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99–435 PDF 2017

THE PRESIDENT’S FISCAL YEAR 2017 BUDGET 

REQUEST FOR COAST GUARD AND MARITIME 

TRANSPORTATION PROGRAMS 

(114–37) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

MARCH 15, 2016 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

CRESENT HARDY, Nevada 

RYAN A. COSTELLO, Pennsylvania 

GARRET GRAVES, Louisiana 

MIMI WALTERS, California 

BARBARA COMSTOCK, Virginia 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

LEE M. ZELDIN, New York 

MIKE BOST, Illinois 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

DUNCAN HUNTER, California, Chairman 

DON YOUNG, Alaska 

FRANK A. LOBIONDO, New Jersey 

BOB GIBBS, Ohio 

MARK SANFORD, South Carolina 

GARRET GRAVES, Louisiana 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

LEE M. ZELDIN, New York 

BILL SHUSTER, Pennsylvania (Ex Officio) 

JOHN GARAMENDI, California 

ELIJAH E. CUMMINGS, Maryland 

CORRINE BROWN, Florida 

JANICE HAHN, California 

LOIS FRANKEL, Florida 

JULIA BROWNLEY, California 

PETER A. DEFAZIO, Oregon (Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

Admiral Paul F. Zukunft, Commandant, U.S. Coast Guard, accompanied by 

Master Chief Steven W. Cantrell, Master Chief Petty Officer of the Coast 

Guard, U.S. Coast Guard .................................................................................... 4 

Hon. Paul N. Jaenichen, Administrator, Maritime Administration .................... 4 

Hon. Mario Cordero, Chairman, Federal Maritime Commission ......................... 4 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Admiral Paul F. Zukunft ......................................................................................... 37 

Hon. Paul N. Jaenichen .......................................................................................... 55 

Hon. Mario Cordero ................................................................................................. 62 

SUBMISSIONS FOR THE RECORD 

Admiral Paul F. Zukunft, Commandant, U.S. Coast Guard, responses to questions for the record from the following Representatives: 

Hon. Bob Gibbs of Ohio .................................................................................... 44 

Hon. Don Young of Alaska ............................................................................... 50 

Hon. Duncan Hunter, a Representative in Congress from the State of California, submittal of statement of Kathryn Sullivan, Ph.D., Under Secretary 

of Commerce for Oceans and Atmosphere, National Oceanic and Atmospheric Administration .......................................................................................... 69 

Hon. Mario Cordero, Chairman, Federal Maritime Commission, response to 

request for information from Hon. John Garamendi, a Representative in 

Congress from the State of California ................................................................ 80 

Hon. Garret Graves, a Representative in Congress from the State of Louisiana, submittal of report entitled ‘‘The Economic Importance of the U.S. 

Shipbuilding and Repairing Industry’’ by the Maritime Administration, November 2015; Web link to report provided ......................................................... 33 

Hon. John Garamendi, a Representative in Congress from the State of California, submittal of statement of General Darren W. McDew, U.S. Air 

Force, Commander, U.S. Transportation Command, before the House Subcommittee on Readiness ...................................................................................... 90 

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(1) 

THE PRESIDENT’S FISCAL YEAR 2017 BUDGET 

REQUEST FOR COAST GUARD AND MARITIME TRANSPORTATION PROGRAMS 

TUESDAY, MARCH 15, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COAST GUARD AND MARITIME

TRANSPORTATION, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:03 a.m. in room 

2167, Rayburn House Office Building, Hon. Duncan Hunter (Chairman of the subcommittee) presiding. 

Mr. HUNTER. The subcommittee will come to order. The subcommittee is meeting today to hear testimony on the President’s 

fiscal year 2017 budget request from the leaders of the Coast 

Guard, Maritime Administration, and the Federal Maritime Commission. 

For the fifth year in a row the Coast Guard is seeing funding 

cuts in the President’s budget request sent to Congress. The request would slash the Coast Guard’s acquisition budget by 42 percent from fiscal year 2016 enacted level. The proposed fiscal year 

2017 request is roughly $1 billion short of what is required to sustain the acquisition program of record. The underfunding of Coast 

Guard programs will continue to severely undermine efforts to recapitalize the Service’s aging and failing legacy assets, increase acquisition costs for taxpayers, and seriously degrade mission effectiveness. 

The administration is playing a reckless game. Annual budget 

requests cut funding for the Coast Guard to pay for increases at 

other agencies, betting that Congress will not ignore the needs of 

the Coast Guard and restore the hundreds of millions of dollars 

needed to sustain its acquisitions and frontline operations. 

This yearly game of chicken is not conducive to recapitalizing the 

Coast Guard’s fleet or in sustaining its missions. What is perceived 

as the administration’s lack of support for Coast Guard programs 

makes it difficult to continually fight for funding increases during 

the appropriations process. If the President is going to continue to 

propose these cuts year after year, he needs to tell us how he intends to rescope the missions of the Coast Guard to reflect his reduced budgets. 

Admiral Zukunft and Master Chief Cantrell are here before us 

today. I want to commend you both for your leadership and tremendous service to our Nation. Admiral, I fully understand the sitVerDate Aug 31 2005 13:40 May 01, 2017 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\3-15-1~1\99435.TXT JEAN
2 

uation you have been put in with this budget and previous year 

budget requests, and I appreciate your candor in describing what 

these cuts will mean for the ability of the Service to successfully 

conduct its missions. 

The budget request for the Maritime Administration is a slight 

increase of 1 percent over the current level. Operations and training and the ship disposal program receive increases in fiscal year 

2017. The administration is again requesting a one-time payoff to 

the maritime industry in exchange for a permanent reduction in 

the number of U.S. mariner jobs carrying cargo under the hugely 

successful Food for Peace program. 

Since 1954, the Food for Peace program has provided agricultural 

commodities grown by U.S. farmers and transported by U.S. mariners on U.S.-flagged vessels to those threatened by starvation 

throughout the world. Unfortunately, since fiscal year 2014 the administration has proposed restructuring the Food for Peace program. This misguided proposal will eliminate a vital program for 

our farmers, put mariners out of work, and undermine our national 

security by reducing the domestic sealift capacity on which our Nation’s military depends. 

Members of Congress have repeatedly, in a bipartisan manner, 

come together to vote down this flawed proposal. I hope my colleagues will join me once again in rejecting the President’s proposal 

and work with me on efforts to strengthen our merchant marine. 

I look forward to hearing from the Administrator on how he intends to move forward with his efforts to revitalize the U.S.-flag 

fleet. 

Finally, for a second year in a row the budget request for the 

Federal Maritime Commission proposes a 7-percent increase in 

funding over current levels. While this budget increase amounts to 

less than $2 million, it is hard to reconcile with a 42-percent cut 

in Coast Guard acquisition. Nonetheless, I look forward to receiving from the Commission the explanation that I have requested 

from the Chairman of the uncontrollable cost increases imposed on 

the FMC [Federal Maritime Commission] over the last several 

years. 

Our Nation is facing a very tough budget climate, and the President’s unrealistic request only makes things harder. 

I look forward to working with my colleagues to enact a responsible budget. 

And with that I yield to Ranking Member Garamendi. 

Mr. GARAMENDI. Good morning, Mr. Chairman, and Admiral, 

Chief, Mr. Jaenichen, Mr. Cordero. Thank you very much for being 

here. 

Mr. Chairman, you pretty much laid it out. We got a problem 

here. Our national economic strength and vitality remains closely 

tethered to the global supply chain, a supply chain that is dependent on safe, efficient, and reliable marine transportation. Consequently, few things could be any more important than to ensure 

that we invest wisely and sufficient funding in agencies that serve 

to protect, secure, and facilitate the maritime commerce of the 

United States. 

Yet, after reviewing the fiscal year 2017 budget request for the 

United States Coast Guard, the Maritime Administration, and the 

3 

Federal Maritime Commission, there is only one conclusion that I 

can make, and that is these are not going to be the best of times. 

We are headed for a problem here. 

Certainly it is the best of times when you have a Coast Guard 

and a budget that requests substantial funding to maintain 

progress on the vital recapitalization of the offshore cutter fleets, 

especially new funding to procure long lead-time materials for the 

Offshore Patrol Cutter, and to begin the recapitalization of the 

polar icebreakers. 

But the Coast Guard budget that cuts over $800 million from its 

acquisitions and construction account, which also neglects the requested adequate funding to address the significant backlogs in 

both unmet shoreside infrastructure and Coast Guard housing 

needs is shortsighted and disappointing. 

Similarly, the great success that we all shared last year when we 

pushed through the increased authorization funding levels for the 

Maritime Security Program, it has been dampened by MarAd’s 

[Maritime Administration’s] request seeking to fund the MSP at 

the 2015 funding level, while also perpetrating the administration’s 

ill-advised food aid reform policies. I must tell you it is disappointing to see this come back again and again and again. 

The chairman spoke very clearly about the lack of wisdom of that 

program, and what it means to our mariners and, more important, 

what it means to starving people around the world. I note Ethiopia 

and the crisis that they are having there, and the need for food. 

Purchased locally? Are you kidding me? So, maybe we can put an 

end to the ill-advised reform that is inherent in this proposal. 

Mr. Jaenichen, on top of all this disappointment we also find that 

the administration has not requested funding for Title XI, loan 

guarantees for the small shipyards. Everybody wants to talk about 

making it in America, about manufacturing, about jobs. And one of 

the most important programs we have available to us on the cheap, 

Title XI. So we are going to starve it. 

In closing, we want to have a reliable marine supply chain and 

a vibrant maritime and shipbuilding industry and a safe and secure marine environment and to deter drugs and, and, and. Better 

fund the Coast Guard, folks, and the merchant marines. This budget doesn’t do it. 

So, let’s get in a brawl with the administration, and let’s make 

some choices. I just left a meeting this morning with the Air Force 

that wants to rebuild their entire nuclear arsenal at a cost of several billion dollars a year. So let’s make some choices. The Coast 

Guard comes out on top, the merchant marine comes out on top of 

that equation. 

All right. Enough said. Let’s get on into it. Thank you, Mr. 

Chairman. I yield. 

Mr. HUNTER. I thank the gentleman. Our panel of witnesses 

today is Admiral Paul Zukunft, Commandant of the U.S. Coast 

Guard; Master Chief Petty Officer of the Coast Guard, Steven 

Cantrell; the Honorable Paul Jaenichen, Administrator of the Maritime Administration; and the Honorable Mario Cordero, Chairman 

of the Federal Maritime Commission. 

Admiral, you are recognized. 

4 

TESTIMONY OF ADMIRAL PAUL F. ZUKUNFT, COMMANDANT, 

U.S. COAST GUARD, ACCOMPANIED BY MASTER CHIEF STEVEN W. CANTRELL, MASTER CHIEF PETTY OFFICER OF THE 

COAST GUARD, U.S. COAST GUARD; HON. PAUL N. 

JAENICHEN, ADMINISTRATOR, MARITIME ADMINISTRATION; 

AND HON. MARIO CORDERO, CHAIRMAN, FEDERAL MARITIME COMMISSION 

Admiral ZUKUNFT. Mr. Chairman and Ranking Member 

Garamendi, members of the subcommittee, let me first express my 

profound thanks to this subcommittee for the largest appropriation 

in Coast Guard history in fiscal year 2016. It literally got us out 

of debt. 

But we are here to talk about the President’s budget in fiscal 

year 2017. I first ask that my written statement be accepted as 

part of the official record. 

Mr. HUNTER. Without objection. 

Admiral ZUKUNFT. OK. The fiscal year 2016 appropriation significantly advances our long-term acquisition strategy, and it provides stable operating funds for new assets. You are helping us 

build a 21st-century Coast Guard postured for mission success 

around the globe. 

Notably, our increased efforts and our approaches in transit 

zones netted 700 smugglers’ arrests and seized over 190 metric 

tons of pure cocaine destined for the United States this past year. 

You can be assured that we are leveraging the full scope of the intelligence community to drive our operations and disrupt 

transnational criminal networks attempting to move illegal goods 

and people by sea. Last year two of our National Security Cutters 

returned to port and offloaded more than $1 billion worth of pure 

cocaine. 

But it is not just about the drugs. These cartels also undermine 

rule of law, good governance—as we see in Central America, where 

8 out of the 10 most violent countries in the world exist south of 

the border, which also gives rise to human trafficking and unaccompanied minors arriving on our southwest border. Our interdictions at sea are making a significant difference, but we are doing 

so with very finite resources. 

The appropriation you provided in 2016 and the President’s 

budget request in 2017 will allow us to move forward with the most 

important acquisition we have undertaken since 1790, and that is 

the recapitalization of our 50-year-old Medium Endurance Cutters 

with the Offshore Patrol Cutter. Now, I remain confident we will 

down-select to a single shipbuilder and award the Offshore Patrol 

Cutter detail design by the end of this fiscal year. 

The budget also provides funding to continue our efforts to complete our program of record for the Fast Response Cutter. We are 

in negotiations to award phase 2 of the Fast Response Cutter contract, and I remain committed to attaining a fair and reasonable 

price for the American public. 

The recapitalization of our cutter fleet is the Coast Guard’s top 

priority, and I am open to all acquisition strategies, including 

multiyear and block-buy options. These new ships increase our 

operational capability, best leverage intelligence, and most imporVerDate Aug 31 2005 13:40 May 01, 2017 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\3-15-1~1\99435.TXT JEAN
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tantly they keep our men and women safe on an often unforgiving 

sea. 

Moving to the polar regions, the cutter Healy reached the North 

Pole this past summer in support of the United States Arctic interest and sovereignty. Today, cutter Polar Star is homeward bound 

after completing a successful breakout and resupply of McMurdo 

Sound in Antarctica. She is the only heavy icebreaker in the 

United States inventory capable of completing that mission, and 

she has less than 7 years of service remaining. I am grateful for the President’s request for $150 million that 

demonstrates our commitment to building heavy icebreakers, and 

takes this project through the critical design phase, and avoids the 

uncertainty that often plagues shipbuilding projects. I look forward 

to continuing to work with you to accelerate heavy icebreaker acquisition. 

In closing, investing in a 21st-century Coast Guard is as much 

about people as it is about platforms. Our 2017 budget request allows us to continue to build the workforce of the future. Now, this 

is not without challenges, but we have the best workforce in Coast 

Guard history. 

I am seeing the impact of decreased retention and slowed accessions. Our increasingly uncertain and complex world requires highend skill sets from an in-demand talent pool such as cyber, intelligence, marine inspections, and technically trained professionals 

have many options today besides serving in the military service. To 

that end, we are crafting the Coast Guard manpower requirements 

plan to baseline our 21st-century workforce as this committee has 

mandated. 

As I said in my State of the Coast Guard Address—and I am an 

optimist—these are the finest hours to serve in the United States 

Coast Guard. I thank you for your support in making that a reality. I look forward to working with the subcommittee as we make 

prudent investments in the 21st-century Coast Guard. Thank you, 

and I look forward to your questions. 

Mr. HUNTER. Thank you, Commandant. 

Master Chief, I understand you have comments for the record. 

Do you want to make a statement? 

Mr. CANTRELL. No, sir, I will just forgo to limit the time, and 

then I will be ready to answer questions when you guys are. 

Mr. HUNTER. Roger, OK. 

The Honorable Chip Jaenichen is recognized. 

Mr. JAENICHEN. Good morning, Chairman Hunter and Ranking 

Member Garamendi, and members of the subcommittee. I appreciate the opportunity to discuss the President’s fiscal year 2017 

budget priorities and initiatives for the Maritime Administration. 

The fiscal year 2017 budget request is $428.1 million, which 

funds activities supporting national security, strategic mobility, 

ships and shipping, port operations, ship disposal, environmental 

sustainability, and mariner training and education. The President’s 

budget request continues to support funding readiness for programs that support the Department of Defense sealift requirements. 

For fiscal year 2017, $186 million is requested for the Maritime Security Program, or MSP, to fund $3.1 million for each of the 60 

6 

ships enrolled in the program. That funding amount was based on 

the program of record prior to the increased authorization amount 

that was included in the Consolidated Appropriations Act of 2016. 

The timing of that authorization did not allow sufficient time for 

us to analyze the new funding levels to support submission with 

the President’s fiscal year 2017 request. 

The MSP provides direct annual stipends for up to 60 active, 

commercially viable, militarily useful, privately owned U.S.-flag 

vessels and crews operating in international trade. The MSP fleet 

ensures access to U.S.-flag ships in oceanborne commerce with the 

necessary intermobile logistics capability to move military equipment and supplies during armed conflict or national emergency. 

Funding provided from the U.S. Navy will allow the Maritime 

Administration to continue to provide surge sealift support in 2017 

through our Ready Reserve Force program. This is a fleet of 46 vessels whose primary purpose is to provide for rapid surge movement 

of defense equipment and supplies and support of global projection 

of our armed forces, and to respond to national and humanitarian 

emergencies globally. 

It takes many years of training to develop the necessary merchant mariner competencies to operate these ships. The U.S. Merchant Marine Academy and the six State maritime academies graduate the majority of the U.S. Coast Guard credential merchant marine officers needed to crew these vessels. 

To support the necessary training, the President’s fiscal year 

2017 budget request includes $99.9 million for the U.S. Merchant 

Marine Academy. This request will enable the academy to achieve 

its core responsibility of providing the highest caliber of academic 

study with state-of-the-art learning facilities for the Nation’s future 

merchant marine officers. 

The budget request also includes $29.6 million for the State maritime academy program. This request includes $22 million to fund 

maintenance and repair costs for the federally owned training ships 

that are on loan from the Maritime Administration to the six State 

maritime academies. The training ship fleet is aging, with an average age of 37 years. 

And the oldest, the Empire State, at the State University of New 

York Maritime College, is 55. Through the fiscal year 2017 budget 

request, the Maritime Administration is requesting priority maintenance for the six training vessels, to ensure they all meet safety 

and functional requirements to stay in service as long as possible. 

Additionally, the Maritime Administration will be validating the 

next appropriate steps to ensure adequate shipboard training capacity remains available in order to produce sufficient quantity and 

quality of mariners to support our sealift needs into the future. 

The fiscal year 2017 budget request also reflects a continuing 

commitment to reducing and mitigating maritime transportationrelated impacts on the environment. This includes a request for the 

ship disposal program of $9 million to support disposal of nonretention National Defense Reserve Fleet vessels that are in the worst 

condition, with priority emphasis on the removal of the three remaining obsolete vessels in the Suisun Bay Reserve Fleet that were 

identified in the April 2010 California court consent decree. 

7 

The President’s fiscal year 2017 budget request also includes $11 

million for the inactive former nuclear ship Savannah. This includes $8 million to begin the Nuclear Regulatory Commission required decommissioning process, including the dismantlement and 

decontamination of the defueled nuclear propulsion plant on board 

the vessel. 

In addition, the budget request includes $3 million for energy 

and environmental technology initiatives designed to enhance maritime sustainability and affordability through our maritime environmental technical assistance program. Finally, the fiscal year 2017 budget requests $3 million for a pilot 

program to support port infrastructure improvements through our 

StrongPorts program. This funding will provide port planning 

grants to enable ports to create investment-grade infrastructure development plans that comply with Federal planning requirements 

and satisfy private lending institutions, and also promote public 

and private partnerships. 

Mr. Chairman, thank you for your opportunity to present and 

discuss the President’s fiscal year 2017 budget request for the Maritime Administration. I will be happy to respond to any questions 

that you or members of the subcommittee may have. 

Mr. HUNTER. Thank you, Administrator. 

Chairman Cordero, you are recognized. 

Mr. CORDERO. Chairman Hunter, Ranking Member Garamendi, 

members of the subcommittee, good morning and thank you for 

providing me the opportunity to testify in support of our fiscal year 

2017 budget. 

With your permission, I will summarize my prepared remarks, 

which I kindly request to be entered into the record. 

Please allow me to begin by reporting our response to two congressional mandates we were given last year by way of the Howard 

Coble Coast Guard Act of 2014. The Commission issued a rule that 

became effective on March 1, 2016, that implements term limits on 

our Commissioners and changes how attorney fees are awarded in 

cases brought before FMC. 

Mr. Chairman, in 2015 the United States saw a level of international container traffic that was a record-breaking 31.5 million 

TEUs [twenty-foot equivalent units]. The commodities inside these 

containers carried on ships, transiting marine terminals all move 

on top of a regulatory system that seeks to facilitate trade while 

protecting the American shipper from unlawful anticompetitive behavior. That regulatory system is the jurisdiction and responsibility 

of the Federal Maritime Commission. And through our work, we facilitate and safeguard fair, efficient, and reliable transportation for 

oceanborne international cargo. 

International container trade is growing significantly. Based on 

conservative estimates of a 5-percent annual growth, box volumes 

will double by the end of the next decade. That is tens of millions 

of containers above and beyond the 30 million TEUs that arrived 

here last year and are already overwhelming our marine terminal 

infrastructure, leading to port congestion and inefficiencies in the 

supply chain. If left unaddressed, congestion at our maritime gateways will result in gridlock, and that is an outcome that none of 

us can afford to see come to pass. 

8 

We have directly tackled the issue of congestion. The latest development is the unanimous vote that was taken in February by 

the Commission to establish the Supply Chain Innovation Team 

project. That effort will be led by Commissioner Rebecca Dye, and 

will culminate in a report to be issued to the Commission. 

At the same time, as container volumes are growing, the container shipping industry is going through a period of major change. 

As a result of merger and acquisition activity, we anticipate considerable consolidation among container carriers, the net effect of 

which will likely be game-changing impacts on the marketplace. 

Additionally, we are noting a marked increase in the number of 

agreement filings made at the Commission by VOCCs [vessel-operating common carriers] and MTOs [marine terminal operators]. 

These agreements reflect a trend in which carriers and terminal 

operators have increased working in cooperation with each other, 

sharing resources and assets. 

In short, we are projecting the future where millions and millions 

more containers are going to be entering the United States. The 

ships calling to the United States are ever going to be larger. The 

increased influence of foreign-controlled vessels via vessel-sharing 

alliances. There is a substantial consolidation in the industry 

among those overseas-based entities. Those very same companies 

are increasingly working cooperatively to share resources and assets. 

Chairman Hunter, the future has arrived. It is happening now. 

And it is fraught with challenges. Indeed, the Journal of Commerce 

noted in a recent issue—and I will quote—‘‘Global changes in container shipping are confronting the U.S. Maritime Commission 

with some of the most difficult decisions in its 55-year history.’’ 

As trade grows and the shipping industry consolidates, the Commission will need to increase its monitoring and analysis of the industry in order to ensure that the American shipping public and, 

ultimately the American consumer, does not become a victim of decreased ocean transportation options or unlawful anticompetitive 

behavior. This will be accomplished through ongoing, thorough, and 

careful review of service contracts and the VOCCs and MTO agreements filed with the FMC. 

Just as container volumes are hitting record levels, so are the 

number of filings received by the agency. It is significant, resourceintensive, and time-consuming work to assess what these documents reflect in terms of business trends. There is a significant 

strain to our agency’s resources as our employees endeavor to stay 

on top of this amount of work. Simply put, we need additional specialized personnel in order to help meet the FMC mandate. 

In previous years this subcommittee has encouraged us to be efficient in how we spend our appropriated funds, and I assure each 

and every one of you, even without this directive, the FMC is diligent in maximizing its dollars. Recent steps have been taken to 

save money: one, looking for opportunities to share services with 

other agencies; two, reducing the amount of space we have in our 

headquarter building to save on our lease cost; three, delaying hiring of new personnel so as to create funds that we can use to address pressing requirements, such as conducting our information 

technology refresh; four, bringing whatever human resource servVerDate Aug 31 2005 13:40 May 01, 2017 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\3-15-1~1\99435.TXT JEAN
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ices we can in-house in order to save money and payments that we 

must make to OPM [Office of Personnel Management]. 

That said, only 2 percent of our budget may be characterized as 

discretionary spending. Furthermore, even though we are a small 

agency, we must comply with each and every obligation that other 

Federal agencies are required to meet. 

For example, the Commission responded to at least 75 different 

annually mandated reporting requirements. When we are unexpectedly tasked to do something, the cost associated with satisfying 

that directive must come out of a budget that is already spoken for 

in its entirety. 

The Federal Maritime Commission budget request will alleviate 

some of the stressors that are challenging our ability to continue 

to operate effectively and responsibly. We hope our request will be 

supported by the subcommittee at the full amount. 

Thank you for your time, attention, and consideration. I am 

pleased to answer any questions you have regarding our budget request or any issues over which the Federal Maritime Commission 

has jurisdiction and can share our valuable insight. 

Mr. HUNTER. Thank you, Chairman. Before we get into the question portion of the hearing, I would like to submit for the record 

the statement of Dr. Kathryn Sullivan, Under Secretary of Commerce for Oceans and Atmosphere, and Administrator for the National Oceanic and Atmospheric Administration, NOAA. 

[No response.] 

Mr. HUNTER. Without objection, so ordered. 

[The information can be found on page 69.] 

Mr. HUNTER. The NOAA Office of Response and Restoration has 

oil and chemical spills and marine debris programs which fall 

under this subcommittee. Some of us also take a parochial interest 

in other NOAA programs within the Office of Coast Survey, since 

all nautical charts and surveys are critical for safe navigation. 

So we are now going to move on to questions. But before I do 

that, Chairman Cordero, you have three Federal Maritime Commissioners here with you today: Rebecca Dye, right behind you; Michael Khouri; and Bill Doyle. Just want to say welcome, and 

thanks for being here. 

And with that, I am going to yield to Mr. Garamendi to start 

with the questions so I can call my kids before they go to school 

really quickly. 

Mr. GARAMENDI. They must start very late, or else they are in 

San Diego. 

Mr. HUNTER. They are in San Diego. 

Mr. GARAMENDI. They are in San Diego, OK. 

Admiral Zukunft, a series of questions about the Fast Response 

Cutter, the contract. Where are we with it? Phase 2. Brief us. 

Admiral ZUKUNFT. Congressman, right now we are continuing 

negotiations for a fair and reasonable price, and we are making 

great progress. I know there may be consternation among some of 

what is in the next block buy, the final 26 of these ships. The one 

change is we are modernizing the command and control systems, 

because the ones on the first 32 will have reached obsolescence by 

10 

the time these next 26 are delivered. But basically, it is the same 

hull form, and so we are in negotiations right now. 

We will need to reach closure on these negotiations by mid-May 

so we do not have a disruption in the build-out of this very critical 

asset. 

Mr. GARAMENDI. So we can look forward to fiscal year 2017 moving these contracts underway and expenditures being made? 

Admiral ZUKUNFT. Absolutely. We have got to come with a fair 

and reasonable agreed-upon price with the vendor—— 

Mr. GARAMENDI. And you say the control systems on the previous 

set are going to be obsolete? 

Admiral ZUKUNFT. These are command and control systems. It is 

computers, it is surveillance systems. And as we find, these normally have a shelf life of 10 years, maybe, at most. By the time 

these are built out, those will be obsolete. So that is the one modification that will be made. 

Mr. GARAMENDI. OK. The Offshore Patrol Cutter, can you assure 

us that you will be awarding the contract by the end of this year? 

Admiral ZUKUNFT. Congressman, we have three very incentivized 

vendors, and those requirements are coming forward, as I speak. 

And by the fourth quarter of this fiscal year we absolutely will 

down-select to one vendor to move this forward. 

And again, I am very thankful for this subcommittee for putting 

in our appropriation the final design work, which is going to be a 

huge lift for us and the Department, but that was put into our appropriation, so we can move this major acquisition forward. 

Mr. GARAMENDI. So you were able to get one icebreaker to the 

North Pole. Let’s talk about the Polar Sea. Where are you with 

that? And then also the $140 million for some sort of new icebreaker. 

Admiral ZUKUNFT. Thank you for that question, Congressman. 

So we have pulled the Polar Sea out of the water to do a materiel 

assessment on the ship. A third party will validate and provide us 

that assessment by this summer. And within that should be a 

threshold of what it would take to reactivate the Polar Sea. Recognizing that would be a reactivation, probably measured in less than 

10 years. 

And so it really becomes a business decision. Is it a prudent investment to put that much money in a ship that has been laid up 

for 6 years? And some of those parts were cannibalized in order to 

bring the Polar Star into service, as well. What this $147 million 

set-aside does, it has already incentivized industry. We can build 

a polar icebreaker here, in the United States. Maybe we look at 

parent craft designs. It provides us certainty that we will need to 

go forward as we have seen through funding lapses and continuing 

resolutions that have disrupted some of our major acquisitions. But 

this is not one that time can wait upon; we need to move this 

project forward. 

Mr. GARAMENDI. So we are really looking at two ships here, 

maybe, the Polar Sea being recommissioned—rebuilt, recommissioned, and then this new heavy polar icebreaker? 

Admiral ZUKUNFT. So we are really looking at a variety of options. One, we have Polar Star, and we project she has roughly 7 

11 

years of service life remaining. A catastrophic casualty could 

change that. We have the potential reactivation of the Polar Sea. We have looked at leasing options, but, quite honestly, we have 

looked across the inventory here in the United States, and there 

are no ships that meet the requirements of either a medium or a 

heavy icebreaker for leasing. You may know we have looked—I 

have a 13-page matrix—side-by-side—and that vessel will not meet 

Coast Guard requirements. 

We put an operation requirement document together, crosswalked that with the Arctic Research Council, National Science 

Foundation, Defense, Interior, Commerce, Coast Guard, and all 

came to agreement that this is what we need an icebreaker to do 

for the United States of America. So that requirement is out there. 

And so that leaves us with the final alternative of reacquiring— 

buying new—a heavy icebreaker. 

Mr. GARAMENDI. If the Polar Sea is to be rebuilt, repurposed, you 

will need money in the 2017 budget to carry that forward. 

Admiral ZUKUNFT. We will, and we have this $147 million that 

is currently in the President’s budget. So that is an option. 

And, fortunately, we will have this summer to make that final 

decision and fully brief members of this subcommittee of what it 

would take to reactivate a nearly 40-year-old ship and be honest 

of how many more years do you get out of a 40-year-old ship, and 

how much money do you put into it. 

Mr. GARAMENDI. It sounds like you may have made a decision already. 

Admiral ZUKUNFT. We have not. So we will see what it will cost. 

But that would provide us a floor, and maybe not a ceiling, of what 

it would take to reactivate a ship of that age. 

Mr. GARAMENDI. So if the Polar Sea is to be rebuilt, repurposed, 

there will only be money for the Polar Sea, and not for the second 

or third heavy icebreaker. 

Admiral ZUKUNFT. Either way, Congressman, it would require further top-line relief in our budget. So this $147 million is a topline relief. There was some back-and-forth whether it would come 

at the expense of some of our other, more mature acquisition programs, such as the Fast Response Cutter. 

Mr. GARAMENDI. Well, you are aware of the interest of the chair 

and the ranking member in icebreakers. So when is the next time 

you are going to report back to us about the Polar Sea? 

Admiral ZUKUNFT. Yes, the next report will be when we get the 

materiel assessment back on the Polar Sea, which will be—— 

Mr. GARAMENDI. Summer is a 3-month or 4-month period. Could 

you be more precise? 

Admiral ZUKUNFT. I asked the same question of my staff yesterday, because I knew you were going to ask me that question. 

Mr. GARAMENDI. And the answer was? 

Admiral ZUKUNFT. I am going to say July 31st. 

Mr. GARAMENDI. July 31st? 

Admiral ZUKUNFT. Thirty-first. 

Mr. GARAMENDI. I think we are leaving before that. So why don’t 

you push that up a week, while we are still here? 

Admiral ZUKUNFT. Will do. 

Mr. GARAMENDI. Thank you. Yield back. 

12 

Mr. HUNTER. I thank the gentleman. I called my kids. Nobody 

answered. Now they are all calling me back right now. Right. That 

is just how it works. 

My first question is—let’s talk about nukes really quick. We had 

a hearing here, we talked about—if you can get coke on U.S. soil 

you can get nuclear weapons on U.S. soil. And with the Iranian 

deal, let’s just say that 10 or 15 years from now, nuclear weapons 

are not ubiquitous, but they are more prevalent throughout the 

world. You will have North Korea, you will have Iran at that point. 

They will have maybe sold them off. 

And what we are looking at, for the first time ever, is nonstate 

actors with nuclear weapons, where there is—where we can’t attribute a strike to anybody, there is no way to retaliate, there is 

no deterrent in retaliation because you are not going to—because 

they are nonstate actors, right? 

So my question is what is the Coast Guard doing 10 years out 

from now—I mean that would be numero uno priority, right? What 

are you doing to face the nuclear threat that we could be facing? 

Not getting shot at by an ICBM [intercontinental ballistic missile], 

but simply having something either come across the border, come 

into a port, come in with the same routes that they use coke, or 

they bring up coke. 

Admiral ZUKUNFT. Chairman, we have a number of actions in 

place, as I speak right now. One is being a member of the national 

intelligence community. Intelligence drives operations. So when I 

look at counterdrug as an example, 2 years ago, right before I came 

into this job, we had awareness of about 80 percent of the maritime 

drug flow destined for Central America, but ultimately destined for 

the United States. But on any given day we had enough resources—and back then we had the Navy’s Perry-class frigates in 

our inventory—to target maybe 15 percent of that 80 percent. So, 

we knowingly let 65 percent get through. 

Since then, the Coast Guard has nearly doubled its presence at 

the expense of other missions. And so we have closed some of that 

gap. But now we no longer have the Navy Perry-class frigates in 

our inventory. So it is pretty much a Coast Guard mission. 

But when you look at the nuclear threat, we use that same maritime domain awareness. We have a special force team. We have 

two in the United States Coast Guard, one in San Diego, one in 

Chesapeake, Virginia. We have over a dozen bilateral agreements 

with flags of convenience that authorize the Coast Guard to board 

those ships anywhere on the high seas if we expect that there is 

a weapon of mass destruction aboard that ship. 

We don’t ask permission. And we come in covertly. But we use 

it leveraging our Title XIV authorities. And so, it is a unique set 

of authorities, bilateral agreements, but it is the platforms that we 

have invested in, as well. 

The National Security Cutter can operate in a marine environment. Our people that fast-rope hook and climb operate in marine 

environments. And if they have to compel compliance using Title 

X authorities, they squeeze off about 40,000 rounds a year. These 

are the—— 

Mr. HUNTER. What about nukes coming in just in cargo containers? 

13 

Admiral ZUKUNFT. With cargo containers we work closely with 

Customs and Border Protection at the National Targeting Center 

in Reston, Virginia, where every cargo manifest, every crewmember 

is screened, from consignee to the packer, to discriminate if there 

is a new shipper, you know, in—you know, that has put something 

in a container that may profile that particular container as a potential threat. So we have increased our domain awareness just 

through the National Targeting Center, as well. 

Mr. HUNTER. Does it make sense, in your point of view, to test 

every cargo box on a ship prior to it being loaded, or when it is 

offloaded? 

Admiral ZUKUNFT. If we were to do that we would literally gridlock our—— 

Mr. HUNTER. Not necessarily. I mean based on the technology 

that exists today you can drive stuff through those quick-scanners 

at certain ports. They have those now, right? 

In fact, didn’t—it is not Kuwait. Is it Dubai that has—that scans 

every single cargo container that comes into their country? 

Admiral ZUKUNFT. I am not certain about Dubai. The technology 

may get there. But if you have to open and inspect, you know, each 

container before it is destined for the global market, the time that 

it would take would literally disrupt our—— 

Mr. HUNTER. We had a hearing here. There is technology right 

now where you can see through it. You don’t have to open it and 

inspect it. Right? 

Admiral ZUKUNFT. At a much higher level, if I were to try to conceal, you know, a weapon of mass destruction with the appropriate 

shielding, that may not be detectable. So the intelligence—— 

Mr. HUNTER. But the shielding is now detectable, too, because 

you can see a shield. You can see the lack of the—— 

Admiral ZUKUNFT. Right. 

Mr. HUNTER [continuing]. Moving around if it is shielded, right? 

Admiral ZUKUNFT. Right. So—but that would cause you to open 

and inspect a given container. Maybe you don’t open each and 

every one of those. But right now we have that technology today 

to make those informed decisions. And we do actually carry out 

that work, working hand in hand with the Customs and Border 

Protection. 

Mr. HUNTER. So that is more CBP? 

Admiral ZUKUNFT. CBP and Coast Guard. I would say it is probably 70 percent CBP, 30 percent Coast Guard. 

Mr. HUNTER. OK. All right, thank you. So let’s get into, really 

quick, to acquisitions. You talked about block-buy options, you 

talked about multiyear procurement. So we have been talking 

about this. Tell me why it hasn’t been done yet if you are amenable 

to doing it. 

Admiral ZUKUNFT. Yes—— 

Mr. HUNTER. I mean because you are going to be building cutters 

for the next decade. 

Admiral ZUKUNFT. So let me turn the hands of time back to 

when we first acquired the National Security Cutter. We did it 

under—through a third party known as Deepwater. We finally 

moved that acquisition program in-house under the United States 

14 

Coast Guard. So, we were not able to do that with the National Security Cutter. 

We have also gone through variations as much as 35, 40 percent 

in over a 3- to 4-year period in our AC&I [acquisition, construction, 

and improvements] budget. When we do a block buy we almost put 

that block buy into a nondiscretionary element of our budget. And 

so we have to make difficult trade-off decisions. But if we are making this block buy, we will incur a penalty if we can’t deliver on 

that block-buy purchase. And maybe it comes at the expense of 

other operations. And that is where having a stable—— 

Mr. HUNTER. Wait, explain that. Explain that. Why would you 

incur a penalty if you do a block buy? 

Admiral ZUKUNFT. So if I—say I want to do a block buy of two 

Offshore Patrol Cutters in 2021. But then my appropriation for 

that year is something less than what I needed to build out those 

two OPCs [Offshore Patrol Cutters]. Well, I have got to commit to 

that block buy, or I will pay a penalty to that vendor. So I lose the 

flexibility, if you will, to make other appropriations under a block 

buy. And that is why—— 

Mr. HUNTER. But you wouldn’t do a block buy unless you had the 

money appropriated to do it. 

Admiral ZUKUNFT. Right. And so it is the certainty of that appropriation, going forward. But certainly it makes all the good business sense, going forward. It is an area that we will look at with 

the Offshore Patrol Cutter. 

Mr. HUNTER. So—OK. How about multiyear procurement, then? 

Because you know you are going to be buying years and years out. 

Why not do multiyear procurement? 

If you can save—I think it was 5 percent on the FRCs [Fast Response Cutters], right, 5 percent, $500 million, on the OPC program, you can save $1 billion—or 10 percent. And on an icebreaker 

you could save $1 billion. So the $1 billion you could save on the 

OPC is, according to CRS [Congressional Research Service]—that 

is a lot of money. Why not do that? And why hasn’t it been done 

yet? 

Admiral ZUKUNFT. Yes. So let me use the OPC, as I—— 

Mr. HUNTER. Because the Navy has been doing this. I mean the 

Navy buys ships, the Coast Guard buys ships. Much less complex 

systems, too, than the U.S. Navy buys. You don’t build complex 

Navy ships, right? So you would—theoretically be easier for the 

Coast Guard to do this than it is for the Navy, who does this all 

the time, right? 

Admiral ZUKUNFT. So, with the Offshore Patrol Cutter, it will 

take the first three. One is we hold our requirements steady. When 

you change requirements, that is where you see growth in any acquisition program, where you are building large ships or airplanes 

or the like. 

So you hold the requirements steady, but the underlying criteria 

for the Offshore Patrol Cutter, besides meeting our requirements, 

is affordability. And by the time you get to the first three, by that 

time we should be able to lock in what an affordable price is for 

the Offshore Patrol Cutter, which will be the time to negotiate for 

the remaining 23—22, forgive me—to do a multiyear buy, a block 

15 

buy, for those remaining 22. What the underlying criteria is, we 

have locked in an affordable price for the remainder of those ships. 

But right out of the starting block, taking a new ship off an assembly line, and as we run it through its paces, we don’t know 

what we don’t know yet with that first ship coming off the line—— 

Mr. HUNTER. So you are saying you can’t do a block buy until 

you get through the first three OPCs. 

Admiral ZUKUNFT. I feel like I owe it to the taxpayer to make 

an informed decision, rather than one that hopes for the best. So 

by the time we get through the first three, and as the contractor 

goes through those learning curves to build those first three 

ships—— 

Mr. HUNTER. That is what happened with the NSC. 

Admiral ZUKUNFT. Right. 

Mr. HUNTER. Right? It didn’t—no one knew what they wanted 

until ship 3 came out. 

Admiral ZUKUNFT. Number three met all of our requirements. 

Mr. HUNTER. Sean Stackley, who—do you know who Sean 

Stackley is? U.S. Navy. So when Secretary Stackley talks about acquisition, buying ships up, it is like Moses coming down from on 

high with the word of God. And Stackley said that there is no reason whatsoever why the Coast Guard should not be doing 

multiyear procurement of block buys. I mean it should almost be 

mandatory. 

So, I guess my question is you said you like it. It sounds good. 

The Coast Guard wants to save money. So what would stop you 

from doing that, going forward? If anything. 

Admiral ZUKUNFT. Yes. For us it is always the uncertainty of 

what is in our acquisition budget. I would love to have Sean 

Stackley’s acquisition budget—— 

Mr. HUNTER. But if we give you the money and the authority, 

what would stop you from doing a multiyear—— 

Admiral ZUKUNFT. Absolutely nothing, Chairman. As I have said before, a floor of a recurring $1.5 billion AC&I budget—put that 

next to the Navy budget. You know, if we had that reliability, repeatability, then we could certainly move forward with a block buy. 

If you look across our 5-year capital investment plan, as we mature that out we get to that threshold level that will allow us to 

make block-buy decisions. 

Mr. HUNTER. Thank you very much. And we will keep going 

later, but I would like to yield to Mr. Gibbs. 

Mr. GIBBS. Thank you, Mr. Chairman. Thank you, Admiral, for 

your service and all your work on the drug interdiction, protecting 

our shores. 

I do just want to emphasize what the chairman was talking 

about with Iran and North Korea and their State-sponsored terrorism, and the tremendous growth of the terrorist organizations 

out there. And we know what they are, you know, hell bent to do. 

And that should be a top priority, and a growing priority. So I just 

want to emphasize that. 

But I do want to talk a little bit about—since I am from Ohio— 

concern about the Great Lakes. My first question, Admiral, is I see 

that the Coast Guard is conducting a mission analysis of the Great 

Lakes icebreaking needs. And, as you know, the Great Lakes, it 

16 

has lost—loses millions of dollars when we have severe winters like 

we did not this current winter, but the last two winters, especially. 

I want to make sure that you ensure that the analysis that you 

are—the Coast Guard is doing will hit those domestic icebreaking 

targets, which I believe are 95 percent of keeping it open during 

icebreaking season. But hopefully, that is based on the worst winters, and not this past winter. And can—you want to address that? 

Admiral ZUKUNFT. Thank you, Congressman. We are storing our 

140-foot icebreaking fleet. And certainly this year has given us a 

bit of a reprieve. There is an authorization for us to look at another 

Great Lakes icebreaker. 

We also have a series of memorandums of agreement with Canada. So if we require their assistance to do icebreaking to support 

our port infrastructure in the U.S., they will provide that to us, 

and we will do so, vice versa, as well. 

The real challenge with moving forward with the Great Lakes 

icebreaker is what is in my AC&I budget. And it concerns me that, 

for the next 4 to 5 years, we will make no investment whatsoever 

in our military housing. We underfund some of our shore infrastructure that currently has over a $1 billion shortfall. So we are 

paying interest on an existing debt, but we are not making any 

principal payment into that shore infrastructure. So it really comes 

down to an appropriation. 

But can I assume that the winter of 2016 will be repeated in 

years following? That would be a flawed decision for a Service that 

prides itself on being semper paratus to make. 

Positive news, those 140’s are being refurbished. And again, we 

rely heavily on our relationship with Canada, as well, to address 

these very concerns that you address with commerce on the Great 

Lakes. 

Mr. GIBBS. Yes, I think the one that concerns us, the situation 

with the Mackinaw—that is the main icebreaker on the Great 

Lakes, right? 

Admiral ZUKUNFT. It is. 

Mr. GIBBS. Mr. Cordero, speaking of Canada, in 2014 the Canadian Government was proposing the implementation of a transit 

standard for ballast water regulation. And I guess that would mean 

Canada would apply most of the onerous ballast water requirements on vessels that are not actually discharging in Canadian waters, but merely transiting through. 

My concerns with the proposal include the effect the standard 

would have on our U.S. carriers and shippers. Did the Commission 

hear from industry regarding the Canadian transit standard? And 

I got three here. Did the Commission investigate what Canada was 

proposing and comment on it and engage with the Canadian officials? And then, finally, what is the status of the proposal, the Canadian proposal? 

Mr. CORDERO. Thank you for your question, Congressman. Number one, yes, the Commission did hear concerns of some stakeholders in the Great Lakes area. And with that, we have partnered 

with the State Department and gone to relevant meetings. In addition, Commissioner Doyle represented the FMC in meetings on this 

issue that he held in Canada with some of the officials to discuss 

this issue. 

17 

In terms of the status, my understanding is there has been no 

further movement by Canada with regard to the implementation of 

those standards. So at this point my understanding is there is no 

further movement on that application. But, of course, our office will 

follow up with you to absolutely confirm that, and give you more 

detail on that. But thank you for your question. 

Mr. GIBBS. Well, that is good news, because we certainly don’t 

want the Canadians making it tough on our side. We have got to 

work together. 

Mr. CORDERO. Absolutely. 

Mr. GIBBS. Thank you, and I yield back. 

Mr. HUNTER. I thank the gentleman. Mr. Garamendi is recognized again. He likes this, because we go back to him every time. 

Mr. GARAMENDI. We are a little short on our side over here. 

Admiral Zukunft, if you were told to do a block buy, the onus is 

really on us, that year after year we would have to meet that commitment, whatever it was. Could you do a little mathematical calculation for us, the amount that could be saved by a block buy 

versus the penalty of us failing to adequately fund at some future 

year the requirements? I suspect that that equation would work 

out that it is still cheaper to do a block buy, even though there may 

be a penalty because of our failure to fund the program. 

Admiral ZUKUNFT. Yes, Congressman. I will be happy to provide 

that information to you. I will get my stubby pencil to work, but 

probably not an answer I could give you, you know, here, at this 

committee hearing. 

But I know you look out for the best interests of the Coast 

Guard, and we owe that so we can both go in and make informed 

decisions on block buys, going forward—— 

Mr. GARAMENDI. I think—— 

Admiral ZUKUNFT [continuing]. The OPC. 

Mr. GARAMENDI. I know I, and I believe the chairman, would like 

to see a block-buy requirement in this year’s appropriation. And we 

need to have some sense of the savings that would be achieved by 

a block buy, let’s say, over the next 5 years. If you would do that, 

it would be helpful to us, as we move that forward. 

Coast Guard housing, you are short $1.1 billion. Is there some 

way we can find at least $100 to buy a couple of gallons of paint? 

It would seem to us in this budget that, as we move this appropriation forward, that we find at least some money for the repair of the 

housing to go—just to zero it out is just, frankly, not acceptable. 

I will move to some other questions. Mind if I go to Jaenichen? 

You want—OK. 

Mr. Jaenichen, how long are we going to have to fight this food 

aid program before—I guess until we get a new administration. Is 

that a fair—— 

Mr. JAENICHEN. What is in the 2017 budget request, Congressman, is the administration proposal. 

Mr. GARAMENDI. Well, we will eventually have a new administration, which I hope has more sense about how to do this. 

If we move—if the administration’s proposal were to move forward, what would be the effect on the American maritime industry? 

18 

Mr. JAENICHEN. Well, I can tell you, Congressman—thank you 

for the question—we have seen a—since 2011—a 40-percent drop 

in the total amount of food aid cargo and agricultural cargo that 

has been carried on ocean shipping. And, as a result of that, we 

have seen a decrease since 2012, in combination with the DOD [Department of Defense] cargoes, which have also dropped to about 75 

percent in the same period. 

We have seen a reduction from 106 ships at the end of 2011, the 

first of January of 2012, to the current number of 77 today. That 

is a 26-percent drop in the fleet, so we know that there has been 

an effect. But it is a combination of not just the amount of food aid 

cargo, it is a combination of all the cargoes that are being carried. 

Predominantly, that used to be DOD cargo, roughly 80 percent. 

But now, with the smaller footprint that we have overseas in 

basing, but also the number of troops that are stationed overseas, 

we are seeing much less DOD cargo movement. And, as a result, 

the agriculture—— 

Mr. GARAMENDI. I want to focus—— 

Mr. JAENICHEN [continuing]. Larger contribution to the total carriage—— 

Mr. GARAMENDI. I appreciate the DOD. Focus specifically on the 

food aid. How many ships have been lost as a result of the change 

in the food aid. And, more importantly, how many ships would be 

lost if we were to accept the administration’s proposal on the food 

aid? 

Mr. JAENICHEN. We estimate 6 to 12 have been lost as a result 

of some of the changes that have occurred since 2012. I can’t give 

you an exact number, but we do know that the fleet that has had 

the most challenge is our bulkier fleet, especially dry bulk. And 

many of those ships are being laid up right now. So I think those 

ships would be at risk, though it is at least four to six. 

Mr. GARAMENDI. Four to six more ships? 

Mr. JAENICHEN. Yes, sir. 

Mr. GARAMENDI. And the number of mariners that would be losing their jobs as a result of that? 

Mr. JAENICHEN. Each ship carries a combination—it is about 20 

to 25 billets, so you are looking at 40 to 50 per vessel, total. 

Mr. GARAMENDI. And the risk to the United States national security of not having another six ships available? 

Mr. JAENICHEN. If we lose additional ships—I am putting it— 

from a mariner availability standpoint today, I put us in the amber 

range, and I have probably a delta of about four ships before I go 

to the red. So I am concerned about the number of mariners that 

are available to fully man the Government reserve sealift fleet in 

a time of either conflict or in humanitarian crisis if we fully had 

to active that. 

Mr. GARAMENDI. So if the food aid program were to go forward, 

we would lose four to six more ships. And that puts the Nation’s 

security with regard to the availability of ships into the red zone, 

as into very dangerous—— 

Mr. JAENICHEN. As part of the administration’s proposal, there is 

$25 million that is intended to compensate for that loss. And so the 

$24 million would be used for non-MSP ships, specifically, and then 

19 

$1 million for the mariners themselves. So that should offset the 

loss. That is the administration’s proposal. 

Mr. GARAMENDI. So—but the mariners are not working. And 

therefore, they may not be licensed. 

Mr. JAENICHEN. That is part of the challenge, yes, Congressman. 

Mr. GARAMENDI. So, instead of spending $25 million in basically 

what is a subsidy, a welfare check, we could just maintain the food 

program as it is today and ship food, keeping the ships busy, keeping the mariners busy, and actually doing something, rather than 

a welfare check. 

Mr. JAENICHEN. The idea of the subsidy, or the $24 million, it 

would actually keep those ships in operation. So we do not see that 

the mariners would be lost. But your analysis is not flawed. 

Mr. GARAMENDI. My analysis is not what? 

Mr. JAENICHEN. Flawed. 

Mr. GARAMENDI. In other words, correct? 

Mr. JAENICHEN. Correct. 

Mr. GARAMENDI. Thank you. I yield back. 

Mr. HUNTER. Mr. Graves is recognized. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Chairman. Admiral, 

welcome. I appreciate you being back again today. 

In the budget proposal you include an increase of 325 personnel. 

You also have a decrease of 400 personnel, including the elimination of high-value escorts and other support services. Can you 

talk about how this sort of adapting—or how this change of the 

Coast Guard is occurring, and sort of the motivation behind the increase and the decrease? 

Admiral ZUKUNFT. Congressman, we have—actually, it is a net 

gain at the end of the day of 325 personnel. But when you ask, 

‘‘Well, how did we arrive where we are today?’’ and it goes back 

into some of these other questions about acquisition, repeatability, 

you know, what that floor needs to be. 

And in order to keep the National Security Cutter program alive 

without the support of this administration, we had to make force 

structure reductions in order to keep that program viable. 

And so, now that we have the best acquisition in Coast Guard 

history, we need to make sure that we are investing in the talent 

that is going to operate and maintain these platforms into the future, as well. 

So, when we talk about—and as mandated in the authorization 

bill, we owe you a force planning construct of what does the Coast 

Guard need to meet mission in the 21st century when it comes to 

people? We have made that argument when it comes to platforms. 

But without people, you know, those platforms really will not get 

the job done. 

Mr. GRAVES OF LOUISIANA. Sure, OK. So, I mean, in summary, 

adapting to the evolving mission of the Coast Guard, evolving 

threat and new equipment? 

Admiral ZUKUNFT. Yes, sir. 

Mr. GRAVES OF LOUISIANA. All right, thanks. Another question 

for you. Two years ago you said—I think at the end of the day, 

changing the Jones Act would put our entire fleet in jeopardy. Can 

you talk briefly about the current status of the defense industrial 

20 

base and—as we are working on this recapitalization effort for the 

Coast Guard? 

Admiral ZUKUNFT. I can provide you a couple of data points. 

One, when I look at our acquisition program itself, holding 

steady requirements, on-time delivery, and platforms that will be 

serving our Nation 40 years from now. When I meet my counterparts from other coast guards, including the commandant of Japan 

Coast Guard, he is under scrutiny because at the end of 20 years 

many of their ships reached the end of their service life. And they 

say, ‘‘Well, why can’t you be like the United States Coast Guard?’’ 

And I think that is a testimony to the quality of product that we 

are building here. 

Another data point, when I was at NASSCO [National Steel and 

Shipbuilding Company] shipyard, where they are building one of 

two ships for—this is an LNG [liquefied natural gas] and conventionally fueled U.S.-flag container carrier that will run between 

Jacksonville and Puerto Rico. State of the art. Absolutely state of 

the art. You take Jones Act away, the first thing that goes away 

are these shipyards. And what goes behind that is the mariners. 

And as we talk about what is the world going to look like 10 

years from now, and if we have a peer competitor, if we don’t have 

a U.S. fleet, and if we don’t have a U.S. shipyard to constitute that 

fleet, as we look at how did the United States prevail in wars past, 

it really began with our industrial base. And the Jones Act, I am 

concerned, you know, any repeal of that would cut at the heart of 

that industrial base. 

Mr. GRAVES OF LOUISIANA. And how would the repeal or changes 

to it affect from a security, from a safety, from a pollution perspective, having foreign vessels running inland waterways of the 

United States? 

Admiral ZUKUNFT. We do what is called port state control 

boardings. These are foreign-flag ships that do trade with the 

United States, and we inspect them for their port security code 

compliance under IMO, and for their Safety of Life at Sea compliance, also under the International Maritime Organization. 

On any given day we detain two or three ships that arrive in the 

United States because they are not in compliance, even though that 

flag state upholds that they are. We are dealing with an oil spill 

in Long Beach today. A foreign-flag carrier. We don’t know why, 

but it had an oil spill. 

So, yes, the United States does hold a higher standard when it 

comes to safety and security. No one does it better than the United 

States. 

Mr. GRAVES OF LOUISIANA. Thank you. Chief, thanks for being 

here, and good to see you again, as well. At the State of the Coast 

Guard Address that the Commandant gave, he really focused on 

the people of the Coast Guard. That was a big part of his—theme 

of his message. If you deviate, or you have different thoughts than 

the Commandant, then I assure you your secret is safe with me. 

But I wanted to ask you. What are your greatest concerns for the 

Coast Guard workforce? 

Mr. CANTRELL. Well, thanks, Congressman. I will tell you, our 

folks are the very best at what they do, despite budget or resource 

21 

deficits. They will find a way to get the job done. And it is often 

at a cost of a work-life balance. 

So what concerns me is when we steer away from programs that 

make them more resilient: family, child-care programs, housing, 

tuition assistance, all those tangible programs that keep them focused on getting the job done. 

It also is a retention tool for us, because they need to know that 

we got them covered. But again, I think we have got the very finest 

workforce we have ever had in my 33 years of service. And I would 

just like to protect those programs that support them so that, one, 

we have got a new retirement system that comes online in 2018 

that we don’t know yet how that is going to affect our workforce. 

But we need to focus on those things, because there could be opportunity for people to leave service before they serve a 20-year career after that plan goes into effect. And I believe that these programs that directly support them and their families are things that 

our budget process has to pay attention to. 

Mr. GRAVES OF LOUISIANA. Thank you. Yield back. 

Mr. HUNTER. I thank the gentleman. We are now honored to 

have the ranking member of the full committee here, who understands that it is not all about just trains and trucks and planes, 

but the importance of the maritime industry and the Coast Guard. 

Mr. DeFazio is recognized. 

Mr. DEFAZIO. Thank you, Mr. Chairman. I am honored to be 

here before the subcommittee today. Admiral, good to see you. Master Chief, good to see you. 

You might remember last year I made a bit of a point regarding 

the unfunded projects and/or backlog. And I see we have a somewhat more comprehensive list that—although it is—and it is focused on very important things, so I will go over that first, and 

then I will talk a little bit about the total deficiencies. 

I am concerned that we are looking at less—you know, fewer dollars this year to deal with the, you know, shoreside infrastructure 

backlog than last year. And it seems to me that—and I am not an 

expert on housing, although I have my own home repair projects 

all the time. But it seems to me that some of these things you are 

dealing with, whether it is docks, hangars, housing, stations, you 

know, that there is probably a point at which they are deteriorating more quickly, they are impeding, to some extent, the mission 

because the facilities aren’t adequate. And you know, this causes 

me concern. 

Now, I know that you are in a chain of command, you know, 

under the President, and you submit some requests to them and 

the trolls at OMB [Office of Management and Budget], you know, 

cut a lot of things out, and then we end up with whatever your proposal is, which is less than you originally proposed, which is what 

we see. And then we get this. 

But at least this is more comprehensive. I mean can you just address this a little bit? I mean it seems to me that this—you know, 

even if we move ahead with all due dispatch with a new class of 

cutters and do all the other things we are doing, this is going to 

impede the mission to some extent. Is it not, sir? 

Admiral ZUKUNFT. It will. And I—first, Ranking Member, I will 

reflect on this year’s omnibus appropriation in 2016. As I said at 

22 

the very beginning, it did get us out of debtor’s prison, somewhat. 

It bought down some of the principal of our shore AC&I debt that 

we carry, going forward. But you can see, you know, right now we 

will find on that unfunded priority list to be able to address some 

of our military housing, but not all of it. 

Some of those costs are actually hidden in our major acquisition 

shore infrastructure, which is as we move new ships into new home 

ports and piers and the like, there is infrastructure that comes in 

with that for people, as well. 

But, at the end of the day, what missions matter the most across 

our 11 statutory missions? First of all, mariners in distress on the 

high seas. And you and I have talked about this at length, and we 

have had several heroic rescues in your district here of late. I am 

very mindful of that. And as the chairman and others have brought 

up, the security of the homeland, which begins at sea. And so those 

will continue to be our areas of focus. And we cannot dismiss what 

is happening in the high latitudes in the Arctic and Antarctica, as 

well. 

So, as we look at building heavy icebreakers, we look at some 

top-line relief to bring that program of record. As we are building 

National Security Cutters, Fast Response Cutters, and offshore patrol craft, we are modernizing the C–27J, and now we are bringing 

in an icebreaker. So we have a lot going on right now in our acquisition budget. 

But we can’t take our eye off this other ball. And it talks to some 

of these quality of life investments that Master Chief mentions, as 

well. The health of the workforce for the 21st century across all the 

armed services is a concern for me, as it is for all of the Service 

Chiefs in uniform today. 

Mr. DEFAZIO. Well, thank you. Master Chief, since you are the 

representative of the troops, you want to give us a little more perspective on that? Just fill out a little bit what it means, in terms 

of problems with housing and/or facilities. 

Mr. CANTRELL. Well, thanks to this year’s budget, we were able 

to make some pretty modest investments in some our housing, new 

housing in Astoria, Oregon; Kodiak, Alaska. We have been able to 

bump up some of the renovations that are done on some of the 

older housing. 

But most of our units, as you well know, are outside of a basecentered DOD or Coast Guard base area. They are in very rural, 

very coastal communities. Sometimes very high cost. And it is not 

just the Coast Guard-owned housing that concerns me. When we 

talk about basic allowance for housing, that is proposed to be reduced over the next 5 years. That can really hit home for some of 

our folks that are in those high-cost areas that don’t really have 

a choice when, you know, they are competing with tourists and 

other high-cost competitors there to find adequate housing, and 

often have to drive an awful long way to get to work. 

And with medical care, as well, and in some of these very remote 

areas that don’t have access to a military treatment facility, and 

they could be 2 hours away from the nearest doctor that accepts 

Tricare. And that burden is on the member, to get them and their 

families there. So those things concern me, and we need to continue to stay focused on that, because I don’t want people making 

23 

career decisions based on those types of services that are either 

hard to get or they are just too expensive and then they decide that 

they don’t want to be in the Coast Guard any more. 

But the folks are not complaining, they are out there doing the 

very best that they can. And, you know, they are not shy about it. 

As you know, visiting some of our units, they are not shy about 

showing off their talent and what they are really, really good at. 

Mr. DEFAZIO. Yes. We had a good example of that on the bar. 

That was great. The Astoria Bar, not the bar-bar. 

Mr. CANTRELL. Yes, sir. That was fun. 

Mr. DEFAZIO. Admiral, I was pleased that you mentioned the icebreakers. I assume we are now in the evaluation phase on the 

mothball—I always mix them up, the Polar Star and the Polar Sea. Which one? The Polar Sea. In terms of the feasibility of the, you 

know, rehabilitation versus new. Are we moving along with that 

analysis? 

Admiral ZUKUNFT. Yes, we are, Ranking Member. And it was 

Ranking Member Garamendi who gave me the homework assignment that I will provide, you know, the materiel assessment, which 

is being done by a third party, by the way, of what would it take 

to reactivate the Polar Sea. 

Mr. DEFAZIO. All right. 

Admiral ZUKUNFT. And that will really be a business decision, 

going forward, recognizing how many years do we buy forward with 

that reactivation? But does it get us out of the proposition of at 

what point do we build new, as well? 

But we will provide that by July 31st, and I believe Congressman 

Garamendi backed me up a week, so that would make it July 24th. 

Mr. DEFAZIO. Oh, yes. Before we depart for the longest summer 

break ever, since—and I have been here a long time. Sorry, excuse 

me. 

No, that is excellent, and I will look forward to that analysis. 

One other thing, quickly. You mentioned the—having to, you 

know, sometimes build new port infrastructure to accommodate 

new cutters, you know, and I know you are evaluating where we 

are going to base cutters. But I would say you are ready-made to 

go in Coos Bay, North Bend, for those—two of those ships. So just 

to put in my plug, locally. Thank you. 

Thank you, Mr. Chairman. 

Mr. HUNTER. I thank the ranking member. Really quickly, before 

I go to Mr. Rouzer, we talked about the block buy and the 

multiyear procurement stuff. So you have CRS, you have Stackley. 

I would like you, if you could, to do your own study, and not take 

a long time. But see how much the Coast Guard thinks it will save 

if you wait until ship 3 for the phase 2 of the OPCs—excuse me, 

phase 2 of the FRC or the entire OPC program, if you wait until 

ship 3 and you do multiyear buys, how much money you think you 

will save. OK? 

Admiral ZUKUNFT. Absolutely, Chairman. And it was my understanding as—you know, I wouldn’t wait until year number three, 

because I will be long retired. No, we need to provide, you know, 

this Congress, you know, that diligence. And so we will work with 

your staff to run those numbers—— 

Mr. HUNTER. OK. 

24 

Admiral ZUKUNFT [continuing]. In terms of what are the savings, 

if there is a penalty involved as well, so we can look at this holistically. 

Mr. HUNTER. OK, thank you. With that, the gentleman from 

North Carolina is recognized. 

Mr. ROUZER. Thank you, Mr. Chairman. Admiral, first let me say 

how much I appreciate the work of the Coast Guard, everything 

that you do in such a professional manner, and what a great service and commitment you have to this country. 

I have several questions here, and I am just trying to get some 

clarification. And this is an issue that has come to my attention 

over the past couple days, and it deals with implementation of the 

Safety of Life at Sea International Maritime Organization guidelines regarding the verified gross mass of a container carrying 

cargo, something that I understand you are more familiar with 

than I am. 

Obviously, exports of cargo from the United States are crucial to 

economic prosperity in this country. Steel and agriculture, in particular. My district, in southeastern North Carolina, is predominantly agriculture. We have the port right there at Wilmington, so 

I have a vested interest in this matter for a variety of reasons. But 

that one, specifically. 

Is it correct that the Coast Guard does not intend to enforce the 

SOLAS [Safety of Life at Sea] guidelines? Walk me through this, 

and what has transpired here. 

Admiral ZUKUNFT. So the Coast Guard does enforce SOLAS 

guidelines. As I mentioned to Congressman Graves, we inspect 

ships for SOLAS compliance, and also for security compliance, and 

we will detain those ships if they are not in compliance. 

Now, for an exporter—and let’s use grain as an example—maybe 

that grain goes in a railcar. And so that exporter has no direct involvement with the container. But when that grain goes into a container, it then goes to the carrier, and it arrives in a manifest that 

will say what the contents of the container is, and what is the 

weight of the container. And if that carrier does not see a weight 

for that particular box, he won’t take it on board the ship, because 

he would be in violation of these SOLAS guidelines. 

But, more importantly, these guidelines are designed for stability 

purposes and for Safety of Life at Sea. So what happens is that box 

does not get loaded until the weight can be verified. And there are 

two methods of verifying that weight. You can add the container 

and the contents all at once, or you can take the weight, the tare 

weight that shows up on that box, and then add in whatever 

weight is added into it, add the two, and then that is the weight 

that would show up on the cargo manifest. But the carrier has to 

see a weight before they will take that container on board, effective 

1 July of this summer. 

Mr. ROUZER. I am sorry I wasn’t here to hear the entire question 

and answer with my colleague, Mr. Graves. I was chairing a hearing of the Subcommittee on Livestock and Foreign Agriculture of 

the House Committee on Agriculture a few minutes ago, and just 

got here. 

But my question and what I am most concerned about, apparently the shipping industry feels like this is a change in direction, 

25 

the rug has been pulled out from under them, so to speak, in terms 

of what they were anticipating, and the conflicting statements from 

the Coast Guard. Can you address that, specifically? 

Admiral ZUKUNFT. I will. The IMO guidelines came out on the 

9th of June of 2014, and we have been engaged with the World 

Shipping Council, a number of exporters, carriers here in the 

United States. So we have had a very aggressive outreach campaign as this date draws nearer. And perhaps it is our outreach 

campaign that has sensitized others, and maybe it wasn’t the IMO 

guidelines that came out. And I can only conjecture in that regard. 

But the information has rolled out and has been rolling out for 

nearly 2 years now, as this implementation date draws near. 

Foreign carriers are pretty much all in compliance today. When 

I was at the container terminal in Long Beach a month and a half 

ago, all of the containers that come on to that yard are already 

weighed before they go in. So I am not seeing a sky falling panacea 

playing out around us, but we need to make sure that there are 

not unintended consequences while we are continuing to reach out 

with the many exporters and how their commodity ultimately gets 

in the container, and that container shows up on a manifest before 

it is loaded on board a ship. What is needed is that final weight. 

But, by and large, most of these manifests already have that 

weight filled in in that column. 

Mr. ROUZER. Thank you, Mr. Chairman. I appreciate it. 

Mr. HUNTER. I thank the gentleman. I have got just a quick— 

bring up a subject, and it is unmanned aircraft systems [UAS]. And 

from what I understand, the CBP has kind of taken control for the 

Coast Guard. If the Coast Guard wants to use UAS, they have to 

use CBP UAS. Is that correct? It means you don’t have organic assets. 

Admiral ZUKUNFT. Correct. 

Mr. HUNTER. So if you want to use them, you have to say, ‘‘Hey, 

Border Patrol,’’ or hey, whoever, ‘‘We would like you to launch a 

UAS over this part of the Caribbean,’’ right? 

Admiral ZUKUNFT. Correct. 

Mr. HUNTER. Has that ever happened? 

Admiral ZUKUNFT. It has. We have done two proof of concepts, 

one in the Caribbean, and then we did another one in the Eastern 

Pacific. What this particular UAS lacks is a wide aerial surveillance sensor. It ostensibly looks through a straw. And so—— 

Mr. HUNTER. Let me stop you there, I mean, because we have 

wide area surveillance stuff, and you have the straw stuff, you 

have whatever you want. I mean you slap a sensor, any kind of a 

sensor, on any UAS, pretty much. So why haven’t you, then? 

Admiral ZUKUNFT. Well, I can’t speak for another agency’s acquisition project—— 

Mr. HUNTER. Which, to my point, why doesn’t the Coast Guard 

have their own organic assets in which you could put on what 

you—whatever kind of sensor you wanted? 

Admiral ZUKUNFT. So two-part answer to your very challenging 

question. The first is our immediate need is sea-based UAS, because we follow a very mobile threat. And so, within our—you 

know, this year we will down-select, and it is not a major acquisition, a small UAS that will go on board our National Security CutVerDate Aug 31 2005 13:40 May 01, 2017 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\3-15-1~1\99435.TXT JEAN
26 

ters that can look over the horizon, provide covert situational 

awareness. 

We are first pulling in national-level intel, so we already know 

that something is out there. And then we use a small UAS to discern what it is. And we have had great success using this in the 

past. But this technology will emerge. 

And do we need to be in the land-based UAS program? Absolutely. And as you look across our capital investment plan, as we 

get into years 20 and 21, we start making significant 

downpayments on UAS, which would be land-based, to keep step 

with technology as that emerges, as well. But this will be a key 

contributor for maritime—— 

Mr. HUNTER. Here is what I would ask. I mean if you are using 

a land-based UAS, you are not going to be armed, obviously. You 

are going to have over 40 hours of time up in the air, if you use 

a Predator, for instance. Up in the air for 40 hours, plus. You don’t 

need to launch off a ship, because you have so much sustained 

time, where they can loiter for pretty much—you know, forever. 

You have two or three, you are up in the air 24/7. 

I hope the money is not going into proof of concepts or saying, 

hey, let’s try to figure out what we need, when they make what you 

need right now, especially for the land-based side. I mean that is 

out there, it exists. There doesn’t need to be any tests on it or anything else. And I would say for your ship-based UAS, let the Navy 

lead the way, right? Why not use what the Navy is doing? If the 

Navy is spending tens of millions of dollars—hundreds of millions 

of dollars on R&D [research and development], on ship-based UAS, 

whether it is a Fire Scout, whether it is a, you know, rotary-type 

UAS or a fixed-wing, they are doing all of this for you, right? Why 

not piggyback? 

Admiral ZUKUNFT. So we have done exactly that. So we took— 

the Navy, as they went ahead with a ship-based UAS, we put it 

on one of our ships, and it is the same size as one of our manned 

helicopters. It comes with a support team of 20 people. And so, in 

our case, that is a lot of people. It becomes the tail that wags the 

dog. So that is why we are looking at small UAS, going forward. 

At the same time, though, we made an investment in the 

peopleware. We have Coast Guard members working with CBP so 

we operate these land-based UAS. And that is a downpayment, at 

least in the skills that it is going to take to bring this fully on 

board into the Coast Guard, as we take advantage of this technology. 

Mr. HUNTER. Administrator Jaenichen, we have been working 

the National Maritime Strategy for a couple of years now. How is 

it going? 

Mr. JAENICHEN. Thank you for the question. I am happy to report that the draft strategy is with OMB, it is going through the 

interdepartmental review. Prior to delivering it to OMB I did share 

it with the Committee on the Marine Transportation System, about 

27 different Government agencies and commissions. I have incorporated all of their comments, as the comments from our national 

advisory committee, the Marine Transportation System National 

Advisory Council. Those have all been incorporated in the draft 

strategy that is currently undergoing interdepartmental review. 

27 

So I am hopeful I will be able to get something that I can publish 

in the Federal Register here soon. And prior to that publication, we 

will provide it to the committees both in the House and the Senate. 

Mr. HUNTER. But why—when are we going to get recommendations from you? When are we going to get recommendations? Not 

necessarily—I mean we are not doing this as an exercise on how 

to do it, right? We are doing this so we can actually do something 

and have an effective maritime strategy that incorporates everybody here today, and everybody that operates on the ocean who is 

not here today, all the fishermen, all the shippers, the Jones Act, 

all of that combined into one thing, right? 

Mr. JAENICHEN. Absolutely. 

Mr. HUNTER. So, I mean, we want recommendations from you on 

what we should do. That is why we are doing this. 

Mr. JAENICHEN. Absolutely, and that is going to be included in 

the National Maritime Strategy, Chairman. 

Mr. HUNTER. So when is OMB going to release it? Blink once if 

it is this year, blink twice if it is next year. 

[Laughter.] 

Mr. JAENICHEN. We have met with OMB, and I can tell you it 

is going through the interdepartmental review, and I am hopeful 

we will have it out within a couple of months. 

Mr. HUNTER. OK. Last thing, really quick. How do you choose 

who gets the small shipyard grants? Is it geographic location? Is 

it the type of project? Is it the yard itself that would be doing the 

shipbuilding? Or all of those things? What are your—— 

Mr. JAENICHEN. It is really all of the above, Chairman. And I will 

tell you, from a distribution standpoint—and we took a look at the 

actual numbers—we had 80 applications that were submitted with 

this particular round when it closed back on the 16th of February. 

Actually, I am sorry, we had 118 that were submitted, a total of 

$80 million in requests. Of those we had about 22 from the west 

coast, 6 were from California. So it is a pretty even distribution, 

about 28 or so from the gulf coast, 22 from the west coast, and the 

rest are from the east coast. So it is a fairly equal distribution, geographically. 

We do take a look at the return on investment, we do take a look 

at the projects. In this particular case, thank the Congress for appropriating $5 million, but it is a much smaller amount in order 

to disperse, and we are probably going to be limited to about eight 

different projects. So we are—it is going to be a very small portion 

of that which was—the applications that were actually submitted. 

But we do take a look at the whole project, in terms of what return on investment you get in terms of employment opportunity, 

you know, how it potentially impacts the local community. Have 

you received a previous grant? All those things are factored into 

the review. 

Mr. HUNTER. Thank you all for being here. And I am going to 

pass it off to Mr. Graves. I am going to go—the Army Chief of Staff 

is in town here, and I am going to yield to Mr. Garamendi and then 

Mr. Graves is going to chair and finish up. So thank you all. We 

are going to keep on working and pushing forward, and we look 

forward to doing block-buy stuff, UAS, happy Coast Guard people, 

28 

maritime strategy, and great oversight from the FMC. So, thank 

you. 

Mr. Garamendi is recognized. 

Mr. GARAMENDI. Thank you, Mr. Chairman. Let’s just take—you 

just mentioned the Small Shipyard Grant Program. It zeroed out 

this year. A little bit zeroes out in 2017, is that correct? And you 

discussed it. 

Have you engaged—Mr. Jaenichen, have you engaged with the 

SBA [Small Business Administration] and other governmental— 

Federal governmental programs to assist the small shipyards, everything from educational programs, job training, SBA, and the 

like? 

Mr. JAENICHEN. Thank you for the question, Congressman. I 

have not personally engaged. I would have to go back to my staff 

and check and see if we have done that. 

We do know that, as we build the budget, you know, some of 

the—we are challenged with our top-line number. In the 2017 request we had to take a look at some other priorities that we had, 

and one of those included the—our ship disposal program, primarily because I am under a very tight timeline with the California consent decree to remove the last 3 remaining ships that 

were identified of the 57 back in April of 2010. 

So, I had to put a priority. And in some cases those priorities 

beat out other priorities. Otherwise, I would like to be able to include this funding in every year, because we know that it has a 

great return on investment. 

Mr. GARAMENDI. Well, here is my point. There are other Federal 

programs that could be coordinated with the Small Shipyard Grant 

Program, everything from job training to the SBA. SBA has actually had a significant increase in their budget year, year after year. 

So if you look at that—and maybe they are doing the same thing, 

maybe they are not—I am going to go at them and find out. 

With regard to the scrap metal ship disposal, you mentioned 

California. I think you are talking Suisun Bay. You had three ships 

there. I think—yes, it is. Mare Island is about 5 miles away. So 

why are you taking all these ships to Texas? 

Mr. JAENICHEN. Currently, Mare Island is not a qualified Maritime Administration disposal facility. 

Mr. GARAMENDI. Is it not? 

Mr. JAENICHEN. It has not—— 

Mr. GARAMENDI. Could we not request it? 

Mr. JAENICHEN. It has not been requested under the new ownership. 

Mr. GARAMENDI. Oh. You do not take into account the cost of 

moving the ship all the way to Texas from California, do you? 

Mr. JAENICHEN. We actually do take into account in terms of the 

request for appropriations. We also have requirements from an 

invasive species standpoint to be able to drydock them before we 

actually remove them from the California waters—— 

Mr. GARAMENDI. In terms of bid competition. In terms of the bid 

competition, you do not. The cost of moving the ship is separate 

from the bid itself. So the bid might be 100 for Texas, and, I don’t 

know, 105 for Mare Island or San Francisco. But the cost of moving 

the ship is not part of that bid, is it? 

29 

Mr. JAENICHEN. The bid for a—sales, it actually is included. 

And—but if we do a service contract, we have to include that as 

part of the contract, to be able to get it moved. 

One of the challenges is currently today we are at a historic low 

for the number of ships that we actually have remaining to be recycled. That number is 16 today. I think it is a business decision on 

the part of the companies tho decide to do recycling. In this particular case, Mare Island does not have an application with us to 

certify them as a recycling facility. 

Mr. GARAMENDI. OK. I want to move on. Mr. Cordero, you say 

you are overloaded with 75 requests for information. 

Mr. CORDERO. That is correct. 

Mr. GARAMENDI. Could you send us information as to what those 

75 are? And are we the problem, we, the Congress, requesting multiple reviews and information? And, if so, could you please describe 

the 75? Not here, but in writing, so that we might assist you in 

reducing the onerous burden that has been placed upon you. 

Mr. CORDERO. Thank you for the question, Congressman. We will 

do that. 

[The information can be found on page 80.] 

Mr. GARAMENDI. Good. Maybe we can help you. The supply 

chain. You spoke of the supply chain. I believe we moved a bill out 

of here called the FAST Act [Fixing America’s Surface Transportation Act] that had a freight movement in it. 

Mr. CORDERO. That is correct. 

Mr. GARAMENDI. How are you coordinating your work with the 

freight movement? 

Mr. CORDERO. Well, first of all, by way of the Department of 

Transportation, they have the Bureau of Transportation Statistics, 

which will form a working group to address some of these issues. 

One of the primary questions is in terms of the metrics, the work 

performance group. The FMC is identified as one of the parties to 

that group, and we will be more than happy to participate and offer 

our insight with regard to that. 

Mr. GARAMENDI. So you are clearly integrated into and coordinating with the freight movement programs that the Department 

of Transportation is putting together? 

Mr. CORDERO. Absolutely. We will partner with them. The Administrator has been very helpful in working with the FMC, as 

well as the Department of Commerce, and as well as the Surface 

Transportation Board. One of the good things that we have been 

doing the last couple years is partnering with our fellow agencies 

regarding issues of mutual interest. 

Mr. GARAMENDI. Thank you. Chairman Hunter left to go talk to 

the Army about their needs, which is important. But also going on 

simultaneous with this hearing was General McDew, on the other 

side of this building. And I have been informed that General 

McDew said that he has a very serious concern about the ability 

of the merchant marine to meet the needs of his global movement 

of men, women, and materiel. 

So, Mr. Jaenichen, can you explain to me why you and the administration are further weakening the ability of the merchant marine to have cargo, as in the food aid program, if we have a naVerDate Aug 31 2005 13:40 May 01, 2017 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\3-15-1~1\99435.TXT JEAN
30 

tional security issue that—spoke about just a few moments ago? Is 

it that the administration is not coordinating on this critical issue 

of the ability to move materiel? 

Mr. JAENICHEN. Thank you for the—— 

Mr. GARAMENDI. You seem to be going in different directions 

here. Can you explain why you are going in different directions, 

why we have Mr. McDew over there, saying he is terribly concerned about this, and then, on the other hand, your organization 

and the USAID [United States Agency for International Development] removing cargo? 

Mr. JAENICHEN. Ranking Member, the—General McDew and I 

are very closely tied with regards—and the real issue he is talking 

about is the mariner numbers. And I talked a little bit earlier 

about the mariner pool, and where we are, and it is—— 

Mr. GARAMENDI. The real issue is cargo. 

Mr. JAENICHEN. Well, without cargo, you don’t have ships. Without ships, you don’t have mariners. I agree, sir. 

Mr. GARAMENDI. Cargo comes from Export-Import Bank loans, 

guarantees. It comes from military, as you said earlier. And it also 

comes from food aid and other things. You and the administration 

are rapidly reducing one of the three. 

Why are you doing that, when we have—at least according to 

General McDew—a significant national security issue? Why are 

you doing it? Is it that you are not coordinated, the left hand 

doesn’t know what the right hand is doing? Or maybe you just 

don’t care about this. And by ‘‘you,’’ I mean the imperial you. 

Mr. JAENICHEN. The administration’s proposal, Ranking Member, 

is to ensure that there is some funding in the program. That is 

what is in the $25 million to try to offset some of these—— 

Mr. GARAMENDI. The welfare program. 

Mr. JAENICHEN. We certainly would tend to disagree with that, 

this would be a welfare program, but we recognize that a program 

that is modeled after the MSP program works. So that is the reason why we structured it as we did, as we attempted to support 

the administration’s proposal, with regard to food aid reform. And 

that was a piece that was actually installed as part of that proposal. And that is the administration’s request to achieve the 25- 

percent additional flexibility—— 

Mr. GARAMENDI. The administration’s request was to reduce food 

and transfer the money to the military. That is for the MSP program, which was a very interesting program. So we got hungry 

people in Africa. We are going to reduce the money for them and 

give it to the military. Is that still part of the program that you 

are proposing that—— 

Mr. JAENICHEN. That is not the administration’s position. 

Mr. GARAMENDI. It was. 

Mr. JAENICHEN. No, there was a discussion that was ongoing between the USAID and MarAd to support a proposal as a food aid 

reform. That is not on the table any longer, Ranking Member. 

Mr. GARAMENDI. Any longer. Good. So where is the $25 million 

coming from? 

Mr. JAENICHEN. The $25 million is included in the MarAd’s 2017 

budget request, as part of the MSP program, and it is an effort to 

ensure that any type of food aid reform—in this particular case for 

31 

the 25-percent additional flexibility for interventions that include 

local and regional purchase—to ensure that it does not affect the 

merchant marine fleet. 

Mr. GARAMENDI. Wouldn’t it be better all the way around to ship 

food than to just ship money? 

Mr. JAENICHEN. USAID has indicated that the cost of that actually does have an impact on the number of folks that can be fed. 

And again, that is a calculation that they have provided and the 

administration supports. 

Mr. GARAMENDI. Well, this fight is not over. And we are going 

to stay with it. 

I am out of time, Mr. Chairman, I yield back. 

Mr. GRAVES OF LOUISIANA [presiding]. Thank you. Administrator, 

thank you also for being here today. It is good to see you again. 

Some folks in the office recently had a meeting in regard to the 

Maritime Security Program. It is my understanding that under 

that program you have a number of priorities. Number one is RoRo 

[roll-on, roll-off] vessels, number two is—— 

Mr. JAENICHEN. Tankers. 

Mr. GRAVES OF LOUISIANA. Heavy lift. Yes, number two is heavy 

lift—— 

Mr. JAENICHEN. No, number two is tankers, number three is 

heavy lift. Those priorities that were established by the U.S.—— 

Mr. GRAVES OF LOUISIANA. Wait, so it is RoRo—— 

Mr. JAENICHEN. Tanker. 

Mr. GRAVES OF LOUISIANA [continuing]. Tanker, geared—— 

Mr. JAENICHEN. Heavy—— 

Mr. GRAVES OF LOUISIANA. Oh, heavy lift—— 

Mr. JAENICHEN. Heavy lift, geared container ship, and then container ship. 

Mr. GRAVES OF LOUISIANA. OK. And it is my understanding that 

you have a current section 2 participant that is proposing to replace vessels. And as I understand, they are allowed under the operating agreements to provide for a replacement vessel of equal or 

greater capacity, and it is my understanding that they have done 

just that, but that they are having some trouble getting approval 

from MarAd in regard to that. 

I want to ask, before you make a final decision on that, I would 

like to schedule a briefing with you to get an update on what is 

going on there, to understand the prioritization process, to understand the compliance or lack there of, of the operating agreement, 

if you would agree to that before you make a final decision on this. 

Mr. JAENICHEN. Congressman, I would be happy to meet with 

you, but I would emphasize that both of these operating agreements have been vacant since the 15th and the 22nd of September 

of last year. And so we have been working with the company in 

question to get substitution, and we have been working and imploring them to fill those vacancies, and we are reviewing what they 

have submitted thus far. And I will make a decision here shortly. 

I well get with you some time this week to have that discussion. 

Mr. GRAVES OF LOUISIANA. Great. Great, thank you. Commandant, I would like to come back to you. There has been talk— 

and following up on a previous conversation, there has been talk 

about the Jones Act recently, and I have seen some folks that have 

32 

expressed concern about the Jones Act from a fiscal perspective. It 

certainly concerns me, as well, anything that would be perceived or 

in reality, of course, as being a waste of taxpayer funds. 

If you—you know, going back to what we talked about earlier, if 

we repealed the Jones Act, if we made significant changes, the potential game changer from a security situation and many others— 

referring back to your previous comments—do you view—you know, 

if you were to monetize the Jones Act, the capability it provides to 

the defense industrial base, the security stability that it provides, 

do you view that as a money loser for taxpayers? 

Admiral ZUKUNFT. I can only conjecture on that. You know, my 

biggest focus is what is due to our resiliency, as a maritime Nation. 

And, quite honestly, it will nearly bankrupt our maritime resiliency. 

When we look at the challenges that the MarAd Administrator 

is facing, that the Commander of TRANSCOM [United States 

Transportation Command] is facing in the event of a contingency, 

and we don’t have a lift within the U.S. fleet to respond to a contingency at a point in time we are seeing the reemergence of peer 

competitors, you know, it is in our Nation’s best interest. And I 

think, from a sovereign interest, not necessarily from a taxpayer, 

that we protect our maritime resiliency. And the Jones Act does 

provide that wherewithal. 

Mr. GRAVES OF LOUISIANA. Thank you. Another question—— 

Mr. JAENICHEN. Congressman, if I might interject—— 

Mr. GRAVES OF LOUISIANA. Please. 

Mr. JAENICHEN [continuing]. On this particular topic, if the build 

requirement were changed, there’s about 40 different yards across 

the country that are building both Federal programs and also commercial. 

Today, under construction, there are 32 large vessels under construction. And, of those, 12 are what I would refer to as normal, 

self-propelled tankers. There’s also 20 articulated tug and barges 

with large vessels, in terms of the capability to carry 150,000 to 

200,000 barrels. We also have four of what I call special purpose 

ships, they are built to carry containers. And roll-on, roll-off, and 

also just regular LNG-ready type container ships. Without the 

Jones Act, those builds don’t occur, which means that the Federal 

Government now has to assume all of the cost of the overhead for 

that industrial base, which means that your cost for those vessels 

is going to go up. 

The industry itself—and that includes both the Federal shipbuilding and the commercial shipbuilding—we just released a 

study last fall that updated some numbers we did from 2013—that 

is 110,000 people around the country that are building ships; that 

is a $36 billion industry. Without that commercial shipbuilding and 

that industrial base, it will have an impact on the taxpayer, in 

terms of what we have to pay to acquire the ships, whether they 

are for the Navy, the Coast Guard, for NOAA, for the Army Corps. 

Mr. GRAVES OF LOUISIANA. Administrator, could you provide a 

copy of that report for the record? 

Mr. JAENICHEN. Yes, sir, I can. 

33 

[The Maritime Administration report from November 2015 entitled ‘‘The Economic 

Importance of the U.S. Shipbuilding and Repairing Industry’’ can be found on the 

Maritime Administration Web site at https://www.marad.dot.gov/wp-content/ 

uploads/pdf/MARADlEconlStudylFinallReportl2015.pdf.] 

Mr. GRAVES OF LOUISIANA. Thank you. So again, I want to make 

note, you know, any program that is going to waste taxpayer funds 

would obviously cause great concern. And I think if you look at 

only the surface, in some cases it may cause concern. But it sounds 

like, based on what you are saying and some of the admiral’s comment, when you actually dig deeper, that this does provide value 

to taxpayers in regard to the resiliency of our defense industrial 

base and the security of the country. 

One last question. Admiral, I want to come back. The fiscal year 

2016 NDAA bill, the National Defense Authorization Act, 

transitioned the military retirement program for the Coast Guard 

for new military servicemembers, or Coasties, from a defined benefit plan over to the Thrift Savings Plan that many other agencies 

participate in, and it requires participation in that. It provides a 

match from the Coast Guard in that program. 

Has the Coast Guard talked with OMB to determine how the 

Coast Guard’s current mandatory funding for these benefits can be 

moved to a discretionary situation, as DOD currently is? 

Admiral ZUKUNFT. Congressman, we haven’t, but it is a conversation we must absolutely have. Right now we don’t know how 

many people will opt in to up to 5 percent, with a matching 5 percent. But we do know, if we have a significant number, right now 

that comes out of our operating base. And that will directly impact 

frontline operations. It will challenge some of our many other operating expenses that we have right now. 

And so, we need to build that wedge for those who will be required to opt in in 2018, whether they contribute the 5 percent or 

not. But how many other members with fewer than 12 years of 

service decided, hey, they want to opt in, as well? And so there are 

real costs involved with this. And right now our base does not provide us the wherewithal to sustain those type of matching payments to thrift savings. 

Mr. GRAVES OF LOUISIANA. Thank you. Would you support using 

the $25 million for increased MSP payments, pursuant to the recently passed increase in the authorization? I am sorry, to the—Administrator Jaenichen? 

Mr. JAENICHEN. Would that be assuming that food aid reform is 

actually implemented or not, Congressman? 

Mr. GRAVES OF LOUISIANA. No. 

Mr. JAENICHEN. What I can tell you with regard to the MSP program is that they are under severe pressure with regards—when 

the program, at its inception back in 1996, it was really based on 

three things. It was based on a stipend amount, it was based on 

access to Government-impelled cargo, both DOD and civilian cargo, 

and also the ability to carry civilian cargo. 

Currently, civilian cargo today is—there is an over-capacity, 

with—the actual scrapping price is so low they are not—ships 

aren’t being scrapped, so that capacity is continuing. We have seen 

the lowest shipping rates in a long time. Our Government-impelled 

rates, as I indicated earlier, DOD is down 75 percent, agriculture 

34 

and USAID cargoes are down 40 percent. The only place you can 

go now is to go to the stipend amount in order to ensure the fleet 

is viable. 

DOD and the U.S. Transportation Secretary both support the viability of this program. We understand its significance in support 

of DOD requirements, specifically for sealift, to globally project and 

sustain our armed forces. 

Mr. GRAVES OF LOUISIANA. Thank you. 

Mr. Garamendi? 

Mr. GARAMENDI. First of all, I would like to enter into the record 

of this hearing Mr. McDew’s testimony today that he provided with 

regard to the MSP program and the necessity for that. I think it 

would be useful to have on our record. 

Mr. GRAVES OF LOUISIANA. Without objection. 

[The information can be found on page 90.] 

Mr. GARAMENDI. Thank you. I think I will probably leave that go 

for a while. 

Chairman Hunter had been talking about the UAV [unmanned 

aerial vehicle], or UAS, or RPAS [remotely piloted aircraft system], 

as the military now calls them. There is a program that the CBP 

is conducting. They have nine Predator B and Guardian—a maritime variety of the Predator B that they are using to patrol the 

border. 

Recently, the analysis that has been done on their program by 

the Department of Homeland Security indicates that that program 

is just totally inefficient and ineffective. They are spending $600 

million annually on that program, presumably to protect, like, one 

one-hundredth of the Mexican border. It seems to me that we need 

to make some choices about—here, where $600 million is being 

spent. 

We know that the Coast Guard has a need for better surveillance, some of which will be provided by new ships, but others of 

which might be more effectively provided by UAS, UAV, or RPAS, 

whatever we want to call them. And so I think this committee 

ought to take this issue up with the homeland security committees 

about where $600 million could be most effectively spent in protecting our borders. Since there is a whole lot more sea border than 

there is land border, perhaps that $600 million could be better 

spent by the Coast Guard acquiring maybe those very same assets. 

So, I put that out there. Mr. Zukunft—or Admiral, excuse me— 

you normally don’t go mess with other people’s budgets, but it 

seems to me you are part of the Homeland Security Department. 

Have you talked to the Secretary about transferring this $600 million and the nine Predators to you to be used more effectively? 

Admiral ZUKUNFT. That would be the equivalent of internal warfare, Ranking Member. 

But what we do have within the Department of Homeland Security, we have a Joint Requirements Council. These nine Predators 

predate the standup of this Joint Requirements Council. An example is, working with the Navy, we identified the right sensor package to go into our fixed-wing aircraft. It is called Minotaur. But it 

is a defense project. You know, the R&D, the work has been done. 

And through this Joint Requirements Council at the Department 

35 

of Homeland Security, it is not just Coast Guard, but CBP is now 

acquiring this Minotaur project, as well. 

As we mentioned earlier, you know, the remotely piloted aircraft, 

whatever we want to call them, it is merely a platform. It is the 

sensor pod that you put in it, and the sensor pod that is in it right 

now does not afford for the wide-aerial surveillance that we would 

need. But you could argue you might need that same capability, 

whether you are flying over land or over the water, as well. But 

that would be a process to work through the Joint Requirements 

Council that has been stood up under this Secretary’s leadership 

within the Department of Homeland Security. 

Mr. GARAMENDI. You got a problem with internal warfare, when 

you have got $600 million that is inefficiently used by the CBP, 

and you are not willing to go grab it and be able to use it more 

effectively by putting in the new sensor system that the Navy and 

you are jointly commissioning? 

Admiral ZUKUNFT. We are at an inflection point where, under 

this Secretary’s leadership, it is all about unity of effort. And so we 

have created joint task forces, where we have combined the cultures of Coast Guard, CBP, and ICE [Immigration and Customs 

Enforcement]. And we are—you know, so we are operating at the 

front line. 

But if you have one agency now second-guessing how another administration expands its—— 

Mr. GARAMENDI. It is our business to second-guess. And we have 

a report that there is $600 million that is being spent very inefficiently by CBP with their Predator B UAS. And I am curious as 

to whether they could be repurposed. 

Let me ask you a specific question. Could they be repurposed 

with a different sensing device for the use by the Coast Guard? 

Admiral ZUKUNFT. Absolutely. 

Mr. GARAMENDI. Absolutely? Is that your answer? 

Admiral ZUKUNFT. Yes. Identifying the right sensor pod that 

goes—— 

Mr. GARAMENDI. Is that this new Minotaur thing that you 

are—— 

Admiral ZUKUNFT. This would probably be yet a different sensor 

pod. 

Mr. GARAMENDI. Does it exist today? 

Admiral ZUKUNFT. That I can’t answer. We will have to do a—— 

Mr. GARAMENDI. I think the chair answered the question as yes, 

it does. 

Well, it is our business to conduct internal warfare within the 

Departments, and to decide where the money goes. We have evidence that the CBP is inefficiently using $600 million, and six or 

nine Predators that could be repurposed for the Coast Guard. If 

you had them, could you use them? 

Admiral ZUKUNFT. Yes. 

Mr. GARAMENDI. Thank you. No more questions. 

Mr. GRAVES OF LOUISIANA. If there are no further questions—— 

Mr. GARAMENDI. Note that as a yes. 

Mr. GRAVES OF LOUISIANA. If there are no further questions, I 

thank the witnesses for their testimony and the Members for their 

participation. 

36 

The subcommittee stands adjourned. 

[Whereupon, at 11:50 a.m., the subcommittee was adjourned.] 

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