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U.S. COAST GUARD FISCAL YEAR 2001 BUDGET REQUEST
House of Representatives, Committee on Transportation and Infrastructure, Subcommittee on Coast Guard and Maritime Transportation, Washington, D.C.
The subcommittee met, pursuant to call, at 10:10 a.m., in room 2167, Rayburn House Office Building, Hon. Wayne T. Gilchrest [chairman of the subcommittee] presiding.
Mr. GILCHREST. The Subcommittee on Coast Guard and Maritime Transportation will come to order.
We have a few members who are en route because all of us have busy schedules.
We will get started this morning first with Congressman Stupak. Good morning, Congressman. Thanks for coming and we look forward to your testimony. Anything we can do to assist you in this situation, we would be more than happy to attempt to do once we have all the facts. You may begin your testimony.
TESTIMONY OF HON. BART STUPAK, A REPRESENTATIVE IN CONGRESS FROM MICHIGAN
Mr. STUPAK. Thank you, Mr. Chairman.
Thank you for the opportunity to testify on issues that are important to people in my district but also this Nation.
First, I ask that my full testimony be made a part of the record.
Mr. GILCHREST. Without objection.
Mr. STUPAK. Thank you, Mr. Chairman.
I will summarize and I will be brief. I have two main issues I would like to speak to you about today. First is the asbestos removal on a former Coast Guard property in Traverse City, Michigan.
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In 1994, I believe it was, we transferred some excess property of the Coast Guard to Traverse City area public schools to be used as soccer fields. We appreciate this committee's support in helping us to do that.
After we obtained this property and after soccer fields were established, it was put forth that there was asbestos hot spots on this field, so the Traverse City schools went through and graded down the fields again to remove the hot spots of asbestos. The asbestos is coming from Coast Guard buildings put up in the 1940s on the property.
Title has been transferred to the school district and the buildings remain. If the buildings had a hole in it and we could call it an emergency, we would then have the authority to have the Coast Guard and/or the EPA go in and remove the asbestos and these buildings. However, because the buildings are standing there, not being used but contain asbestos and structurally still in fairly good shape, not an open detriment, we have an argument between the EPA and the Coast Guard as to who has authority and who should be doing what to remove these buildings containing asbestos.
Traverse City Schools would like to do it but they have a shortfall of about $2 million. We have gone around and around with both the EPA and the Coast Guard saying, look, in order to demolish and remove these buildings, it's about $200,000. They all say that shouldn't be a problem to get the $200,000 but they all say we don't have the authority, you have to give us the authority to go in and remove these buildings and remove this asbestos.
So for the last couple of years, we have been going around and around between EPA and the Coast Guard and they both point to each other as having the responsibility but no one will really step forward.
In fairness to the Coast Guard, they said we did transfer the property, it does belong to Traverse City. We are happy to do it, we would like to do it but we need authority or direction from the committee telling us and directing us to do it. I have been to the appropriators, they are willing to put forth the money; we need some legal authority to direct them to do it.
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That is the main thing I am asking from this committee, to direct the Coast Guard to take the initiative, and they are willing to do so at the local level—they have been tremendous to work with—to remove these buildings and get that asbestos out of there.
Like I said, the EPA came in and ordered us to strip the fields once and we are already on our second fields. With the short growing season in the northern Michigan, that is not always easy to do, but we removed the hot spots and we removed the asbestos. With these buildings here, there is always the concern that we will have degradation and have more hot spots developing and every couple of years we will have to grade the field to get the asbestos out.
We need your help in that and I would appreciate your seriously directing the Coast Guard to help us. The local people have been great. They want to do it but they just don't have the authority.
Mr. GILCHREST. Congressman Stupak, do you have a bill to that effect?
Mr. STUPAK. We have put in a number of requests with both the appropriators and here. Whether we have an actual bill, I don't believe we do.
Mr. GILCHREST. We need a line item to direct the Coast Guard to remove the buildings.
Mr. STUPAK. Very well. I know we have had amendments in the past and we will make a separate, free-standing bill.
Mr. GILCHREST. Whatever language and whatever process we use to accomplish the task, I think we can work out that. How many buildings are there?
Mr. STUPAK. I believe there are two, sir.
Mr. Gilchrest. Do you know how big they are or what they were used for?
Mr. STUPAK. No bigger than this room. They were used for storage of some equipment and also for heating and cooling.
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Mr. GILCHREST. How long have they been abandoned?
Mr. STUPAK. I believe at least 15 years.
Mr. GILCHREST. But there is no value right now?
Mr. STUPAK. Little or no value because of the asbestos.
Mr. GILCHREST. The asbestos is what is wrapped around the pipes?
Mr. STUPAK. Correct.
Mr. GILCHREST. Do they have asbestos siding on them?
Mr. STUPAK. On the outside, no.
Mr. GILCHREST. Who paid the cost of the grading of the field? Was that because there were asbestos particles in the dirt?
Mr. STUPAK. In the dirt there were some other buildings and sort of buried up the asbestos, so they were removed. The Traverse City local schools, all the money for this comes from the local soccer organization who paid for it to get it removed, reseeded, redone.
Their plans to put in a concession and locker rooms at this site which is some distance from the school have been on hold until these buildings are removed. There is a local soccer league, they draw about 3,000 players a year. It is a huge sport up there. They have great community support and they have put a lot of money into these fields, lights and everything else. Their next phase is can't go forward until we remove these buildings.
Mr. GILCHREST. The estimated cost to remove the buildings?
Mr. STUPAK. $200,000.
Mr. GILCHREST. Just $200,000.
Mr. STUPAK. Everyone says just but I think it is easier to get $200 million than it is to get $200,000 around this town. It is just crazy.
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Mr. GILCHREST. The cost of the removal will be $200,000 and your suggestion is to direct the Coast Guard to have the authority to remove the buildings. I would assume under the watchful eye of the EPA?
Mr. STUPAK. Yes. The EPA has been involved, the Michigan Department of Environmental Quality has been on it. There have been many studies done by both State and EPA on how best to do it. Everyone agrees it has to be removed, everyone agrees the price is about $200,000. Everyone agrees it should be done but no one seems to want to accept the authority to do it.
Mr. GILCHREST. Congressman Stupak, we will help you out.
Mr. STUPAK. Thank you, sir.
Last but not least is the replacement of the Coast Guard cutter Mackinaw. The Mackinaw has been in existence almost 55 years. We have made a number of modifications through those 55 years to make it more cost efficient to run and operate. It is the only heavy ice-breaking vessel we have on the Great Lakes. It is time to replace it. It is old, it is outdated. We cannot upgrade it anymore.
A newer vessel would have less people, could run more efficiently, and have more than a single mission which is basically icebreaking. We can use it for a buoy tender, we can do a number of things.
Plans have been let in the past, designs and engineering is ongoing right now for a new replacement. The Administration put forth in their 2001 budget $110 million deferring $8 million to fiscal year 2002. We would like to see all $118 million put in the 2001 budget so they can get this accomplished.
It has been one of these things that is ongoing. We have stretched the Mackinaw as far as we can. Even the thick sides of the Mackinaw are becoming very thin from all the 55 years of use.
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As you know, Mr. Chairman, 55 years for an ship is a long, long time. Everyone agrees it is time to replace the Mackinaw, everyone agrees we have to do it soon. We would like the Administration's amount of $110 million kicked up to $118 million so we are not back here trying to get $8 or $10 million the next year or year after to get it completed.
The Coast Guard and everyone agrees this is something that has to be done. We would like the full amount to be put in the budget so it can be completed so I am not back here every couple of years trying to get another $8 to $10 million from the committee.
Mr. GILCHREST. I know Congressman Oberstar has been interested in this issue for a long time. We don't get as much ice on the Chesapeake Bay as you do up there in the Great Lakes but we do get ice occasionally and we recognize in some situations the urgency that you have an icebreaker on hand to do the job.
I think the committee can also be of some help in this issue as well.
Congressman DeFazio?
Mr. DEFAZIO. Thank you, Mr. Chairman.
When we did the authorization last year, I was fully supportive of the Mackinaw authorization. As Mr. Stupak said, you can only push some of these ships so far so long. I have had some experience with cutters in my district in the past like that. You just have to make the investment. This is an essential function the Coast Guard needs to perform in the Great Lakes.
You had a pretty open year this year I guess but some years, it is real tough up there. So I appreciate his testimony on that and we will do whatever we can. All we have to do is convince the Senate to act on the bill and send it back. Maybe you can help us out there.
Mr. STUPAK. You bet.
Thank you.
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Mr. GILCHREST. Thank you, Bart.
Mr. STUPAK. Thank you, sir.
Mr. GILCHREST. Our next panel will be: John Anderson, Director, Transportation Issues, GAO and Thomas J. Howard, Deputy Assistant Inspector General, Maritime and Departmental Programs, DOT.
This is the second hearing we have held this year on the Coast Guard's fiscal year 2001 budget. Today we will hear from several witnesses on matters that have an impact on Coast Guard budget. The two most important issues we will discuss today are the Coast Guard's Deepwater Capability Replacement Project and the National Distress and Response System Modernization Project.
We are most concerned that the Coast Guard move as fast as it can to modernize its distress and response system. The need for a modern maritime communication system is critical. We urge the Coast Guard to consider, with our help, speeding up this project.
The General Accounting Office and the Department of Transportation Inspector General have raised several concerns with the Coast Guard's Deepwater Replacement Project. We will hear the GAO and the Assistant Inspector General discuss those concerns today.
I am sure the Coast Guard will seriously consider the suggestions made by the GAO and the Inspector General's Office to strengthen the Deepwater Project and to ensure that the project moves forward on schedule.
Finally, I look forward to discussion of the Coast Guard's enlisted work force concerns and the importance of the State recreational boating safety programs.
I will yield at this time to Mr. DeFazio for any opening statement he may have.
Mr. DEFAZIO. Thank you, Mr. Chairman.
I believe that we have a number of witnesses that will come before the committee that will have a lot to contribute. I look forward to hearing their testimony.
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Mr. GILCHREST. Thank you, Mr. DeFazio.
Gentlemen, welcome this morning. Mr. Anderson, you may go first.
TESTIMONY OF JOHN H. ANDERSON, JR., DIRECTOR, TRANSPORTATION ISSUES, RESOURCES, COMMUNITY, AND ECONOMIC DEVELOPMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE; AND THOMAS J. HOWARD, DEPUTY ASSISTANT INSPECTOR GENERAL FOR MARITIME AND DEPARTMENTAL PROGRAMS, U.S. DEPARTMENT OF TRANSPORTATION
Mr. ANDERSON. Mr. Chairman, members of the subcommittee, I am pleased to be here today to discuss two challenges facing the Coast Guard in fiscal year 2001 and beyond, the Deepwater Project and opportunities for improving the agency's operating efficiency.
I will summarize my statement and ask my entire statement be entered in the record.
Mr. GILCHREST. Without objection.
Mr. ANDERSON. First, I want to talk about the Deepwater Project which will modernize the Coast Guard's fleets of aging cutters and aircraft. It is the largest acquisition project ever undertaken by the agency and could cost $10 billion or more before it is completed.
Last year, we told you that the Coast Guard had not justified the need for the project and that most of its existing cutters and aircraft would last far longer than the Coast Guard initially thought. Since then, the agency has made good progress by completing evaluations on many of these assets. They are providing this data to the three contract teams that are currently developing competing proposals for the project.
Also, last month, the Presidential Roles and Mission Study concluded that the project was a national priority. This new information is a positive step toward justifying the project, but the Coast Guard still needs to complete several important tasks before a formal project justification is finalized later this year.
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In addition, a number of other key issues must be resolved as the project proceeds. First, the affordability of the project is still a major concern. Next year, the Coast guard plans to ask for about $350 million for the Deepwater Project and over $500 million each year thereafter for as many as 20 years.
Coupled with funds needed for its National Distress System which you mentioned, and other projects, the Coast Guard's annual capital budget could nearly double from prior funding levels. Finding new funding of this magnitude will present a challenge for both the Coast Guard and the Congress.
Second, if the Coast Guard requests $350 million for the Deepwater Project next February as planned, that would be two months before the design proposals from the three contractors are due and ten months before the Coast Guard is scheduled to complete its analysis of the proposals and award a final contract.
History shows that asking for such a large amount of funds without the support of a full planning and evaluation process increases the risk of cost growth, schedule slippage, and performance degradation down the line. How the Coast Guard plans for and manages these risks is crucial to the successful outcome of this project.
Third, the Coast Guard has not officially decided on an acquisition strategy yet. Now, it is planning to award a single contract for the entire Deepwater system to one of the three design teams. This approach is unique and its success may not be known for several years.
Since different system components—cutters, aircraft, and their subsystems—will be brought on at different times over a 20-year period, the Coast Guard must carefully assess how costs will be controlled and technology improvements will be incorporated into the overall system in the absence of competition.
Completing project planning, adopting a sound acquisition strategy and providing effective oversight of contractors are vital elements to the project's success. The Coast Guard's plan to request significant funds for the project next February while many uncertainties still remain should be closely examined.
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At the request of this subcommittee we are currently evaluating these and other issues and will report to you before budget hearings next year on this important matter.
While the Deepwater Project is definitely the most significant budget challenge facing the Coast Guard, the agency also has opportunities to improve its operational efficiency. Given the budget challenges it will face in the coming years, the Coast Guard needs to vigorously investigate any areas that might reduce its cost. I will just recap a couple of them for you.
Past studies by groups outside the Coast Guard have suggested lengthening the agency's rotation periods for military personnel as a means of reducing transfer costs which now amount to about $75 million annually. Currently, relocation costs for Coast Guard officers are higher than their DOD counterparts, and we have suggested that the Coast Guard explore this area.
Also, previous studies by the Coast Guard and others have suggested closing or consolidating agency facilities such as the training center in Petaluma, California, some small boat stations, and other facilities. The agency has not taken action in these areas because they are often controversial and not popular with the public.
Another area that would provide some budgetary savings for the Coast Guard, and save significant money for the Federal Government over the long term, involves the use of civilians rather than military personnel in some administrative and support functions.
We reported earlier this month that about 800 officer positions in these areas have potential for conversion, resulting in long-term savings to the federal government of about $15 million annually. To its credit, the Coast Guard has agreed that additional conversions are possible and will examine the positions we identified.
That concludes my oral statement and I would be glad to answer any questions.
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Mr. GILCHREST. Thank you, Mr. Anderson.
Mr. Howard?
Mr. HOWARD. Thank you, Mr. Chairman.
I would ask that my statement be submitted for the record.
Mr. GILCHREST. Without objection.
Mr. HOWARD. Our statement focuses on the Deepwater Capability Replacement Project. We reviewed this project at the request of Admiral Loy. He wanted to ensure that the Coast Guard was being responsive to concerns raised by GAO and the Office of Management and Budget.
The Congress has supported the planning phase of the project, appropriating $75 million through fiscal year 2000. The Coast Guard is requesting $42.3 million for fiscal year 2001 to complete planning and to develop an acquisition strategy. If appropriated, this will bring total funding for the planning process to $117 million.
I will address three issues today. First, the Coast Guard is using an innovative planning process. In the past, the Coast Guard acquired assets without a focus on interoperability. Now, to its credit, the Coast Guard is planning for the replacement of its deepwater capability as a coordinated system of assets. Three industry teams are developing competing proposals for replacing or modernizing all deepwater assets. When completed, this process should provide the Coast Guard a good base for establishing needs and developing an acquisition strategy.
Second, the Coast Guard strengthened the planning process in response to recommendations by GAO and OMB. It did this by obtaining better data on the condition and cost of existing assets and providing it to the industry teams. However, our work shows that significant gaps still need to be filled.
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For example, the Coast Guard needs to complete engineering assessments and to provide for independent verification on the condition of its 110 foot vessels. This approach was used on the three larger classes of vessels and showed that those vessels could be used five or more years longer. The 110 foot vessels represent 53 percent of the deepwater hulls, so completing this process is important.
The Coast Guard needs to update condition assessments on existing communications and navigation systems to reflect ongoing and planned improvements that will reduce capability shortfalls. Right now, more than $25 million in these types of projects are ongoing.
The Coast Guard also needs to correct inaccuracies we identified in operating cost data provided to the industry teams so the teams can complete the assessments that they are being paid to do. These inaccuracies understate the cost of operating current assets. This could skew comparisons by the industry teams on whether it is more cost effective to replace or modernize current assets.
It is important that the planning process achieve its objective of identifying an integrated system that can reduce personnel and operating costs. This is so because recapitalizing the Coast Guard's deepwater capability will be costly.
As shown in the chart being displayed, the Coast Guard's acquisition budget has been about $400 million annually for the past five years. However, this budget is projected to rise dramatically in fiscal year 2002, more than doubling when the deepwater project moves into the procurement phase. This deepwater increase shown in yellow may be required for 20 or more years.
Although the Coast Guard is requesting an increase in acquisition funds for fiscal year 2001, this request is attributable primarily to the replacement of the Great Lakes icebreaker and an additional buoy tender. It is not for deepwater assets.
This brings me to our third point. The Coast Guard's planning process will not be completed in time to support its planned deepwater budget request of $350 million for fiscal year 2002. The budget will be submitted to the Congress in February 2001. However, the Coast Guard will not decide on an acquisition strategy until July 2001. As Mr. Anderson indicated, this will require the Coast Guard to prepare a budget justification eight to ten months before its comprehensive planning process is complete.
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Available data shows that the Coast Guard's deepwater assets will reach the end of their useful lives over the next 30 years. The question is not whether they have to be replaced or modernized but how, when, and at what cost. An important subsidiary issue is how priorities will be established within annual fiscal limitations.
The Coast Guard will have to reconcile how it can proceed with the budget request in advance of completing its comprehensive planning process. Three options we have suggested it consider are: to defer the fiscal year 2002 budget request until the planning process is complete; expedite the planning process to identify the most critical needs and justify the budget on that basis; or use preliminary information from the industry teams to develop a current cost and schedule estimate for the project that identifies anticipated acquisitions and justify the budget on that basis.
This concludes my statement, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. Howard and Mr. Anderson.
Mr. Howard you said you gave the Coast Guard three recommendations on how it proceed with its Deepwater budget request before the planning process is complete.
Mr. HOWARD. We issued that report last week, Mr. Chairman, and we have asked the Coast Guard to respond to our recommendations within 30 days.
Mr. GILCHREST. Do you feel any of those three recommendations would be suitable to solve this problem?
Mr. HOWARD. The third one, sir. If the Coast Guard can develop current cost and schedule estimates using preliminary information from the industry teams that would be the best at this point.
Mr. GILCHREST. Rather than defer the budget request?
Mr. HOWARD. Yes, sir, if they can get the information that they need from the industry teams.
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Mr. GILCHREST. Do you think that is possible, Mr. Anderson, to get that information?
Mr. ANDERSON. I think that is a major risk right now with the project and that is one of the things we are going to be focusing on in our review for you.
One of the things that strikes me is that the Coast Guard does have some wiggle room based upon its evaluation of its assets. I don't want to rule out the possibility that it might make perfectly good sense for the Coast Guard to go forward with their budget request as planned, but there is a risk associated with that because typically, the process calls for doing things in sequential phases. That is designed to identify all the possible problems that might occur with the project.
Mr. GILCHREST. Does deferring the budget request appeal to you more?
Mr. ANDERSON. Right now, I can't say whether it is a better alternative or not until we look at it more. I am sure it has some down sides associated with it. You are going to have contract teams that are out there ready to get geared up and you can't keep them in limbo for an indefinite period of time. Maybe there is some middle ground too, and we have to explore those options with the Coast Guard and see what the pros and cons are.
Mr. GILCHREST. I see. Thank you.
Do either one of you feel the construction phase of the Deepwater Replacement Project can begin in 2002?
Mr. ANDERSON. That is the $64,000, or $10 billion question. They have some things to do between now and then. That is their goal and that is their plan. Once they start evaluating the proposals that the competing teams submit, they might identify some new issues.
I know the Commandant has suggested, for example, that he might want to pick and choose from the proposals of the various teams. While I can understand he might want to keep his options open in that regard at this point in time, if he does that, that could create a whole new set of issues that must be dealt with. If you take the proposal from one of the contractors and try to integrate it with part of a proposal from another contractor, it is a new type of system, if you will.
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Mr. GILCHREST. Mr. Howard?
Mr. HOWARD. I agree with that, sir. The time frame that the Coast Guard has allowed itself right now to review the industry proposals and make a decision on what its going to do is about 60 days. That is a relatively short time frame in a rather long planning process.
We have also discussed with the Commandant this idea of whether he is going to choose one industry team or pick and choose a combination of them. We think that is going to require some detailed analysis and may take a little bit longer than the Coast Guard has estimated.
Mr. GILCHREST. So funding in fiscal year 2002 is wishful thinking?
Mr. ANDERSON. Possibly, yes. I think it is risky right now.
Mr. GILCHREST. Mr. Anderson, you recommended some reduction in costs the Coast Guard can undertake to help fund some of this deepwater project, lengthen stay at duty stations, closing facilities, using civilians in place of officers and things like that. Mr. Howard, would you go along with those recommendations?
Mr. HOWARD. We haven't identified or examined all of those areas that the GAO has. In their recent report on the conversion of military positions to civilian, we think it is encouraging that the Coast Guard has agreed to take a look at the recommendations and see what it can do in that area.
Mr. GILCHREST. Mr. Anderson, would the recommendations you made equal a total savings cost of about $100 million annually?
Mr. ANDERSON. In terms of savings, all of them, probably about $70 million annually.
Mr. GILCHREST. $70 million annually?
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Mr. ANDERSON. Yes, once implemented. Obviously the conversion of some of the military positions to civilian positions would occur over a longer period of time. You might not realize those savings for some time down the road, but eventually they would pay off in terms of recurring annual savings. The same is true of these other things. If they were able to consolidate facilities, there are going to be savings that recur year after year.
Mr. GILCHREST. Mr. Howard, with your chart, it sure looked like the potential for a $500 million add-on to the Coast Guard budget annually is something, first, I think most everybody if not everybody on this committee supports what the Coast Guard is doing, we recognize there has to be an introduction of a large amount of money to allow the Coast Guard to do what we ask them to do every day.
I think both of you mentioned the word affordability. Is there some fear with both of you into the real fact that $500 million add-on annually would be difficult to happen?
Mr. HOWARD. Yes, sir. In the past the Coast Guard received some funding spikes when it needed an infusion of funds. The sustained increase that is required here, $500 million over 20 or more years, is significantly different than what the Coast Guard has experienced in the past. It is basically taking their AC&I budget and ramping it up for a sustained period of time to a level that is about double what it has been in the past.
Mr. Anderson. I agree with that, and I also think that it is funny, here we are in a surplus situation--we were in a deficit situation for years--but the demands aren't any less. In fact, the demands are greater. Some of the needs in other areas could challenge the Coast Guard's request for funds—AMTRAK, FAA, a number of discretionary programs out there.
Mr. GILCHREST. Thank you very much, gentlemen.
Mr. DeFazio.
Mr. DEFAZIO. Thank you, Mr. Chairman.
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Further on the subject of the replacement of the commissioned officer positions in administration and support with civilians, it is my understanding in talking with staff that part of the difference in opinion or problem lays in the way total costs are computed. Apparently the other uniform services in DOD, when comparing and weighing these things include retirement costs for both uniformed and I assume non-uniformed and the Coast Guard does not?
Mr. ANDERSON. That is correct. That is part of the difference and another part is that the Coast Guard, I don't believe, took into account the tax advantage that would occur. The military people get a number of untaxed benefits in the form of housing allowances and things like that. If you convert the positions to civilian, those types of things would be taxed. So there is a tax benefit as well.
When we did the analysis for this report, we worked very closely with the Coast Guard, and I believe there was general agreement with our methodology. I think the disagreement, if there is one, has to do with the magnitude of the positions that we are talking about and the flexibility that the Coast Guard views they have by having military officers in some of these positions as opposed to civilians.
There are advantages and disadvantages that we cited in the report. On the whole, we believe there might be some instances where they shouldn't convert, but we believe a substantial number of these positions offer potential for conversation.
Mr. DEFAZIO. Mr. Howard, you say the Coast Guard is looking at this. Will they comment position by position or what sort of response are we going to get?
Mr. HOWARD. They will respond to the GAO report and to the committees in terms of what action they are taking on the recommendations. I have not looked at their detailed action plan to see what it is exactly they are about to undertake. They agreed in principle and said they would study the positions.
Mr. ANDERSON. Part of our recommendation was that they do provide an annual report to the appropriate oversight committees on the Hill on their progress. I think that will help give you some insight to the progress that is being made.
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Mr. DEFAZIO. The 800, you detailed the individual positions?
Mr. ANDERSON. Yes, we actually identified them. They were largely in administrative and logistics and support positions. We sealed off and didn't even look at any operational positions at all. We didn't want to get into that bailiwick because we figured if there is a question, you need somebody in an operational position at sea, we don't want to touch that.
Quite frankly, there are some positions there, vessels services and some of the marine inspection positions, that might also be candidates down the road. We want to leave it up to the Coast Guard and give them some flexibility. They are the ones in the business and should know the actual impact of these things.
In the past, the Coast Guard themselves identified a number of positions that could be converted. They just didn't follow through.
Mr. DEFAZIO. On the deepwater issue, this is of considerable concern to me given the magnitude of the replacement costs over time. I would address this to either or both of you.
It seems to me that a strong case can be made that part of the cost of deepwater will benefit national defense needs of the country. It goes beyond the law enforcement, civilian, peacetime activities of the Coast Guard, therefore, I guess my solution is that some part of this cost, particularly if we could attribute what part—and I don't know if anyone has done that analysis, that is one of my questions—is going to give potential for a more robust national defense and national defense purposes.
DOD has a slightly larger acquisition budget. We basically take the margin of error over there and pay for the whole program. Could either of you comment on that?
Mr. ANDERSON. I would say I don't know if the Coast Guard has done this analysis or not. It is not something we are aware of. I do believe that is an option. I believe the Coast Guard gets some support from DOD now to the tune of about $300 million a year or something like that. That is clearly an option because they do perform some defense-related missions.
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Mr. HOWARD. I agree with that. When the Coast Guard does its analysis national defense shows up as relatively small portion of its missions. Many of the things that they don't include in national defense are drug interdiction, the interdiction of aliens, and those account for a large part of the deepwater requirement. I think your point is well taken that in fact, much of what they are doing under the Deepwater Project is in support of national defense in the broad definition.
Mr. DEFAZIO. Perhaps we should be asked the Coast Guard or someone else like maybe GAO to analyze what portion they believe is fairly attributable to national defense.
Thank you, Mr. Chairman.
Mr. GILCHREST. I think that is an excellent suggestion. I think we should make a formal request to do just that.
Mr. DEFAZIO. Thank you, Mr. Chairman.
Mr. GILCHREST. Gentlemen, thank you for your testimony.
Gentleman, it was short time frame you have been here giving us testimony, but it was very, very valuable. Thank you very much. I think each of us here will probably be in continued communication with you as we go through this process.
Our next panel will consist of: Charles L. Calkins, National Executive Secretary, Fleet Reserve Association, accompanied by Joe Barnes, Director, Legislative Programs, Fleet Reserve Association; Paul Donheffner, President, National Association of Boating Law Administrators; and Michael G. Sciulla, Vice President and Director, Government and Public Affairs, Boat US.
Welcome, gentlemen. Mr. Calkins, when you are ready, you may begin, sir.
TESTIMONY OF CHARLES L. CALKINS, NATIONAL EXECUTIVE SECRETARY, FLEET RESERVE ASSOCIATION, ACCOMPANIED BY JOE BARNES, DIRECTOR, LEGISLATIVE PROGRAMS, FLEET RESERVE ASSOCIATION; PAUL DONHEFFNER, PRESIDENT, NATIONAL ASSOCIATION OF BOATING LAW ADMINISTRATORS; AND MICHAEL SCIULLA, VICE PRESIDENT, BOAT OWNERS ASSOCIATION OF THE U.S., BOAT/U.S.
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Mr. CALKINS. Thank you very much.
Mr. Chairman, Mr. DeFazio, distinguished members of the subcommittee, members of the Coast Guard Caucus, thank you for the opportunity to present the Fleet Reserve Association's views on the Coast Guard budget.
My name is Chuck Calkins, the Association's National Executive Secretary. With me today is Joe Barnes our Director of Legislative Programs.
I will briefly summarize several key points and with your permission, our full statement will be submitted for the record.
Mr. GILCHREST. Without objection.
Mr. CALKINS. FRA works to protect and enhance pay and benefits for the sea services and the Association thanks you and members of the subcommittee for supporting the most significant pay and benefits improvements in nearly 20 years which were enacted last year. We also remain committed to ensuring Coast Guard parity with all pay and benefits provided to DOD uniformED personnel.
Looking to fiscal year 2001, the Association is concerned about adequate funding for these improvements within the budget and believes the Coast Guard should not be required to rely on emergency supplemental appropriations, DOD or the need to shift funds from operations and maintenance accounts to cover these enhancements.
FRA strongly supports the 3.7 percent active duty pay increase included in the Administration's budget. Higher than ECI pay adjustments through 2006 are very important and send a powerful message to service members about the importance and value of their service. However, at the end of this period a pay gap in excess of 8 percent will remain between military and civilian pay levels.
We are pleased that the budget covers pay table improvements and reform of the Redux Retirement Program. However, it cautions that as with pay, these enhancements mark a beginning and not the resolution of complex recruiting and retention challenges.
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The widespread perception within the enlisted ranks is that career petty officer communities were overlooked in the pay reform enacted last year. Responding to concerns voiced by its members, FRA examined the new pay tables and found that pay grades for E-5, E-6 and E-7 are undervalued compared to other pay grades. The Association has released a detailed report calling for additional reform for these grades and invites your support of this initiative. The value of these and other senior enlisted personnel to maintaining operational readiness cannot be overstated.
About one-fourth of Coast Guard personnel live in military housing with the remaining 75 percent residing in communities at or near their duty stations, many of which are high cost areas along our coastlines.
FRA is grateful that funds were appropriated last year to speed implementation of new housing allowance rates. In addition, DOD recently announced that $27 million more will be allocated to ensure that rates remain at or above 1999 levels. The budget should cover these unanticipated costs which will total $15 million for the Coast Guard.
A DOD priority for 2001 is to pay down housing costs from 19 to 15 percent and to eliminate the remaining 15 percent by 2005. FRA strongly supports this plan along with the appropriation of the necessary funds within the Coast Guard budget.
Access to health care is frustrating for many Coast Guard personnel because they have limited access to government health care treatment facilities. They also face significant expenses for care. Only half can participate in Tricare Prime because of their duty location and others must select Tricare Standard which requires a 20 percent cost share along with a $300 annual family deductible. Most facilities also charge more than the Tri-Care allowable charge and service members must pay the difference.
FRA strongly supports health care enhancements in the budget including Tricare Prime remote coverage for family members and the elimination of co-pays from families who do not reside near MTFs or military treatment facilities.
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Like the other services, the Coast Guard is struggling to recruit adequate numbers of qualified personnel and the retention of mid-career and senior enlisted personnel becomes increasingly important. They are essential to the force and when their ranks are thinned, readiness suffers.
Unfortunately, the Coast Guard only offers a fraction of reenlistment bonuses and other benefits that the DOD services provide. More must be done to ensure parity with DOD.
During the past year, the Coast Guard achieved the 8,000 reserve billet end strength; however, the budget funds reserves training for only 7,300 personnel. FRA believes an additional $7 million to cover the difference is a small price to pay give the Coast Guard's increasing reliance on reservists to sustain growing operational requirements.
Again, thank you for the opportunity to present the Association's views. FRA strongly supports the Administration's budget. Please support funding to adequately compensate Coast Guard personnel for their tremendous and untiring service to our Nation and fully fund other benefits to achieve parity with those offered to DOD uniformed personnel.
I stand ready to answer any questions that you may have.
Mr. GILCHREST. Thank you, Mr. Calkins.
Mr. Donheffner?
Mr. DONHEFFNER. Thank you, Mr. Chairman and members of the committee.
I have submitted written testimony that I would like added to the record.
The States are concerned over the Coast Guard's role in recreational boating safety, known as RBS, and declining RBS program funding. We have a great deal of respect for the Coast Guard and the multimission service they provide to Americans. There is no question that the Coast Guard's role in search and rescue is essential. They do a great job.
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However, we are increasingly concerned that the Coast Guard is not placing a high enough priority on boating safety especially in prevention and law enforcement. Over the past 25 years, the Coast Guard has shifted the responsibility for these functions to the States. However, on joint jurisdictional waters, it remains a shared responsibility. The States cannot do it all alone.
Just as the Coast Guard has acknowledged that they may have cut back too far in other areas, we think they need to be more engaged in boating safety.
The New Roles and Missions Report notes that ''Recreational boating will double in the next 20 years along with the doubling of commercial traffic on our Nation's waterways.'' Aside from search and rescue, the report places the emphasis for prevention of boating accidents on the backs of State programs.
Two weeks ago in testimony before this committee, there was no mention of funding to assist State programs. On February 24, Vice Admiral Card testified in the Senate Appropriations Committee that ''Recreational boating safety is largely a State responsibility.'' However, he noted that failure in that area directly impacts the Coast Guard. Seventy percent of their search and rescue caseload results from recreational boating accidents and incidents. So an ounce of prevention is worth a pound of cure.
We fear that RBS is being crowded out by other Coast Guard priorities such as deepwater, drug interdiction and so forth. They are all very important parts of the Coast Guard's mission and clearly they are a strong advocate for those programs. I am not suggesting that boating safety is more important than those areas, but it is a fact that it is a shrinking part of the budget and it seems to be slipping lower and lower each year.
Our number one concern is safety funding. We fear the Coast Guard is not providing enough advocacy as it should for RBS. TEA-21 provided a safety net to the States of $59 million but it authorizes up to $70 million for that program. However, the Coast Guard will not ask for any funding in effect, capping the program at the minimum $59 million level. This severely strains our Federal-State partnership for boating safety when they oppose us getting more than that bare minimum.
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Unfortunately, the fact is that we are being cut back each year as inflation and a growing demand for services cuts into that static funding, in effect, using Admiral Loy's phrase, ''We are pulling back on the throttle of boating safety,'' and we don't think that is acceptable.
DOT has safety as its number one priority. The fiscal year 2001 budget proposes record levels of spending for an assortment of transportation safety modes, except for boating safety which is capped at $59 million. Last year, sadly, 734 people died in boating accidents. Recreational boating remains the second leading cause of transportation related deaths. It remains on the National Transportation Safety Board's most wanted list and yet funding is slipping backwards. I think we have to ask, is this the best we can do?
The question is, is the success of our program as measured in the 23,000 lives it has saved since 1973 working against us? If those 734 fatalities came in the form of crashes that killed hundreds at a time, boating safety would be top of the news. The fact that these deaths happened one or two at a time makes them no less tragic. We can't pull back on the throttles of boating safety without higher casualties. That is not acceptable.
In the past two years, over $25 million in Federal aid and at least as much in State matching funds, over $50 million total, has been lost from boating safety. It will take leadership from the Administration, from the Coast Guard and from Congress to solve this problem. The States will not go away or retreat from this issue.
I was very encouraged two weeks ago to hear Admiral Loy tell this committee that he would work with us to find a way and we stand ready to do that. I have three quick points on what we think is needed to get us out of this box.
One, explore every option for an administrative budget solution through OMB, CBO and the Department of Transportation. Boating safety and prevention should be a higher priority and funded to the fullest extent possible. If key policymakers decide this is a priority, we think they can find the way.
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Second, we need to change the authorization from boating safety from a fixed, capped amount to a fair percentage of total motor boat fuel tax. At a fixed amount, we are a shrinking piece of a growing pie. In 1984, boating safety was 70 percent of those revenues; today it is at 37 percent and in two years, we will shrink down to 32 percent.
We need this committee to help us determine a fair percentage of the total for RBS. If the original ratios were followed today, boating safety would be funded at $120 million a year.
Third, and final, the tide is rising but not for boating safety. In fiscal year 2002, another 1.5 cents per gallon will roll into the trust fund generating $25 million a year. If the base amount of the Clean Vessel Act formula for the transfer of boating safety funds could be increased by half of that amount or $13 million, we could achieve the $70 million mark without hurting the Coast Guard budget. Sport fishing interests would also see a rise and it would be a win-win for all sides.
My remarks today are not intended to be negative towards the Coast Guard. Please understand that we share this committee's respect for the great things they do. We wholeheartedly support them getting the funding necessary to do their job, especially in search and rescue. We need the Coast Guard side by side with us pushing for boating safety as hard as they push for other programs.
With Admiral Loy's leadership and your support, I believe we will find a better way to strengthen the Federal-State partnership for boating safety and provide the resources the States need to assist the Coast Guard in this important program that has a proven track record of saving lives on our Nation's waterways.
Thank you.
Mr. GILCHREST. Mr. Sciulla?
Mr. SCIULLA. Good morning. I am Michael Sciulla, Vice President of Boat Owners Association of the United States. With over 500,000 members, we are the largest organization of recreational boat owners in the country. We have some 35,000 members, for example, in the State of Maryland where 1 of every 5 boatowners is a Boat/U.S. member.
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I have been testifying on recreational boating issues for the past 20 years going back to the 96th Congress. I would like you to know that I am really honored to have the opportunity to come back again and testify at this time on the Coast Guard's fiscal 2001 budget.
Let me begin by commending you for taking the time last November to hold a hearing into the Morning Dew tragedy. If there is one lesson to be learned from this incident, it is that the lives of American citizens will be at risk at sea unless and until the Coast Guard is provided with up-to-date equipment and trained manpower to respond to calls for assistance, no matter how brief or how early in the morning they come in.
Consequently, one of the most important provisions of this year's Coast Guard budget is funding for the National Distress and Response System modernization project which will compete with the Coast Guard's Deepwater Project in their AC&I account for scarce dollars and attention.
While Distress and Response Modernization Project will cost a mere fraction of the Deepwater Project, and while I am sure the Deepwater Project has considerable merit, the fact of the matter is that many more American lives are lost within five miles of our coast than out in the blue water.
The NDRSNP will give the Coast Guard the ability to get an electronic fix on a distress signal and allow watchstanders to do their job. It should help take much of the search out of search and rescue as well as some of the risk out of rescuing. It is a sound investment that could ultimately end up saving the Coast Guard and taxpayers considerable sums of money.
We are concerned, however, with the length of time that it appears it will take to get the system up and running. It is time for Congress to kick start the program, establish a definite and accelerated timetable for full implementation of the system in fiscal year 2004, not 2006 and give the Coast Guard maximum flexibility to get the project completed without being constrained by overly restrictive annual appropriations.
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Based on what I heard this morning with the deepwater funding coming in at 2003 or perhaps 2004, it might be a wise idea to get this part of the project underway before the demands of the deepwater project come in.
Installing new equipment is only one part of making the system work. The Coast Guard also needs additional billets to operate the system. Otherwise, Peter will be robbed to pay Paul and somewhere else in the Coast Guard, already scarce manpower resources will be stretched even thinner.
While I am on the subject of communications, the committee should also know that there is a potential problem in implementing GMDSS, a fundamental part of the Distress and Response Project. GMDSS relies on the issuance of what is called maritime mobile service identity numbers, MMSIs. These will be employed by a new generation of VHF radios that will be equipped with digital selective calling. These numbers are the equivalent of a telephone number for DSC-equipped radios and will give each radio a unique identifying number which when broadcast in a mayday situation, will give the Coast Guard the identity, the description and location of a vessel in distress.
Within a few short years, hundreds of thousands of these DSC-equipped radios could be on the market and in the hands of the Nation's recreational boaters. Some 188 lives that were lost at sea in 1998 after the Coast Guard was notified of a distress situation could have been saved if this system were fully operational now. However, the only way for a recreational boater to obtain an MMSI is to purchase a $115 VHF radio station license from the FCC.
It shouldn't cost the FCC $115 to issue an MMSI. Boaters shouldn't have to obtain a VHF radio license and pay $115 to have an MMSI assigned and recorded, especially since the Congress repealed the VHF radio license for boaters in 1995.
The fact of the matter is that the FCC does not want to be in the business, the Coast Guard doesn't have the manpower to do the job. We believe the private sector could issue MMSIs for $10 or less.
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I urge you to take whatever steps are necessary to convince your colleagues who have jurisdiction over the FCC that this MMSI business is a priority and that it is an integral part of the Coast Guard's distress and response system.
While I am on the subject of lives at sea, I could not leave this session without noting that some 8,259 Americans lost their lives in recreational boating mishaps from 1989 to 1998. Far more Americans lost their lives while boating during this period than from commercial or general aviation, railroad or marine modes of transportation.
If 8,259 Americans lost their lives in airplane crashes during this period, there would be a national uproar and Congress would demand action and hundreds of millions of dollars would be thrown at one agency, the FAA. It is difficult for us to fathom why it is that only $59 million of the $174 million that recreational boaters pay every year in fuel taxes are returned to 56 States and territories for them to do the job that was once the purview of the Coast Guard, especially since the States are now authorized to receive $71 million.
Something must be done to break the legislative log jam in which every trust fund dollar going to the States for boating safety comes out of the hide of the Coast Guard. If the problem is beyond the resolution within the Coast Guard, perhaps funding for State boating safety programs should be transferred from budget function 400 to 300 where the bulk of funding now resides while leaving the administration with the Coast Guard. We will be happy to work with you on that.
Finally, I would say we will be happy to work with you to secure some of the tens of millions of dollars in new money that will be coming to Wallop/Breaux. We estimate that it will be at least an additional $25 million within the next two fiscal years, rising to $210 million by 2003. These are user fees generated from recreational boating and they ought to be returned to save lives and provide boaters with Federal programs that benefit boating.
Thank you.
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Mr. GILCHREST. Thank you, Mr. Sciulla.
Each of you, as representatives of your groups, have presented them extremely well this morning. Your observations and recommendations are of the highest grade and we will take all of them into consideration. You have been very helpful.
Mr. Sciulla, the National Transportation Safety Board has recommended that the Coast Guard use off-the-shelf radio directional finding equipment similar to what is used in Canada. Do you have an opinion on that?
Mr SCIULLA. No, sir, I wouldn't second guess the Coast Guard or the NTSB on that.
Mr. GILCHREST. The Coast Guard doesn't want to use it, just go to the local electronic stores, Radio Shack, buy one of those and they don't want to do that. NTSB has recommended that they do that. I am just curious if you have an opinion on that.
Mr. SCIULLA. If only it was that easy, but I am not the technical expert to ask.
Mr. GILCHREST. Your recommendation that we go from $59 million as a cap—the point to this question is do you have a fixed dollar? You mentioned $70 million. Do you think a bump up from $59 million to $70 million for the Federal share of boating safety is a reasonable amount?
Mr. SCIULLA. As my colleague, Mr. Donheffner suggested, I am not sure we can put a price tag on lives lost at sea. I can't tell you whether $59 million or $71 million or $100 million will do the job. What I do know is that in the course of testifying before this subcommittee and its predecessors over 20 years, the Nation's boating safety effort has been very successful. We have been able to cut the fatalities down from 1,700 20 years ago to some 750 to 800 now.
The fact of the matter is we are going to be getting $25 million to $35 million more just under the current authorization. That money will be basically diverted to the States and spent on fishing, making more fish.
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Mr. GILCHREST. The way we operate here, and I tried to ask the question so I could help you, is when we authorize a certain amount, we also have to go fight with the appropriators. Each of us has to do that to hold on to what we have authorized. We have to justify that increase.
If we can say that Boat US or other group recommended this increase because this is how it is going to be spent, that would be helpful to us and to you.
Mr. SCIULLA. My response would be that 750 lives lost at sea is unacceptable and if $71 million is the authorized amount, then that is what we should be getting at a minimum.
Mr. GILCHREST. Thank you.
Mr. Donheffner, the Coast Guard has been trying to implement a vessel identification system for over ten years. Can you give us, from your perspective, why this system is important to boating law enforcement? What have the States done to help the Coast Guard implement that vessel identification system? Does your organization have any suggestions for speeding up the development of this important law enforcement tool?
Mr. DONHEFFNER. Yes. Actually it has been over 12 years that project has been underway. We are disappointed that just recently last fall the Coast Guard scrapped the data system that was being developed as a part of that and have gone back to the drawing board.
Mr. GILCHREST. Was there a reason they scrapped it?
Mr. DONHEFFNER. It wasn't producing what they wanted. There were three tests. The States have been cooperating with the Coast Guard on the development of this for the past 12 years. Three States were actually testing the system when the Coast Guard decided to pull the plug on it so it is back to the drawing board.
They have also had rulemaking underway since 1992 to establish the unique identification number for the system. The States and other organizations have made the case for a 17-digit number similar to a vehicle identification number that is used on cars, trucks, heavy equipment. That rulemaking is currently stalled because the Coast Guard wants to go back and do a cost benefit analysis of the cost versus benefit of that to manufacturers and so forth.
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We certainly think it is time for Congress to ask the question when they are going to get this going.
Mr. GILCHREST. Are you aware from your discussions with the Coast Guard of the time frame for this to be completed?
Mr. DONHEFFNER. It keeps slipping and slipping. I don't think there is a goal line in sight. Frankly, I don't know that we are any closer today than we were 12 years ago when Congress authorized the system. It has been very elusive, it is very frustrating. Insofar as it is a voluntary system for States to participate in, unless it really starts to shine soon, I think State participation in it will be rather low simply because States are skeptical of joining with the system.
Mr. GILCHREST. That is an area we can ask the Coast Guard direct and use whatever. We don't have any power but we sometimes have influence. So we will use that influence to push that along.
Mr. DONHEFFNER. That would be helpful.
Mr. GILCHREST. One more quick question for the two of you. Do you have any sense as far as boating accidents are concerned to the personal water craft that are being used now more than ever, whether it has increased law enforcement problems or whether it has increased accident problems?
Mr. DONHEFFNER. The answer is yes to both. Personal watercraft have been the fastest growing form of recreational boating. One of every three boats sold in this country during the last decade was a personal watercraft. They have caused an exponential increase in demand for law enforcement, safety programs, education.
The accident rate that we see from personal watercraft on a pure basis tends to be much higher than what we see in traditional boating.
Mr. SCIULLA. The good news, however, Mr. Chairman, is that the sale of personal watercraft hit a peak of 200,000 units a year in 1996. They are down to 100,000 a year now, so I don't think they are riding the wave of popularity they once were.
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Mr. GILCHREST. My time is up and I will yield now to Mr. DeFazio.
Mr. DEFAZIO. Thank you. I welcome Mr. Donheffner here from the State of Oregon. We have boats out there too.
I know he is particularly concerned about the allocations to the States for the boating safety program. The problem I have here is, and I have discussed it with him as I do not want to see it come out of the Coast Guard budget, so I welcome any ideas. As I recall, the House tried to do that. We tried to divide the funds which would have provided an automatic future adjustment for boating safety funds and divide them between the users, half for boating safety purposes, but we failed in dealing with the Senate.
I would hope we don't get at cross purposes where because the way these things are scored, you can say the money is created by the fund and it goes to the Coast Guard but that's not the way it works. In the great maw of the Federal Government is where that money is; it didn't go to the Coast Guard.
Any idea you have on how to move that issue forward is of interest. I am concerned about the education and the prevention aspects that we could have which ultimately could save the Coast Guard money. In the short run, I am loath to take it out of their budget.
Mr. DONHEFFNER. We don't want to take it out of their budget either, although if it were made a base, part of the Coast Guard's base budget, if that $70 million was incorporated into their base budget one time and then resided within that base, I don't know why we can't be a part of their budget.
The budget authority is there to spend these funds whether it is spend in Interior or in Transportation functions. As Mr. Sciulla indicated, I think that is something we need to explore further, whether some of that can be transferred from function 300 to 400 or whether there is some way to have the funds authorized under 300 where there doesn't seem to be any limitation of these funds fighting against Interior. The Department of Interior doesn't walk away from any of the funds that come over for sport fishing purposes.
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We think there are ways to explore that. We don't have all the questions, but we don't know that they have been asked. Yesterday I met with Admiral Loy and he agreed to try to help us in pushing those questions forward administratively. I think we need to exhaust all those options before we come back and look at ultimately reauthorization of this which is coming up sooner than we think.
Mr DEFAZIO. When you get into permanent appropriations, we raise the umbrage of our colleagues on the Appropriations Committee who like to play with the money and have it run through their hands every year as opposed to being fenced off. Perhaps that is where Mr. Sciulla could come in with his large membership. Perhaps they could target some members of the Appropriations Committee and convince them of the error of their ways and the fact they would rather see these funds be more generous and more stable in the future.
Mr. SCIULLA. That is a rhetorical question, isn't it?
Mr. DEFAZIO. Well, all these members, 35,000 in Maryland and I am sure there are members of the Appropriations Committee.
Mr. SCIULLA. The last time I checked, Mr. DeFazio, one out of every 100 of his constituents was a Boat US member. It doesn't appear to be having any effect. It wasn't this chairman, the other chairman.
Mr. DEFAZIO. Oh, the other chairman. That is good. I would hope we can make some use of that statistic.
We are certainly here in conceptual agreement. We just have to figure out how to work out this without taking it out of the Coast Guard.
If I could go to the concerns raised by Mr. Calkins. You raised both health and housing issues as well as the enlisted grade issues. I am very interested in the enlisted grade study since we did have the general increase last year. I did notice within the pay scale some strange anomalies. Apparently you found it and that it particularly targeted E-5, E-6 and E-7, correct.
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Mr. CALKINS. Yes, sir. After researching some of the concerns I mentioned earlier, we found that there were not comparable pay increases for all pay grades throughout the officer and enlisted structure. In some cases, O5s will receive a 5.5 percent increase on July 1 whereby E-5s, E-6s and E-7s will receive a 2.2 percent increase.
Mr. DEFAZIO. Of a smaller base?
Mr. CALKINS. Very small. We all know that much of the weight of the Armed services responsibilities rests on that group of enlisted personnel, the careerist, the mid level careerist. That is our concern. We are going to pick up the banner, carry it and we are asking for your help once legislation is introduced to move that forward.
Mr. DEFAZIO. Do you have someone in mind for that legislation, is someone drafting it? How far along are you?
Mr. CALKINS. We would look to you for help if you would like to offer input. We are working with one of the members of the House Armed Services Committee.
Mr. DEFAZIO. It seems it would be good to incorporate an amendment to the DOD authorization this year as we move forward. I looked at the pay scale and I suggest we might want to cut it off at certain levels, particularly the highest officer grades and put more emphasis on some of these ranks when I first saw the proposed scale. You really pointed to a deficiency here.
Mr. CALKINS. We are not begrudging pay increases for anybody, but we would like to see it be fair and equitable across the board.
Mr. DEFAZIO. Have you been hearing complaints about the housing recomputations, the black box program that does the housing allowances? I have been hearing a lot of complaints in my district from the Coast Guard personnel.
Mr. CALKINS. We hear of some inequities. They are based on transfer experience, especially in remote locations, yes. We hear negatives and also positives and we're investigating this.
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Mr. DEFAZIO. The key would have been if you could have held people harmless. I don't know how the scoring of the program worked and whether it was supposed to be no net increase in the budget and therefore, some people lost and some gained. I don't know if that is how it was designed. I don't think some of those deductions or losses in allowance were merited.
There are a lot of local circumstances that come into play particularly for the Coast Guard and coastal resort communities and other areas that I don't think are fully accounted for in that program.
Mr. CALKINS. I think your comments are true. As we all know, the Coast Guard is everywhere and they are often in remote locations that are very high cost areas. Personnel must either commute an awful distance to get to work, or come up with a lot of money to live there.
Mr. DEFAZIO. That doesn't work if we want a quick response time for some of these small boat stations for them to be a hour away.
Thank you for your advocacy and I will look forward to working with whomever on that bill. I may have my staff contact the phone number you have in your testimony.
Mr. CALKINS. Please do. Thank you for your support.
Mr. GILCHREST. Thank you. I think we can both move on that issue as a committee.
On the pay raise, you say the pay raise for officers is higher than the pay rise for the enlisted throughout the Department of Defense?
Mr. CALKINS. Proportionately, I', speaking of the pay reform, not the Jan. 1 pay raise. The pay reform was included in last year's DOD bill for the plus up on 1 July 2000. Those are the figures that we've targeted.
Mr. GILCHREST. For the Coast Guard as well, 2.5 for enlisted and 5 percent for officers?
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Mr. CALKINS. 5.5 percent for the mid level, mid career officers, yes, sir.
Mr. GILCHREST. On health care, it sounds similar to housing. Health care for Coast Guard personnel in remote areas, because of the remoteness of where they are, is going to be more expensive to that individual than it would be at a larger facility where health care is available?
Mr. CALKINS. Yes.
Mr. GILCHREST. And there is no compensation given for that extra cost in health care?
Mr. CALKINS. It is very limited. Most of it is out of pocket because there are no facilities available nearby. A lot of the doctors in those remote areas don't accept Tricare, so where are they supposed to go? Obviously they are going to provide for their family and/or themselves. That is really a problem. That is why we are pushing for Tri-Care Prime Remote.
Mr. GILCHREST. That is one thing we can be specific on as well.
Thank you again for your testimony. It has been extremely helpful to all of us.
The hearing is adjourned.
[Whereupon, at 11:25 a.m., the subcommittee was adjourned.]
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