a reservist or you want to join the Coast Guard Reserve, they have to find a billet for you at a specific location that matches your talents that's within your geographic area. If they can't, then they can't take you. And that's one of the things—that's an internally imposed requirement.
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    Mr. GILCHREST. Would you say that again?

    Captain BECKER. Yes, sir. What they've got is they have certain billets for reservists at certain locations. Let's take for example, Jacksonville, Florida. And you must, if you want to come into the Coast Guard Reserve and there's a billet at Jacksonville, Florida, you must live within a certain distance of that billet, as a general rule. And you must have certain talents to go into that billet. If not, they won't take you even though you're interested into coming into the United States Coast Guard Reserve.

    They've relieved that somewhat. We ask that they go so far as to say, if at anytime you don't take a Coast Guard reservist, you report it into headquarters and we'll see if we can find a place where we can put this person that wants to come into the Coast Guard Reserve.

    Mr. GILCHREST. That's not now done?

    Captain BECKER. No, sir. In addition, they haven't given quotas, they have quotas on the active duty side, they haven't given quotas for recruiting reservists. We understand that's one of the things that's under consideration. The other item I'd say is, as I sit back and think about this, as I have on many a weekend, if the United States Army can make its reserve recruiting requirements—not to criticize those who might be attracted to the Army—I would think that the people would be attracted to the United States Coast Guard Reserve as well, given what the United States Coast Guard Reserve does on the weekends, et cetera, you know, for their two weeks, and does for the country. And so it's got to be some other systemic problem that's causing this ability to just not get there. Whether it's notification to the young kids coming out of high school that these opportunities are available, or whatever, I'm not sure.
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    Mr. GILCHREST. Well, we'll call on Mr. Clement to continue the questioning.

    Mr. CLEMENT. Yes, Captain Becker, you testified before this committee last year on the Coast Guard Reserve problems. Has anything improved in the last year with the Coast Guard Reserve program?

    Captain BECKER. I think the Coast Guard Reserve program is working well as Team Coast Guard. It's working extremely well. The problem is that they're not getting enough reservists to get up to the numbers and as you know better than I, the modern thought is, in this day and age under constrained budgets, when you don't get there, you cut it, either at the OMB level or by the Congress.

    It's my understanding that the Commandant had to personally fight, and we appreciate his doing that, a further cut this year because he didn't reach the 7,600 level. And, as I mentioned to you, the Armed Services Committee has already asked me why they should continue the authorization level at 8,000. At the same time, the Commandant acknowledges they need for 12,000.

    Mr. CLEMENT. Mr. Nekvasil, how much do your members pay the Coast Guard for current user fees for services such as shipping space?

    Mr. NEKVASIL. I believe the fee is $5,800 for the inspection of the vessels. The individual mariners pay for the renewal of their documents when they upgrade. Those are the fees that I'm aware of right now.
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    Mr. CLEMENT. I assume that bulk ship holders would simply pass the cost of these navigational aid taxes on to the shippers, and how price-sensitive are many bulk commodities? Could these fees make them uncompetitive in the international market?

    Mr. NEKVASIL. Concerning the international market, you must understand my members trade domestically only, in the Jones Act trade. Concerning the effect of these fees, as I said in my testimony, the competition between the various modes of transportation in this country is fierce. You can win a contract or lose a contract on a tenth of a cent per ton. As a trade association, the antitrust laws really preclude us from having much to do with freight rates, we do know that the margins in this industry are not fat, so they cannot absorb the additional costs. What you would see is those cargos that could go to the rail mode would be switching there, or you would see maybe more Canadian iron ore coming in.

    Mr. CLEMENT. Mr. Cox. You know I know you got no NAT, but I thought NAT was spelled G-N-A-T, rather than N-A-T.

    Mr. COX. We had a discussion about that, Mr. Clement, and we thought we should call it Government Navigation Assistance Tax so we would be correct from the spelling standpoint. I thought it would be important for anybody living around Washington for any time to be aware of the G-N-A-T which is certainly a noxious pest around here during the summertime.

    Mr. CLEMENT. I see. Is there any way to quantify how much a given vessel uses or aids to navigation on a voyage. For example, a vessel entering Los Angeles harbor passes relatively few aids, while a vessel entering the New Orleans will pass many?
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    Mr. COX. I think that's a very good—it is very complex, and I think that there's an impossible—it's nearly impossible to try and say, you're utilizing that safety navigation more or less than another, because a large vessel is going to use more than one means of confirming its position. Today, I would be very surprised if most vessels weren't relying on Differential Global Positioning to position themselves in our harbors, and aids to navigation that we are familiar with, buoys and let's say range lights and other types of lights. They're probably used as a secondary means of positioning. You might even use a tertiary means such as a picket or grain silo along the waterway.

    Mr. CLEMENT. Do any other countries charge for U.S. flagged vessels using their aids to navigation?

    Mr. COX. I was thinking about that as I sat here, and I know that Britain has something they call the light fees, which are assessed. I think there possibly could be some others around. I don't know to what extent that is predicated on aids to navigation, or whether it's a general fee assessed for vessels coming into their waterways. I think that would certainly be one of the distinctions that I would look for as we assess these other nations charging for vessels coming in.

    Mr. CLEMENT. Thank you. Mr. Gilchrest.

    Mr. GILCHREST. Thank you, Mr. Clement. I just have one more quick question. I guess it would be basically for Mr. Nekvasil and Mr. Cox. The Admiral mentioned waterways management plan that the Coast Guard was coming up in anticipation of the tripling of water borne commerce, and how we can effectively deal with it at our ports. Have either one of you been privy to that, been consulted about that, know about that?
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    Mr. NEKVASIL. I believe there was a notice in the Federal Register here in the last few days. I think the first meeting is in New Orleans. They're planning one in Cleveland at the 9th District, but I do not have any—we have not, at Lake Erie, had time to sit down to review the thing, review the proposal in detail.

    Mr. COX. Yes, sir, we do know about it. We've been talking with the Coast Guard for a couple of years about this. What we see as a future problem. Which is that there is going to be a growth in trade and the United States, as the world's main trading partner, is going to participate in that to a great degree.

    I was drawn back to some things that I heard when I quit sailing in 1971 and went to work for a company, and I was questioning the future of the maritime industry, much as many of these younger people involved in it now are asking the same questions. And the gentleman that I was working for handed me a piece of paper, and said read this study done by one of the ubiquitous helpers. That study said trade was going to quintuple within the next 20 years. I don't know whether that occurred or not.

    Mr. GILCHREST. That was 1971?

    Mr. COX. That was 1971. Now whether that happened, I do not know. But I'm assured it has increased quite a bit. We recognize that within the industry and I think that you're seeing ships that are being designed for 6,000-20-foot equivalent units, 8,000-20-foot equivalent units, they're being designed like that because we know there's going to be the cargo that must be carried.
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    And I think in this nation, we have spoken with the Coast Guard about our shore-side infrastructure to handle that amount of cargo coming across our docks, the roadways, the rails, the access to the ports, the deepening of the ports, and, in fact, the navigation safety mechanisms available to make sure we're going to get the maximum number of ships coming in and out. We're going to have to look at all these as a nation within in the next 5 years so that we can be prepared for the next 25 years.

    And I think the Coast Guard has rightfully grabbed on to the reins of this particular wagon, I guess I should be using maritime analogies.

    Mr. GILCHREST. Of the barges.

    Mr. COX. I think that they have rightfully identified it as a priority for the Federal Government to become involved in.

    Is it complex? No question it's complex. But we do have to deal with it, and there's no doubt.

    Mr. GILCHREST. Thank you, Mr. Cox.

    Captain Becker, Mr. Clement and I are going to invest—so we could help out a little on our weekends off.

    Captain BECKER. Yes, sir. We offered last year to take Mr. Clement in the Coast Guard Reserve.
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    Mr. GILCHREST. Thank you, gentlemen, very much, you've been very helpful this morning. We'll see you in another year. The hearing is now adjourned.

    [Whereupon, at 1:00 p.m., the subcommittee adjourned subject to the call of the Chair.]

    [Insert here.]